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Staying on top of finances isn’t always easy if you’re a freelancer or small business owner. However, paying big bucks for professional bookkeeping and accounting services isn’t always feasible. The good news is that there are free accounting software products that can help.
We’ve taken on the task of comparing the best free accounting software on the market. We researched and reviewed features, including invoicing options, receipt scanning functionality and secure document management capabilities.
With all of this information in one place, you can easily compare the best free accounting software and decide which one is right for you.
Best free accounting software
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Best free accounting software comparison
We extensively research the key competitors within an industry to determine the best products and services for your business. Our experts identify the factors that matter most to business owners, including pricing, features and customer support, to ensure that our recommendations offer well-rounded products that will meet the needs of various small businesses.
We collect extensive data to narrow our best list to reputable, easy-to-use products with stand-out features at a reasonable price point. And we look at user reviews to ensure that business owners like you are satisfied with our top picks’ services. We use the same rubric to assess companies within a particular space so you can confidently follow our blueprint to the best free accounting software.
The best free accounting software has positive user reviews on customer review sites and app stores, as well as free plans for businesses. Free accounting software companies should provide customers with fast and reliable support. Using a combination of phone support, live chat and knowledge bases, customers should be able to quickly resolve issues 24/7.
The best free accounting software will have dashboards and invoicing tools. It should also allow businesses to create and send purchase orders to customers. Free accounting software should also integrate with popular CRMs, offer support for multiple currencies, have receipt scanning functionality and have bill pay functionality.
What is free accounting software and how does it work?
Accounting software allows individuals and small business owners to track their income and expenses so they can have an overview of their finances. Depending on the accounting software’s features, it may also help with tasks like payroll, receipt scanning and purchase order issuance.
Free accounting tools tend to have more limited functionality than paid tools but can still be useful for basic financial record-keeping.
Benefits of free accounting software
If you’re a freelancer or small business owner, a free accounting tool can help you streamline your operations management. Different tools have different capabilities. In general, here are some of the benefits a free accounting software may offer:
- Maintain financial oversight. By recording both your invoices and expenses, your accounting tool will let you see how much you’re actually earning. Some tools also offer reporting functionality, so you can generate charts and graphs that show your net earnings versus gross earnings.
- Simplify paperwork management. Some free accounting tools allow for customized invoices and purchase orders, speeding up paperwork. Tools may also allow for receipt scanning so you can efficiently digitize your paperwork. Finally, the secure document management offered by some tools helps ensure your data is protected.
- Integrate payroll. If your small business hires employees, one of your biggest expenses is probably wages. Many free accounting tools have integrated payroll functionality, so you can easily track this expense.
- Enhance customer communication. Some financial accounting tools allow you to create customer portals where customers can log on and view documents like service estimates. This can cut down on back-and-forth paperwork.
- Access financial data on the go. A number of accounting tools include mobile apps. This means you can check your finances anytime, anywhere, allowing for easy accessibility and the peace of mind that brings.
Who needs free accounting software?
Accounting software can be useful for small business owners, freelancers or solopreneurs who want to track their income and expenses in one place. You can use an accounting tool for quarterly bookkeeping and for preparing your annual tax returns.
Different types of tools are suitable for different groups. For example, if you’re a solopreneur, you don’t need payroll functionality. However, if you’re a small business owner with employees, this is useful.
How to choose the best free accounting software
The reality is that we can’t pinpoint a single “best” tool because the best free accounting software will depend on your unique needs. That said, there are a few key features that you will likely want in your accounting tool, whether you’re a freelancer, solopreneur or small business owner.
Key features to look for
While free accounting tools vary in their functionality, there are a few basic capabilities you’ll probably want in your software. Here are the highlights:
- Double-entry accounting support: Double entry is an accounting method that records every transaction as both a credit and a debit. If you have a credit, like a business expense you need to pay, that increases your business’ liability account and decreases your business’ asset account. Conversely, if you have a debit, like an invoice paid by a client, that decreases your liability account and increases your asset account. The double-entry accounting method gives you a more comprehensive overview of your business finances than the single-entry method. However, it can be more complex and time-consuming.
- Invoicing tools: Whether you’re a solopreneur, freelancer, contract worker or small business owner, you probably need to collect payments from clients. Odds are that you issue invoices to request those payments. Being able to record, create and issue invoices through your accounting tool can save you time and help you maintain an accurate overview of who owes you what. This also makes it easier to chase down past-due invoices and ensure you get the money you’re owed.
- Receipt scanning: A receipt scanner can save you time when uploading business expense notes to your accounting tool. Instead of having to manually enter the data, you simply scan the document using your mobile phone. Some accounting tools have integrated receipt scanning, while others work with scanner integrations.
- Secure document management: Financial documents may contain sensitive information, like bank account details. A good tool will have security features to help keep this data safe, like two-factor authentication. This can help protect against threats like identity theft and bring you peace of mind. Since financial documents like invoices may also have sensitive customer details on them, your customers’ data is also protected.
- Payroll functionality: If you’re an independent contract worker, freelancer or solopreneur and you don’t hire employees for your business, payroll isn’t really an issue. However, if you’re a small business owner with employees, payroll adds a layer of complexity to your business finances. You have to accurately calculate wages as well as what to withhold, like Social Security and taxes. In this case, payroll functionality built into an accounting tool is a big plus.
How much does free accounting software cost?
We’ve handpicked the providers on this list because they all offer no-cost versions of their accounting software. While some other names in the business may offer temporary free trials, these are the providers that offer forever-free versions.
There is also paid accounting software with more comprehensive functionality, such as budgeting dashboards. If you’re interested in additional features and willing to spend a bit more, we recommend checking out our review of the best accounting software for small business.
Paid accounting software plans can range from as little as $15 to upward of $350 per month. In general, you can save money by paying for an annual plan instead of month-by-month. While the upfront cost is greater, when you break it down into monthly costs, the fee tends to be cheaper than if you pay only by the month.
Frequently asked questions (FAQs)
The best free accounting software will include essential functions like double-entry bookkeeping, invoicing, receipt scanning and secure document management. Depending on your unique needs, you may also seek additional functions, like the ability to issue purchase orders or manage payroll.
For example, if you have a team of employees to manage, payroll integration is an advantage.
While a free accounting tool is undoubtedly cost-efficient, you might want to pay for premium accounting software if it offers additional functions you can use. For example, say you want access to a budget dashboard, which aggregates all of your business’ financial data in one place.
While this is rarely found in free tools, it’s often a feature of premium providers.
There are a few basic functions you’ll probably want in an accounting tool, including double-entry accounting support, invoicing tools, receipt scanning capabilities and secure document management.
If you have employees, payroll integration is another convenient feature. Beyond that, you’ll have to consider your unique business needs when deciding what to look for. Other possible useful features include purchase order capabilities, the ability to set up customer portals and a mobile app for on-the-go financial monitoring.
If you struggle to maintain oversight of your business income and expenses, accounting software can be a savvy investment. Accounting software can also help you save time by consolidating your financial management in a single place and automating tasks like payment reminders.
Finally, having a digital record of all your profits and losses in a single accounting tool can save time and headaches when it comes to quarterly bookkeeping and tax preparation.
If you can confidently use an accounting tool, you may be able to forego the expense of an accountant. Your accounting tool can track your income and expenses, and you can use this information to manage your quarterly bookkeeping and annual tax filing.
However, if you don’t have the time or aren’t confident in your financial expertise, you may still want to hire an accountant to prepare your financial paperwork, especially anything that goes to the IRS. You can still use accounting software to upload invoices and expenses, and your accountant can then access this information through the software. The streamlined process usually means your accountant’s job will be less time-consuming, so they’ll charge you less.
If you want to use an accounting tool and still hire an accountant, check the access details of your desired software tool. The provider should specify how many people can use a single software subscription. For example, it might specify access for one user plus one accountant.