When your bookkeeping needs have grown beyond the capability of spreadsheets, but don't yet require all the bells and whistles of a high-end commercial accounting package, consider the free options for small businesses to use for their bookkeeping and accounting needs. Some packages provide basic income and expense recording, some are stripped-down versions of a commercial package you can upgrade to in the future and others are open source systems supported by a community of one or more developers.
Before you evaluate the various free small business bookkeeping software packages, make a list of the features and functionality you need. Group the items on your list into three categories: "must have," "should have" and "nice to have." For example, the ability to customize the chart of accounts might be a "must have," and the ability to track inventory might be a "nice to have." As you review each software package, create a vertical column on your list and put a check next to the features that it provides. The chart will help you select the right software.
Free Accounting Software
FreshBooks and Wave are two free accounting packages for small businesses highlighted by PC Magazine. FreshBooks provides comprehensive accounting support that's free for a single client. The free version has FreshBooks branding on client emails, and excludes functionality such as expense imports and time sheets. Wave, an online accounting system, began as an invoicing tool and has expanded to provide free double-entry accounting and a payroll module for a nominal charge. Adminsoft Accounts also provides general ledger, accounts payable and receivable, invoicing, inventory and other modules for free. It was created and is maintained by a small business owner.
Open Source Accounting Software
Three open source packages made TechRadar's list of the best free accounting software. TurboCASH provides complete bookkeeping support including general ledger, invoicing, accounts payable and financial reporting. GnuCash provides double-entry accounting and a reconciliation tool; it runs on Windows, Mac, Linux and even Android. PostBooks is most appropriate for larger businesses. It provides comprehensive accounting functionality for free. Support and add-on modules such as CRM, sales and manufacturing are available with a commercial license.
Invoicing and Payment Solutions
If your bookkeeping requirements are primarily focused on recording income and expenses, try Zoho Invoice, NCH Express or Invoice Expert XE. Zoho Invoice provides a forever-free plan for creating and emailing invoices, tracking their status and receiving payments. NCH Express Invoice provides free invoicing functionality for businesses with fewer than five employees. Invoice Expert XE is a free version of a commercial program, but it limits you to 100 customers and products.