Introduction
When building an early-stage startup, time is your most valuable resource. Finding the right tools that help you focus on growing the business without getting too stuck in the weeds is essential. In other words, while you’re building and scaling software that solves problems for your customers, you need accounting software that does the same for you.
Choosing the best accounting software for startups poses some unique challenges. You may have a small team — maybe your CFO is still doing the books and sending out invoices — but your business may also deal with much more complexity than a typical young business.
The right software can make a huge difference, but with so many options on the market, how do you choose the best one? In this guide, we’ll break down three key features to look for, highlight some of the top accounting tools available in 2025, and provide tips to help you get started.
Why accounting software matters for startups
Streamlining financial workflows
Accounting software does more than just track your expenses; it also automates critical financial tasks, reducing human error and freeing you up to focus on scaling your business. Tools like automated invoicing, expense categorization, and real-time reporting ensure that your finances are always up-to-date without hours of manual work.
Scaling with your business
As your startup grows, your financial needs will continue to evolve, which is why it’s important to find an accounting system that can scale with you. You’ll want to think about both your current and future needs, like handling multi-currency transactions, managing payroll for a growing team, or providing advanced reporting for potential investors.
Accurate reporting and compliance
As your startup grows, financial reporting becomes more complex—and more critical. Investors need clear profit-and-loss statements and cash flow projections, regulators require tax compliance and audit-ready records, and internal stakeholders depend on accurate forecasts for decision-making. Accounting software helps automate tax calculations, generate standardized financial reports, and ensure GAAP or IFRS compliance, reducing the risk of costly errors and penalties.
Alternatives to accounting software
Accounting software tools have become standard practice for most startups and businesses of all sizes, but there are a couple of alternative options as well. At the DIY end of the spectrum, there are those who swear by Excel and manually track their finances in spreadsheets. While this is certainly an option, and what many accountants did for years before other options were available, it’s easy to overlook important steps if you aren’t familiar with accounting and much harder to generate useful reports with the click of a button.
The opposite end of the spectrum is the “don’t do it yourself at all” option, outsourcing everything to an accountant. If you have the budget and ability to take accounting off your plate and entrust it to an expert, that can be a great idea. However, there are still good reasons to be familiar with your accounting software. First, your accountant will use this software, and you’ll want to ensure it works with the rest of your tech stack. Second, you’ll probably want to be able to access the software and pull reports without needing to ask your accountant, so make sure that’s an option. Finally, if you start down a DIY path with the intention of hiring an accountant down the road, make sure your software will work for a future hire so you don’t have to move everything over to new software when you engage an accountant.
When should I start using accounting software?
Ideally, from day one. Setting up a system early helps prevent future headaches and keeps your finances organized as you grow. While we talked about DIY options and cost levels for software, it’s best to keep your data organized the right way from the start. The less expensive options mentioned, like Wave, can give you an affordable start while maintaining records that can be exported and moved to a different software as you scale. Others, like QuickBooks and Xero, can quickly scale up with you but have inexpensive entry-level tiers to get you started.
Key features to look for in accounting software
Integrations
Your accounting software should integrate seamlessly with the tools you already use—such as payment processors, CRM platforms, and banking systems—to reduce friction in your workflows. But what if the software you’re considering doesn’t support a critical integration? In that case, check if it offers APIs or third-party connectors like Zapier, which can help bridge the gap. Otherwise, a lack of integration with essential tools could be a red flag, leading to more manual work and data silos.
Beyond payments, CRMs, and banking, consider integrations with tax software, payroll systems, e-commerce platforms, and expense management tools. The more connected your financial ecosystem, the easier it is to maintain accurate records and streamline operations as you scale.
Scalability
As you assess your options, don’t just think about the features you need today but also the features you’ll need in 3-5 years, such as advanced financial reporting, support for multiple users, and integrations with the tools you’ll be using as you scale. This can prevent you from needing to migrate all your data to a new accounting software as you grow.
Cost-effectiveness
Startups often operate on tight budgets, so it’s important to find a tool that offers the right balance of functionality and affordability. Free or low-cost options can be a great starting point, but make sure they won’t limit your growth down the line.
The best accounting software for startups in 2025
Here’s a breakdown of the top accounting platforms available this year, rated based on criteria such as ease of use, features, scalability, and affordability:
QuickBooks Online
Best for startups looking for a versatile, all-in-one solution, especially within the US.
QuickBooks Online is one of the most widely recognized accounting tools, offering a comprehensive set of features for small and growing businesses. It provides solutions for expense tracking, invoicing, and advanced financial reporting, and almost any external bookkeeper or accountant will be familiar with QBO, making it a versatile option for startups.
Key features:
- Automated invoicing and expense tracking
- Multi-user access with customizable permissions
- Integration with many third-party apps and banks
- Advanced financial reporting
- Mobile app for on-the-go access
Xero
Best for startups with international operations or those heavily focused on automation and integrations.
Xero is known for its powerful automation features and seamless multi-currency support, making it ideal for startups with international operations or aspirations. Its user-friendly interface and robust integrations provide a strong foundation for scaling businesses.
Key features:
- Multi-currency support
- Real-time financial tracking and reporting
- Over 1,000 app integrations
- Payroll and inventory management
- Automatic bank feed synchronization
FreshBooks
Best for service-based startups or small teams needing intuitive invoicing and time-tracking tools.
FreshBooks is tailored for service-based businesses, offering a clean and simple interface that prioritizes ease of use. It excels in invoicing and time-tracking, making it a popular choice for freelancers and small teams.
Key features:
- Professional invoicing with customization options
- Expense tracking and project management tools
- Time tracking for billing
- Recurring billing and subscription management
- Integration with popular payment gateways
Wave
Best for budget-conscious startups with straightforward accounting needs.
Wave provides a free, intuitive accounting solution for startups with straightforward needs. While it lacks some advanced features, it’s an excellent choice for budget-conscious entrepreneurs.
Key features:
- Free accounting and invoicing tools
- Receipt scanning and expense tracking
- Basic financial reporting
- Integration with payment processors (with fees)
- Secure cloud-based storage
Zoho Books
Best for startups already using Zoho's ecosystem or those seeking an affordable, integrated solution.
Zoho Books is part of the Zoho ecosystem, offering a cost-effective solution for startups already using Zoho’s other business tools. Its integration capabilities and affordability make it an attractive option for small teams.
Key features:
- Integration with the Zoho suite and third-party apps
- Automatic bank reconciliation
- Customizable invoices and payment reminders
- Multi-currency support
- Comprehensive tax management
NetSuite
Best for rapidly scaling startups requiring enterprise-level features and advanced customization.
NetSuite is an enterprise-level solution with robust features designed for rapidly scaling businesses. Though it requires a steeper learning curve and investment, its scalability and customization options make it worth considering for high-growth startups.
Key features:
- Enterprise-grade financial planning and reporting
- Advanced inventory and order management
- Multi-subsidiary management
- Customizable dashboards and analytics
- Strong security and compliance features
Sage
Best for startups needing strong reporting and compliance tools with a focus on analytics and automation.
Sage offers a range of accounting products, with Sage Business Cloud being particularly well-suited for small startups. It combines robust reporting tools with ease of use, making it a reliable choice for growing businesses.
Key features:
- Advanced reporting and analytics
- Automated workflows for recurring tasks
- Payroll and compliance tools
- Cloud-based access for flexibility
- Strong customer support and knowledge base
Campfire
Best for startups who’ve outgrown entry-level tools but don’t have the budget or need for enterprise-level tools like Netsuite or Sage.
A newcomer to the space, Campfire is finance and accounting software designed specifically for startups, offering intuitive tools to manage finances without the need for advanced accounting knowledge. With its focus on simplicity and collaboration, it’s perfect for small teams working in dynamic environments.
Key features:
- Easy-to-use interface tailored for startups
- Real-time collaboration for multiple team members
- Customizable financial dashboards
- Automated reporting and forecasting tools
- Secure cloud-based storage and compliance features
Questions to ask before committing
Choosing the right accounting software is a long-term decision, so it's worth taking the time to evaluate your options carefully. Before committing, ask:
- Does this software integrate with my existing tools? If not, does it offer APIs or third-party connectors to bridge the gap?
- Can it scale with my business? Look at features you may need in the future, like multi-currency support, payroll, and advanced reporting.
- What’s the pricing structure? Are there hidden fees for additional users, integrations, or advanced features?
- Is customer support reliable? Test response times and support channels—do they offer live chat, phone support, or only email?
- Is there a free trial or demo? Whenever possible, test the software firsthand to evaluate ease of use, automation capabilities, and how well it fits into your workflows.
- What do other users say? Check reviews from businesses of a similar size or industry to see if the software aligns with your needs.
Taking the time to trial the software and ask these questions can help prevent costly migrations down the line.
If you’re working with an accountant or looking for one to help you grow, it’s a great idea to talk to them and find out what software they recommend. They may not only have insights into what works for your business but could also have a stack of software that syncs with a certain platform to make your life easier.
3 tips for getting started with accounting software
Once you’ve chosen the right accounting software for your startup, here are three things you can do to get the most out of it:
Setting it up right
The setup process is crucial. Link your bank accounts, customize your categories, and ensure your reporting templates align with your goals. Garbage in/garbage out applies here, and your software only knows what you tell it, so it’s important to have the categories sorted and the right information going to your reports up front.
Streamlining financial workflows
Accounting software does more than just track your expenses—it automates critical financial tasks, reducing human error and freeing you up to focus on scaling your business. But automation is only effective if it’s set up correctly.
Start by identifying the most time-consuming manual tasks in your workflow, such as invoicing, expense categorization, and bank reconciliation. Then, configure automation rules to handle these processes, ensuring they align with your financial structure. For example, set up recurring invoices for subscription-based revenue, create rules for categorizing expenses, and enable automatic tax calculations.
Once automation is in place, testing is key. Regularly review reports and reconciliations to confirm that transactions are categorized correctly and workflows are running smoothly. Mistakes in automation can compound over time, so periodic audits will help catch discrepancies before they become bigger issues.
Ongoing best practices
To get the most out of your accounting software and keep your finances in order, follow these best practices:
- Automate, but verify. While automation saves time, it’s important to regularly audit workflows, like expense categorization and invoice processing, to catch errors early.
- Schedule routine financial check-ins. Set aside time weekly or biweekly to review cash flow, reconcile transactions, and ensure records are accurate. This prevents small errors from becoming bigger issues.
- Keep software and integrations up to date. Regularly check for updates and new features to ensure compatibility with other business tools and improve security.
- Back up financial data. Use cloud storage or external backups to safeguard your records against data loss or unexpected system failures.
- Train your team. If multiple people use the software, ensure they’re familiar with its features and best practices to prevent mistakes and inefficiencies, and limit access to your accounting software to those who need it to avoid unnecessary risk.
- Prepare for tax season year-round. Use tax automation tools, categorize deductions properly, and reconcile accounts monthly to avoid last-minute stress.
By building these habits into your workflow, you’ll keep your finances organized and minimize disruptions as your business scales.
Conclusion
Choosing the right accounting software is one of the most important decisions a startup founder can make. The tools you select today will not only simplify your financial management but also set you up for long-term success.
By understanding your needs, exploring your options, and leveraging partnerships with trusted advisors, you can find the perfect fit for your business.
Start your search today and ensure your finances are one less thing to worry about as you scale your startup.
Josh Richards