How to Choose the Best Accounting Software for Small Businesses in the US (2025 Guide)

When evaluating “how to choose accounting software”, you should understand your business needs and select a tool that handles your financial tasks without unnecessary complexity. This evaluation involves comparing features, costs, and long-term flexibility so the software supports both current and future operations.

Do you know what choosing accounting software today feels like? It’s like picking a “co-pilot”, you only notice its importance when your financial turbulence hits. And with about 64.4% of small and midsize businesses in the US already relying on accounting software, this “co-pilot” has become a non-negotiable part of day-to-day operations. 

But the question is:

• How to choose accounting software that serves your business needs?

This is exactly where many leaders get stuck! Too many choices, overlapping features, unclear pricing, and hidden costs confuse them and lead to an inferior selection. Don’t want that? Read this article to learn how to choose accounting software that fits your size, industry, workflow, and long-term goals. 

How to Choose Accounting Software? 8 Factors You Must Consider in 2025!

As a VP or director of a D2C company earning $5M+ revenue, you should choose accounting software based on what your business actually needs (rather than picking one at random). 

The following factors significantly affect your choice:

• Your business size
• The industry you operate in
• How much can you spend
• The tools you already use 

Note that when the software matches your business conditions, it becomes easier to manage finances, stay organized, and handle taxes. So want to pick the right fit in 2025? Learn how to choose accounting software by making a thorough evaluation via these eight factors:

1. Make Sure the Software Is Simple to Use

When you run a small business, you cannot spend hours learning complicated tools. Your accounting software should have a clean dashboard where you can see your main numbers without searching for them. 

The software must have 100% clear labels and must allow you to easily perform these basic tasks:

• Adding expenses
• Checking payments
• Generating reports

You should not need an accountant to understand where to click! A simple layout also reduces mistakes because you always know where your data is stored and how to update it.

2. Choose Software You Can Use From Anywhere

Cloud-based accounting software stores your financial data online instead of on your local computer. Studies show that cloud-based accounting solutions made up over 67% of the market revenue share in 2024. This trend shows that now organisations are shifting to cloud infrastructures for:

• Remote collaboration
• Lower costs
• Continuous regulatory updates

But why this growing popularity? A cloud-based accounting software lets you check your accounts from any place (your office, your home, or even while traveling). You only need an internet connection.

Additionally, cloud access also gives you real-time updates. This means your numbers change instantly when you:

• Enter a sale
• Record an expense
• Update inventory

Your accountant or partner can also log in at the same time without sending files back and forth. This keeps your records current + reduces the risk of outdated data.

3. Pick a Tool That Makes Invoicing Simple

When learning “how to choose accounting software”, note that invoicing is one of the most important tasks for any small business. Your software should allow you to create invoices quickly without extra steps. You should be able to add:

• Customer details
• List items or services
• Send the invoice directly by email

Tracking unpaid invoices should also be easy, so you always know who still owes you money. Additionally, a good software:

• Shows when an invoice was opened, paid, or overdue

and

• Should send reminders so you do not have to follow up manually

This keeps your cash flow steady and reduces delays in payments.

4. Look for Automatic Links With Your Bank Accounts

Your accounting software should connect directly to your bank. This link removes the need to type every transaction manually. Once the connection is set, your sales, expenses, transfers, and payments show up inside the software on their own. 

The advantage? This reduces mistakes because you are not entering amounts manually. It also helps you match bank statements with your books without digging through receipts. Moreover, when the system pulls data regularly, you always see your:

• Current balance
• Recent activity
• Latest cash flow status

5. Select a System That Handles Payroll From Start to Finish

When evaluating how to choose accounting software, your selected tool should offer “payroll capabilities”. This includes:

• Calculating monthly pay
• Recording hours
• Adding bonuses
• Adjusting deductions

The software should also manage benefits, keep payroll records, and create pay slips. When payroll + accounting stay in one system, your expense calculations stay accurate, and your books stay organized. Also, you avoid switching between platforms, and your financial reports stay updated as soon as payroll is processed. 

6. Pick Software With Built-In Tax Support

An accounting software should offer strong tax features, including automatic tax calculations based on your:

• Income
• Expenses
• Payroll

The software should guide you through “what you need to file” and “when to file it”. It should also store records in one place so you can access them during tax season without searching through paperwork. Some tools even allow direct submission of tax forms. 

The benefits? These features let you:

• Stay aligned with IRS rules
• Avoid missed deadlines
• Keep your financial data ready for audits or reviews.

7. Choose Software That Can Grow With Your Business

While searching for how to choose accounting software, you must realize that your business needs today will not be the same a year from now. So the software you pick must handle that growth. Ideally, you should look for a system that can take on:

• More users
• Higher transaction volumes
• Extra features as your business expands

You should not need to change platforms every time your company adds a new product, serves more clients, or hires more staff. A scalable system also gives you room to add tools like:

• Advanced reporting
• Inventory management
• Payroll when the time comes

This keeps your financial data in one place and prevents disruptions as your operations grow.

8. Go For a Platform That Offers Strong Customer Support

Your accounting software should offer support through chat, email, or phone so you can reach someone without long delays. Check if the company provides:

• Clear guides
• Tutorials
• A help center that explains common issues

Support should be available during your business hours, and the team should understand accounting basics so they can guide you through errors or setup questions.

Top Accounting Software Options for Small Businesses in 2025

The evaluation of how to choose accounting software can be highly tricky with so many tools available in the market. To make your search easier, below are some most trusted options in the US, you may consider in 2025:

Don’t Want to Subscribe to Any Software? Outsource 100% of Your Accounting Department to Atidiv in 2025!

So now you know how to choose accounting software to match your business needs. Your selection should ideally be based on these factors:

• Simple and clear user interface
• Anywhere, anytime cloud access
• Strong invoicing and billing tools
• Direct bank account integration
• Built-in payroll and tax features

But as a VP or senior manager of a D2C company, you must recognize that most accounting software comes with hidden costs, such as add-ons, integrations, extra user fees, and ongoing upgrades that increase your total expense over time. 

This is why in 2025, many consumer brands are shifting to accounting outsourcing companies like Atidiv. We are a US accounting firm with 16+ years of experience and a 95% client retention rate. 

Our expert team of 390,000+ chartered accountants and CPAs delivers bookkeeping, strategic advisory, and customized financial process setup – starting at just $15 per hour! Book a consultation to learn more.

How to Choose Accounting Software FAQs

1. Why is it so hard to choose the right accounting software for my small business?

Most business owners struggle because each software offers different:

• Features
• Pricing tiers
• Hidden add-on costs

Always remember that what works for one business may be unnecessary for another. So, the real challenge? You should find a tool that fits your size, workflows, and growth plans instead of choosing based on popularity alone.

2. How do I know if an accounting software can support my business as it grows?

You should look at its:

• User limits
• Transaction capacity
• Module expansion
• Integration options

If the software lets you add payroll, inventory, automation, or more users later without switching platforms, it is built for long-term use.

3. What hidden costs should I watch out for when selecting accounting software?

Many platforms charge extra for:

• Payroll
• Multiple users
• Tax tools
• Advanced reporting
• Automation
• Integrations

Some also increase prices every year! As a VP of a growing D2C company, you should review the full cost (including add-ons and future upgrades). This allows you to avoid paying far more than the base subscription suggests.

4. How are accounting software trends changing in 2025?

In 2025, automation and AI tools are becoming standard. They reduce manual work by handling:

• Data entry
• Reconciliation
• Error checks

Additionally, several modern platforms now even include mobile access, blockchain-based security, and real-time dashboards.

5. Is software enough, or should I consider outsourced accounting support?

Always remember that software can only handle your accounting tasks, but never replace judgment, planning, or financial strategy. Many US businesses now combine software with outsourced accounting experts to:

• Avoid mistakes
• Remain compliant 
• Get proper guidance in tax, cash flow, and reporting

On top of this, hiring accounting outsourcing companies like Atidiv can also help you save up to 60% costs as compared to running in-house teams.