Accounting software can be your secret weapon when it comes to managing your small business finances. Think of the software as your assistant, helping you track cash flow, revenue, and expenses. But if you’re budget-conscious, you probably don’t want to overspend on software loaded with bells and whistles you’ll never use.
The good news is that several decent accounting programs out there are free for the taking. It’s just a matter of choosing the most suitable one for your small business’s financial needs.
How can accounting software be free?
When you think of accounting software, names like QuickBooks, Excel, and Peachtree probably come to mind. But these packages can command a pretty hefty price tag and come with features that may be too complicated for a small business owner doing their own accounting off the side of their desk.
If you’re not ready to pay for features you won’t use, many companies offer free accounting and bookkeeping software that can be a good fit for your small business. These free programs contain useful features without the high-level add-ons of their pricey big brothers. Without the advanced features, there is no need for complex, expensive program development.
Another reason some companies freely distribute the software is because it is open-sourced, meaning any developer can customize it any way they see fit. The license for open-sourced software specifically states that it must remain free for every user.
Top free accounting software for small business owners
If you decide to take on your accounting duties, there are several suitable free software options to choose from. We’ve done the research for you, and here are our top seven free accounting software packages.
- GnuCash: no frills, plenty of features
- Wave: powerful and cloud-based for anywhere, anytime access
- ZipBooks: great if you’re new to accounting
- CloudBooks: unlimited users, limited free invoicing
- Zoho Books: cloud-based, single-user platform with many features
- Akaunting: open-source software
- Brightbook: web-based with powerful tools and features
Read on for our breakdown of the best free accounting software for your small business finances.
Note: All software options are compatible with Windows and Mac computers. Several are also cloud-based and compatible with mobile devices where indicated in the description.
GnuCash: no-frills but plenty of features
GnuCash is an open-source accounting program that offers many features to help you manage your small business accounting. Volunteer developers update the software regularly, which means the program is always kept up-to-date.
GnuCash’s strength is that it contains advanced features such as customer and vendor tracking, job assignments, invoicing, bill pay, sales tax management, payroll management, and budget creation and management.
The checkbook-style register is an easy-to-use interface for entering all of your checking and credit card transactions. You can also enter income, stock, and currency transactions.
You can split transactions, mark transactions as canceled or reconciled, autofill entered transactions, and display multiple accounts in a single register window.
Since GnuCash is not cloud-based and only locally installed on a desktop computer, access to your financial data is limited to only one machine and one user. While GnuCash offers a mobile app, it is only for Android-based devices and requires you to manually import the data, which can be a pretty tedious process.
The interface of the program is also a bit dated and requires some time to get used to. Many users report problems with manually importing their transactions.
GnuCash’s customer support is through a public email-based discussion board, so it may take a while before you get a response to your question. Their chat support uses an obsolete IRC channel system, which can be tedious to set up.
Wave Accounting: powerful and cloud-based for anywhere, anytime access
Wave Accounting checks all the boxes for many powerful features that are well-suited for your small business.
Wave Accounting pros
One of Wave’s most powerful features is that it’s cloud-based, which means real-time access and instant updates from anywhere. Your information is stored and backed up on highly secured servers.
Wave also includes unlimited and customizable income and expense tracking, receipt scanning, invoicing, and a smart dashboard for easy viewing.
Wave offers unlimited bank and credit card account connections, and there’s no charge if you want guests to sign in and collaborate on the financials with you. If you need someone else, like your accountant or another member of your financial team, to log in and check the numbers, relax: there’s no limit to the number of users you can add.
Wave has a robust Help Center for self-service support, and they also provide email support for all invoicing and accounting questions related to their free features.
Wave Accounting cons
While Wave allows you to track accounts receivable (aka any money your customers owe you), it doesn’t allow you to track accounts payable (meaning the money you owe your suppliers or creditors). Wave also does not offer inventory management.
And while all of Wave’s basic features are free, there is a per-transaction credit card processing fee of 2.9% plus .30 for Visa, Mastercard, and Discover and 3.4% plus .30 for American Express.
Wave’s payroll application is available at $20 or $35 a month, depending on which state your business is located in.
Live chat support is only available for paid features. If you’d like to speak to an expert about your bookkeeping questions, you’ll have to purchase it from their Wave Advisors.
ZipBooks: one of the best options if you’re new to accounting
ZipBooks is a powerful yet simple web-based program that is useful for streamlining your small business accounting.
ZipBooks allows you to send unlimited invoices in multiple currencies. The software’s vendor tracking and expense management capabilities are right up there with several other free competitors. The free starter plan comes with multi-currency payment acceptance, separate records for 1099 expenses and payments, receipt tracking, and a chart of accounts.
ZipBooks is cloud-based, so you can use it on the go from any mobile device. An app is currently unavailable as new features are in development. However, you can use your device’s browser to access ZipBooks. The program uses 256-bit SSL encryption to keep your data secure.
ZipBooks allows you to toggle between cash and accrual accounting, while most other programs only let you choose one or the other.
The free version only allows you to connect one bank account and view basic reports. If you need multiple accounts and additional team members added, it will set you back $15 a month or more.
The free plan only lets you generate a balance sheet and profit and loss statement. Additional financial statements can set you back as much as $35 a month as part of ZipBook’s Sophisticated plan.
The only support that we found was a self-service Knowledge Base with articles and tutorials. ZipBooks does have an active community of users on Facebook and Twitter that may be of some help if you run into problems.
CloudBooks: unlimited users, restricted invoicing for free
While CloudBooks’ basic features are free, it doesn’t offer as much as the competition.
CloudBooks is an online accounting software program that allows you to manage your online invoices, expenses, and projects. You can also view financial reports from any mobile device with their free app. Their platform allows for unlimited staff users, which means you can share access to your books as needed.
CloudBooks is generally geared towards freelancers with few clients. Unless you are willing to shell out $10-$20 a month, you are limited to only five unbranded invoices per month. There is also no phone support or Paypal integration for the free version.
Zoho Books: cloud-based, single-user platform with many features
Zoho Books offers a free plan for small businesses that need help invoicing customers and managing payments with a single account.
Zoho Books pros
The free version of Zoho Books includes up to 1,000 customizable, branded invoices per year. The user-friendly software also features contact management, expense tracking, multiple bank and credit card accounts, and the ability to import bank and credit card statements.
A useful client portal allows you to share recent transactions and allow clients to make bulk payments. You can also set up recurring invoices and automatic payment reminders.
The client portal even allows you to capture customer satisfaction feedback to share on social media, leveraging that all-powerful social proof to build your brand.
Zoho Books cons
The biggest drawback to Zoho Books? It’s only for businesses with less than $50K in annual revenue. Only one user and one accountant can access the program, unless you pay monthly for one of their subscription packages.
Only email support is available in the free version, while the paid versions use voice and chat.
Akaunting: great open-source software to manage your cash flow
Akaunting is an accounting solution that is completely online and has all the features you need to manage your small business’s financials. Akaunting is open-source, which means it has a large library of add-ons you can use to customize the software to suit your needs.
Akaunting’s easy-to-use interface is mobile and tablet-friendly. The cloud-based option allows you to access and update your financial information from any location on your device.
The software allows you to create and schedule recurring invoices, revenues, bills, and payments for continuous jobs. Akaunting also includes detailed financial reports.
A client portal is also available to share transactions and invoices with your clients and accept online payments. You can even set your clients up with a sign-in to access information.
Akaunting allows an unlimited number of bank and cash accounts. You can easily add deposits and make transfers between all accounts. The ability to add non-billable expenses as payments helps to keep the account balances up-to-date.
While Akaunting is one of the more customizable accounting options available, you may need to invest in some pricey apps available through Akaunting’s app store to get the most out of the program.
Free support is only available through the community forums, and dedicated support requires an expensive subscription plan. The support ticket system is only for users who purchased an app from their App Store.
Brightbook: web-based with powerful tools and features
Brightbook certainly lives up to its name with its colorful website. Advertising as the “world’s most loved free accounting system,” Brightbook’s cloud-based software lets you access it anywhere with an internet connection.
Brightbook is a great alternative to the paid accounting programs with unlimited user access, expense tracking and recording, bank statement processing, and auto-generated profit and loss reporting. Tax reporting is also available to track what you paid in taxes and how much you will get back. Another plus is that Brightbook has no optional, expensive additions to consider. What you see is what you get without any hidden fees.
Brightbook also links to Paypal, allowing your clients to pay you online. You can invoice a client in any currency, and the program will automatically convert it back to your home country’s currency.
Since it is cloud-based, Brightbook lets you monitor and track your financials in real-time from anywhere. While there is no dedicated mobile app to access the program, you can use any mobile browser to view and update your data.
Brightbook’s invoice templates allow you to email invoices straight to clients without leaving the site. You can also view bills and expenses in a list or a more eye-pleasing gallery view. If you have other companies, Brightbook allows you to access them under one login.
Unlike some of their other free competitors, Brightbook can’t perform double-entry accounting. There are also no third-party integrations available. While the program can be accessed from a mobile device browser, it requires more steps without a dedicated mobile app. Support is available only through web-based email.
Limitations of free small business accounting software
Free accounting software options have many features that can help you manage your business financials. However, before you dive headfirst into one of the freebies, consider a few of the drawbacks of using free accounting software.
The first problem is that the software is not scalable. As your business continues to expand, free software will likely be unable to keep pace with your growth. Once that happens, you have to invest in an expensive accounting system that can handle the financial reporting needs of your larger business.
If you decide to upgrade, it’s not always easy to migrate your financial data to the new platform. Manually inputting months or even years of financial information means a lot of data entry and wasted time on your part. If you can’t migrate the data, you will have to have your accounting information spread across two different systems.
Another pitfall with free small business accounting software is that their algorithms, or problem-solving formulas, may be more error-prone. You will need to take more time to generate and review reports to make sure the numbers add up.
Valuable accounting features you will miss
If you decide to go with one of the free small business accounting software platforms, be sure to double-check that the free version has everything you need for your financial recordkeeping. Many of these packages have decreased functionality or force you to pay extra for necessary features. Free small business accounting software will not include:
In-depth financial reports: Many free accounting packages offer the basic profit and loss statements, but that’s where it ends. That is, unless you are willing to upgrade to a paid subscription plan, which defeats the purpose of the free software.
Payroll services: You will end up paying extra if you need payroll processing since the free packages do not include this feature.
Lack of quality support: If you are knee-deep in expense accounting and you come across an issue, immediate support is almost impossible to come by. There is usually only email support or trying to find help from a community-based message board.
User limits: Free accounting software limits how many users are on the account. That can really put a crimp in things if you need additional team members, like your accountant, to access the financials.
Lack of third-party integration: One of the most useful features in accounting software is integration with other programs and apps. Unfortunately, many free programs don’t have this feature or charge extra for their own integrated apps.
Is it worthwhile to do your own accounting?
With free software available, you may have visions of saving big bucks since you won’t need an accountant. But doing your own financials can affect your business in other ways.
Wearing the accounting hat means spending more of your valuable time tracking and analyzing your business’s expenses. That’s time away from your current customers, who depend on you for information and resolving any problems with their orders. It’s also more time away from drumming up more business and continuing your future growth.
You will also have to learn your way around the new software. This may take even more time, especially if you are unfamiliar with accounting fundamentals.
An accounting software program is also only as good as the data entered into it. That means there’s always the possibility of user error. Free software is not a replacement for an experienced accounting professional.
These errors can come back to haunt you at tax time, which could result in a pretty stressful, time-consuming audit. If that should happen, you have no one to represent you to face the fire. An accounting professional will make sure your business is compliant with IRS regulations.
When you’re deciding how to manage your business finances, be sure to weigh each option carefully. It’s not all about saving a few dollars on accountant fees, but rather the risk of losing valuable time to help your customers.
How Bench can help
While there are many free small business accounting software options, in the end, you’ll still pay the price in the form of lost time or costly additional features.
Instead of paying extra for à la carte features to add to an incomplete program or worrying about inaccurate data and valuable time lost, you could always outsource your bookkeeping and accounting. That’s where Bench comes in.
Our team of small business financial experts can save you from the headaches and stress of doing your own books. Our powerful financial reporting, dedicated bookkeepers, one-on-one support, and tax experts offer the insights you need to make sure your small business is headed in the right direction.