Best Free Accounting Software in 2024

Businesses today rely on accounting software for almost all accounting-related processes. As an indispensable tool in business management, accounting software has the ability to quickly organize and collate crucial information that feeds the business lifeline. Choosing the right solution for your business, however, requires that you spend time to understand what is accounting software and identify the most important features that will add value to your overall operations. You also need to identify the costs involved. Fortunately, there are free accounting software offered in the market that can deliver the same services as that of the paid versions. Presented here are the key features that you need to look for, as well as the factors that you need to consider, in choosing the best free accounting software for your business.

The review of free accounting software reveals feature-rich options that can help you get your business in order. The free accounting software available on the market today provides all the essential accounting tools that will keep your business running smoothly. The features offered in the free version are basically the same functionalities in the paid version, with the only difference being the number of users. Having said this, it is not enough to just browse through the features of each product. We recommend you try out some free accounting software tools and perform a comparison. Have a pen and paper handy, and note down the advantages and disadvantages of each product in the context of your business. Keep in mind that since you intend to grow your business, you also should intend to grow with your chosen accounting software. Begin your appraisal with the following free accounting software providers in the market today: Zoho Books, Zoho Expense, Airbase, ProfitBooks, Xolo Go, and Momenteo.

• Routine small business. This includes freelancers, entrepreneurs, and small businesses with accounting requirements that are typically at a bare minimum. The essential processes of accounts payable/accounts receivable, preparing a general ledger, recording fixed assets, and bank reconciliation form part of everyday transactions. The free plan is ideal for these types of businesses as they are still establishing a workflow and still have plenty of room for improving operations. As routines are established, additional accounting functionalities may be availed. For a more in-depth look at these solution types, check out our list of accounting software for small business.
• Growing business. Compared to start-ups and small businesses, growing businesses are companies that are beginning to gain more customers and business partners. Typically, businesses that belong in this category are granted credit lines by suppliers, which impacts the accounting process. Given this scenario, more robust accounting software is required to optimize transaction tracking and ensure that expenses are monitored accordingly. At this point, you have to assess if your accounting system still meets your requirements or if it is time to have additional modules.
• Specific industries. Every industry and business sector has specific requirements for cost accounting. Depending on the details that need to be included for proper recording of expenses, accounting software companies are offering different modules that cater to each specific accounting need. There are available apps and solutions that can manage the accounting of even nonprofit and fundraising organizations. For businesses that have unique accounting needs, there are also vertical accounting solutions available on the market.

• Zoho Books is an accounting software designed for growing businesses. It puts together key accounting processes in one place and automates the process of balancing entries. The automation of accounting processes saves time. Zoho Books also easily integrates with other management software.
• Zoho Expense is an expense reporting and monitoring software that simplifies the recording of expenses. Specific accounts are recorded based on the expense recording preferences of the user. Reports can be generated anytime, helping the user stay on top of financial transactions.
• Airbase is an accounting platform that provides businesses with a full view and control of spending by synchronizing financial transactions and processes. Through monitoring and managing spending, Airbase gives the user an overall picture of how company resources are used.
• Momenteo is a cloud-based invoicing software that speeds up the creation of invoices, in any format, as requested by your business partners. Expense management is a breeze with Momenteo as transactions are recorded and synchronized, while at the same time keeping all your transactions safe and secure.
• ProfitBooks is an accounting solution that helps record income, expenses, and journal entries in as fast as one click. With it, you can track your entire inventory life cycle accurately and seamlessly. This free software also features tools that let you create professional-looking invoices and other financial documents.
• Xolo Go is an invoicing software that answers the need for an automatic invoicing system by entrepreneurs, freelancers, and small business owners. Xolo Go provides self-service online tools that can track invoices, income, and expenses from a dashboard.

Free accounting software offers the most basic features that business entities need for accounting. While there are free accounting tools on the market that offer complete systems, some only focus on specific areas such as bookkeeping, month-end reporting, spend management, invoicing, and expense reporting. Before choosing a product, it would be helpful to identify if their free plan offers all the accounting essentials in one system or if it only supports select functionalities.

• Complete accounting system software. Free accounting software such as Zoho Books offers a complete accounting system, even for the free version. The accounting system includes cash flow, P&L, balance sheets, inventory management, and other essential tools that provide an overview of financial data.
• Invoicing solution software. Accounting software Momenteo and Xolo Go are both invoicing solutions that offer a free version. Designed specifically for freelancers and entrepreneurs, the invoicing solution software is meant to assist small business owners in creating invoices for clients.
• Expense reporting and management software. Airbase and Zoho Expense are two examples of accounting software that focus on expense management and monitoring. The free version is used by small business owners for effective management of spending. You may also refer to our list of expense management software for further comparison of key features.
• Bookkeeping software. Bookkeeping is one important aspect of accounting and there is free accounting software such as ProfitBooks that helps small business owners and freelancers in keeping a record of earnings and expenses, as well as in preparing month-end reports.

• Core Accounting. The accounting software should include core processes, which include general ledger, accounts payable, accounts receivable, and bank reconciliation. Free accounting software that offers the essential features usually limits the number of users. More users typically require additional payment or the purchase of additional modules.
• Billing and Invoicing. This feature comes as a standard in most free accounting software. What makes it different from the paid version is automation. The free version typically does not include an automated billing and invoicing feature. While invoice creation is automatic, user intervention is required in sending them to clients and business partners.
• Budget and Forecasting. This functionality of the accounting software allows the user to make accurate estimates of future expenditures. This projection feeds financial planning, which leads to a more efficient allocation of resources. However, as it is often considered an advanced feature, this module is often excluded from free plans.
• Fixed Asset. Part of managing your company’s finances is the management of company assets. These items are always included in the accounting process, thus your accounting software should have this feature for complete accounting management. Depending on the volume of your assets, you may choose to add this feature as a separate module, otherwise, the bundled version may suffice.
• Payroll System. This is a major feature of accounting software that focuses on the processing of employee payroll. It is often equipped with tools for tax preparation, calculating deductions, and gauging corresponding employee contributions. Free versions of accounting software may have this feature but can be very limited as entrepreneurs and freelancers typically work alone, and payroll preparation is not a usual part of the workflow.
• Project Accounting. This advanced feature of accounting management systems is typically availed by businesses that manage multiple projects at the same time. Having this module is particularly helpful because each project will have a different set of inventory, suppliers, and billing cycles. Typically, free accounting software is intended for simple project accounting. Businesses that are poised to take on more projects may need to upgrade to paid versions.
• Fund Accounting. Compared to the typical for-profit business, fundraisers and nonprofits follow a different accounting process. Fund accounting is not typically included in the basic features of accounting software because this type of accounting only tracks revenues and expenses. There are, however, free accounting software solutions built for small-scale fundraisers and nonprofits that they can use for recording and tracking donations and grants.
• Inventory Management. Because inventory management is a major area of accounting especially for large companies, this typically requires a separate module. However, some free accounting software such as ProfitBooks and Zoho Books have the “manage inventory” feature that offers the essential tools that can monitor inventory levels.

Using accounting software in your business is important because accounting is at the core of every business operation. For start-ups and young companies, getting free accounting software will be ideal as the business is still pooling resources. The following are some of the benefits of having free accounting software:

• Significant cost savings. The use of free accounting software delivers significant savings because money that would have been spent on purchasing an accounting software could instead be used for other business improvement initiatives. Organizing the operations of any new business would require investments and getting free accounting software gives a big boost to resource management.
• Improved workflow. Feature-packed free accounting software may be hard to find, but the freelancer or entrepreneur may combine different products to build an accounting system that can provide a 360-degree view of the business without spending a dime. Spend management software may be combined with invoicing solutions, and bookkeeping software. As these tools easily integrate with other apps, getting these free accounting software will definitely lead to increased productivity.
• Increased transparency. In business operations, transparency is important to promote accountability. Having accounting software in place minimizes human error and establishes an audit trail for all transactions. This will promote a healthy workflow and accuracy in bookkeeping will eliminate guesswork.
• More automation and less paperwork. Accounting entails a lot of work, and using accounting software cuts the time that it takes to cover all bases. The process automation as provided by the accounting software allows the business owner to spend more time on activities that can add more value to the business. Free accounting software also extends these benefits.
• More data captured provides more insights on operations. Nurturing a business for growth entails setting the foundations while at the same time refining strategies. Having an accounting system in place provides support to a growing business by giving a snapshot of the overall health of the business.

As with other software solutions on the market today, emerging technologies are shaping the next generation of accounting software. These include artificial intelligence, blockchain, machine learning, and automation. The latest trends in accounting software include:

• Artificial intelligence for accounting. Globally, 47% of CIOs agree that COVID-19 pandemic has accelerated the adoption of emerging technologies such as AI in digital business processes. Given this, trends in accounting software are clearly leading to a direction where AI would play a key role in automating workflows, including accounting management systems.
• Shift from transactional to analytical processes. Data analytics is another significant trend that is poised to add value to the accounting process. In the next five years, 45.8% of finance and accounting professionals believe that their core work will be more analytical.
• Increased emphasis on security. Crucial business information is kept within the accounting management system. This makes data security a priority among CIOs, with 47% citing security and privacy as one of their top three investments in technology.

• General vs. industry-specific accounting. Carefully evaluate the features and functionalities of a general accounting software against the industry-specific accounting software. Identify the demands of your current workflow, and anticipate future requirements. Take into account after-sales support, the capability of the software to integrate with other apps, as well as scalability, to come up with a sound comparison and choose the best accounting software type.
• Cross-process integration. Your main objective in getting an accounting software is to streamline work processes, so it is important to look for software that easily integrates with other business management apps such as sales software, CRM and project management solutions. Check if the software is able to export data using standard file formats such as CSV, TXT or PDF to ensure compatibility.
• Scalability. Initially getting free accounting software does not mean that your business will not be requiring add-ons, paid features in the long run. In any business, infrastructure is crucial. Free software features may suffice for the time being, but consider the scalability of the accounting software for smooth transitions in the future.

Free accounting software can be deployed (1) on-premise, (2) cloud-based, or (3) hybrid. Hybrid deployment, however, is typically a feature offered to paid users. In choosing between these options, identify your accounting management requirements and choose the deployment type that matches your work demands.

• On-Premise. In this type of deployment, your free accounting software may be downloaded and installed in your device. Some free accounting software, however, are only cloud-based, which means that on-premise installation is not possible. In terms of security and accessibility, cloud-based offers an advantage. The advantage of on-premise software is that you can work offline, although collaboration features may be absent for the on-premise type.
• Cloud-Based. Getting a cloud-based software will not require you to have powerful hardware to run the app. You may also access your accounting software from any device with a web browser, which allows for collaboration anytime and anywhere. However, cloud-based accounting software would require you to be online at all times to be able to use the app, and your information may not be as secure as data that is kept on-premise.
• Hybrid. While most free accounting software are cloud-based, there are downloadable accounting software that include a mobile app feature. Hybrid software can be accessed both offline and online, but free accounting software would typically be offered as either cloud-based or on-premise.