How do you choose accounting software for a small business, and how should it fit with your invoices?
Start with the IRS's test for any recordkeeping system: it should clearly show your income and expenses. Ask your bookkeeper or accountant what they need, then choose software that gives them their own login, records each invoice and payment once, produces reports you can read, lets you export your data if you leave, and sits in an account under the business's name. This is general advice, not tax advice.
What the IRS asks of a system
The IRS's recordkeeping page (last reviewed 2026-05-01) says you may choose any recordkeeping system suited to your business that "clearly shows your income and expenses". It adds that, except in a few cases, the law does not require any special kind of records, although the business you are in affects the type of records you need to keep for federal tax purposes. It also says to keep records as long as needed to prove the income or deductions on a tax return.
This is a plain summary, not legal advice, and it is not tax advice either. What your business needs to keep is a question for your accountant.
Ask your bookkeeper or accountant first
Whoever prepares your books or taxes has to work with whatever you pick, and often has a setup they prefer. Ask before you buy: how do they want to see your records, what do they need each month, and would they rather have their own login or a file from you? A tool they cannot use well can cost you more time than it saves.
Questions to ask about any accounting software
- Who enters what? Decide whether you, a bookkeeper or the software itself (by bringing in bank transactions) records each item, and who checks it.
- If it connects to your bank, what happens when that connection breaks, and who notices?
- Does it record an invoice and its payment once, so the same sale is never typed twice?
- Can your bookkeeper or accountant have their own login instead of using yours?
- Can you read its reports without help, such as money in, money out and what customers still owe you?
- Can you export everything, and in what form, if you leave?
- Whose name is the account in? It should be the business's, with you as owner.
- Can you limit what each staff member sees to what their job needs?
How it fits with your invoices
The books are where every invoice and its payment should end up. If invoices come from another tool, decide which one holds the record: either the invoice tool passes each invoice and payment to the books, or the books create the invoices. Either way, a sale should be recorded once. The related answer on sending invoices and reminders automatically covers the invoice and payment side, and the related answer on which business tools to connect covers when a join is worth setting up.
Before you rely on a new tool, compare one month of invoices and payments in it with your bank statement. If you are replacing an older tool, the related answer on switching business software without losing data covers the move.
Sources
Related answers
- Which of your business tools are worth connecting, and which can stay separate?
- How can a small business send invoices and payment reminders automatically?
- How do you switch business software without losing your data?
Business systems and integrations
Many businesses already pay for the right tools. They just do not talk to each other, so details get typed twice and things fall through. We set them up properly and connect them.