Navigating small business accounting can be daunting, especially on a tight budget. In recent years, physical accountants and bookkeepers have been replaced with software that can do the same tasks, at a fraction of the time. Free accounting software can be a game-changer, streamlining financial management without breaking the bank. But with so many options, how do you choose the best one? What features should you look for? And are these free tools really as good as they claim?
In this guide, we explore the best free accounting and bookkeeping apps available, taking a look into their features, benefits, and potential drawbacks. We'll also dive into the wonders of IFTTT, our free automation software that has helped millions of people worldwide with all of their business needs. So, buckle up and keep reading to see how one of these revolutionary free apps can change the way you do work.
The importance of accounting software for small businesses
First a note on bookkeeping and accounting: although these terms are often used interchangeably, they are technically different. Bookkeeping refers to organizing financial transactions, while accounting refers to this concept and also covers financial advising. However, for the purposes of this article, we will use the word accounting as most software goes beyond simple bookkeeping capabilities.
Accounting is the backbone of business, crucial for tracking income, expenses, and ensuring legal compliance. Managing it manually can be time-consuming and error-prone, neither of which is what you want when running a business. Accounting software automates complex tasks, reduces errors, and saves time, allowing you to focus on running your business. It provides valuable financial insights that can help improve profitability and drive growth.
Free accounting software offers these benefits without any upfront costs, making it ideal for small businesses and startups on a shoestring budget. The majority of accounting software is scalable, meaning they offer free or cheap options for small businesses with simple tasks, and then charge more when your business grows in size.
Key features to look for in free accounting software
When choosing free accounting software, consider the following features:
Basic accounting functions: Income and expense tracking, invoicing, and financial reporting are essential for managing your business finances.
Multi-user access: Crucial if you have a team or accountant who needs access, ensuring seamless collaboration.
Integration capabilities: The software should work well with other tools you use, like payment gateways or project management apps, to streamline workflows and save time.
Mobile access: A mobile app allows you to manage your finances on the go, a must-have for busy entrepreneurs.
Scalability: As your business grows, your accounting needs will change. Choose software that can grow with you to avoid switching systems later.
Lastly, don't disregard the software's user-friendliness. Look for intuitive interfaces and good customer support. The best software for you depends on your specific needs, so take time to evaluate different options.
Top free accounting software options for small businesses
Wave Accounting
Wave Accounting is a popular choice for small businesses, offering income and expense tracking, invoicing, and financial reporting for free. It supports multiple users and integrates with other business tools, including payment gateways and project management apps. However, it lacks a mobile app, which can be a drawback for some users.
Pricing:
The core accounting, invoicing, and receipt scanning features are available at no cost. Advanced features like payroll and late reminders starts at $16/month.
Standout features:
Financial reporting: Generate detailed financial reports, including profit and loss statements, balance sheets, and cash flow statements.
Multi-user access: Collaborate with team members or accountants by providing them access to your Wave account.
Integrations: Seamlessly integrate with other business tools, such as payment gateways and project management apps.
Receipts scanning: Scan receipts with your mobile device and sync them with your Wave account (available through the Wave Receipts app).
Drawbacks:
- No mobile app yet.
Zoho Books
Zoho Books is part of the Zoho suite of business tools. It offers basic accounting functions, supports multiple users, and integrates with other Zoho apps. The software has a mobile app for on-the-go access, a big advantage for busy entrepreneurs.
Pricing:
A free plan is available for businesses with annual revenue under $50,000.
Standard Plan: $15/month, includes up to three users and additional features.
Professional Plan: $40/month, includes up to five users and more advanced features.
Standout features:
Multi-user access: Supports multiple users, allowing collaboration with your team or accountant.
Mobile app: Access your finances on the go with the Zoho Books mobile app.
Integration: Integrates seamlessly with other Zoho apps like Zoho CRM, Zoho Inventory, and third-party tools.
Automation: Automate repetitive tasks such as recurring invoices and payment reminders.
Drawbacks:
- Scalability: This might not be the best option for rapidly growing businesses needing extensive customization and scalability.
GnuCash
GnuCash is a classic free, open-source accounting software ideal for tech-savvy users. It offers income and expense tracking, invoicing, and financial reporting, and supports multiple users. However, it lacks a mobile app and has a steeper learning curve than some other options.
Pricing:
As an open-source software, GnuCash is completely free to use.
Standout features:
Income and expense tracking: Manage your business’s financial transactions efficiently.
Invoicing: Generate and send invoices to clients.
Financial reporting: Create various financial reports, such as profit and loss statements, balance sheets, and more.
Multi-user access: Supports multiple users, though setup might require more technical knowledge.
Investment tracking: Track your investments and portfolios.
Drawbacks:
Mobile app: Lacks a dedicated mobile app.
Learning curve: Has a steeper learning curve compared to other options, which may be challenging for non-technical users.
The interface is a tad dated.
Odoo
Odoo is another versatile open-source software that includes a range of business applications, including a robust accounting module. The service offers income and expense tracking, invoicing, financial reporting, bank synchronization, and reconciliation.
Pricing:
The Community edition of Odoo, which includes the accounting module, is free.
Paid plans start at $24/user/month, offering additional application downloads and professional support.
Standout features:
Multi-user access: Allows multiple users to access and collaborate within the platform.
Integrations: Integrates with other Odoo modules such as CRM, Inventory, Sales, and more, offering a unified business management system.
Customizable dashboards: Create customized financial dashboards to keep track of your business's financial health.
Drawbacks:
Complexity: Odoo can be complex to set up and use, especially for those unfamiliar with ERP systems.
Mobile app: The mobile experience may not be as seamless as some other dedicated accounting apps.
Pros and cons of using free accounting software
Free accounting software can be a great asset for small businesses, but potential customers should know that there are some drawbacks when compared to splurging for a paid version.
On the plus side, these tools are obviously highly cost-effective, helping you save on software expenses. If you are just starting out, we advise you against spending hundreds of dollars on software. Free versions often come with user-friendly interfaces and intuitive tutorials, making them easy to use even for those without extensive accounting knowledge.
Additionally, they provide automation capabilities, which can save you significant time and reduce errors by handling repetitive accounting tasks. Most free software includes all the basic features you'll need like income and expense tracking, invoicing, and financial reporting.
However, there are some drawbacks to consider. Free versions always offer more limited features compared to their paid counterparts, which might not suffice for all your needs. Customer support can also be lacking, leaving you to troubleshoot issues on your own. In terms of scalability, these tools may not grow alongside your business, potentially necessitating a switch to a more robust solution later on. Security is another concern, as some free software might not have the same stringent protections as paid versions.
Making accounting a breeze with IFTTT
If you are into numbers and love diving into all the little details about accounting, then by all means, you do you. For the others who find bookkeeping simply a drag, we'd like to introduce you to your new best friend: IFTTT.
IFTTT (If This Then That) is our powerful automation tool that connects over 1000 different apps and devices to streamline your workflow. By creating "applets", or pre-packaged automations, that trigger actions based on certain conditions, IFTTT can significantly reduce the manual effort required in managing your accounting tasks. We offer hundreds of accounting and bookkeeping automations, like for example, our applet that will create a new Wave Accounting customer every time a JotForm is submitted.
Founded in 2011, IFTTT has been used by over 25 million individuals to automate both business and home tasks, saving time and increasing efficiency. It's commonly used to connect disparate services and systems, making all products and services work well together in a way that instills user confidence. Best of all, it's free and only takes a couple of minutes to set up.
Top finance applets with IFTTT
Automatically create Wave customers when deals close in Pipedrive
Streamline the process of adding new customers to your accounting platform once you land a new sales deal. Use this Applet to automatically create a new customer in Wave once a deal in Pipedrive matches the filter you've selected.
When I receive a payment in QuickBooks, post to a Slack Channel
Let the team know that there hard work has paid off! Every time a sale is made and logged in QuickBooks, there will automatically be a notification sent to a Slack channel of your choosing.
Track new Stripe sales in Google Sheets
If you're looking for some quick bookkeeping assistance, this automation will save you a ton of time. With this Applet, every new sale in Stripe will be automatically added as a row to a Google Sheets spreadsheet with all the accounting details you need.
To enable these applets and millions more (yes, millions), try IFTTT today for free.
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Best free accounting and bookkeeping apps
September 20, 2024
