In 2025, there are a plethora of accounting software programs promising automation, real-time data, and fewer manual tasks. But ask any VP or director of a D2C company, and choosing the right one often feels harder than actually doing the books!
To make this selection easier, Atidiv analyzed and hand-picked several best accounting software for small businesses. We found six renowned solutions, like:
- Xero
- QuickBooks Online
- FreshBooks
- CustomBooks
- Sage Intacct
- NetSuite
These platforms are widely recognized for usability, automation, strong integrations, and scalability. If you are searching for “what is the best accounting software for small business”, read this article to learn their strengths, limitations, hidden costs, and the business profiles they best serve.
What is the Best Accounting Software For Small businesses?
Studies show that the global accounting software market was valued at approximately USD 14.98 billion in 2024 and is projected to reach USD 28.27 billion by 2032. But why such a craze? That’s largely propelled by cloud-based solutions and automation demands from small and medium-sized enterprises (SMEs).
But given the huge variety of accounting software in the market, the selection is tricky and requires careful analysis. For your reference, below are some top picks by Atidiv, you may consider in 2025-26:
1. Xero
Xero is strong for businesses that want flexible invoicing, basic inventory tracking, and an interface that is easy to move around in. Its standout feature is the ability to create custom invoice templates using Microsoft Word. You can design the invoice exactly how you want, then upload it to Xero.
Xero also helps with recurring invoices. You choose the:
- Customer
- Dates
- Line items
Next, Xero can send them out automatically or save them as drafts. Moreover, inventory ties directly into invoicing. If an item is running low, Xero alerts you so you avoid selling something that is out of stock. If you need more, you can generate a purchase order from the same screen.
The best part? Xero integrates with PayPal, Stripe, and GoCardless to help customers pay from the invoice. But note that payroll is not included, so you need third-party add-ons. Another limitation is that the entry-level plan allows only 20 invoices a month, which is restrictive if you bill frequently.
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2. QuickBooks Online
If you are searching for “what is the best accounting software for small business”, QuickBooks Online is a strong fit. It may particularly suit D2C companies earning $5M+ revenue with several bank or payment transactions. Its bank feed feature imports transactions from:
- Credit cards
- Checking accounts
- Payment processors
Everything shows up in one place. So, you can match each transaction to an invoice or bill or create rules (such as marking every Stripe deposit as sales income).
Additionally, the reconciliation screen is detailed. It matches bank entries with your books and shows mismatches or duplicate records. You can also open journals, audit logs, and payment histories directly from these screens.
Okay, but want to know the biggest complaint? It is the price! Subscription costs often rise, and many users feel the price increases are more frequent than major product updates.
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3. FreshBooks
FreshBooks is built for freelancers, contractors, and small D2C companies or consumer brands. The base plan of FrehBooks covers:
- Invoicing
- Time tracking
- Estimates
- Expenses
Unlike many tools, even the lowest plan allows unlimited invoices. The primary advantage? The reports generated are highly detailed, and you can get financial statements like profit and loss, balance sheet, and general ledger. Also, the software is easy to understand even if you have no accounting background.
If we talk about payment management, FreshBooks accepts credit card and ACH payments. It also imports transactions from connected bank accounts. But the main drawback? Its pricing is based on how many active clients you bill. Adding more clients increases your subscription cost.
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4. CustomBooks
Another tool in the list of what is the best accounting software for small business is CustomBooks (formerly AccountingSuite). This tool is built for CPAs and small to mid-sized companies. It handles recurring accounting work such as:
- Tax filing
- Bank reconciliation
- Report creation
- Account allocations
This reduces the time you spend on manual bookkeeping tasks. Additionally, it also includes inventory tracking, time tracking, and the ability to work across multiple modules using browser-style tabs. However, the interface can feel crowded, and there is no mobile app.
CustomBooks can be best for D2C companies and consumer brands with 5 to 500 employees that want a tool with broad accounting coverage without high extra fees. Note that the entry price is low, but the Business plan is the one most companies use for invoicing, billing, and deeper functionality.
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5. Sage Intacct
Sage Intacct is designed for companies that manage several entities, branches, or subsidiaries. It can automatically consolidate financials across locations without needing to pull data from multiple spreadsheets. It supports both multi-currency operations + inter-entity transactions.
This tool includes more than 150 built-in reports and a dashboard that updates in real time. You can track financials by:
- Department
- Location
- Customer
This tracking can be easily done via a “drag-and-drop dashboard”. The system also lets you look at high-level results or drill down into specific entity transactions. Sage Intacct can be a strong choice for growing mid-market companies that have outgrown tools like QuickBooks.
However, the pricing is high and increases with additional users. Some features, like budgeting and interactive reporting, cost extra.
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6. NetSuite
NetSuite is a full ERP system and not just accounting software. It fits mid-sized companies that need all the following services in a single platform:
- Accounting
- HR
- Inventory
- Procurement
- Order management
- Compliance
Additionally, NetSuite includes tools for general ledger, fixed assets, global tax handling, revenue recognition, and inventory control. This software may be particularly ideal for D2C companies and consumer brands operating across multiple countries, such as the US, UK, and Australia.
But how? NetSuite supports various currencies + tax rules. It has 20 built-in financial reports and a report builder called SuiteAnalytics. Also, NetSuite is highly customizable and has a large marketplace of add-ons for different industries. However, setup can take time, and pricing is available only through sales consultations.
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Still Skeptical? Yes, Accounting Software May Carry Hidden Costs. Why Not Hire Atidiv in 2026?
So now you know what the best accounting software for small businesses in the market looks like. Each tool serves a different business stage, structure, and operational need. Let’s have a quick recap of the six platforms covered above:
- Xero: trong custom invoicing and simple inventory controls
- QuickBooks Online: Reliable bank feeds and fast reconciliation
- FreshBooks: Built for freelancers with unlimited invoices
- CustomBooks: Useful for CPAs with built-in tax and allocation tools
- Sage Intacct: Best-in-class multi-entity consolidation
- NetSuite: Full ERP suite for scaling and global operations
But it’s not all rosy? You must know that all these tools carry hidden costs! These often include:
- Per-user charges
- Add-on fees for advanced reporting
- Extra modules for payroll
- Implementation costs
- Data migration fees
- Ongoing support charges
As your business grows, these costs compound quickly. That’s why most D2C companies earning $5M+ in revenue now outsource their accounting operations to leading accounting companies in the USA, like Atidiv.
With over 16 years of experience, Atidiv handles end-to-end finance and accounting at every stage. Our expert team of 390,000+ chartered accountants and CPAs has 16+ years of experience in finance and accounting. Get started at only $15 per hour and cut costs by up to 60%. Book a free consultation to learn more.
What is the Best Accounting Software for Small Businesses? FAQs
1. How do I choose the right accounting software for my business?
Start by identifying your core needs, such as invoicing, multi-entity consolidation, or inventory tracking. Then look at transaction volume, team size, and growth plans.
Small firms may start with Xero or QuickBooks, while multi-entity or scaling businesses may need Sage Intacct or NetSuite for deeper controls.
2. What accounting trends should VPs and directors of D2C companies prepare for in 2026?
In 2026, cloud accounting + automation is expected to grow. Nowadays, several SMEs prefer cloud tools because they reduce upfront costs and scale quickly. Real-time dashboards, automated reconciliations, and AI-driven bookkeeping are becoming standard.
All these developments are now pushing businesses to choose platforms that support automation rather than relying on manual workflows.
3. Which accounting software is dominating the market in 2025?
QuickBooks Online holds up to 81% of the global small-firm market because its integrations and bank feeds fit almost every industry.
4. What hidden costs should I expect when using accounting software?
Most platforms add costs for:
- Extra users
- Payroll
- Advanced reporting
- Customer support
- Industry-specific modules
Implementation, onboarding, and migration fees also increase total ownership costs. For growing D2C companies, these unexpected charges can surpass the software’s advertised pricing over time.
5. When should a business outsource accounting instead of relying on software?
Outsourcing becomes cost-effective if:
- Your revenue is rising
- Your transaction volume is expanding
- You manage multiple sales channels or entities/ subsidiaries
Accounting outsourcing companies let you access their professional team of accountants from Day 1 of association. This reduces errors, speeds up reporting, and removes hiring overhead.