Best Free Accounting Software for Small Businesses of 2024 - NerdWallet (2024)

3.5

Wave tops the list for hitting the mark in multiple categories. Its invoicing feature, in particular, is hard to beat. The free software lets you generate an unlimited number of estimates and invoices and customize them with your business logo. And with Wave’s mobile app, you can do your invoicing from anywhere. Wave can also generate the most important financial statements (profit and loss, balance sheet and cash flow statement) along with reports on sales tax, payroll, aged receivables and aged payables.

Wave has recently added a paid plan option that allows you to send automated payment reminders to clients, link a bank account for automated transaction import and reconciliation, and add users to your account for easy collaboration and sharing with your accountant. On top of that, the software offers different invoice templates depending on the type of business you run: consulting, freelance, legal services, marketing or professional services.

4.5

Zoho Books’ free plan puts a limit on invoices and users, but unlike other options, it has the capacity to grow with your business. The lowest-tier paid plan, for example, gives you access to reporting tags, customized reporting and phone and chat support (whereas the free plan offers support only by email). Higher-tier plans include more advanced features, like workflow rules, purchase orders, cash flow forecasting and custom roles. And you can integrate with a wide range of other Zoho suite products, like Zoho CRM, Expense and Inventory (additional subscription fees may apply).

The free plan covers a lot of ground in its own right, though. You can send up to 1,000 invoices per year (as long as your business makes less than $50,000 in revenue annually), accept online payments through Stripe and PayPal, send estimates and recurring invoices, manage 1099 contractors and create bank rules for categorizing transactions. There’s also a mobile app that lets you send invoices through iMessage or add widgets to your iPhone’s home screen so that you can easily access overdue invoices.

If you’re a Mac user in search of free accounting software for Macs, then ZipBooks can fill that need. ZipBooks’ free plan stands out for its Square and PayPal payment integrations, a feature some companies only provide in paid plans or as an add-on. This is especially nice for small-business owners who accept payment in person with a Square card reader.

Aside from payment options, free plan subscribers can also integrate with business apps like Gusto and Slack. Some competitors, like Wave, offer their own in-house payroll software, but it’s hard to find a free product that integrates with a popular third-party alternative like Gusto. In addition to offering these integrations, ZipBooks lets you snap photos of your expense receipts, track customer and vendor details, and send custom quotes and invoices. But you’ll have to subscribe to a paid plan to schedule recurring invoices and send automated payment reminders.

4.0

Odoo is an ecosystem of business software that promises to integrate seamlessly. Because the software is developed through the open-source model, thousands of business professionals and coders work together to ensure all of the apps that Odoo offers play together smoothly.

Odoo’s accounting software syncs with your bank to easily track transactions, enables automated payment reminders, offers a variety of reports and ways to access them and displays all your key financial information in a single clear dashboard. With Odoo, an unlimited number of users can manage invoices, accounts receivable and accounts payable, bills and cash. And because Odoo’s library of apps includes dozens of apps for business functions such as website building, CRM, point of sale, inventory, HR and marketing, you can custom build the complete business software solution you need — without the headache of connecting multiple third-party apps.

$0.

You can use Brightbook’s free accounting software to send quotes to clients, convert them to invoices, bill for time, add discounts or taxes and accept payments through PayPal.

The dashboard gives you quick insights, like money owed to you and cash flow. It’s a plus whenever free products come with reporting capabilities, but Brightbook offers fewer reports than some competitors. Because it’s a single-entry system, for example, you won’t find a balance sheet. However, you can view basic reports on profit and loss, taxes, sales, bills and expenses.

Although you won’t find a formal account for liabilities in Brightbook, you can still upload your bills to the software so you can keep track of what you owe vendors and suppliers. And once you’ve paid a bill, just check it off as “paid.”

ProfitBooks stands out among its competitors with robust inventory management capabilities that let you generate purchase orders and email them to vendors from within the software, transfer stock between warehouses, group items into batches and assign expiration dates to perishable goods.

Inventory aside, you can choose from a variety of invoice templates, add custom fields and automatically calculate taxes. The platform also lets you accept online invoice payments via card or PayPal, but note that you can’t exceed 25 invoices per month with the free plan. While you can manually import bank statements into ProfitBooks and reconcile accounts from there, the process isn’t as seamless compared to products with online bank feeds that automatically pull in transactions. This is where the company’s paid remote bookkeeping service may come in handy, as the bookkeeper will handle this tedious manual work for you.

As your small business grows, you can upgrade to ProfitBooks’ SMB plan, which includes unlimited users, lets you send unlimited invoices and allows you to track unlimited customers, products and services.

Manager is another free accounting option, and it offers software both for desktop and cloud access. It supports cash and accrual accounting and lets you manage purchase orders, track accounts receivable and payable, send invoices, and run an array of reports. In addition to the basic reports — like an income statement and balance sheet — you can generate reports on inventory, fixed assets, suppliers, customers and changes in equity. Other more advanced features include the ability to create separate tax codes for different line items in invoices, track inventory and assign production stages to items.

$0.

GnuCash is appealing for its fully free software and benefits that come with open-source technology, like faster iteration and improvement due to its crowdsourced development and testing. However, GnuCash will also require some familiarity with coding as well as some comfort with using a checkbook-style register and entering transactions manually. Among other capabilities, you can split transactions and customize how the register is displayed.

GnuCash is desktop-based, meaning it must be locally installed on your computer. It’s compatible with both Windows and Mac operating systems, but it cannot be accessed remotely like cloud-based software can.

Accounting software makes it easier to categorize transactions and keep your books organized for tax season. Since it tracks your income and expenses, it also helps you stay on top of your business’s financial health. Free accounting software generally comes with basic reports, invoicing features and other tools like online bank connections, which help you record money coming into and out of your business.

Free accounting software companies often make their money from additional paid services that generate income. Wave, for example, has free accounting software, but it charges fees for online payments, bookkeeping support, payroll software and coaching.

In most cases, small businesses benefit greatly from accounting software — free or not. It can take manual bookkeeping tasks off your hands and simplify how you record transactions. Accounting software is also less susceptible to human error than spreadsheets. If there is a discrepancy, you can use audit trails to track down the source. Just know that some free accounting software, like Wave, does not have an audit trail feature.

Free accounting software should come with most of the features you’re looking for, and if it doesn’t, it’s probably worth subscribing to a paid product instead. While you’re unlikely to find features like advanced reporting, job costing or mileage tracking, a handful of products still generate basic double-entry accounting reports and support unlimited invoicing.

Other common tools, like online bank connections, help speed up the reconciliation process. And make sure to consider integrations — free accounting software should be compatible with how you choose to accept payments.