Running an accounting firm requires more than just crunching numbers—you need to manage client accounts, track billable hours, handle payroll, and generate detailed financial reports. Whether you’re managing a small boutique firm or a larger operation, having the right accounting software is essential for streamlining your workflow and improving efficiency.
Here’s a breakdown of the best accounting software for accounting firms, starting with FreshBooks, which offers powerful features for managing client accounts and simplifying billing processes.
Top Accounting Software for Accounting Firms
1. FreshBooks
FreshBooks is ideal for small to medium-sized accounting firms that need a user-friendly platform with advanced invoicing and time-tracking features. It helps you manage client accounts, track billable hours, and stay organized with easy reporting.
Features:
- Client account management with automated invoicing
- Time-tracking for billable hours with direct client billing
- Expense tracking and receipt scanning
- Financial reporting (profit/loss, cash flow, balance sheets)
- Integration with tax software for tax filing and preparation
Why it works: FreshBooks is perfect for accounting firms that want a simple, yet robust tool for managing client accounts and billing. The time-tracking feature makes it easy to log billable hours, while automated invoicing ensures clients are billed accurately and on time. The software’s intuitive interface also makes it a great option for firms that need an efficient system without a steep learning curve. FreshBooks integrates with many payment gateways, making it easy for clients to pay their invoices, and the detailed reporting tools give firms a clear view of profitability and cash flow.
2. QuickBooks Online Accountant
QuickBooks Online Accountant is specifically designed for accounting firms, offering all the tools needed to manage clients’ books, track payroll, and generate reports. It’s ideal for firms of any size, offering scalability as your client base grows.
Features:
- Client management dashboard to handle multiple accounts
- General ledger, accounts payable/receivable, and payroll management
- Automatic bank reconciliations for client accounts
- Advanced financial reporting (profit/loss, balance sheets, tax reports)
- Accountant tools like adjusting journal entries and batch reclassifications
Why it works: QuickBooks Online Accountant provides everything an accounting firm needs to manage multiple client accounts from one central dashboard. I’ve found the tools for making adjusting journal entries and batch reclassifications particularly helpful for cleaning up client books. QuickBooks also offers powerful reporting features that help firms generate tax reports, profit and loss statements, and balance sheets with ease. The accountant-specific tools, like the ability to close the books, make it a must-have for firms handling multiple clients.
3. Xero
Xero is a cloud-based accounting software that’s great for accounting firms managing multiple clients. It offers advanced features like bank reconciliation, invoicing, and payroll management, making it ideal for firms handling complex client needs.
Features:
- Client management with multi-currency and multi-region support
- Automated invoicing and recurring billing for clients
- Bank reconciliation and transaction matching for client accounts
- Payroll management and expense tracking
- Detailed financial reports (cash flow, balance sheets, and tax summaries)
Why it works: Xero is a top choice for accounting firms that need flexibility and scalability. Its cloud-based platform allows firms to manage clients from anywhere, while its robust financial reporting features help you generate insights for clients quickly. Xero’s bank reconciliation tools make it easy to track client accounts and ensure their books are accurate. I’ve also found Xero’s ability to support multi-currency transactions particularly useful for firms with international clients.
4. Sage Intacct
Sage Intacct is an advanced cloud-based accounting solution designed for larger firms or those handling complex accounting needs. It offers in-depth financial management tools and is ideal for firms needing advanced reporting and compliance features.
Features:
- Real-time financial reporting and dashboards
- Multi-entity management for firms handling clients with subsidiaries
- Advanced general ledger and revenue recognition
- Comprehensive accounts payable and receivable automation
- Integration with tax and audit tools for compliance
Why it works: Sage Intacct is a powerful tool for accounting firms that need to manage multiple clients with complex financial structures. Its real-time reporting and dashboard give firms the ability to see an up-to-the-minute view of their clients’ financial health. I’ve seen firms benefit from Sage Intacct’s ability to handle multi-entity clients, especially those managing subsidiaries or businesses with various locations. The revenue recognition features are particularly helpful for firms dealing with long-term contracts and complex revenue streams.
5. Canopy
Canopy is designed specifically for accounting firms, offering comprehensive practice management alongside accounting software. It’s great for firms that want an all-in-one solution for client management, billing, and accounting.
Features:
- Client management with document storage and secure file sharing
- Time tracking and invoicing for client billable hours
- Workflow management tools for managing accounting tasks and deadlines
- Tax preparation tools with e-signature integration
- Integration with accounting tools like QuickBooks and Xero
Why it works: Canopy is ideal for accounting firms looking to streamline client management and workflow in one place. The time-tracking and billing features ensure firms can easily bill clients for work done, while the workflow management tools keep accounting tasks organized and on schedule. I love that Canopy also integrates with popular accounting tools like QuickBooks and Xero, so firms can continue using their preferred accounting software while benefiting from Canopy’s practice management features.
Features to Look for in Accounting Software for Firms
Before choosing the right accounting software for your firm, consider these key features:
- Client Management: Your software should allow you to manage multiple client accounts from one dashboard, track their financials, and stay on top of deadlines.
- Invoicing and Billing: Automated invoicing for clients, along with time-tracking for billable hours, is essential for accurate billing and efficient payment collection.
- Expense Tracking: Make sure your software tracks expenses, both for your firm and for your clients, to streamline tax preparation and financial reporting.
- Payroll Management: If your firm manages payroll for clients, look for software that integrates payroll tools to automate the process and ensure compliance.
- Financial Reporting: Detailed reports, including profit/loss statements, cash flow summaries, and tax reports, are critical for advising clients and managing their financial health.
- Cloud-Based Access: A cloud-based platform ensures your team can access client accounts and manage financials from anywhere, offering more flexibility and collaboration.
Common Mistakes to Avoid in an Accounting Firm
Even accounting firms can fall into some common financial pitfalls. Here’s how to avoid them:
- Not Automating Invoicing: Manual invoicing is time-consuming and error-prone. Automate your invoicing process to ensure timely payments and reduce administrative work.
- Failing to Track Billable Hours: Use time-tracking software to log all billable hours, ensuring you’re accurately billing clients for work done.
- Mixing Personal and Business Finances: Keep your firm’s finances separate from your personal accounts to make tracking easier and avoid tax issues.
- Not Using Financial Reports Regularly: Regularly review financial reports to stay informed about your firm’s profitability and cash flow.
- Missing Client Deadlines: Use practice management software to keep track of client deadlines, ensuring you meet all tax and reporting deadlines without rushing.
Final Thoughts
Choosing the best accounting software for your firm depends on your size, client needs, and specific features. FreshBooks is ideal for small to medium-sized firms that need strong invoicing and time-tracking tools. QuickBooks Online Accountant and Xero are great for larger firms or those managing complex client needs. If you’re looking for more advanced tools, Sage Intacct offers powerful financial management features, while Canopy provides a seamless combination of practice management and accounting.
With the right accounting software in place, your firm will save time, improve efficiency, and ultimately better serve your clients.