Best Free Accounting Software Programs for 2023
This article is part of a larger series on Accounting Software.
Sole proprietors and freelancers can often use free accounting software to track income and expenses to file tax returns. The best free accounting software should include the ability to track all income and expenses, import bank account transactions, and produce basic financial reports like profit and loss, balance sheets, and cash flow reports.
Here are our top five recommendations for the best free accounting software for small businesses:
- Wave: Best overall free accounting software
- Zoho Books Free: Best for freelancers and businesses with less than $50,000 in revenue
- ZipBooks: Best for creating and sending unlimited invoices
- GnuCash: Best open-source desktop accounting software
- NCH Express Accounts: Best desktop accounting software for businesses with five or fewer employees
Software | Free Plan Limitations | Scalable, Such as Availability of Premium Plans | Accessibility | Standout Free Features |
---|---|---|---|---|
No limitations | ✕ | Cloud |
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Only for businesses with less than $50,000 in revenue; only one user | ✓ | Cloud |
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Only one user | ✓ | Cloud |
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Only one user | ✕ | Desktop only (Windows, Linux, and Mac) |
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Limited to companies with five employees | ✓ | Desktop only (Windows and Mac) |
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Retailers need accounting software that tracks their cost of goods sold (COGS), which the free cloud-based software on our list won’t do. We highly recommend any business with significant inventory spend the money to subscribe to QuickBooks Online Plus for high-quality inventory accounting in easy-to-use software. You can check out our best small business accounting software, which have some advanced accounting features like inventory management.
Wave: Best Overall Free Accounting Software
Pros
- Free accounting and invoicing
- Easy to set up
- Vendor bills and customer invoices can be created and tracked easily
- Offers bookkeeping assistance for a fee
Cons
- Bank reconciliations don't work if there are checks written that have not cleared the bank
- Very limited mobile app functionality
- Cannot track project profitability
Features
- Bookkeeping support through Wave Advisor at $149 per month
- Assisted payroll services through Wave Payroll for $35 per month for tax service states and $20 per month for self-service states
- Recurring invoices
- Autofill items into invoices and bills
- Sales tax tracking
Zoho Books: Best for Businesses With Less Than $50,000 in Revenue
Pros
- Free plan for businesses with less than $50,000 in annual revenue
- Competitive features at an affordable price
- Can reconcile bank accounts even when checks are outstanding
- Capable mobile app
Cons
- Free plan is only for a single user
- Billing, inventory, and project accounting is available only in the Professional and Premium plans
- Custom reports and budgeting is available only in the Professional Plan
Features
- Manage up to 1,000 invoices per year
- Online and offline payments
- Recurring invoices
- Mileage and expense tracking
- Bank and credit card statement imports
- Payment gateways through PayPal and Stripe
ZipBooks: Best for Creating & Sending Unlimited Invoices
Pros
- Unlimited invoices are very easy to create and track
- Easy to use, even for nonaccountants
- Able to attach receipts to transactions
- Unlimited customers and vendors
Cons
- No mobile app
- Can only connect one bank or credit card account
- Cannot import transactions from comma-separated values (CSV) or spreadsheet files
- No inventory tracking features
Features
- Unlimited invoicing to unlimited customers
- Payment gateways from PayPal or Stripe
- Account for value-added tax (VAT), taxes, and invoice discounts
- Multicurrency invoicing
- Track vendor and customer details
Are you unsure between ZipBooks and Wave? Read our ZipBooks vs Wave comparison to learn which free accounting software is more suitable for your needs.
GnuCash: Best Open-Source Accounting Software
Pros
- Outstanding cash management and amortization features
- Free and customizable
- No internet connection required
Cons
- Requires programming expertise to modify or enhance the source code
- No option to remotely share data with another user
- Very hard to use
- Customer support is software manual only
Features
- Checkbook-style register for recording cash, check, and credit card transactions
- Transaction scheduling
- Customizable reports for profit and loss (P&L) statements, balance sheets, portfolio valuations, and cash flow
- Multicurrency accounting
- Stocks and mutual fund accounting
NCH Express Accounts: Best Free Desktop Accounting Software for Businesses With 5 or Fewer Users
Pros
- Reconcile bank and credit card accounts even when timing differences exist
- Free for companies with fewer than five users
- Easy to use considering it’s a traditional accounting software program
Cons
- Cannot establish a live connection with your bank or credit card account
- Remote access to your program requires configuration of your firewall and router
- No mobile app
- Steep learning curve for non-accountants
Features
- Sales and A/R management and reporting
- Basic financial statements and other specific financial reports like sales by customer report, sales by salesperson report, and many more
- Purchases and A/P management and reporting
- Check creation and printing
- Purchase order creation
Microsoft Excel is a helpful tool to supplement your free accounting software by providing some of the missing accounting functions. Read our article on how to use Excel for accounting to learn how to track invoices, bills, COGS, and inventory costs. Plus, you get a free downloadable template.
How We Evaluated Free Accounting Software
We evaluated the best free accounting software in terms of general features and whether they have the basic functions of paid solutions, such as bank feeds and bank reconciliations. Finally, we assessed the platforms based on pricing, ease of use, and our own expert evaluation.
40% of Overall Score
We considered the software’s general accounting features, banking, A/P, A/R, tax, and reporting features. Since we were evaluating free applications, we gave higher points to products that offered premium accounting features. Moreover, we looked into whether or not they contained at least the basic features needed in small business accounting.
5% of Overall Score
Inventory accounting appears to be an elusive feature in most free accounting software. If you need inventory accounting, we recommend going with a paid accounting program. Hence, we gave inventory a light weight. We evaluated the software’s ability to track inventory costs and stock levels. More importantly, we took into consideration whether the software could automatically track the COGS and compute the cost of ending inventory.
5% of Overall Score
Just like inventory accounting, project accounting is an elusive feature. Project accounting is essential for service-based businesses looking for a free accounting software product. That’s why we evaluated the software’s ability to do more than just bill clients and create estimates.
25% of Overall Score
Most users looking for a free accounting software service intend to self-manage the books. For ease of use, we gave higher scores to products that are easy for non-accountants to use. We also considered accessible customer service and support networks.
5% of Overall Score
A mobile app should help on-the-go users keep their books organized. It should let users send invoices, send payments, receive payments, and enter bills. We also like to see advanced features, like viewing reports and recording time worked.
20% of Overall Score
We considered user ratings in the evaluation of free accounting software. User reviews have a large percentage because we want to take into account the feedback of actual software users. Since these platforms are free, there is an abundance of reviews from users who have tried the software.
Frequently Asked Questions (FAQs)
When do I use free accounting software?
If you are a budget-conscious small business or freelancer and only need simple accounting, like income and expense tracking and invoicing, then you should consider free accounting software. Don’t use free tools if you buy and sell goods as you’ll need to calculate your COGS by hand.
How do I choose the best free accounting software?
When looking for the best free accounting software, determine the features you need. Do you require an invoicing solution? Do you have multiple users? Do you want the ability to manage projects? Figure out which functions are important to you and find out which programs offer those. Other factors you should consider include ease of use, customer support, and user reviews.
What are the important features of free accounting software?
Small businesses should look for essential features, such as income and expense tracking, invoicing, and reporting. Also, check if the software has a free mobile accounting app—which is important in today’s digital age. We recommend Zoho Books’ mobile app because it allows you to perform many basic functions, such as sending invoices, recording bills, accepting payments, and recording time worked.
Bottom Line
Wave is the overall best free accounting software for small businesses because it has no limitations, unlike other free options. Both ZipBooks and Zoho Books have great free plans but are limited only to a single user. Moreover, Zoho Books sets a $50,000 annual revenue limit to qualify for the free plan. We recommend choosing either one if you have plans to scale in the near future.
If you’re looking for accounting software with all the accounting features you’ll ever need, we recommend checking out QuickBooks Online Plus.