Accounting is an integral task in an organization. It includes recording monetary transactions, sorting and analyzing those transactions, and preparing reports that provide information about the organization's financial condition.
Accounting can tell whether a business is enjoying profits or bearing losses, and thus, it is a significant part of any business. The reports generated from accounting are a concise summary of the financial transactions that occurred over some time and thus help organizations make future decisions relating to operations, marketing, and finance.
Traditionally, accounts were maintained manually by trained accountants using registers, books, vouchers, etc. But, with the evolving technology, companies started using accounting software because of its high-end speed, accuracy, and convenience.
What is Accounting Software?
Accounting software is a computerized system that allows organizations to record financial transactions, audit them, and generate reports providing information about the company's financial position. The main aim of accounting software is to keep a record of income and expenditure, measure assets and liabilities, monitor cash flows, and prevent financial disasters in the business.
Accounting software includes tools for creating invoices, processing payments, maintaining payroll, recording taxes, streamlining communication, and generating reports systematically and accurately. Similar to other automated systems, accounting software has also evolved with time and now includes advanced features for growing and diversified sectors.
Why Is Using Accounting Software Better Than Manual Accounting?
As the business grows, the number of financial transactions increases, and the complexities within the operations also accelerate. Managing accounts manually becomes time-consuming and increases the possibility of human errors. Manual accounting has some limitations, which you can eliminate by using highly functional accounting software.
Accounting is considered the fundamental task of any business, requiring high-end accuracy and reliability. The success of the business depends on the financial decisions taken based on the reports generated from an accounting system. If those reports are not accurate or have errors, the decisions can go wrong, which can be a big disaster for the business in terms of profitability and growth. Accounting software plays a major role in speed and accuracy in recording financial transactions, auditing, and generating reports.
Adopting good accounting software can decrease financial errors. To explain this better, we have created a comparison between the manual accounting system and accounting software.
Features of Accounting Software
Businesses switch to other accounting software for several reasons. One of them is that they don't get the features they require.
So, which are those features which are highly desired by businesses in accounting software?
The features required in accounting software highly depend on the business type and logic. Here, we have listed some features of accounting software that you can look for while choosing one for your business -
Accounting: This is the basic feature that includes accounts receivable and payable, the general ledger, fixed assets, bank reconciliation, etc.
Invoicing: This feature of accounting software can automate the preparation and mailing of invoices to clients.
Fixed Assets Management: This accounting software module simplifies the calculation of depreciation, audit history, resource allocation, and other related tasks.
Inventory Management: If your accounting software includes an inventory management module, you can manage your stock accurately.
Budgeting: Estimating future expenses based on current expenses is budgeting, which is important when crucial business decisions are involved.
Payroll Management: The payroll management module helps you process and pay your employees' salaries on time, file their tax returns, and respond to all their financial queries on time.
Qualities of an Ideal Accounting Software
The accounting software has multiple features, but if it is not easy to use can be disastrous for your business. Adopting a particular accounting software requires investment, which should be done wisely by considering the below significant qualities -
Customization: The accounting software you choose should be flexible enough to allow certain customizations that suit your business logic.
User-Friendly: The accounting software should enable you to access information easily on a single dashboard and help you complete tasks quickly.
Secure: Accounting software deals with a business's most crucial data, and it is supposed to be extremely secure.
Integration: For example, if your accounting software doesn't include a payroll management module, it should have the capability of integrating with a payroll system you already have, which would save you from additional costs.
Pricing: You can choose your accounting software based on your budget. The software's features should match its price and be worth investing in.
Timely Support: If your accounting software fails to provide the results you expect at any point, you should be sure that a support team is available to help immediately.
Mobile-Friendly: Most accounting software now comes with mobile apps that work on different platforms, such as Android, iOS, Windows, etc., which can help you manage your accounts on the go.
Types of Accounting Software
We can diversify the types of accounting software based on three aspects - Features, Deployment, and Cost.
Entry-level Accounting Software is ideal for small enterprises not having more than five employees — this type of accounting software has limited features like accounts payable & receivable with a basic financial reporting facility.
Small to Medium Accounting Software includes additional modules for seamless business operations like purchasing, inventory, point-of-sale, human resources, etc.
Enterprise-level accounting Software includes advanced features and a powerful reporting system. It requires investment and is thus built for large organizations.
All the above accounting software can be deployed either on-premises or cloud-based.
Web-based or open-source accounting software is installed on your computer and can be customized to meet your business requirements.
Cloud-based accounting software, also known as SaaS (Software as a Service), is hosted on remote servers. The data is stored in the cloud, processed there, and sent back to the user.
Not all accounting software requires high investment. There are also free and freemium types of accounting software for businesses having low investment budgets.
First, let us have a look at How Much Paid Accounting Software Costs you.
The cost of accounting software depends on its features. Before selecting accounting software specifically for your business, you need to ensure that the price justifies the features it provides. For instance, the price of Enterprise-Level Accounting Software is high due to its features and facilities. You can buy that software only if you need that level of features; otherwise, you end up investing in accounting software with features you would never use.
Freemium Accounting Software
This type of accounting software provides a free trial period, which you can use for a limited time without any investment and analyze whether it is compatible with your business or not. After the trial period expires, you need to pay the price depending on the features you require.
Free Accounting Software
Using this type of accounting software costs you nothing. Yes, it is free. The perfect accounting software should be great in functionality but not eat away at your profits. After in-depth analysis, we have come up with these 8 best free and open-source accounting software, with feature comparisons to help you select the software that suits your business type and requirements.
Before you go through the list of free and open-source accounting software here, we would recommend you go through one of the most popular accounting solutions: NetSuite Accounting.
NetSuite Accounting
NetSuite Accounting is cloud-based accounting software that allows financial managers and leaders to streamline their processes and operations, making them highly efficient and accurate. It provides real-time financial data and thus enables drilling down to business financial details quickly. NetSuite cloud financials and accounting software help eliminate errors in financial accounting and, therefore, result in reduced back-office costs. Due to its functionality of automation in complex accounting calculations, the delay in generating statements is avoided. Moreover, NetSuite accounting software ensures that the financial statements and disclosures generated comply with multiple regulatory standards, including ASC 606, GAAP, SOX, and others.
Key Features
- Provides clear visibility over business financials
- Facilitates efficient management of accounts receivables, payables, tax, ledger, cash, and so on.
- Allows accepting and processing electronic payments from customers in a secure and reliable way
- Tracks manages, and reports the depreciation and book value of the company’s fixed assets
- Allows configuring customized business processes and workflows and monitoring them regularly
- Generates financial reports providing complete information about the financial performance of the business on a real-time basis
- Allows managing risks effectively using customized and out-of-the-box controls and processes
Now, let's examine some of the popular free and open-source accounting software solutions that are in huge demand in the market today.
8 Best Free and Open-Source Accounting Software
1. Akaunting
Akaunting is open-source accounting software built using technologies like Laravel, Bootstrap, API, Swift Mailer, JQuery, etc. It is platform—and device-friendly and can help you manage all your company financials, whether you are sending invoices to clients or receiving payments online.
It is free software with no setup fees and no hidden charges. Being an open-source software, Akaunting installed on your host can facilitate full control over it. Moreover, you can manage your accounts at your fingertips from your Mac, PC, Mobile Phone, etc.
Having an easy to use interface, Akaunting is just perfect for small businesses. It has a multilingual client & admin panel, making it simple to use. Your financial data is extremely secure if you are using this software.
Features
- Monitor the cash flow in your business and make smart decisions to prevent loss and enable the growth of the business.
- Send invoices to your clients in a professional manner and get your payments released quicker.
- Track company expenses to avoid unnecessary costs and improve the profitability of the business.
- Generate reports to check the financial health of the company and make decisions for the future strategically.
- Share invoices with your clients and accept payments online.
- Create categories for expenses and income for systematic reporting and streamlined processes.
- Add expenses and send invoices in any currency, and the system will automatically convert them into your main currency.
- You can track inventory by recording the stock coming in and going out.
- Manage the finances of multiple companies from a single system by assigning different users to these companies.
- Add discounts for your loyal clients and accept payments accordingly.
- Create different types of taxes and link them to specific transactions, products, and services to ease out the entire taxation process and save time.
- Manage permissions of different users to keep the data secure and process simple.
The Key Takeaway
Akaunting is free and open-source accounting software that is also rich in features. It helps you manage your finances and keep track of your cash flow, invoices, and payments using a single admin panel.
If you have already used Akaunting, please feel free to share your reviews here.
2. Gnucash
GnuCash is powerful accounting software that is highly flexible, easy to use, and specially designed for small businesses. It can track your bank accounts, income & expenses and provide accurate financial reports. Based on basic accounting principles, this software ensures error-free calculations and reporting.
It is free software licensed under the GNU GPL and available for GNU/Linux, BSD, Solaris, Mac OS X, and Microsoft Windows. It can work on multiple operating systems, such as Windows, Linux, and MacOSX.
All the features of this software are highly customizable to suit your business. Moreover, it is very well documented, with a systematic manual and tutorials that describe many steps step by step.
Features
- Its chequebook-style register offers a convenient and known interface for transaction entry.
- Schedule your transactions and get a reminder about your due transactions in time.
- Get access to customized reports in the form of pie charts, bar charts, etc., for your balance sheet, profit & loss, etc.
- The account reconciliation feature helps eliminate errors and provides a clear picture of the company's financial position.
- It can convert multiple currency transactions to the main currency.
- It is a multilingual software supporting 50 different international languages.
- It can manage multiple stock & mutual fund portfolios of accounts.
- It can print cheques in a standard format.
The Key Takeaway
Gnucash is well-documented accounting software that can be customized according to your business logic. Derived from the concept of double-entry accounting, this software is favorable for companies expecting an extremely streamlined accounting and business process.
If you have already used Gnucash, please feel free to share your reviews here.
3. Apache OFBiz
Apache OFBiz is a set of versatile modules that can be used by different sectors and companies regardless of their size and business type. Its extremely flexible design allows developers to add the features required by a specific business. Highly customizable and with robust features, this software is perfect for handling accounting, manufacturing, inventory, and CRM.
This enterprise-level software can scale with your business, and also is stable enough to provide a spectrum of features required for the growth of your business.
This software includes modules for managing Point of Sale, eCommerce stores, manufacturing, customers/suppliers, warehouses, and inventory, in addition to accounting.
(Features
- Manage entire accounting tasks, including transaction entries, balance sheet maintenance, fixed asset management, stock, accounts payable, accounts receivable, invoice preparation, billing accounts, etc.
- Streamline catalog, including product & price management.
- Manage manufacturing, sales & purchases, customers, and order fulfillment accurately.
- Manage content for product pages, websites, blogs, forums, etc.
- Manage business operations, including events, projects, tasks, requests, etc.
The Key Takeaway
Apache OFBiz is free and open-source software for accounting and other business operations. It helps the company streamline processes within different departments. This highly flexible software can be used for a business of any size in any country.
If you have already used Apache OFBiz, please feel free to share your reviews here.
4. Wave
Wave is small business accounting software meant for organizations with fewer than 10 employees. It is open-source and 100% free with no hidden costs, making it perfect for people who manage their accounts independently.
Wave allows you to track your income and expenses, prepare invoices, and scan receipts. You can also connect your bank accounts with the software within seconds. With a few clicks, you can see your company's financial health and make informed decisions.
Being a highly secure accounting software, Wave eliminates all your stress associated with accounting and taxation. You can create professionally designed invoices for your customers and accept payments online easily by using Wave as your accounting software. It eliminates human errors, gets things done quicker, and streamlines the accounting system required to run your business successfully.
You can even send invoices to your customers on the go, as Wave has its iOS and Android mobile apps specially developed for this purpose.
(Features
- Allows connectivity with unlimited bank accounts and credit cards.
- Tracks income and expenses
- Integration with PayPal, Shoeboxed, and Etsy is possible.
- Updates instantly with data relating to payments, payroll, and invoicing.
- Can scan receipts instantly.
- It reminds you of scheduled bills and invoices.
- Can accept payments in multiple currencies.
- It allows payment reconciliation automatically.
- It can calculate sales tax automatically.
- Allows creating professional invoices with your customized logo and brand identity.
- Provides easy-to-understand cash flow reports.
- Can set up automatic payment for recurring invoices.
- Manages to store the backup in the cloud which means no risk of losing important data.
- Allows you to set up payment reminders for your customers.
The Key Takeaway
Wave is the perfect accounting software for small businesses that want to streamline their accounting and business processes by eliminating human errors and gaining insights into the company's financial health. This helps them make informed decisions and succeed.
If you have already used Wave, please feel free to share your reviews here.
5. SQL-Ledger
SQL-Ledger is easy-to-install open-source free accounting software that runs on Nix, Mac, and Windows platforms. Its intuitive interface makes it easy to learn. This accounting software is easily customizable according to your business requirements, as it is built using simple Perl code.
Whether it is double-entry accounting or maintaining a balance sheet, SQL-Ledger can efficiently justify all accounting tasks. The software can also generate invoices in multiple languages, making it easy to use for international clients.
Access your income statement, balance sheet, sales, and profit reports to understand your company's financial health. Important documents like purchase orders, cheques, and receipts can be sent to the printer, fax, or email to speed up your employees' work and improve productivity.
(Features
- It can manage transactions, including accounts receivable and payable.
- Manage inventory, including expenses, income, and taxes.
- Print and email invoices, cheques, purchase orders, etc.
- Can carry out automatic reconciliation of transaction entries with bank accounts.
- It can provide access to financial statements providing a clear picture of the financial position of the company.
- Easy to use admin module enabling customization in report generation.
- Manage customers in a professional manner.
- Back-up data to email or file storage and avoid loss of important and confidential
The Key Takeaway
SQL-Ledger is a free and open-source double-entry accounting and ERP system with a simple documentation system that makes it easy for developers to install and customize it according to business requirements. It can be accessed remotely, making it quite simple for people located globally.
If you have already used SQL-Ledger, please feel free to share your reviews here.
6. Money Manager Ex
Money Manager Ex is personal accounting software that is extremely user-friendly. This cross-platform, free, and open-source software helps organizations manage their finances easily.
This software keeps track of where the money is coming from and where it is going. It provides systematic financial reports for better decision-making. It is extremely user-friendly software with an attractive interface, helping users get things done quickly and seamlessly.
Money Manager Ex is compatible with Windows, Linux, and Mac operating systems. It is useful for tracking income and expenses, assets, and liabilities. It includes a wide spectrum of features required to manage finance in an organization.
Features
- It is a simple and intuitive software that helps businesses in managing finances effortlessly.
- Keep track of savings, stock investments, assets, and credit cards.
- Can send reminders for scheduled bills, payments, and deposits.
- Forecasting budgets and cash flow is possible.
- It provides access to financial reports in the form of pie charts and graphs.
- It can import data in CSV format.
- Installation is not required. It can even run from a USB drive.
- Empowered with non-proprietary SQLite Database with AES Encryption.
- It can support 24 different international languages.
The Key Takeaway
Maintain error-free financial records with Money Manager Ex. You can download it for free without any ads. Moreover, it offers an Android app so that you can manage your finances at your convenience.
If you have already used Money Manager Ex, please feel free to share your reviews here.
7. Openmiracle
Openmiracle is free open-source accounting software considered a 360-degree solution for complete business solutions. It is extremely user-friendly and based on professional accounting principles. So, even if you don't have accounting knowledge, you can still make the most of it to maintain your company finances.
It is a powerful and flexible software that helps businesses maintain accounts systematically and access accurate reports. A proper blend of traditional accounting features and modern accounting principles, this accounting software is just perfect for businesses of all sizes.
Openmiracle is accounting software equivalent to expensive, high-level software, as it includes many plug-ins and study features. Without compromising on quality, it is a pocket-friendly accounting solution.
(Features
- Easy-to-use software, including customized menu launches, makes it comfortable for businesses with unique requirements.
- Design your bills and print them using this software, as it can connect with the dot matrix printer.
- It has comprehensive payroll features, including preparing salary sheets, employee attendance notifications, advance payments, salary vouchers, and more.
- It includes a standard budgeting setup system and analyzes variance in the budget.
- POS for generating invoices easily.
- Easy to set up the standard and discounted rates for the products.
- Can manage PDC payable, receivable, and clearance.
- It can generate important financial reports relating to the balance sheet, profit & loss, cash flow, etc.
- It can generate powerful reports relating to inventory management, stock, sales, purchases, etc.
- Can manage stock and streamline warehouse processes.
- It can set up a barcode system and print barcodes.
- Can handle multiple currencies and convert them at the latest exchange rates easily.
The Key Takeaway
Openmiracle has versatile features that can help you improve your business's financial performance. It simplifies and automates financial management processes and increases accuracy in critical business processes.
If you have already used Openmiracle, please feel free to share your reviews here.
8.LedgerSMB
LedgerSMB is open-source, free accounting software that facilitates businesses' tracking invoices, payments, inventory, and entire operations in an extremely systematic manner. Its simple but powerful interface helps users learn the system quickly. The software is customizable at a high level as per your business requirements.
Due to its open architecture, this software can easily integrate with other business applications. Security is very important in business accounting, and LedgerSMB can fulfill that requirement at a high level. It includes control measures for maintaining code quality and unit testing infrastructure to fix issues permanently.
LedgerSMB generates various customized reports, which makes it preferable for businesses located worldwide. Also, being multilingual, this software can print invoices, orders, quotations, etc. in 45 different languages. It has enhanced functionality and can be deployed in various sectors like IT, retail, trade, communications, etc.
(Features
- Based on double-entry accounting principles, this software enables you to manage your accounts and transfer money within those accounts.
- You can track budgets for different projects running within your company or departments and access reports based on budget planning.
- Manage customers, sales orders, quotations, and invoices.
- Manage suppliers, purchase orders, and invoices.
- Manage cash flow and prepare cheques, receipts, and account reconciliation.
- Manage fixed assets, depreciation, and disposal.
- Manage inventory, order fulfillment, and suppliers.
- It can access important reports displaying the financial condition of the business.
The Key Takeaway
LedgerSMB is a single application with a versatile integration capability that helps manage different processes within a business. It provides a robust accounting platform enabling your business to manage and streamline processes accurately and efficiently, resulting in high productivity and growth.
If you have already used LedgerSMB, please feel free to share your reviews here.
Besides these free and open-source accounting software, we would also like you to recommend one of the most popular accounting software: Invoice Meister. Here, it is explained in brief to help you select the software that best suits your business requirements.
Invoice Meister
Invoice Meister is an all-in-one invoicing and quoting tool with powerful features that can help your business grow exponentially. It can save your manual efforts and time by sending notifications and reminders automatically. Moreover, it is now easy to send recurring invoices through this software. It is cloud-based software, so it can be accessed from anywhere. Below are some of its key features.
Key Features
- Allows creating and sending invoices from any platform or device
- Can schedule recurring invoices to be sent on specific dates
- Includes professional invoice templates
- Allows you to create and send quotes
- Helps in categorizing and tracking expenses
- Supports multiple currencies
- Allows tracking payments
- Can send notifications for overdue and recurring invoices
If you have already used Invoice Meister, please feel free to share your reviews here.
Conclusion
Accounting software has become a significant requirement for businesses these days as it can save time and help your employees to focus on productive tasks enhancing the profitability of your business.
To help you further with the selection, you can also review the best accounting software listed by GoodFirms. If the cost of the software is not a problem for you, we recommend trying Odoo and Dolibarr, which offer a 15-day trial period so that you can check its compatibility with your business before investing.
Based on the business processes and accounting principles your organization follows, we recommend you select the software that is free & customizable, with high-end features, or provide a free trial so that you can use and determine its compatibility with your business before investing.
