Invoicing software makes and sends your invoices, takes the payment, and tells you who still owes you. Accounting software does that and keeps your books: your bank transactions are typed in or imported, depending on the plan, and matched to what you recorded. For an owner-operated business there are three honest answers to whether you need it. Not yet, while an invoicing tool or a spreadsheet keeps up and the monthly check against your bank still works by hand. A free plan, while one person handles it: five free plans in this guide fit one person, two of them invoicing only (Zoho Invoice and Square Free). A paid plan, once you want bank transactions imported beyond what a free plan allows, a second login, or a feature the free plans lack: three logins on each tool’s lowest-priced option cost $19 to $85 a month (Square Invoices not priced at this size), and that prices the logins only, not your invoices, clients, or bills, which each plan caps in its own way.
Here is every tool in this guide at a glance. The links in the first column go to each tool’s own page.
| Tool | Free plan | Lowest paid plan, billed monthly | Free trial |
|---|---|---|---|
| QuickBooks Online | Yes | $38 a month (Simple Start) | 30 days, card required: yes |
| Xero | No free plan | $27 a month (Early) | 30 days, card required: no |
| FreshBooks | No free plan | $23 a month (Lite) | 30 days, card required: no |
| Wave | Yes | $19 a month (Pro) | No trial listed |
| Zoho Books | Yes | $20 a month (Zoho Books Standard) | 14 days, card required: not confirmed |
| Square Invoices | Yes | $49 a month per location (Square Plus) | 30 days, card required: not confirmed |
The lowest paid figure is where each tool’s prices start, not what your business will pay: plans differ in how many people, clients, and invoices they include. Zoho Invoice has no row because it has no paid plan; it’s covered on the Zoho Books and Zoho Invoice page.
Do you need accounting software yet?
Not while the monthly check against your bank still works by hand: it balances, it doesn’t take long, and only one person needs the record. Do you need accounting software, or just an invoicing tool? draws that line and shows the free setup that works until then, and do you need accounting software, or is a spreadsheet enough? does the same for books kept in a sheet.
Not sure whether you need this software yet? Our Do I Need This Yet? check asks a few practical questions and helps you evaluate your next step.
When is a free plan enough?
While you send fewer invoices than your plan allows and nothing you need sits on a paid plan: each free plan ends on something different, from an invoice cap to a revenue cap to a missing feature. A team that wants books should plan on paying: QuickBooks Free, Wave’s Starter plan, and Zoho Books’ free plan are each for one user, and Square Free keeps no books (Square doesn’t say how many people its plans cover). When is free invoicing software enough, and what ends it? sets the free plans side by side, so you can pick the one whose limit you’ll reach last.
Which cap will you hit first?
It depends on what’s growing in your business: invoices, clients, people, or revenue, and each tool caps a different one. Client, invoice, and user limits shows where each plan stops, and why a second person can be the costliest cap to hit.
What will it cost?
For one person the first year can cost nothing, and paying for three logins on each tool’s lowest-priced option costs $228 to $1,020 for the first year (Square Invoices not priced at this size), before card fees, sales tax, and your own time. What accounting software really costs in the first year prices the year at the regular price, with what each vendor’s discount or trial is worth shown separately, and what invoicing costs once customers pay by card shows when the card fees can cost more than the software, depending on how much your customers pay by card.
Which tool fits your business?
There’s no single best one, so we pick by situation: invoicing on your own, a team in the books, an accountant who wants a login, billing your time, taking cards in person, or working in Spanish. Which invoicing or accounting tool fits a 1 to 5 person business? makes the pick for each, says what it gives up, and names the cap that could rule it out.
Already on a tool and thinking of leaving?
Switching pays when another tool does everything you use for a lower bill, and a year of that difference is worth more than the work of moving: your hours, a month of running both, and your accountant’s time. After a QuickBooks price increase: when does switching pay? works it through for QuickBooks, and when have you outgrown Wave or a free invoicing tool? shows when the answer is the paid plan in the account you already have, not a new tool.