Accounting software lies at the cornerstone of sound financial management, starting with the initial selection of a solution that, first and foremost, will fit into a company’s own budget. But, as with any business software purchase, lining up apples-to-apples comparisons during the product vetting process can be challenging because vendors’ pricing structures can vary based on how the software is deployed, feature set, level of support and plenty more.
This article examines the main factors influencing the price of accounting software to help small and medium-size business leaders and accounting/finance teams determine the most cost-effective option for their organizations.
How Does Accounting Software Pricing Work?
Accounting software pricing models fall into a handful of overall categories, with the most prevalent pricing models being one-time licenses and subscription-based pricing. One-time licenses grant businesses ownership of the accounting software in perpetuity; they are typical of on-premises software that runs on a company’s own infrastructure.
With subscription-based pricing, businesses pay a recurring fee, typically monthly or annually, for access to accounting software that resides in the cloud, is hosted by the vendor and can be accessed via an internet-connected device. Some vendors tie their prices to how much data is processed or to the percentage of revenue transacted.
Key Takeaways
- Accounting software can be purchased with a one-time license, via subscription or based on usage.
- Cloud accounting platforms are attractive because they don’t require significant up-front costs for hardware, servers and infrastructure.
- The number of users supported, the features offered, integration capabilities and extent of customizations needed can all influence the cost of accounting software.
- Some easily overlooked costs include fees for initial setup, data migration and early termination.
Accounting Software Pricing Explained
Accounting software is big business, with an estimated market value of $19.7 billion in 2024 and $30.7 billion by 2029. Reasons for growth are easy to understand, especially as businesses and their teams of accountants begin to realize the time and cost savings that result from automating and streamlining their accounting processes.
Businesses have a plethora of accounting software options from which to choose, from more generalized solutions to niche options focused on specific industries or company sizes. Some software is installed and maintained at the company’s location, while other versions are deployed in the cloud and maintained by the software vendor. And just as the types of accounting software platforms and features vary, so, too, do the solutions’ prices and pricing structures (described in depth in the next section).
According to a 2024 Gartner survey, decision-makers who research new software say cost matters most. But price is only one part of the software’s total cost of ownership (TCO). So, as important as it is for businesses to understand what prices do include, it’s equally as important to understand what they don’t include. Add-on fees and upcharges for customization, integration, data migration, advanced security, training and support and extra hardware or infrastructure costs, for example, could easily put what seemed to be the perfect solution financially out of reach. In addition, charges like setup fees, data egress fees, transaction fees or cancellation fees and penalties may be hidden within contract terms, rather than evident in the advertised price, which will have an impact on how much businesses pay over the long run and the value they’re getting for the price point they choose.
Accounting Software Pricing Models
When evaluating accounting software pricing, businesses need to consider their budgets, technical capabilities, requirements, challenges, growth plans and cost of ownership beyond the initial purchase or subscription price. The advantages and trade-offs for the following four main pricing models — subscription-based, one-time license, pay-per-use or transaction-based and freemium — must be weighed against a company’s specific needs and resources.
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Subscription-Based
Subscriptions are the bread-and-butter pricing model of the cloud computing world, whereby vendors charge businesses a recurring fee, usually monthly or annually, for access to their software. This pricing model provides a predictable expense for businesses that rely on cloud vendors’ hardware, servers and other infrastructure to run the software remotely, rather than incurring significant up-front and ongoing costs associated with on-premises software installations. Vendors are responsible for updating and upgrading the software, as well. Subscription pricing allows for easy scalability, enabling businesses to quickly add or remove user licenses as their needs change. Subscription pricing can be preset — plans are often tiered according to what they include — or negotiated on the basis of required features, number of concurrent users, level of technical support and contract duration.
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One-Time Licensing
Perpetual, or one-time, licensing follows the traditional pricing structure of on-premises software. For a one-time, up-front fee, companies buy the accounting software outright and are free to run it in perpetuity on their own infrastructure. Licenses are tied to the specific version of purchased software and don’t necessarily cover major updates or upgrades. Similarly, vendor maintenance and support are often limited to a set period of time, after which the software’s care and feeding becomes the company’s responsibility.
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Pay-Per-Use or Transaction-Based
Pay-per-use or transaction-based pricing ties prices directly to the level of software use. In this model, customers are charged for the number of transactions processed or volume of data handled within the platform. Smaller companies or those with seasonal or highly variable transaction volumes may favor this pricing model to keep from overpaying on unused capacity when business is slow. However, tight oversight is essential to keeping costs from spiraling upward during peaks of high usage.
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Freemium Models
Freemium pricing offers businesses a risk-free — and cost-free — way to test-drive basic, core functions of accounting software, with the option to upgrade to a paid plan for additional features and functionality. The free version typically places restrictions on the number of users, transactions and data storage. Freemium models offer a low barrier to entry for smaller companies and for those that want to try out a platform before buying into its more advanced accounting capabilities.
Factors That Influence Accounting Software Pricing
Businesses seeking the right accounting software must look beyond the stated sticker price. To ensure that they’re getting the best return on their investments, they need to analyze the following key drivers of accounting software pricing with respect to their budgets and requirements before making a selection.
- Software features and complexity: The breadth and sophistication of accounting software features impact how much a vendor charges. For example, an accounting software package providing asset tracking, budgeting and forecasting and tax management that can be integrated with a more comprehensive ERP system will very likely cost more than a basic application limited to recording transactions, reconciling accounts and generating simple financial statements.
- Deployment type: How the accounting software is deployed — on premises or in the cloud — is one of the most influential factors on pricing beyond the feature set. Cloud-based solutions often follow a subscription-based pricing model for access to the software and hosting infrastructure. On-premises solutions require a significant capital outlay for software licenses, hardware and infrastructure maintenance.
- Customization and scalability options: Custom code is expensive; the more an organization needs to tailor its accounting software to its specific financial processes or business needs, the more the software will cost. Adding new users or processing more transactions than originally contracted for can also cause prices to increase.
- Integration capabilities with other systems and software: Accounting software with strong integration capabilities to other business software, such as ERP, inventory management and customer relationship management, is likely to cost more for the added value it brings to the table.
- Support and maintenance services included: Accounting software that folds in support and maintenance services is likely to cost more than comparable options without these services included. However, it is important to note that cloud-based offerings often require less maintenance and have a lower initial price point than on-premises options that need additional maintenance services.
What Do You Get for the Price?
Accounting software solutions span a wide range of capabilities. From basic bookkeeping tools for startups and small firms to comprehensive, enterprise-grade platforms, the feature set plays a pivotal role in determining the software’s functionality and, ultimately, its pricing. While the specific features grouped into each category may vary from one vendor to the next, they can be broadly classified into three tiers: basic, intermediate and advanced.
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Basic Features
Basic accounting software features, typically found in free or entry-level software versions, include a mix of no-frills, minimalistic features that cover the basics of transaction recording, billing and invoicing, bank reconciliation, expense tracking and financial reporting. These options are often enough for solopreneurs, startups and very small businesses with few users and limited volumes of transactions or data.
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Intermediate Features
Intermediate accounting software features often appeal to growing businesses. They may include project accounting, tax management, asset tracking, budgeting and forecasting and customizable financial reporting and dashboards. Intermediate features are usually offered in tandem with more robust multiuser access, thus supporting growing companies with bigger financial teams.
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Advanced Features
Advanced features layer in more sophisticated and automated capabilities, such as real-time business analytics, predictive intelligence, support for multiple business entities and currencies, inventory management, payroll integration, mobile support and the ability to integrate with other business software. Vendors may also include support for stronger security and auditing functionality, such as role-based access control that ensure data integrity.
Additional Accounting Software Costs to Consider
In addition to all of the important cost considerations above, no total cost of accounting software ownership is complete without factoring in a handful of other noteworthy expenses that a business will likely encounter throughout the accounting software life cycle and as their financial processes grow and mature.
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Installation and Implementation Fees
Up-front charges for installation setup and implementation consulting services will drive up accounting software TCO. These expenses can ramp up even more if an organization requires a high level of customization or complex integrations, including fees for the creation of specific workflows and development of custom features or custom reports. Additionally, businesses transitioning from one vendor to another or migrating to the cloud may also have to pay extra fees for data migration.
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Training and User Education Expenses
Oftentimes, accounting software vendors will offer training and user education services as an add-on expense. Whether it is onsite training for IT staff and system administrators or remote classes for business users, these training costs can add up, particularly for complex, on-premises deployments that require a high level of maintenance across the software’s life cycle.
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Upgrades and Updates Costs
On-premises accounting software with one-time licensing fees are particularly impacted by these costs, which are not usually built into the initial price they’re charged. These costs can include fees for major version upgrades, as well as security and maintenance updates once a license extends beyond its service window. However, don’t forget that under the subscription-based pricing model, cloud vendors automatically handle these tasks.
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Technical Support and Customer Service Fees
Technical support and customer service fees are sometimes baked into the price, but companies should look carefully at their contract terms to ensure that everything they need is included. Technical support costs can add up for on-premises deployments, where technicians must troubleshoot software issues as they arise.
Accounting All in One Place With NetSuite
NetSuite Cloud Accounting Software provides businesses with a comprehensive solution that streamlines financial management processes, ensuring both accuracy and integrity in the accounting process. By hosting the software in the cloud, it eliminates the need for on-premises infrastructure and maintenance, reducing IT overhead costs. The solution includes a wide range of automated accounting features, from basic general ledger, accounts payable and accounts receivable capabilities to the more advanced management of taxes, fixed assets and the financial close. In addition, access to real-time financial metrics informs strategic decision-making about resource allocation, cash flow and much more. The platform is designed to fit the needs of companies of all sizes. It’s offered for an annual license that includes the core platform and is further defined by the number of users and optional modules.
From deployment model to the depth of features, scalability and support provided, numerous factors influence the pricing of vendors’ accounting software. Complicating the matter: Different vendors may package their features and services in varying formats. Businesses must closely examine TCO as part of their due diligence to ensure that the accounting software under consideration meets their specific needs and, importantly, doesn’t exceed their budget.
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Accounting Software Pricing FAQs
What is the easiest bookkeeping software to use?
The easiest bookkeeping or accounting software to use is one that is user-friendly. Among the characteristics of user-friendly software: It’s simple to install, deploy and update; it has a well-designed user interface and intuitive navigation; and it provides streamlined workflows. Of course, what is “easy” to one user may not be easy for another.
Is there a free bookkeeping program?
Free bookkeeping programs are available and easy to find with an internet search. They’re typically best suited for solopreneurs and very small businesses with simple accounting needs.
What software do most accountants use?
Leading accounting software vendors, according to G2, include NetSuite/Oracle, Sage, Intuit, Acumatica, Xero, SAP and Microsoft.
What does accounting software cost?
Accounting software costs are highly dependent on the vendor and use case, but the typical rule of thumb is between $30 and $50 for a single-user license on a basic package of core accounting features, and between $50 and $200 for a single user for a mid-tier package, with additional features like inventory management, payroll processing or project accounting. Accounting software that serves larger companies with complex accounting needs can start anywhere from hundreds of dollars per month to up to thousands of dollars for organizations that have many users and need advanced features, integration or customization.
What are the pricing models of accounting software?
Accounting software pricing models include one-time or perpetual licensing (used with on-premises deployments), subscription-based pricing (used in cloud deployments), usage-based pricing (per user or transaction) and freemium pricing (a cost-free introductory option).