$0. $20. $27. $38.
Those are some of the entry prices small business owners see when they shop for accounting software right now. Wave and Zoho Books have free plans. QuickBooks Solopreneur runs around $20 a month. Xero Early starts at $27 after its October price change. QuickBooks Online Simple Start sits at $38.
Every one of those numbers is accurate. None of them is the whole story.
Low cost accounting tools make money somewhere, and knowing where tells you whether the deal actually fits your business. Sometimes the cheap plan really is the right plan. Other times it is a doorway to costs that add up across a year. Here is how to tell the difference.
Where Each Cheap Plan Draws Its Line
| Tool and plan | Entry price per month | The catch to check |
|---|---|---|
| Wave Starter | Free | Automatic bank connections and some automation sit in the paid Pro plan, around $19 a month. Wave earns much of its revenue on payment processing. |
| Zoho Books Free | Free | Only for businesses under $50,000 in annual revenue, capped at 1,000 invoices a year, one user plus one accountant. |
| QuickBooks Solopreneur | About $20 | Built for sole proprietors. Not a full small business ledger for teams. |
| Xero Early | $27 | Capped at 20 invoices and 5 bills a month, which many active businesses hit quickly. |
| FreshBooks Lite | About $23 | Limited to five billable clients. More clients means a higher plan. |
| QuickBooks Simple Start | $38 | One user only. Unchanged in the August 2026 increase that hit higher plans. |
Notice the pattern. Cheap plans are cheap because they cap something: revenue, invoices, clients, users or automation. The question is not which plan is cheapest. The question is which cap you will hit first.
Free Plans Have a Business Model Too
Free accounting software is not charity. It is a funnel.
Wave makes a large share of its money from payment processing. When customers pay your invoices by card through Wave, the processing fee is where the company earns its keep. That can still be a great deal, especially if you were going to accept card payments anyway.
Zoho Books uses its free plan to bring small businesses into the wider Zoho ecosystem of CRM, inventory and payroll tools. Once your revenue passes $50,000, the free plan ends and you move to a paid tier. That is a fair trade, but it means “free” has an expiration date tied to your own success.
Promotional Prices and the Renewal Cliff
Both Intuit and Xero lean heavily on introductory deals. Xero has advertised discounts as steep as 90 percent off for the first six months. QuickBooks regularly offers several months at a reduced rate.
These are real savings. The trouble starts when owners budget around the promotional price and forget it ends. A plan that costs $8 a month in spring can cost ten times that by winter. Always write down the list price, not the promo price, when comparing tools.
Also consider the direction of travel. Intuit raised QuickBooks Online list prices for Essentials, Plus and Advanced on August 1, 2026, with Plus going from $115 to $140 a month. Xero raised all three US plans on October 1, 2026 and started removing its multi organization discount. Cheap today does not guarantee cheap next year.
The Fees That Outgrow the Subscription
Here is the part most comparisons skip. For many businesses, payment processing costs dwarf the software subscription.
Picture a three person service business that invoices $20,000 a month and gets paid mostly by credit card. At a typical card rate near 2.9 percent, that is roughly $580 a month in processing fees. Compare that with a $59 subscription for Xero Growing or $85 for QuickBooks Essentials. The software is the small number.
The fix is often simple. Encourage clients to pay by bank transfer. Intuit lists its ACH rate at 1 percent with a $15 maximum, and Xero includes standard ACH payments on its plans. Shifting even half of that $20,000 to bank transfers can save more each month than switching to a cheaper accounting plan ever would.
Payroll Is Almost Always Extra
Few low cost plans include payroll. QuickBooks Payroll is a separate subscription with its own pricing that rose alongside the core plans. Xero in the US partners with Gusto, whose Simple plan runs about $49 a month plus $6 per employee. Wave and Zoho offer payroll as add on services in some states.
If you have even one employee, add payroll to your comparison before deciding which accounting tool is cheaper.
The Hidden Cost of Your Accountant’s Time
The most expensive accounting software is often the one that produces messy books. If a cheap tool lacks reliable bank feeds or clean reports, your bookkeeper or CPA spends extra hours fixing things at year end, and those hours are billed at professional rates.
Before choosing, ask your accountant which platforms they prefer. Many firms work faster in QuickBooks or Xero simply because they use them every day. A slightly pricier plan can lower your accounting bill enough to come out ahead.
A Quick Way to Compare Real Costs
Run this math for any plan you are considering.
- Multiply the list price, not the promo price, by twelve.
- Add payroll for your actual number of employees.
- Estimate yearly payment processing based on how your customers pay.
- Add any extra apps you will need, such as receipt capture or inventory.
- Ask your accountant whether the platform changes their fee.
The total often reshuffles the ranking. A free plan with high card fees can cost more than a paid plan with cheap bank transfers. A $27 plan with tight caps can push you into a $59 upgrade within months.
When Cheap Really Is Right
None of this means you should avoid low cost software. For a freelancer, a side business or a brand new company, Wave, Zoho Books Free, QuickBooks Solopreneur or Simple Start can be exactly right. They handle the essentials and keep overhead low while revenue is still finding its footing.
The goal is not to spend more. It is to spend knowingly. Read the caps, plan for the renewal price, steer customers toward cheaper payment methods, and count the full cost across a year. Do that, and cheap accounting software stays cheap for the reasons you chose it.