Guides

Best Accounting Software for Canadian Businesses

Discover the best accounting software solutions for Canadian businesses. Compare top solutions like Quickbooks, Xero, FreshBooks, Sage 50, and Wave.

September 8, 2024


Running a Canadian business? You need the right tools to stay sharp and in the know. Keeping tabs on your finances can be a real headache, especially if you’re a small business owner wearing all the hats. We’ve spent years putting accounting software through its paces, and we’re here to share the cream of the crop. We’ve ranked the best accounting apps for small businesses based on user-friendliness, features, and value for money.

Two standouts have earned our top spots:

  • QuickBooks Online shines for small to medium-sized operations.
  • FreshBooks is perfect for solo entrepreneurs and tiny teams.

Ready to find your perfect match? Let’s dive into the best accounting software for Canadian businesses, along with everything you need to know to make the right choice.

Top Picks for Canadian Small Businesses

Our Reviews of Each Solution

Quickbooks Online – website

QuickBooks Online has become a go-to accounting software for many Canadian businesses, and for good reason. This cloud-based solution offers a robust set of features tailored to meet the needs of small to medium-sized enterprises.

Key Features

  • Invoicing: Create professional invoices and easily track payments.
  • Expense Tracking: Capture receipts with your smartphone and categorize expenses automatically.
  • Bank Connections: Sync with your bank accounts for real-time financial updates.
  • Canadian Tax Support: Automatically calculate GST/HST and prepare returns.
  • Payroll Integration: Manage employees’ pay and taxes (additional fees may apply).
  • Reporting: Generate detailed financial reports to gauge your business health.
  • Multi-User Access: Collaborate with your team or accountant in real-time.
  • Mobile App: Manage your finances on-the-go with iOS and Android apps.

Who It’s Best For

QuickBooks Online is particularly well-suited for:

  • Small to medium-sized businesses
  • Service-based companies
  • Retailers with inventory needs
  • Businesses looking for scalable solutions

Its versatility and comprehensive feature set make it a solid choice for many Canadian businesses looking to streamline their accounting processes.

Xero – website

Xero is a powerful cloud accounting solution gaining traction among Canadian businesses. Known for its user-friendly interface and robust features, Xero offers a fresh alternative to traditional accounting software.

Key Features

  • Bank Reconciliation: Automatically import and categorize bank transactions.
  • Invoicing: Create and send professional invoices, with online payment options.
  • Expense Claims: Easily track and manage business expenses.
  • Inventory Management: Keep tabs on stock levels and costs.
  • Project Tracking: Monitor time and costs for client projects.
  • Payroll: Manage employee payments and taxes (through integration with Payroll.ca).
  • Multi-Currency: Handle transactions in over 160 currencies.
  • Financial Reporting: Generate customizable reports for better insights.
  • Mobile App: Access your accounts on-the-go with iOS and Android apps.

Who It’s Best For

Xero is particularly well-suited for:

  • Small to medium-sized businesses
  • Companies with inventory management needs
  • Businesses that work internationally
  • Teams that value collaboration and need multi-user access

Its clean interface and strong feature set make Xero an attractive option for businesses looking for a modern, scalable accounting solution.

Canadian-Specific Features

  • GST/HST tracking and reporting
  • Integration with Canadian banks
  • Compliance with Canadian accounting standards

While Xero is newer to the Canadian market compared to some competitors, it’s rapidly evolving to meet the specific needs of Canadian businesses. Its cloud-based nature means you’re always using the latest version, with updates and improvements rolling out regularly.

Freshbooks – website

FreshBooks is the only free accounting software that’s gained popularity among Canadian freelancers, small business owners, and service-based professionals. Known for its user-friendly interface and focus on simplicity, FreshBooks offers a refreshing approach to managing finances.

Key Features

  • Invoicing: Create professional, customizable invoices with automatic payment reminders.
  • Expense Tracking: Easily capture and categorize expenses, with receipt scanning via mobile app.
  • Time Tracking: Built-in timer for accurate billing of hourly work.
  • Project Management: Collaborate with team members and clients on projects.
  • Client Portal: Provide clients with a secure space to view and pay invoices.
  • Reporting: Generate insightful financial reports including profit & loss statements.
  • Double-Entry Accounting: Ensures accuracy and is suitable for accrual accounting.
  • Bank Reconciliation: Connect your bank accounts for automatic transaction imports.
  • Mobile App: Manage your business on-the-go with iOS and Android apps.

Who It’s Best For

FreshBooks is particularly well-suited for:

  • Freelancers and solopreneurs
  • Service-based small businesses
  • Agencies and consultancies
  • Businesses prioritizing ease of use over complex features

Its focus on simplicity and strong project management tools make FreshBooks a go-to choice for many service-based professionals.

Canadian-Specific Features

  • GST/HST tracking and reporting
  • Integration with Canadian payment gateways
  • Support for Canadian tax rates
  • Compatibility with Canadian banks for bank feeds

The software’s strength lies in its simplicity and focus on the needs of service-based businesses. While it may not offer the depth of features found in some other accounting solutions, its ease of use and time-saving capabilities make it a compelling choice for many Canadian entrepreneurs.

Wave – website

Wave is a cloud-based accounting solution that’s made waves in the Canadian market, particularly among small businesses, freelancers, and entrepreneurs. Its standout feature? It’s free for accounting, invoicing, and receipt scanning.

Key Features

  • Accounting: Double-entry bookkeeping system
  • Invoicing: Create and send professional invoices
  • Receipt Scanning: Capture and organize receipts via mobile app
  • Bank and Credit Card Connections
  • Financial Reporting
  • Multi-Currency Support
  • Customizable Sales Taxes
  • Collaborator Access: Add accountants or team members

Paid Add-ons:

  • Payments: Accept credit card and bank payments (pay-per-use)
  • Payroll: Full-service payroll for Canadian businesses (monthly fee)

Who It’s Best For

  • Freelancers and solo-preneurs
  • Small service-based businesses
  • Startups and new businesses on a tight budget
  • Businesses with simple accounting needs

Canadian-Specific Features

  • GST/HST tracking and reporting
  • Integration with Canadian banks
  • Support for multiple currencies, including CAD

Wave stands out in the Canadian market for its commitment to providing free, capable accounting software. It’s an excellent starting point for new businesses or those with straightforward financial needs. The software is continuously updated, ensuring users always have access to the latest features.

While it may lack some of the advanced features of paid software, Wave’s core functionality is robust enough for many small Canadian businesses. Its pay-per-use payment processing and affordable payroll services allow businesses to add features as they grow.

Sage 50 – website

Sage 50 (formerly known as Simply Accounting) is a comprehensive accounting solution tailored for small to medium-sized Canadian businesses. Known for its powerful features and deep functionality, Sage 50 is a go-to choice for businesses with complex accounting needs.

Key Features

  • General Ledger: Detailed tracking of all financial transactions.
  • Accounts Payable & Receivable: Manage bills and invoices efficiently.
  • Inventory Management: Track stock levels, costs, and sales.
  • Job Costing: Monitor expenses and profitability for specific projects.
  • Payroll: Built-in Canadian payroll system with tax calculations.
  • Multi-User Access: Collaborate with team members and accountants.
  • Bank Reconciliation: Easily match transactions with bank statements.
  • Fixed Asset Management: Track depreciation and asset values.
  • Business Intelligence: Generate in-depth financial reports and forecasts.
  • Customizable Dashboard: Get a quick overview of your financial status.

Who It’s Best For

Sage 50 is particularly well-suited for:

  • Established small to medium-sized businesses
  • Companies with complex inventory needs
  • Businesses requiring detailed job costing
  • Organizations needing strong audit trails
  • Those preferring a more traditional accounting software approach

Its powerful features make Sage 50 a solid choice for businesses that have outgrown simpler accounting solutions.

Canadian-Specific Features

  • Built-in Canadian payroll with up-to-date tax calculations
  • GST/HST tracking and reporting
  • Compliance with Canadian accounting standards
  • Canadian-specific financial statements and forms

As a long-standing player in the Canadian accounting software market, Sage 50 is deeply attuned to the needs of Canadian businesses. It offers a level of depth and customization that many growing businesses find essential.

While Sage 50 is primarily a desktop solution, it does offer cloud access through Sage 50cloud, allowing for some of the flexibility of cloud-based systems while maintaining the robust features of the desktop version.

Choosing the Right Software for Your Business

Consider these factors:

  • Your budget – pick the tool that you can afford first and foremost
  • Business size and growth plans – make sure to choose something that will scale with your business. Switching accounting systems after the fact can be very time consuming and costly
  • Needed features – research must-have features for your business needs (e.g., inventory, payroll).
  • Ease of use – find something that you will feel comfortable with yourself.
  • Give it a try – most of the tools offer free trials. Consider signing up on a trial and seeing if the software works for your needs.

Tips for Getting Started

If you still can’t decide on the right system, consider asking your bookkeeper for professional advice. Don’t have a bookkeeper? Consider our guide to learn how to find the best financial partner for your business.

If you don’t have anyone to ask for help, consider the following criteria:

  1. Take advantage of free trials
  2. Check for Canadian-specific features (like GST/HST tracking)
  3. Read user reviews from fellow Canadian business owners
  4. Ensure the software can grow with your business

Remember, the best accounting software for your Canadian business is the one you’ll actually use. Don’t get bogged down by fancy features you’ll never touch.

FAQ

Is there truly free accounting software for Canadian businesses?

Yes! Wave is a solid free option. Just be aware that some advanced features may come with a cost.

Do I need special accounting software if I’m a freelancer?

Not necessarily. Simple options like Wave or FreshBooks often suffice for freelancers and solo-preneurs.

Can I switch accounting software mid-year?

You can, but it’s best to do it at the start of a fiscal year to avoid complications.

How often should I update my books?

Aim for at least monthly updates, but weekly is even better for staying on top of your finances.

Finding the right accounting software can transform how you manage your Canadian business finances. Take the time to explore your options, and you’ll be on your way to smoother bookkeeping in no time.

Other Critical Accounting Tools – Spend Management Software

While accounting software forms the backbone of your financial management, there are other tools that can further streamline your business operations. One such crucial tool is spend management software.

Enter Float, a Canadian company offering innovative spend management solutions. Float’s platform is designed to work alongside your accounting software, providing real-time visibility and control over your business expenses.

Bill Pay and Reimbursements

Float is Canada’s only all-in-one corporate cards, reimbursements, and bill pay platform that helps customers:

  • Earn cashback on all categories and save on FX
  • Generate 4% interest on funds held with Float
  • Eliminate expense reports and receipt chasing
  • Close the books 5x faster at the month-end

Want to learn how companies like Clutch, Neo, Knix, and 1,000s of other Canadian businesses on average save 7% of their monthly spend with Float? Get started with Float today by clicking the button below!

Want to learn more before singing up? Book a demo today to learn more about the product from our team!


Written by

Ruslan Nikolaev

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