Every small business needs to manage its finances and accounting software makes the job a lot easier by helping you track your finances, manage budgets and cashflow, and use reports to understand trends about your business. There are many great paid-for accounting products on the market but if you’re just starting or if your budget is limited, I’ve looked at free options: are they up to the job of helping you run your small business and do they provide all the features you need, just without the cost?
These free cloud-based accounting software work very well for freelancers and service-based businesses. The main difference between a free and paid-for accounting software product is in the range of features offered; as you might expect, free can mean less powerful when comparing features with a paid version. For example, you’ll probably miss out on features like automatic payment reminders, advanced reporting capabilities, ability to generate unlimited invoices, support for multiple users, and more.
To help you find the right choice for managing your business expenses, I have put together this lis to some of the best free accounting software available.
Choosing the right accounting software package
Before you select the right free accounting software for your business, make a list of the features that you need and those that would be nice to have. You obviously need to be compliant and your financial data must be accurate, but you might not need payroll support. For some small startups and freelancers, it might be enough just to generate and manage invoices – in which case using invoicing software to generate invoices to your clients could be a simpler solution.
Here’s my list of features you should consider when assessing accounting software:
Support
Check the support available to users – free software is going to have its limitations and support might be one of the features that is only available to paid users. This might not be an issue if you are already experienced in using accounting software but if it’s your first business or first time in setting up an accounting system and linking in your bank account feed, then support could be a deciding factor.
Mobile version support
More and more of our lives are run with the help of apps on our mobile phones and business accounting is no different. Does the accounting software offer an app for your mobile? You might be surprised just how useful this can be – for example, allowing you to generate an invoice as you leave a job, checking on unpaid invoices before you visit a customer or reviewing your sales when travelling to a sales pitch meeting.
Ability to scale up
You might be a small business or startup now but you’ll be growing fast and you need accounting software that can grow with you. Is there an upgrade path to support adding on extra features such as payroll as you start to employ staff, manage your VAT as you reach the VAT threshold and deal with multiple currencies if you trade with the USA or Europe?
Standard features
Look for an application that offer the features a small business owner may require. These include online payment options, free plan limits, mileage tracking, and other important features.
Works with your accountant
Even though you manage your business finances, you’ll almost certainly use an accountant to create your year-end tax submission, maybe to advise on VAT or payroll, and help you with any HMRC enquiries. Check the accounting software that your accountant supports – it makes it very easy to give them access as a user to your account or send a file across rather than have to try and export data.
Reports
Most free applications let you create basic reports but check what else is available – especially if you need extra features such as data visualisation, graphs, or a dashboard. You might need a paid plan for these advanced features or you could always use a reporting tool such as Microsoft BI or Salesforce Tableau (both of which are paid-for tools).
Limits on usage
Check any limitations on usage – typically this might limit the number of invoices you can generate each month or the number of users who can log in to your account.
Best free accounting software
I’ve looked at all of the free accounting packages available – including free versions of paid-for products – and put together this shortlist of the most popular products on the market. And to help you navigate, I’ve rated these to give you a guide if you looking for a specific use for the software, for example the best for freelancers or the best reporting on offer.
Worthy of a notable mentions are:
FreeAgent.com that has a partly-free deal: if you open a business bank account with a couple of banks, you can get FreeAgent free.
CrunchAccounting.co.uk is a well-known small business accounting service that offers free accounting software; there’s no catch, you can use the software without using their business accounting services but you’ll find your accountant might not be quite as welcoming.
Here’s my half-dozen free accounting software products available:
- ZipBooks – For Invoicing
- Zoho Books – Best for Freelancers
- NCH Express – Best for Financial Reporting
- Wave – Simple Interface
- Akaunting – Easy Personalization
Zip Books – Unlimited Invoices
Find out more at ZipBooks.com
The Zip Books platform centres around invoices, expenses and payments – it lets you manage and review your accounts and generate invoices, track payments and manage simple finance reporting for your small business. If you’re looking for a simple platform that can help you manage your invoices and provides basic reporting, then ZipBooks is a good option and is particularly easy to use and setup.
Pros
- Unlimited invoices
- Easy income tracking
- Accepts multiple vendors
- Multiple payment options
- Offers multiple currencies
- Easy payment integrations
- Good reviews
Cons
- Pathetic customer service
- Free plan doesn’t offer the auto-billing option or multiple users
- Free plan doesn’t let you use more than one bank account
Zoho Invoice – Best for Freelancers
Find out more at Zoho.com
Zoho offers powerful and flexible tools for almost every aspect of a small and growing business – from CRM to accounting. Most of its software is available either separately or packaged together into a convenient set of features. For this article, I’ve looked at its Zoho Invoice product that, as the name suggests, is perfect for sending and managing invoices – however, there’s more to this product that just invoice management and it’ll help automate the whole process, supports time-tracking and manage multiple currencies. It’s probably better suited to a small business or freelancer, but you can then upgrade to the full paid-for product Zoho Books.
Pros
- Top-rated free accounting application
- Various users
- Mileage tracking
- Well-integrated with other products
- Personalised invoices
- Relatively cheaper
- Best for sharing with bookkeepers
- Customer support is included in the free plan.
- Easy account reconciliation
- Time tracking
Cons
- Limits to invoices
- No more than 15 users allowed
NCH Express – Best for Financial Reporting
Find out more at NCHsoftware.com
NCH Express is a desktop software for small businesses that has one of the easiest user interfaces around and combines this with some impressive financial reporting tools to let you track and understand the detail behind your finances and sales revenue.
However, it is only really suitable for a small business or freelancer in its free version – you’ll need to upgrade to a paid plan to add users or access the full range of accounts features through its Express Accounts’ cloud version.
Pros
- Simple interface
- Track income easily
- Excellent reports
- Free for businesses with a lesser number of employees
- Over 20 financial reports
- Easily manage accounts payable
- Quick expense tracking
- Optimization of balance sheets
Cons
- Customer support is only for paid users
- Bank connections aren’t as strong
Wave – Simple Interface
Find out more at Waveapps.com
Wave is one of the best free accounting software for small business owners with an impressive range of features and an easy-to-use interface. It lets you connect an unlimited number of bank and credit card accounts. All of the accounts can be monitored through Wave’s dashboard which displays a quick view of key information. There’s invoicing and billing features that are good for smaller businesses or freelancers. As your business grows, you can add new users to help with bookkeeping and there are mobile phone versions – all for free.
Pros
- User-friendly interface
- Cloud-based accounting software
- Mobile app for both Android and iOS
- Bill and invoice reminders
- Automatic card syncing for updated reports
- Unlimited bank connections
- Easy income and expense tracking
Cons
- No active customer support
- Processing fee takes long
GNUCASH – Easy Personalization
Find out more at GnuCash.org
GnuCash is a good solution for basic finance tasks such as tracking your income and cash flow. It’s a bookkeeping tool rather than a full accounts package that aims to help you track income, sales, VAT, and reports on revenue and some basic customer insight.
There are some limitations on GnuCash, in that it doesn’t let you send out or track invoices and payments.
What is interesting is that the software is open-source – this means the developer has released the software code and the community (or you) can extend and build new features. If you are looking for a specific feature that unique to your industry, ask the community and you might find another user has built this, giving you a bespoke system for free.
The downside of this is that there’s no real customer service, instead there’s a huge online support wiki and a community to help answer any question you might have.
Pros
- Expense tracking
- Can be used on a variety of operating systems
- Offers transaction matching
- Multiple translations available
- Customizable software interface
- Excellent customer-wiki
Cons
- Complex user interface
- Learning curve isn’t as well
- Doesn’t offer advanced accounting features
Frequently Asked Questions
What is accounting software?
Accounting software is an application that allows businesses to keep track of their transactions and make recurring invoices, accounts payable, sales tax, and much more. It is really a big helping hand in managing the finances of multiple businesses.
These fall into two categories; the free version and the paid version. One must try the free version thoroughly before moving to the paid software. It gives you hands-on practice, and you understand various terms better.
How many users are allowed per account?
Most of these free accounting applications let you add up to three users or up to five users only. This is not very feasible for inventory management. Look for payroll services that let you add unlimited users and multiple credit card accounts.
Which is the best accounting software for my small businesses?
That is something you will decide by looking at the size of your business and its potential growth in the coming years. If you are a freelancer or have just opened a new jewellery business, even the smallest of applications will suffice because your data is in an optimal range.
For a year or two, you might not even have to think about switching to a paid application. You must also consider the number of employees you have and the workload. A good option for businesses with fewer than five employees is Wave and Sunrise.
It keeps your finances on track and alerts you of all changes while giving suggestions. So you can make the best decisions beforehand and be ready for the tax season – which no one ever is.
If your business is rather large, you should go for Zoho books. It works best for average-sized businesses. You can also avail of its paid plan so you won’t need to entirely move to another software.
Conclusion
Choose the right accounting software and you’ll make your business easier and quicker to run when submitting VAT returns and reconciling invoice payments, and it’ll give you valuable insights into your finances through smart reports. As you start out, you might be able to meet all your needs with a free product and I’ve looked at six of the best-known together with a couple of products that are very well-known and have ‘almost-free’ plans.
Also in this series on Accounting Software
