Zoho Books Review
Zoho Books is a solid accounting tool that lacks lustre when compared to its competitors. Though it's hard to truly say anything bad about it, we feel other online accounting software simply does a better job. Check out our full Zoho Books review to find out why we say that.
If you’re investigating cloud-based accounting software options for your small business, the crowded marketplace can be overwhelming. You know you want to manage your accounting online because that means you can access it from any computer or through an app, but there are other factors to consider. Zoho Books may not be the best fit to meet your business’s needs.
If you own or manage multiple organizations, you can add them to a single account in Zoho Books and easily switch between them. It’s a great feature in that case, but useless if you’re a sole proprietor.
While it sells its automated workflows as a time-saving and unique feature, much of the email automation could be done in an existing customer relationship management or email program. Zoho offers many other programs, such as its notebook, mail and CRM software, designed to integrate with one another (our Zoho Notebook review shows we’re not terribly fond of it, however).
If you want to read more about its competitors, check out our best accounting software.
- Automatic bank feeds
- Project & time tracking
- Inventory management
- Requires an app to handle payment processing
- No payroll of fixed assets built in
- Minimal report customization
Zoho Books gives you everything you need to accomplish the basics. Data is stored in the cloud and protected by 256-bit SSL encryption, which is common in the industry. It also offers two-factor authentication if you want another level of security.
There are certain core functions every cloud-based accounting software company must include in its suite to be competitive. Customers need to be able to invoice and collect money owed. They’ll want to see their bank accounts, cashflow and expenses, too. Zoho Books has all that and more.
If you send an estimate for a job and it gets approved, Zoho Books lets you convert it to an invoice. You can add a logo and customize your invoices and, if you have foreign customers, it offers multi-currency and multilingual options. As for expenses, you can record them as billable to a client, set them to recur and record a refund.
It also supports adding more than one bank account and they can be in different currencies.
Not all cloud-based accounting software includes projects, time tracking and mileage, but Zoho Books does. While it’s targeting businesses that provide hourly services and project work, it also has inventory management for product-based businesses.
Unique among its competitors, Zoho Books includes automation rules. If you want to automatically send an email when invoices are 15 days past due or add a 5 percent late fee, you can do so by automating the workflow.
Businesses that need to send many automatic emails or reminders will find this feature helpful.
Zoho Books enhances its basic functions with options that empower businesses to do more. It gives you everything you need to run your business and then some.
Cloud-based accounting software companies often offer their pricing plans in tiers that provide more features as you pay higher prices. Zoho Books is no exception.
The cheapest monthly plan, Basic, costs $9 per month per organization. It supports two users — you and an accountant. You can add up to 50 contacts and automate up to five workflows.
Zoho Books gives you a lot at this level: bank reconciliations, custom invoices, expense tracking, projects and time tracking and the ability to set up recurring transactions. What you can’t do is pay bills, so expect to continue using your checkbook.
The next plan, Standard, is $19 per month per organization. It adds another user and bumps you up to 500 contacts. In addition to the features available at the Basic level, you get bills, vendor credits, the ability to approve purchases and reporting tags.
As you can read in our QuickBooks Online review, the Essentials plan costs $35 per month for the same number of users. FreshBooks is $25 per month. The main difference between it and Zoho Books’s plan is that it still limits you to 50 users.
On the Professional plan, which costs $29 per month per organization, Zoho Books gives you unlimited contacts, 10 users, purchase and sales orders, inventory functions and everything in the lower tiers and QuickBooks Online also includes inventory when you’re paying for their top plan, while Xero offers it from the start (read our Xero review).
FreshBooks doesn’t have an integrated inventory function at any level.
Zoho Books only charges an extra $2 per month if you want to add a user. FreshBooks charges $10 per person, as you can read in our FreshBooks review, and QuickBooks Online doesn’t offer the ability to add users at all. There’s no payroll processing in Zoho Books, though, and you can’t add it through a third-party app like some competitors offer.
There’s not much to differentiate Zoho Books in terms of its pricing plans and it’s odd for it to include invoices but not bills at the cheapest level. If you do decide to go with Zoho Books, it’ll be for other reasons.
While its interface may be user-friendly, its website is not. There is no sign in option for existing customers on the main page and clicking on “books” or “customers” just takes you to case studies or examples. Instead, you have to go to “access your apps” and click on “books.”
For that reason, we suggest that you bookmark the the login page once you’ve set up your account.
Setting up an account took less than two minutes. The first time you log in, Zoho Books will show you an embedded video on how to perform most of the basic tasks. The main dashboard gives you a bird’s eye view of your business.
At the top, it presents a breakdown of current and past due receivables, which shows you how much money you have coming in and how much you need to chase down. Under that is a bar chart of sales and expenses by month. While it’s helpful to view unbilled hours and expenses by project, it’s not as useful as it could be since it doesn’t give a dollar breakdown.
The main navigation menu is to the left of the dashboard. Items are ordered in the typical flow of business, from estimates and invoices to expenses and reports. There’s no guesswork involved when it comes to where to go to get stuff done.
The first time you set up an invoice, Zoho Books will ask you to select your transaction preferences. It offers many nice options, such as indicating whether you give discounts. You can also add shipping charges or adjustments and indicate tax preferences.
The option to attach a salesperson isn’t one we’ve seen with competitors, but is helpful if you pay commissions.
There are a surprising number of options on the standard invoice form for a smaller player in the cloud-based accounting software space. It’s worth noting that you can input an estimate under “sales” in Zoho Books and convert it to an invoice when it gets approved.
At the top, select the customer from a drop-down menu that accesses your contacts list. From there, Zoho Books will generate invoice numbers for you or you can select them. The “terms” drop-down menu has six options or you can set your own. For comparison, Xero doesn’t have terms built into its invoices.
Similar to the customer field, you can assign a salesperson from the drop-down menu. Clicking on the plus sign adds the line items you’re billing for and on each line you can input applicable discounts or taxes. It’s quite intuitive. The ability to apply a discount to some, but not all, line items is a nice perk if you occasionally offer sales or price incentives.
As in QuickBooks Online, there are two boxes at the bottom of the invoice where you can type notes or terms to the customer. Like Xero, Zoho Books doesn’t have an integrated payment processing service, so the credit card icons next to “payment options” only displays the providers you can select from.
Zoho Books lets you make every invoice you send recurring. If you click “make recurring” before hitting save, it adds the recurring fields to the invoice and requires them to be filled out before you can send it. The fields include how often the invoice repeats and either an end date or a “never expires” box. Once it’s saved, you can find it under “recurring invoices” until it’s deleted.
If you choose not to make an invoice recurring, there are many options for saving and sending it. You can save it as a draft, save and send by email, save and print or save and share, which generates a link you can copy into an email. Another option, save and send later, lets you wait until later in the day, the end of the week, the end of the month or until a custom date.
If you already have an invoice template you love, you can still use it with Zoho Books. Its custom invoice features allow you to upload a complete template into its system, not just add a logo or change colors. Once it’s uploaded, you match the Zoho Books fields to those on your template and import it. You can even associate it with a specific customer.
While it’s possible to send late payment reminders or add late fees to invoices, the process isn’t as clear as it is with QuickBooks Online. Instead of checking a few boxes after inputting the invoice, you’ll have to go to “settings” and “reminders” from the dashboard. You can’t customize them by client like you can with FreshBooks, though.
Entering an expense in Zoho Books is straightforward. On the standard form, you can pick the customer and expense category from the drop-down menus, drag and upload a file, such as a receipt, and add notes.
That said, Zoho Books shines with its other expense options. To the right of the first “record expense” screen are two of them: record mileage and “bulk add expenses.” If your business tracks and bills mileage to customers, you’ll love having integrated billing for it. All you have to do is select miles or kilometers, a rate and currency and you’ll be set.
When an employee incurs a mileage charge, the robust mileage form lets you indicate which one it was. Zoho Books calculates mileage using either the distance traveled or the odometer readings. If your client wants to see toll or gas receipts, add a file by uploading or dragging and dropping it.
You can assign the mileage to projects or customers, and check a box if it’s billable.
While you upload expenses into Zoho Books, there’s also the option to “bulk add expenses.” That means you can quickly tab through and enter multiple expenses at once and they’ll appear on your invoice.
Many businesses pay the same bills every month, such as rent or electricity. It saves you time to automate paying them. That isn’t as easy to do in Zoho Books as it is in FreshBooks, which just takes a few clicks after inputting an expense.
For Zoho Books, it has to be done through automating workflow in the settings menu or made recurring after you’ve saved the expense.
While Zoho Books markets its automation and workflow rules as adding value to its product, unless you’re comfortable with writing if-then functions you might find them difficult to set up. It’s important to note that many competitors let you do the same things with a few clicks after inputting invoices or expenses.
Zoho Books includes many standard reports that provide insight into different aspects of your business. They’re grouped by business function and searchable from the top of the screen. They condense your day-to-day business into high-level views that can help inform important decisions.
Under “sales,” reports relay information on sales by customer, item, or salesperson. In each of them, you can sort the columns alphabetically, select a date or date range and export as a .csv file or to Excel. Beyond those selections, reports aren’t customizable.
That said, you can schedule reports. If your manager has asked to see the sales by item report on a weekly basis, you won’t have to remember to log on, download and email it. Zoho Books lets you automatically send the report to contacts in your organization at specified times.
Receivables reports, such as the aging summary, customer balances and invoice details, track your incoming cashflows. Zoho Books lets you do more with them than the sales reports. Options include adding columns with names, emails or other details, changing how you want information grouped and filtering information.
Under “payments received,” you’ll find information about actual cash inflows, including credit note and refund details. The “time to get paid” report displays the time that it’s taken each customer to pay you and the amounts paid late. It’s particularly helpful for assessing a customer’s value to your business if you are considering severing the relationship.
The “purchases and expenses” reports are broken out into expenses by categories and customer, but two additional reports are helpful for project-based businesses. On the “expenses by project” report, filters let you see which expenses have been invoiced and reimbursed, which had receipts and expenses that weren’t billable.
It’s unfortunate that Zoho Book doesn’t have a net profit by project report, but, by comparing this report with sales reports, you can calculate the project’s overall profitability.
The second report that’s helpful for project-based businesses is “mileage expense by employee.” If you’re concerned that you’re sending someone into the field too often, you can compare their mileage to other employees. You can filter by billable and non-billable travel, or use it to identify issues if one employee never submits receipts.
The “projects and timesheet” reports present information specific to project management. “Project summary” compares logged hours to budgeted hours so you can see if you’re on track. If the “billed vs. unbilled” column has a lot of outstanding expenses, accounts receivable might be sleeping on the job. If there are more non-billables than billables, you might want to investigate.
On the “project details” report, information is broken down further into hours associated with assigned tasks. “Timesheet details” shows which staff members have been billing which hours to the customer. Laid side by side, these two reports can give insight into project bottlenecks.
The general ledger, journal entries and trial balance comprise the reports in the “accountant” section. Accountants find them useful for audits and preparing financial statements, but you’re unlikely to use them much in day-to-day operations.
Currency reports that calculate the realized or unrealized gain and loss on currency transactions are unique to Zoho Books, but unless you plan on getting into currency hedging we’re not sure what you would do with them. If you need to track your unrealized gains and losses, and how they impact your profitability in different countries, they will be useful, though.
Activity reports summarize recent activities in Zoho Books and summarize system emails, so you can see if automatic reminders went out successfully. You can also check if a customer has logged into their customer portal recently and see what they did. The reports are nice to have, but don’t add a lot of value from a bookkeeping or accounting perspective.
Zoho Books put more thought into its reporting options than FreshBooks or FreeAgent. We’d still like to see it add more customization options and filters, though, as well as the ability to display projects and customer reports side by side.
Zoho Books puts the three main financial statements — profit and loss, balance sheet and cashflow — at the top of the reports screen, perhaps because they’re integral to running a successful business.
The profit and loss statement calculates your net income and can be run on a cash or accrual basis. You can change the dates and date ranges presented under “customize report” and elect to look at a comparison of two periods. You can’t change account groupings or the reports’ presentation, though.
The balance sheet can also be run on a cash or accrual basis and show a comparative period.
Similar to “sales” reports, it’s easy to schedule financial statements to run and be distributed automatically. The downside is that you won’t be reviewing the report to catch issues, so you could hear from a higher up wondering what’s happening.
The cashflow statement presents the cash moving in and out of your business. In Zoho Books, you can run it by day, month, quarter or set a custom range. Clicking on the line items in blue sends you to related reports and statements. For example, clicking on “net income” takes you to the profit and loss statement.
That is true for all of Zoho Books’ financial statements. As another example, if you click on “sales” in the profit and loss statement, the program navigates to account transactions.
Zoho Books doesn’t go beyond the basics in its financial statements. They don’t calculate percent changes from period to period and you can’t customize them to meet your business’s needs. QuickBooks Online gives you far more.
Zoho Books has an extensive list of guides on its help page. Step-by-step tutorials have screenshots for visual learners, but there are no embedded videos. While they maintain a blog, it isn’t updated often and typically covers company announcements and new features.
On any page in Zoho Books, look to the top right of the screen to find “page tips” with a light bulb symbol. Clicking on it expands a box on the screen’s right with links to the most common help articles associated with that page’s topic. They open in another window, which is nice if you don’t want to lose work you’ve already started.
Phone and chat support are available during business hours and email is an option, as well. You can also search through the “Zoho cares” portal, but it just redirects to the help library. While not as large as some of its competitors, Zoho Books provides the same level of support and resources to its users.
In the crowded market of cloud-based accounting software solutions, Zoho Books doesn’t stand out. What it pushes as a selling point — automating workflows — can be done easier in other programs. Its website is a cluttered mess, difficult to navigate and scattered with all of Zoho’s products.
Some of its invoice and expensing features, such as options to send an invoice later, upload fully customized templates and assign them to specific customers and bulk add expenses outshine Xero and FreshBooks. Others, such as the clunky process to set up recurring expense payments, could lead to a lot of frustration.
Zoho Books relies too much on forcing users to go to the “settings” menu on the main dashboard to perform tasks, which quickly becomes annoying. In our opinion, users would be better served if these tasks were incorporated into the business workflows or easier to find on screens in the software.
Though it’s a smaller player in the cloud-based accounting market, Zoho Books wants to compete in the majors with QuickBooks Online and FreshBooks. It’s not there yet. What do you think of Zoho Books? Let us know in the comments below and, as always, thanks for reading.