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If you run a business, you’re going to need accounting software to help manage your finances. However, many small companies have relatively simple needs and may be able to rely on free accounting software that’s available online.
Let’s go through the top options for free accounting software for a small business. We’ll share each program’s features, upgrade options and what to consider when selecting the best software for your company.
Free Accounting Software for Small Businesses: Top Picks
Sometimes “free” doesn’t mean free. There’s a big difference between a 30-day free trial or a try-it-before-you-buy-it and free. While the following software recommendations do include versions or add-on modules you can purchase, each software developer offers an option for free basic accounting software.
Whether targeted for the self-employed or small companies, here the 8 best free accounting software for a small business:
If you are looking for basic accounting software to manage your accounts and money for free, consider Wave.
This application lets you connect any number of credit cards and bank accounts to the program. It also allows you to track income and expenses. Receipts and invoices can be scanned into the system and matched up with accounts.
You’ll pay an additional fee if you want to invoice customers and collect payments online. Automated Clearing House (ACH) payments will cost you 1% of the invoice. Visa, Mastercard and Discover credit card transactions will cost 2.9% and a 30-cent charge for each in addition to what you pay your credit card provider. (American Express credit card transaction fees are 3.4% plus 30 cents with Wave.) Payroll functions are also an add-on with fees ranging from $20 to $35 per month and $6 per employee or contractor charge.
The free version of CloudBooks lets you add an unlimited number of staff users for a single account. It is a cloud-based program that provides Secure Sockets Layer (SSL) encryption and secures data storage in the cloud. You can create projects, invoices and estimates. It comes with integrated time tracking and expenses tracking.
However, the free business accounting software doesn’t allow you to add your branding or provide telephone or chat support for questions. In addition, it only allows you to create 5 invoices a month and doesn’t let you handle invoice payments electronically through the software. The free version’s potentially biggest limitation is that it handles only 1 client. Either of the paid options will manage an unlimited amount of client accounts. These options are available for $10 to $20 a month, depending on which paid version you select.
ZipBooks will let you manage an unlimited number of vendors, send any number of invoices and accept digital payments from PayPal or Square. You also can connect to 1 bank account.
The free version includes a basic chart of accounts, general ledger, balance sheets and income statements. Paid versions, ranging from $15 to $35 a month, include features such as recurring automated invoices with auto-bill, payment reminders, invoice line items, smart tagging, document sharing, time tracking and reconciliation. You also can integrate payroll with an add-on option from a third-party provider starting at $39 a month and $6 per person.
If you prefer to keep your books on your computer and not in the cloud, you may want to consider GnuCash, which provides free accounting software for personal and small-business use. You can use it to track your accounts, income, expenses and investments.
GnuCash allows you to enter split transactions, reconcile accounts and schedule recurring invoices and transactions. The small business accounting version allows you to manage customers and vendors, jobs, invoices, bill payment, billing terms and helps prepare your books for tax time. It also offers basic receivables and payable accounts to manage payroll for employees.
GnuCash is part of the GNU project, a free software, mass-collaboration effort. It can run on GNU/Linux, BSD, Solaris, Mac OS X and Microsoft Windows as open-source software.
The simplistic look of the website makes it clear: VT Cash Books is no-frills accounting software that’s easy to use. Free and from the U.K., VT Cash Books features fast data entry with auto-complete functions, supports multiple bank and cash accounts, handles bank reconciliation and generates profit-and-loss statements, balance sheets and ledger reports.
It can also handle value-added tax (VAT) returns. The free business accounting software installs with a license, VT Transactions+, which provides added functionality for small businesses. VT Transactions+ comes with a free 60-day trial but requires you to purchase a passkey to continue using it after that period.
This is free online accounting software that offers most of the routine functions you need. You can sync accounts, track expenses, generate invoices and set up recurring bills. Akaunting allows you to manage both customers and vendors. Similar to GnuCash, it’s open-source software.
Akaunting will accept online payments with no fees in addition to your third-party payment provider.
QuickFile is cloud-based accounting software that’s designed for those without accounting backgrounds. An easy-to-use online interface supports automatic invoicing, receipt management, banking automation, estimates and quotes and basic financial reporting. It also has a fully branded client area built in the program.
The company has different free tiers for businesses based on the average number of ledger entries: 200, 201-500 or 501-1000. If you exceed 1,000 transactions yearly, you will move into a paid tier that works out to about $58 a year and will prepare your VAT statements for filing.
TurboCASH is another open-source software application. It benefits from a team of online developers and an active user community that can help answer questions. The desktop version handles your general ledger, cashbook, stock, creditors, debtors and invoices.
Like other free accounting programs, it does double-entry batches to ensure your books are balanced and it provides generally accepted accounting principles (GAAP) reports.
As your business expands, you might need to upgrade to the paid versions, which have more advanced features, including budgeting, payroll and additional analytics. The paid version operates in the cloud.
Free Accounting Software: What You Might Be Missing
Free is good, but only if it gets the job done the way you need it. If you want state-of-the-art accounting software, you’re going to have to spend some money. Here are some of the functions that free online accounting software typically doesn’t include.
Payroll and Tax Capabilities
Most free accounting programs won’t meet your payroll or tax reporting needs. If they do, there will be an upcharge or monthly fee to do so. Depending on the software, the additional charges may add up to more than some paid services.
If you need more than the basic entry-level reports free accounting software provides, you may want to explore paid versions that offer more sophisticated reporting options.
You may get estimating options in free software, but you won’t find financial forecasting. Running your business efficiently means looking ahead and forecasting your cash flow and performance.
Inventory and Invoicing
Few free accounting software offerings will track inventory or orders. Depending on your business, these may be must-have features. Also, note most free accounting software will limit the number of users, customers or invoices you can generate. Some programs also may charge additional fees for sending invoices online and collecting payments online.
Choosing the Best Free Accounting Software for Your Business
If you’re unsure whether you should use free accounting software or opt for a paid version, you may want to compare options. Conduct some free trials. Each of these 6 companies offers free trials for a minimum of 14 days:
Check carefully: Most have higher-level options with added features (at higher prices) and add-ons that might be necessary for your business. Free accounting programs might work well for a small business that’s just started. However, as your venture grows and your operations and finances get more complex, the paid options might better serve your situation.
Choose the accounting software that works best for you. Make sure to make a list of the features you need — and don’t settle for software that doesn’t meet them.
Contributing Writer at Fast Capital 360
Paul Dughi has held executive management positions in the media industry for the past 25 years. He earned his master of business administration degree while working full-time as president of a multistation television group. He is the author of two books on marketing and management.