7 Best Accounting Software for Small & Medium Businesses in Australia

Assuming that if you’re running a small or medium-sized enterprise (SME) in Australia, you’ve probably found yourself drowning in a sea of receipts, invoices, and financial statements at some point. Sound familiar? That’s where accounting software for small and medium businesses steps in, offering a smarter way to manage your finances without the paper chase.

Well, it might be time to consider upgrading your financial management game with some top-notch accounting software. But with so many options out there, how do you choose the right one for your business? 

Don’t stress, we’ve got your back. Let’s take a stroll into the world of accounting software and find out why it’s a game-changer for SMEs, explore the best options available in 2025, and help you make an informed decision. 

Why Small Business Accounting Software is Essential for Australian SMEs?

Before we jump into the nitty-gritty, let’s take a moment to understand why accounting software is such a big deal for small and medium businesses. 

You might be thinking, “I have a good old spreadsheet. Why do I need advanced software?” Well, trust me, there’s more to it than meets the eye. Accounting software is like having a virtual financial wizard at your fingertips. It performs several functions such as accounting and bookkeeping, helping you document and summarise financial transactions, and helping you know how much cash you have, and so on.

But that’s just the tip of the iceberg. As reported by Zoho, a study revealed that 71% of small business owners found that using accounting software saved them time and improved their financial decision-making (Zoho, 2023). 

So, what are the key benefits that make accounting software a must-have for SMEs? Let’s break it down: 

1. Reduces Human Errors

We’re all human, and humans make mistakes. But when it comes to your business finances, errors can be costly. Accounting software greatly helps in minimising the occurrence of human errors by automating calculations and data entry. Deadlines? Worry no more about them crashing on you and messing up your hours. 

2. Saves Time & Money

Time is money in business. Accounting software automates many time-consuming tasks so that you can devote more time to business growth. A survey by Soleapp found that small business owners save an average of 10 hours per week by using accounting software (Soleapp, 2023). 

3. Syncs Financial Data

The olden days of entering figures from one system to the other are long gone. Today’s accounting software can transfer data between more than one platform, ensuring your financial information is always up-to-date and consistent. 

4. Automates Financial Reports

In a business meeting, and you need a financial report in the nick of time? No worries! Accounting software can generate professional-looking reports at the click of a button. This feature is particularly convenient when you’re trying to secure funding or attract investors. 

5. Enhances Decision-Making

With real-time financial data at your fingertips, you can make informed decisions about your business. From cash management to growth strategies, accounting software allows you to understand what you need.  

6. Streamlines Tax Compliance

Let’s face it, dealing with the ATO can be a headache. However, you can cut down the tax compliance time and stress with appropriate accounting systems, ensuring you’re always on top of your obligations and avoiding those nasty penalties. 

7 Best Accounting Software for Small & Medium-sized Businesses in 2025

Now that we’ve covered why accounting software is essential, let’s look at the top contenders for 2025. Each of these options has its own strengths and weaknesses, so let’s break them down to help you find the perfect fit for your business. 

1. Xero – The most recommended accounting software for small and medium businesses

Pros: 

– User-friendly interface 
– Excellent mobile app 
– Robust reporting features 
– Integrates with over 800 third-party apps 

Cons: 

– Can be pricey for larger businesses 
– Some advanced features require add-ons 

Xero has reached the top ranking in the list of accounting software used by Australian SMEs, and it’s for good reason. Its user-friendly interface and comprehensive features make it a solid choice for businesses of all sizes. 

Plus, as it prioritises the cloud business model, you can access your financial data anytime, anywhere. As one Sydney-based small business owner put it, “Xero has been a game-changer for us. It’s like having a financial advisor in my pocket!” 

2. MYOB – A popular finance tool for small and medium businesses

Pros: 

– Tailored for Australian businesses 
– Strong payroll features 
– Excellent customer support 
– Comprehensive reporting tools 

Cons: 

– The interface can be less intuitive than some competitors 
– Some users find it slower to navigate 

When it comes to accounting software in Australia, one cannot forget about MYOB. It’s particularly well-suited to businesses with complex payroll needs. 

Speaking about his experience, a Melbourne-based entrepreneur said, “MYOB’s payroll features have saved us countless hours and headaches, especially during tax time.” 

3. FreshBooks – Easy-to-use accounting software for SMEs

Pros: 

– Simple, intuitive interface 
– Great for freelancers and service-based businesses 
– Strong invoicing and time-tracking features 
– Affordable pricing plans 

Cons: 

– Limited inventory management 
– Fewer integrations compared to some competitors 

As a freelancer or a service-providing business owner, it’s highly likely that you would appreciate the versatility of FreshBooks. Its focus on simplicity and ease of use makes it perfect, so you can concentrate more on your profession.

4. QuickBooks Online – Smart accounting software for small and medium businesses

Pros: 

– Powerful features for small to medium businesses 
– Excellent reporting capabilities 
– Strong inventory management 
– Good integration with third-party apps 

Cons: 

– It can be overwhelming for very small businesses 
– Some users find the interface cluttered 

QuickBooks Online is a heavyweight in the accounting software world, offering a robust set of features that can handle the needs of growing businesses. In particular, its inventory planning is exceptional.

5. Zoho Books – Scalable accounting solution

Pros: 

– Affordable pricing 
– User-friendly interface 
– Strong automation features 
– Part of the larger Zoho ecosystem 

Cons: 

– Limited payroll features 
– Fewer integrations compared to some competitors 

Zoho Books provides excellent features and a reasonable pricing option, making it ideal for small and medium enterprises with a budget-consciousness. Its automation features are particularly impressive, helping to streamline many routine accounting tasks. 

6. Thriday – All-in-one accounting software for SMEs 

Pros: 

– All-in-one financial management platform 
– AI-powered insights and recommendations 
– Integrated banking and accounting 

– Designed specifically for Australian businesses 

Cons: 

– Relatively new to the market 
– May have fewer integrations than established competitors 

Thriday is the new player in the industry and is going places due to its unique concept of making financial management effortless. By combining banking and accounting in one platform, it offers a unique solution for Australian SMEs. 

7. Reckon – Reliable accounting software for small and medium businesses 

Pros: 

– Affordable pricing 
– Good for micro-businesses and sole traders 
– Simple, straightforward interface 
– Strong customer support 

Cons: 

– Limited features compared to some competitors 
– Fewer integrations 

Reckon is a great option for very small businesses or sole traders who need a simple, no-frills accounting solution. Its low cost and usability are appealing to most beginners.

How to Choose the Right Small Business Accounting Software?

Now that we’ve looked at some of the top contenders, how do you choose the right one for your business? Here are some key factors to consider: 

#1 List of Features Your Business Needs 

Every business has its own quirks, and that includes how it handles the books. Kick things off by listing the must-have features for your business accounting setup.

According to Blue Lotus, some essential features to consider include: 

• Invoicing and quotes 
• Expense tracking 
• Bank reconciliation 
• Payroll processing 
• Inventory management 
• Financial reporting 
• Tax compliance tools 

#2 User-Friendly Interface 

Let’s be honest, if the software is a pain to use, you won’t bother with your bookkeeping for long. Choose software that has a simple layout that you and your team can easily navigate. 

As a business owner in Perth recounted, “We switched to a more user-friendly system, and suddenly, everyone in the team was more engaged with our financial processes.” 

#3 Cost and Pricing Structure 

Accounting software is an investment in your business, so it’s important to do a cost-benefit analysis. According to CPA Australia, factors to consider include: 

• Initial purchase or setup costs 
• Ongoing subscription fees 
• Additional costs for extra users or features 
• Training and implementation costs 
• Potential savings in time and resources 

Remember, the cheapest option isn’t always the best value in the long run. 

#4 Regulatory Compliance

Ensuring your accounting software meets Australian regulatory requirements is crucial. Look for software that: 

• Complies with Australian Accounting Standards 
• Supports Single Touch Payroll (STP) 
• Facilitates GST reporting 
• Assists with BAS preparation, scalability 

As your business grows, your accounting needs will likely change. Choose software that can scale with your business. 

Consider factors like: 

• Ability to add users 
• Upgrade options for additional features 
• Capacity to handle increased transaction volumes 

#5 Data Security 

In today’s digital age, data security is paramount. Ensure the software you choose has robust security measures in place, including: 

• Data encryption 
• Regular backups 
• Multi-factor authentication 
• Compliance with data protection regulations 

Choosing the right accounting software for your small or medium business in Australia can be a complicated task. But armed with the right information and a clear understanding of your business needs, you can easily choose which accounting software will pave your way to success. Remember, the best accounting software for your business is the one that meets your specific needs, fits your budget, and helps you manage your finances more efficiently. 

Whether you’re a tradie in Tassie or a startup in Sydney, there’s a solution out there for you. To help you compare some of the popular options we’ve discussed, here’s a handy comparison table: 

Software	Pricing (Starting from)	Best For	Key Features
Xero	$27/month	All-round use	User-friendly, 800+ integrations
MYOB	$24/month	Australian businesses	Strong payroll, local support
FreshBooks	$15/month	Freelancers, service businesses	Simple interface, great invoicing
QuickBooks	$15/month	Growing SMEs	Powerful features, inventory management
Zoho Books	$11/month	Budget-conscious SMEs	Affordable, strong automation
Thriday	$29/month	Tech-savvy Australian businesses	AI-powered, integrated banking
Reckon	$8/month	Micro-businesses, sole traders	Simple, affordable

(Source: Blue Lotus, 2023) 

Keen to make a step forward in business accounting with some top-notch accounting software? Remember, in the world of small business, staying on top of your finances isn’t just smart – it’s essential. After all, when your finances are in order, you can focus on what you do best – running and growing your business. And isn’t that what it’s all about?

Choosing the best accounting software for small business can feel overwhelming with so many options available in Australia. But don’t worry, mate – we’ve got some practical tips to help you navigate this decision without breaking a sweat.

The key is matching your specific business needs with the right software features. Here’s our straight-up guide to finding your perfect accounting solution match:

Quick Decision Guide for Australian Businesses

If you’re a sole trader or small business → Reckon

 Perfect for micro-businesses and sole traders who need simple solutions. Its low cost and usability are appealing to most beginners.

If you want the best budget option → Zoho Books

For budget-conscious SMEs, Zoho Books provides excellent features at reasonable pricing. Its automation features are particularly impressive for streamlining tasks.

If you need strong payroll → MYOB

When you’ve got employees to pay and compliance headaches to avoid, MYOB’s payroll features are second to none. This small business accounting software australia solution is tailored specifically for Australian businesses.

If you need user-friendly cloud-based → Xero

The people’s choice in Australia. Xero’s intuitive interface means you’ll spend less time figuring out the software. Integrates with over 800 third-party apps.

If you need automation & reporting capabilities → QuickBooks Online

For businesses that love detailed reports and want powerful features, QuickBooks delivers comprehensive capabilities. Excellent reporting and strong inventory management make it ideal for growing businesses.

If you need simple invoicing for service businesses → FreshBooks

Great for freelancers and service-based businesses with its simple, intuitive interface. Perfect for those who want focused invoicing solutions.

If you want all-in-one Australian solution → Thriday

The new player combining banking and accounting in one platform. AI-powered insights and designed specifically for Australian businesses looking for effortless financial management. are particularly impressive for streamlining routine accounting tasks.

If you need strong payroll → MYOB

When you’ve got employees to pay and compliance headaches to avoid, MYOB’s payroll features are second to none in Australia. Tailored specifically for Australian businesses with comprehensive reporting tools.

If you need user-friendly cloud-based → Xero

The people’s choice in Australia. Xero’s intuitive interface means you’ll spend less time figuring out the software and more time running your business. Integrates with over 800 third-party apps.

If you need automation & reporting capabilities → QuickBooks Online

For businesses that love detailed reports and want powerful features, QuickBooks delivers comprehensive capabilities that grow with your business. Excellent reporting and strong inventory management.

If you need simple invoicing for service businesses → FreshBooks

Great for freelancers and service-based businesses with its simple, intuitive interface and strong invoicing features. Perfect for those who want to concentrate more on their profession.

If you want all-in-one Australian solution → Thriday

The new player combining banking and accounting in one platform. AI-powered insights and designed specifically for Australian businesses looking for effortless financial management.

Key Factors to Consider Before Making Your Choice

Business Size and Complexity

A tradie running solo has different needs than a Melbourne café with five employees. Consider where your business is now and where it’s heading in the next two years.

Integration Requirements

Does your software need to play nicely with your existing tools? Check what integrations are available – especially for banking, payment processing, and any industry-specific software you’re already using.

Learning Curve

Be honest about your tech comfort level. Some software is plug-and-play, while others might require a weekend crash course or professional setup.

Support and Training

When things go pear-shaped (and they sometimes do), you’ll want reliable support. Look for providers offering local Australian support during business hours.

Should You Consider Desktop-Based Accounting Software?

While cloud-based solutions dominate the conversation these days, desktop-based accounting software still has its place in the Australian business landscape. Let’s explore when going old-school might actually be the smart move.

When Desktop Makes Sense

• Security Concerns: Some businesses, particularly those handling sensitive financial data, prefer keeping everything on their own servers. Desktop software like MYOB offers robust security without relying on internet connectivity.
• Reliable Internet Issues: If your business operates in areas with patchy internet (looking at you, rural Australia), desktop software ensures you can always access your financial data when you need it.
• One-Time Cost Preference: Tired of monthly subscription fees? Desktop software typically involves a larger upfront cost but no ongoing monthly charges, which can be more economical for established businesses.

The Trade-Offs

• Limited Collaboration: Sharing financial data with your accountant or bookkeeper becomes more complex with desktop solutions. You’ll need to manually export files or provide remote access.
• Backup Responsibility: With great power comes great responsibility. You’re in charge of backing up your data – no more automatic cloud backups saving your bacon.
• Update Management: Software updates become your job, and you might miss important feature improvements or security patches.

Our Take

For most Australian small businesses, cloud-based solutions offer better value and flexibility. However, if security concerns or internet reliability issues are deal-breakers, desktop accounting software remains a viable option – just ensure you have solid backup and update procedures in place.

Should I Use Free Accounting Software Instead?

The eternal question for cost-conscious Australian business owners: can free accounting software really handle your business needs, or is it too good to be true?

When Free Accounting Software Works Brilliantly

• Simple Business Structure: If you’re a sole trader or small business with straightforward income and expenses, budget-friendly options like Zoho Books or Reckon can handle everything you need.
• Limited Transaction Volume: Businesses processing fewer than 50 transactions per month often find affordable software perfectly adequate for their needs.
• Basic Reporting Requirements: If you need standard profit and loss statements and basic financial reports, cost-effective software delivers without the hefty price tag.

The Hidden Costs of “Free”

• Transaction Fees: Many free accounting platforms charge for payment processing. Wave, for example, takes a percentage of each transaction – which can add up quickly for busy businesses.
• Limited Features: Free versions often restrict advanced features like inventory management, detailed reporting, or multiple user access.
• Support Limitations: Free software often comes with limited customer support, which can be frustrating when you’re stuck with a problem at tax time.

Making the Free vs Paid Decision

Consider your business growth trajectory. While free software might work today, will it handle your needs in 12 months? Sometimes investing in paid software from the start saves migration headaches later.

Frequently Asked Questions

What is the best free accounting software available in Australia?

From invoice processing to payroll compliance, the utilization of accounting software for small business varies from business to business. With so many popular options, such as Xero, MYOB, QuickBooks, FreshBooks, Zoho Books, Thriday, and Reckon available for the business community in Australia, organizations can choose the one that best aligns with their business requirements and company size.

For budget-conscious businesses, Zoho Books stands out with its affordable pricing and strong automation features, while Reckon offers excellent value for micro-businesses and sole traders starting from just $8/month.

Is MYOB or Xero better for small businesses?

While both MYOB and Xero offer comprehensive features for Australian businesses, Xero is considered one step ahead of MYOB due to its simple and intuitive design. Xero prominently caters to small businesses with its user-friendly interface and integrates with over 800 third-party apps.

MYOB, on the other hand, is well-suited for businesses with complex payroll needs and those requiring strong Australian-specific features. If payroll management is a priority, MYOB’s robust payroll features and excellent customer support might give it the edge for your business.

What accounting software do accountants use in Australia?

Depending on business needs and organizational capabilities, professional accountants in Australia commonly use Xero, MYOB, QuickBooks, FreshBooks, and Zoho Books for bookkeeping and tax compliance. Xero and MYOB dominate the Australian market due to their strong local compliance features and comprehensive reporting tools.

Many accounting firms also recommend QuickBooks for businesses with complex reporting needs, while FreshBooks is popular for freelancers and service-based businesses. Thriday is gaining traction as a new all-in-one solution, and Reckon remains a solid choice for smaller practices working with micro-businesses.

Which free accounting software offers a forever-free version in Australia?

Among the accounting software options available in Australia, Zoho Books provides the most affordable pricing starting from $11/month with strong automation features that can help streamline routine accounting tasks for small and medium enterprises.

Reckon offers excellent value starting from $8/month, making it one of the most cost-effective options for micro-businesses and sole traders who need a simple, straightforward accounting solution with strong customer support.

What is the cheapest accounting software for small businesses?

Reckon stands out as one of the most affordable options for small businesses, starting from just $8/month. It’s particularly good for micro-businesses and sole traders who need a simple, no-frills accounting solution with reliable customer support.

Zoho Books is also an excellent budget-friendly choice at $11/month, offering more advanced features like strong automation capabilities and being part of the larger Zoho ecosystem, making it ideal for businesses looking for scalable solutions that grow with their needs.