Zoho Corporation is not a dedicated financial services company like Intuit. It is, instead, a developer of very good integrated online productivity applications. One such product is Zoho Books, which contains tools that meet the lion’s share of small business accounting needs. Zoho Books’ usability, flexibility, and depth in standard bookkeeping areas—sales and purchases, time and project tracking, and inventory management—equal and sometimes surpass what is offered by competing websites. It also provides more help resources than most rivals, which is critical for accounting solutions.
Among small business accounting websites, Zoho Books is an exceptional value. In fact, its existing infrastructure, combined with the myriad new features and enhancements it has added since our last review, position it in a kind of transitional phase. We still consider it a good choice for small businesses, but its appeal is beginning to expand upmarket, too. It may eventually compete with solutions such as NetSuite and Sage Intacct. At this point, though, its very limited payroll integration (California, New York, and Texas only) makes it a nonstarter for most companies with many employees. QuickBooks Online, our Editors’ Choice winner for small business accounting, is better suited to small businesses that need integrated payroll.
How Much Does Zoho Books Cost?
After a 14-day free trial to Zoho Books, you can subscribe to the Basic Plan for $9 per organization per month, which limits you to 50 contacts, one user plus an accountant, and five automated workflows (more on that later). The supported features include invoices, expense tracking, projects, time sheets, and the site’s new budgeting tools. The Standard plan ($19 per organization per month) gives you higher limits on everything in Basic, and adds bills, vendor credits, and reporting tags. It also offers two additional features: multilevel purchase approvals and integration with Twilio, which allows you to automate SMS messages to customers. The Professional tier ($29 per organization per month) supports unlimited contacts and users and 10 automated workflows per module, in addition to purchase orders, sales orders, and inventory tracking.
That pricing compares favorably with that of our Editors’ Choice winner QuickBooks Online which starts at $25 per month for its Simple Start plan. Its next tier up is Essentials, which adds billing, multiple users, and time-tracking capabilities for $40 per month. The $70 per month Plus plan offers full project and inventory tracking. Sage 50cloud Accounting’s starter level, Pro Accounting, lists for $503.95 per year.
Much Improved, But What About Payroll?
Since I last reviewed it, Zoho Books has incorporated dozens of small changes that improve flexibility and usability, along with many major changes. The site now offers vendor portals in addition to customer portals, more functionality in automati9i8ion, staff hour cost tracking, more granularity in user roles (including the new Accountant role), and support for multi-branch companies (franchises). It also added budgeting capabilities and bulk bill payment. The site now integrates with the Uber for Business app and supports report comparisons. No other service I reviewed this year has improved so much.
There is one area where Zoho Books doesn’t meet or exceed the standards set by Xero and Intuit QuickBooks Online, but it’s a critical one for some companies. As mentioned earlier, its payroll system is primarily intended for companies that are incorporated in California, New York, and Texas that have employees who live in those states.
Not providing payroll is not a showstopper, but Zoho Books doesn’t even integrate with third-party payroll providers like Gusto. This is a serious deficit for an accounting solution suitable for companies large enough to have employees. But in every other area—contact and item records, transactions, inventory management and project management, customizability, automation, and user interface—it’s the most powerful and flexible accounting service I’ve reviewed.
Generous Setup, Import Options
Zoho Books’ setup walks you through a series of screens after you create an account and helps you configure some personal settings. You can revisit the settings options later if you prefer, though it’s a good idea to supply this information upfront. You start by providing contact and pertinent sales tax information. Some features, like invoices and expenses, are included on the site by default, but you can choose which other modules you’d like to activate, like inventory, purchase orders, and time sheets.
The next screen displays a setup guide that suggests actions you should take, along with educational videos and links to the appropriate pages. These include connecting with payment gateways; configuring user roles and permissions; setting up the approval flow; and adding custom fields. This is a great introductory screen that helps you build a foundation for your accounting data and activities.
There’s still more to do in the site’s Preferences section, however. This page is a massive list with several sub-lists. No other small business accounting website breaks down its functions for setup in this detail because no other site I reviewed is as flexible or feature rich. Take the time to check out the settings for every module you plan to use, and you can take full advantage of Zoho Books’ exceptional functionality.
Part of the setup involves creating records for contacts and items. You can do this as you go along, but it takes less time to create transaction forms if you’ve done this early on. You can, of course, enter everything manually, but there is little data you can’t import into Zoho Books. The site allows you to download sample files to ensure that your mapping is correct, and then import contacts, item records, and sales/purchase transactions in CSV and a handful of other global formats, depending on what you’re importing.
Excellent User Interface, Navigation, Help
Zoho Books’ dashboard provides more financial information than does the dashboard in Kashoo, but it’s not as interactive as Xero’s. Current and overdue receivables/payables and cash flow appear at the top in both numbers and graphs. Below that is a customizable chart comparing income and expenses, and an accounting of your top expenses. Project status and account balances, along with an account watchlist, round out the screen’s data.
Zoho Books’ user interface is exceptionally clean, attractive, and easy to understand. The left vertical pane displays navigation links to Zoho Books’ functional areas: Dashboard, Items, Banking, Sales, Purchases, Time Tracking, Accountant, Reports, and Documents. There’s a link to Payroll here, too, which opens in a separate screen. Some of these links take you straight to a working page, while others display a submenu of options. An effective combination of buttons, drop-down lists, fill-in-the-blank fields, and checkboxes make navigation and data entry options quite clear.
Click the small gear icon in the upper-right corner and a menu opens, displaying links to numerous settings screens. These include currencies, taxes, templates, reminders, and automation (automation options have been enhanced since I last reviewed the site and include custom functions). There’s also a link to a page that lists all of the tight built-in integrations that Zoho Books has with other applications (besides its own Zoho CRM, Zoho Projects, Zoho Expenses, and others), like Office 365, Google G Suite (fetch customer-only Gmail), Yearli (1099 filing), Slack, and Square. You can also connect with Amazon, eBay, and Etsy.
A link to help resources also appears in the upper right part of the screen. Zoho Books’ numerous guidance tools (like FAQs, documentation, and forums) are at least comparable with those offered by Xero, which has some of the best support options I’ve seen. You can also contact experts via chat, phone, and email. But Zoho Books does not have nearly the network of experts at its disposal that QuickBooks and Xero have built up over the years. That said, its pool is respectable for a product that only came out in 2011.
Impressive Records
Customer and vendor records are exceptionally detailed. You enter your primary contact details at the top of each record, then move down to a tabbed window below that lets you toggle between tax and payment details, address, contact persons, custom fields, reporting tags, and remarks. No other small business accounting tool I’ve looked at lets you create up to 46 custom fields for records and not one of them supports such thorough profiles for contacts.
Once you build some contact records, you can view each in a window that is, once again, better than Zoho Books’ rivals. The records show key contact information on the default screen, as well as numbers and graphs for receivables/payables and income/expenses—kind of like a mini-dashboard for each customer. There’s also a timeline—similar to an audit trail—for the current contact, and a box with additional details like Currency and Portal Language (Zoho Books lets you communicate with contacts in their preferred language). Tabs here open other types of related content, like Sales (by form), Mails (you can connect your Gmail, Outlook, or Zoho Mail account), and Statements.
Inventory management capabilities are also comparable to the competition and better than some. Item records contain standard fields (sales and purchase description, rates/selling prices, and accounts), but you can also create and use units of measure. If you indicate that you want to track inventory, you can complete fields for opening stock, opening stock rate per unit, reorder point, and preferred vendor. Invoices then display the number available when you enter an item. You can also easily set up price lists and adjust inventory levels. QuickBooks Online offers similar inventory flexibility, and it goes a step beyond, allowing the bundling of items (assemblies). You have to subscribe to Zoho Books’ Inventory add-on to get this feature.
Transaction Forms and More
Zoho Books offers more transaction types and more flexible forms than any other product I reviewed. Beyond the standard sales forms that competitors support, it includes retainer invoices, delivery notes, and packing slips. Invoices contain fields for shipping charges and adjustments in addition to discounts and sales tax. Purchase transactions—expenses, bills, purchase orders, and so on—are similarly detailed and flexible. Like records, transaction forms can contain up to 46 custom fields, which is unique to Zoho Books.
No one else at this solution level offers automated workflows like Zoho Books does. This tool comes with a bit of a learning curve—in fact, it’s fairly complex unless you’ve worked with multi-segment formulas before—but it can be quite useful. You could, for example, specify that you want the sales manager to receive an email alert when an estimate amount is changed by more than $250. That’s a simple example—you can create formulas with even more conditions and results.
Zoho added document management to its expansive toolbox a couple of years ago. Scan documents like bills and expense receipts and upload them to Zoho Books—or have clients email them directly to your scanning inbox. The tool then uses OCR to read the date, merchant name, amount, description, and expense category (after Zoho Books recognizes a pattern for categorization or just automatically “knows”) and enters that information in transaction forms; you complete the rest. 50 scans per month are included in your subscription fee, but you can purchase more.
The site has also added vendor portals since the last time I reviewed it. Like the customer portals that were already available, vendor portals can save time and improve communication with your suppliers. Your vendors can see the details of purchase orders and invoices anytime, and track payments. They can upload transactions to you and generate a customizable statement of accounts. And you and your vendors can both post comments so you can work together on outstanding issues.
Projects and Time Sheets
Zoho Books integrates well with Zoho Projects, but you can do a lot just by using the main site’s tools. To define a project, you give it a name, select the billable customer, and choose a billing method (fixed cost or based on hours). You can then add a budget, additional users, and individual tasks, as well as up to 46 custom fields. Each project has its own home page, from which you can add hours worked (automatically timed or entered manually) and view lists of related purchases and sales. At a glance, you can see whether all billable hours have been billed; where you stand with your budget; and your profitability. You can require approvals by the project manager or client and set a maximum number of loggable hours per day. No other small business accounting website offers this kind of project depth and customizability.
Tasks on the time sheet are always linked to a customer and project, which would be a problem if you were using time tracking in conjunction with payroll or to bill customers for one-off jobs. So, if you need that kind of flexibility, you need to subscribe to a site like QuickBooks Online.
Better Reports
Considering Zoho Books’ depth, flexibility, and integration abilities, you’d expect that it would offer an equally impressive slate of reports. And you’d be right. The tool offers dozens of reports in every category, from sales and purchases to receivables and payables to projects and activity. There’s a group of advanced reports that are designed for accountants; it includes an enhanced General Ledger, Journal Report, and Trial Balance.
General reports are now more useful because of improved views and filters that support better customization. You can modify reports by date range and usually one or more additional views (like transaction type, status, group by), but it’s the new advanced filters found in some reports that really let you pare down your data set to just the right result. You first select a filter, whose options of course change for each report, and then a comparator (such as is or contains), and then your target value. You can also show or hide columns for many reports. Zoho Books also allows you to schedule report distributions by date and time, sending them to email recipients in PDF, CSV, or XLS format.
Zoho Books has also added reports since I last reviewed the site, like the Customer and Vendor Balance Summary Report and Project Cost Summary Report. You can now compare some sales and purchase reports with those from preceding years.
Excellent Mobile Access
Zoho Books displays as much excellence in its Android app and iOS app as it does in the browser-based version. A multi-screen dashboard displays charts for elements like Total Receivables, Cash Flow, and Income & Expense. Contact records, which are quite robust in the browser-based version, are well executed in the mobile app, though not nearly as detailed. Open one, and you instantly see contact information and the receivables/payables balance. Icons on this screen let you call, email, or message the contact, while another icon takes you to links for creating new transactions, accepting payments, and more. Extra menus on both versions display additional options.
Other tools provide good subsets of the website’s data storage and transaction capabilities, like the apps’ product records, bill-pay, time tracking, reports, and projects. In fact, you could probably run your business for a while from your phone if necessary—the apps are that comprehensive. The Android and iOS versions have different navigation systems but offer a similar set of tools. The iOS app uses a bottom-of-the-screen toolbar, while Android works primarily from a vertical menu. Both are quite effective and attractive.
An Excellent Value
Zoho Books accommodates a wide variety of business types. A sole proprietor could use it without having advanced features get in the way, given its low cost and friendly user experience. However, those advanced features are what make it an excellent choice for a larger business, with the major caveat that payroll features are currently limited to businesses in California, New York, or Texas. The service offers several unique features not found in competitors, such as extensive custom fields, a dedicated inbox for expenses and other documents, and automated workflows. It’s easy to see its growing appeal to companies who have more advanced accounting needs than the sites reviewed here.
What Zoho Books does, it does extremely well. If you’re in the market for a new accounting solution and you already have a payroll service you’re happy with (and don’t mind not being able to integrate payroll with accounting at this time), Zoho Books is well worth considering.
QuickBooks Online is our Editors’ Choice for small business accounting, though. It is more expensive than most competitors, but its tiered service levels make it possible to only buy what you need. It’s been around since the early 1990s, and it’s published by a trusted financial software company. It has millions of users and a strong network of individual advisors. QuickBooks Online is the most comprehensive, flexible, extensible small business accounting tool available today. For freelancers and sole proprietors, however, FreshBooks is our accounting software of choice.
While you’re whipping your money into shape, you might also want to take a look at our stories on the best payroll services and the best tax prep software.
