The Best Free Accounting Software for Small Business Owners

Raising invoices, tracking expenses, checking your bank statements, and paying your taxes are all necessary to run a successful small business. If you’re still doing all of this manually, you’re spending a lot of time each month on administration—time you could be spending growing your business. You can significantly reduce this overhead by using some small business accounting software.

It doesn’t have to cost you anything either—although popular accounting software like QuickBooks or FreshBooks can charge you anywhere from $25 to $150 a month—there are several bookkeeping solutions that are free. 

Free accounting software may not provide all the features and functionality of paid platforms, but if you’re just getting started or have simple financial management needs, they could be ideal. It also helps to get an understanding of how to manage finances in your business, and we’ve got a guide to that here.

Essential Features for Free Small Business Accounting Software

Here are the minimums you should be looking for when comparing free accounting software:

  • A high-level business dashboard so you can quickly understand your business’s financial position.
  • Add and track customer details so you can send estimates and invoices.
  • Create, send, and track estimates and invoices.
  • Create and track bills and expenses.
  • Reconcile bank account transactions with the accounting software.
  • Generate bookkeeping reports like balance sheets and profit and loss.

We’ll explore some of the most popular free accounting software and explain the features and restrictions of each.

ZipBooks Free Accounting Software

ZipBooks provides simple, stylish accounting and all the basic features you need as part of its free offering.

Features Included with ZipBooks Free Accounting Software

The free version of ZipBooks allows you to:

  • Get an overview of your business.
  • Manage unlimited vendors and customers.
  • Send unlimited invoices.
  • Accept digital payments (there is a payment processing fee for this).
  • View basic bookkeeping reports.
  • Connect and reconcile one business bank account.

Restrictions on ZipBooks Free Accounting Software

The free version of ZipBooks does not allow you to:

  • Customize your invoices or estimates.
  • Send recurring invoices.
  • Create automated payment reminders.
  • Import and bill time entries.
  • Create customer or vendor statements.
  • Automatically categorize expenses.
  • Several other features.

You can find a full comparison on their pricing page.

ZipBooks offers various paid plans that give you more features. These paid plans vary between $15 and $35 a month.

Wave Free Accounting Software

Wave takes a slightly different approach to paying for its software. There are no monthly fees for its fully-featured suite of accounting tools. Instead, you pay a small amount each time you take payments from customers or clients. This “pay-as-you-go” model means you only pay when you get paid, which can be very good for cash flow.

Features Included with Wave Free Accounting Software

The free version of Wave is fully featured, with all of the services you’d expect from an in-depth accounting platform:

  • Get an overview of your business.
  • Manage unlimited customers and vendors.
  • Create, send, track, and take payments on an unlimited number of invoices, including recurring invoices.
  • Take payments directly from the invoice.
  • Automatically send out payment reminders.
  • Track sales tax on income and expenses.
  • Track and categorize all your expenses.
  • Connect with an unlimited number of bank accounts and credit cards.
  • Manage multiple businesses.
  • Get detailed accounting reports.
  • Scan and record receipts.

Restrictions on Wave Free Accounting Software

There are no restrictions on the accounting features included in the free tier of Wave. The only monthly fee they charge is if you want to run payroll. You only need to set up and run payroll if you have employees or if you’re filing taxes as an S- or C-Corporation.

Paying for Wave Accounting Software

Although Wave has no monthly fees, it does still charge for its software by taking a small percentage of invoices paid through its platform. This works as follows:

  • Credit cards and debit cards: A fee of 2.9% of the transaction amount + 30c. AMEX cards are charged at 3.4% of the total amount.
  • ACH payments: A fee of 1% of the transaction amount.

The fee on credit cards and debit cards is identical to any fee you would pay elsewhere to process cards. This means you’re paying exactly the same fee to Wave as you would anywhere else, like Stripe or PayPal.

Because of this, the only “effective” additional fee you’re paying is on ACH transfers where clients pay directly into your bank account. For example, if customers directly deposited $20,000 into your business bank account, Wave would charge 1%, or $200.

Learn more about Wave Accounting.

Akaunting Free Accounting Software

Akaunting is a genuinely free, cloud-based accounting software platform. Rather than charging a monthly fee, they instead make money by selling optional “apps” which can expand the platform in different ways. Their basic, free accounting software will still meet your small business needs.

Features Included with Akaunting Free Accounting Software

The free version of Akaunting allows you to:

  • Get an overview of your business.
  • Manage unlimited customers and vendors.
  • Create, send, and track, an unlimited number of invoices, including recurring invoices.
  • Send invoices out in multiple currencies.
  • Track and categorize all your bills and expenses.
  • Connect with an unlimited number of bank accounts.
  • Manage multiple businesses.
  • Get detailed accounting reports.

Restrictions on Akaunting Free Accounting Software

There are no restrictions on Akaunting’s features. They do provide a number of paid, optional apps that enhance what you’re able to do with the platform. These include:

  • Adding double-entry bookkeeping ($69).
  • Sending out estimates ($49).
  • Integrating customer relationship management ($99).
  • Integrating eCommerce functionality ($various).
  • Managing inventory ($49).
  • Adding various payment methods. ($39 – $49).

Akaunting provides access to more than 60 apps which significantly increase the capability of their platform. The amount you pay for each app is a one-time annual fee. 

Learn more about Akaunting.

Other Free Accounting Platforms for Small Businesses

There are many other accounting solutions available for small businesses, but due to their limited nature, we chose not to cover them in detail. Here are three options you can also explore:

  • SlickPie provides a complete platform but only allows you to have a maximum of ten clients before you need to pay a monthly fee.
  • CloudBook’s free plan only allows you to have one client and to send five invoices before you need to pay a monthly fee.
  • Zoho Invoice only allows you to have a maximum of five clients before you need to pay a fee.

In our view, ZipBooks, Wave Accounting and Akaunting are the best free accounting software platforms for small businesses. They all provide comprehensive features and each has a slightly different pricing method. Try them out, and get on top of your finances, today!

*All prices quoted are correct as of September 2020.