Pros and Cons of Zoho Books: Analysis of a Leading Accounting Software

What are the pros and cons of Zoho Books?
The pros and cons of Zoho Books revolve around its ability to automate accounting processes and make them accurate. Zoho Books allows you to stay within regulations and standards. However, more advanced features are only available for more premium versions.

If you’ve been searching around for small business accounting software, you’ll probably come across Zoho Books not a few times. But no matter the buzz you hear about Zoho, can its accounting app help you cross your t’s and dot your i’s? To answer that, let’s take a look at the pros and cons of Zoho Books. 

Many think Zoho Books is a steal because of the price points, one of the lowest in the category. It can surely help you keep accurate records and comply with regulations while saving you time and money. But let’s go beyond pricing and basic features and look at the pros and cons of Zoho Books.

In this article, we will discuss where and when it can be helpful to freelancers, small and medium businesses (SMBs) and even large enterprises. By the time you’re done reading the article, you’ll have a better grasp of Zoho Books, if indeed, it’s the best accounting platform for you.

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It is not just individual professionals and SMBs who are susceptible to accounting errors. In fact, big popular businesses can also make embarrassing accounting blunders. Bank of America, Rolls Royce, and even the State of California are three world-famous entities that have bungled their books.

The causes of such organizational calamities are many. Bad judgment is one but also a spreadsheet boo-boo is another.

Once, the British intelligence agency MI5 in 2010 suffered a spreadsheet formatting error. This error caused them to tap into more than a thousand incorrect phone numbers.

Another spreadsheet mishap is when London Olympic staffers entered 20,000 in a cell instead of 10,000. This led the Committee to sell extra 10,000 tickets for imaginary seats! These errors when you are of that size are terribly costly. The losses can be arguably imagined. The embarrassment not so easy.

This is exactly why a dedicated accounting platform is preferred over good old spreadsheets.  In fact, these accounting statistics tell us that 90% of accountants feel their practice leans toward further technological adoption.

Also, 67% of accounting professionals prefer cloud accounting tools as they have shown to lend businesses 15% year-over-year growth in revenue. Not only that, companies that switched to online accounting platforms have five times more customers than those that don’t have it. 

Source: National Small Business Association’s 2018 Small Business Taxation Survey

So, can Zoho Books help you avoid losses and help grow your business? Let’s find out, first, by getting the big picture about this software.

What is Zoho Books?

zoho books dashboard example

Zoho Books is a cloud-hosted accounting platform designed to work best for growing businesses. It helps you manage your finances while allowing you to collaborate across departments. You can save time and effort as it has features that automate your business workflows. It has end-to-end accounting capabilities plus it is integrated with Zoho’s 40+ native applications and also with many third-party programs.

You can try all its premium features at no cost when you sign up for Zoho Books free trial here.

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With Zoho, you can create invoices in just seconds. There are payment reminders so you can chase payments easily. The SaaS has also an online payment option to make paying easier for your customers. You can also reconcile transactions in the Zoho Books pretty easily. In this way, you don’t get ready for but stay ready for whenever tax season creeps in.

The Basic Plan only costs $9 per month per organization. The Standard Plan is twice and a dollar at $19 while the Professional Plan is a reasonably low $29 per month per organization. At first glance, the price points are a steal. Another thing that makes these prices seem great is that it integrates seamlessly with other productivity suite software. Also, mobile versions are available for Android and iOS. Now, it’s time to get to know the pros and cons of Zoho Books.

The following are key features of Zoho Books:

  • Easy Collaboration
  • Integrated Platform
  • End-to-End Accounting
  • Intuitive User Interface
  • Categorized Banking Transactions
  • Multi-Project Management
  • Time Tracking
  • Contact Management
  • Customizable Reports
  • Automatic Bank Feeds

Zoho Books Pros and Cons

Receivables and Payables

Zoho Books allows you to create invoices in no time. You can manage your receivables easily, send estimates, and even get paid online. Also, there is a payment reminders feature so you can get paid on time. You can also set invoices on loop for recurring payments. With Zoho Books, you will also be able to handle refunds, returns, and retainers.

You can also let your customers choose how they will make their payments. They can do it via cheque, web, or cash. Zoho Books is integrated with PayPal and other payment gateways. Furthermore, the platform supports multi-currency transactions. Your clients can pay in their currency while their payments reflect in your currency in your records.

Invoices can be customized so you can send professional-looking invoices. You can add your company logo and use your preferred fonts to reflect your brand personality. This is a very important touchpoint as this involves the monetary aspect of your relationship with your customer. Skimping on this with thoughtless templates will only let you come across as unprepared and unpolished.

Customizable invoices. Courtesy of the vendor.

Zoho Books also help you keep track and be on top of your payables. The intuitive interface allows you to create and send purchase orders easily. You can also upload expense receipts for easy filing. Just like receivables management, you can set up recurring payments so you will never miss a bill again. Just create a bill once and let Zoho send them at a regular time interval.

Of course, bills payment is a delicate matter. This is why Zoho Books has an approval feature to increase your security. Once bills are created in the system, the platform will only make the transaction once it is approved by the right person. This decreases the risks for incorrect transactions resulting in losses.

Another nifty Zoho Books feature is letting you associate billable items with customers. This means that you can connect the line items you purchase from your supplier to the intended customers. This helps you track transactions from end-to-end easily. Furthermore, you can also keep track of vendor credits. Should you want to return items to your vendors, you can have it recorded in Zoho Books until you receive a refund.


Zoho Books also has an inventory management module. It keeps accounting and inventory under one roof. These seemingly disparate processes are usually being managed by different applications. But with Zoho Books, you can manage them in one dashboard unless you want a dedicated inventory management software to boot.

If you want to go with Zoho Books for your inventory management as well, you can view your product details completely. Also, you can check your SKU, vendor details, and stock on hand. Furthermore, you can also attach a product image for easy identification.

You can also customize rates for different customers. Your business will likely have preferred and loyal customers or vendors. You can customize your price list for them. Have markups or markdowns. It’s your call and Zoho Books has you covered. The module also records changes in your inventory in real-time, and you can set reorder alerts. Inventory reports can also be generated automatically.

As this is just a module, it is not as powerful as standalone inventory software. It may lack some features like sales analytics and in-depth item breakdowns. Should you need a dedicated inventory management software, you can also check out Zoho Inventory. It is part of the Zoho Suite and it integrates well with Zoho Books.

Inventory Management capability in Zoho Books. Courtesy of the vendor.


You can also connect all your bank accounts with Zoho Books. When done, the platform will reconcile your records for you. You can fetch transactions from your bank accounts and even your PayPal account. You will also get accurate cash flow predictions and be notified of balance mismatches right on your dashboard. Furthermore, as bank reconciliation is streamlined, your business will always be tax-ready.

It is fairly easy to miss transactions when there is a lot. Zoho Books allows you to use bank rules to categorize these automatically. This feature will filter and categorize transactions for you. In this manner, you will never lose track of a single transaction again. Also, you can manage transactions in bulk.


Like many SaaS, Zoho Books also allows you to create roles-based access. You can easily add colleagues on the platform with given roles and permissions. Like you, they will be able to view reports, log time, and even manage accounts. Of course, this totally depends on the administrator of the organization.

In this manner, updating the dashboards and data will not just be a one-person job. Your inventory manager can update SKUs and stock on hand from their end. Your accountant can check reports and reconciliation from a personal device. Everybody can be hands-on. More heads, more hands, less effort and save time.

Time Tracking

Zoho Books allows you to track time and bills more effectively. You can even track multiple projects under one single dashboard. You can monitor project expenses, reordering, and other important processes. Of course, access to information on the platform depends on the permissions set by the admin.

There are two complementary options for tracking. One is through a clock widget that acts as a timer. Once you start working, you just click on the widget and it will automatically track your billable hours and minutes. Also, you can also manually log the amount of time you spent on the project manually. If you are on the go, you can access this via the Zoho Books mobile apps.

Furthermore, there are other features that can be helpful. While monitoring multiple projects, you can easily add a retainer invoice to payments. This means you can receive advance payments for projects should you need it. For a full-blown project management software, you can check out Zoho Projects.

Contacts Management

Contacts management dashboard. Courtesy of the vendor.

Zoho Books also helps out with contact management. You can store all your contacts in one place and locate them easily with its powerful search function. This makes internal communication more convenient. The contact management module allows you to easily create, edit, and even manage supplier and customer contacts.

Furthermore, there is a client portal allowing you to collaborate with your clients more easily.


You can instantly see important details just on your dashboard. Data such as your sales numbers, receivables, top expenses, and many more are readily available. You do not have to open more windows just to get insights. Moreover, if you want deeper insights and more accurate data, you can instantly generate reports. You don’t have to wait for the end of the week or month. You can just let Zoho Books create a Cash Flow Statement or a Balance Sheet any time you need it to. Tax reports can also be generated depending on current tax regulations. If you operate outside the US, no problem. There are 50+ built-in reports to choose from.

There is also a feature that allows you to schedule reports. You can set it to weekly, monthly, or quarterly. It all depends on what you need. You can even set the email addresses that you want to send it to. Zoho Books will automatically generate the reports and send them automatically. These reports are also shareable to your team. You and collaborators can easily view them, export and print hard copies. Of course, reports can be customized to suit your needs. With these tools, you can make better-informed decisions in the future.

Some may feel that the analytics in Zoho Books is somewhat “basic.” Although it covers most of your needs, it may not be enough if you want advanced analytics. This can only be provided to you by a dedicated analytics platform. Should this be your case, you can try out Zoho Analytics as it integrates seamlessly with other Zoho products.

Pricing and Integrations

Zoho’s pricing is a real strong point. This is because the most advanced plan, the Professional Plan, will only set you back for $29 per month. It includes 10 users and 10 Automated Workflows. It also includes purchase orders, sales orders, inventory plus a custom domain. These are something that Standard and Basic Plan subscribers do not get. Standard Plan subscribers pay $19 per month per organization but only get 3 users (2 users plus 1 accountant).

Unlike the Professional Plan, it only gets 500 contacts instead of unlimited ones. The Standard Plan includes a Twilio integration, vendor credits and purchases approvals to name a few upgrades from the Basic Plan. The Basic Plan only gets a total of 50 contacts, 2 users and only 5 Automated Workflows. But for $9 a month per organization, you can already get custom invoices, recurring transactions, expense tracking, and bank reconciliation.

All plans are armed with SSL encryption and two-factor authentication for trustworthy security. Plus, you can connect third-party apps thanks to Zoho’s open REST APIs. The price points are very affordable and you can also add users for $2 a month per user. If you pay for the subscription yearly, you get 2 months off. This does not sound like a bad deal at all.

Is Zoho Books a Perfect Fit to Your Business?

If, after reading this guide on the pros and cons of Zoho Books and you’re still unsure if it fits you right, try to simplify the scenario. If you are already using a free version of any Zoho product and you like it, it is just intuitive to go for Zoho Books because you’re already familiar with the interface and aesthetics.

Likewise, if you own a startup or are just trying to figure out how to migrate your manual processes to digital and the cloud, Zoho products are a good bet for you. They are something to consider as the total Zoho offering is quite comprehensive and at budget-friendly rates. You can tie them all together and have a powerful business management suite at your disposal.

One good word that can describe Zoho Books is that it is robust. It is just armed with thoughtful and powerful features that can help you avoid embarrassing accounting blunders. With it, you can comply with regulations, internal standards, and be on top of your taxes.

The user interface is pretty self-explanatory that tutorials and training won’t really take up much of your time. Many businesses in the tech and service industries find Zoho Books to be the go-to cloud accounting app. They find it flexible and customizable. It won’t be a stretch to say that startups to enterprises can benefit from this lightweight but powerful app. Of course, the best way to find out if this works for you is to try it. Simply sign up for Zoho Books free trial here.

Daniel Epstein

By Daniel Epstein

Daniel Epstein is a senior financial research analyst at FinancesOnline and the architect behind our Fintech and ERP content division. His main areas of expertise are blockchain technologies, cryptocurrencies, and the use of biometrics in fintech solutions. His work has been frequently quoted by such publications as Forbes, USA Today, Entrepreneur, and LA Times. With more than 1,800 solutions scrutinized in the last 5 years spent on our team he always prioritized offering readers an unbiased perspective on modern financial technologies.

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