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Accounting software isn’t just a back-office tool—it’s a critical part of how founders understand runway, prepare for fundraising, and stay compliant with the IRS. Choosing the right solution early on helps you avoid messy spreadsheets, surprise tax bills, and investor frustration down the line.
In this guide, we’ll break down the top accounting tools for startups, compare free and paid options, and help you find the best fit based on your business stage.
Book a free consultation, and we’ll help you get your numbers in order—tech stack included.
Accounting software refers to digital tools designed to help startups organize and manage their finances, tracking revenue, expenses, bank activity, invoices, and other essential data. It replaces manual spreadsheets with structured systems, automations, and real-time reports.
Startups need accounting software because:
Even if you’re pre-revenue, having a simple accounting system in place now can save you thousands of dollars (and headaches) later.
If you’re just getting started and every dollar counts, free tools can help you stay organized while minimizing costs. Here are three reliable options:
Ideal for solo founders or very early-stage teams. It includes invoicing, bank connections, and basic financial reports.
A great entry point if your revenue is still low. Paid plans scale up as your needs grow.
Basic but functional. Includes invoicing, expense tracking, and financial reports with limited customization.
These tools are great to start with—but as soon as you start generating revenue or preparing for fundraising, you’ll likely outgrow them.
Every startup grows through different operational needs. Here’s what to consider at each phase:
Focus on free or low-cost software that handles basic tracking. Wave or Zoho (free) is a good fit.
You’ll need better categorization, basic reporting, and scalability. QuickBooks, Xero, or FreshBooks are solid options.
Look for automation, integrations, and multi-entity support. Xero, Pilot, or Lazo work well here.
You’ll need audit-friendly reports, cash flow statements, and collaboration with your finance team. Lazo, Pilot, or NetSuite depending on your complexity.
Not all accounting tools are built with startups in mind. VC-backed, early-stage companies have very different needs than traditional small businesses—and your financial stack should reflect that.
Here’s what really matters when evaluating accounting software:
Startups can grow fast—especially with funding. That means more transactions, more vendors, and more complexity. Choose a system that can grow with you. QuickBooks Online, for example, offers robust APIs and bank feeds that automate a huge portion of data entry and reconciliation. Automation becomes critical when your team expands and your time becomes more valuable.
You might start by managing your books yourself, then bring in an outsourced provider like Lazo, and later move to an in-house finance team or even get audited. Choosing a widely used system like QuickBooks means that every accountant, CPA, or financial operator you bring on board will know how to work with your setup—saving you onboarding time and reducing transition risk.
Eventually, you may outgrow your current system and migrate to an ERP like NetSuite. QuickBooks is designed with this path in mind, offering clean data exports and compatibility with most enterprise solutions. Starting with the right foundation can save you from painful data migrations later.
Some bookkeeping tech providers use their own proprietary systems, meaning your data lives inside their platform—making it hard to leave or change providers. Choose accounting software that’s independent, widely compatible, and doesn’t lock you in. Your data should always be accessible, transferable, and yours.
Tax season is inevitable. The right software helps you prepare by keeping your records clean, categorized, and ready to hand off to a CPA or tax advisor. QuickBooks, for instance, makes it easy to generate the reports needed for filings, freeing you to focus on running the business—not gathering documents.
The best founders are data-driven—and financial data is one of the most powerful tools for decision-making. Look for software that gives you access to investor-ready reports like profit and loss statements, balance sheets, and cash flow summaries. Bonus points if it lets you customize reports and track KPIs like burn rate and runway.
Your accounting tool is only as good as the systems it connects to. Strong integrations reduce manual work and give you real-time visibility. At minimum, your software should connect with:
QuickBooks leads the industry here, offering direct integrations with most of the tools startups already use—no middleware or custom connectors needed.
Even the best tools have limits. Software organizes your numbers, but it doesn’t interpret them. It won’t reconcile bank errors, prepare you for a due diligence call, or flag suspicious expenses.
That’s where human support makes the difference.
At Lazo, we combine bookkeeping services with startup-focused financial guidance. You get:
Accounting software helps you track. Expert support helps you grow.
Yes. Tracking expenses, grants, or founder contributions early helps you avoid confusion later—and gets you ready for taxes and fundraising.
Not recommended. While Excel may work for very basic tracking, it doesn’t scale well, lacks automation, and can easily lead to mistakes.
Yes, but migrations can be messy. Choose something that will support you for at least the next 12–18 months.
Book a free consultation and we’ll guide you through it.
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