The need for free online accounting system for small business has increased manifold in the recent times. There are many entrepreneurs who wish to start their own business but are deterred by the barriers of expense. Expense, however, is taken as one of the most critical barriers which needs to be tackled if you are to make your dream business successful. As a result there are many entrepreneurs who wish to start their business but, due to financial constraints, they end up never starting it. The reason for this is that it is very difficult to run even a small scale business without proper financial management. Even if you have all the required startup capital, to save that money for the future you will need an easy way to save your money in one place.
Small Business Accounting is very important for the survival of your business. Before starting any business you must keep in mind that how you manage your business finances. It’s obvious that you can’t afford to pay $100 per hour for an accountant to handle your day-to-day tasks. You must learn to do it yourself or hire someone within your budget. That is why I came up with this FREE Online Accounting System For Small Businesses.
Wave
Wave is an ideal accounting software platform for a service-based small business that sends simple invoices and doesn’t need to track inventory or run payroll. For many freelancers or service-based businesses, Wave’s free features will cover all of their accounting needs and is the best free software in our review. At year-end, accountants can pull the necessary reports from Wave to prepare a business’ tax return.Pros
- Free accounting, invoicing, and receipt scanning
- No transaction or billing limits
- Run multiple businesses in one account
- Unlimited number of users
- Mobile app
Cons
- Limited third-party app integrations
- Higher fees for credit cards and ACH payments
- Full-service payroll is limited to only 14 states
- No inventory management
Wave was founded in 2010 and is based in Toronto. The company has over 250 employees and was purchased by H&R Block in 2019.34 The foundational accounting features that most small businesses need, such as income and expense tracking, financial reporting, invoicing, and scanning receipts, are all included with this free software. These features can be accessed online or on the mobile app. Customer payment processing and payroll are considered premium services that cost extra, but all of the bookkeeping, invoicing, and reporting features are completely free.
Wave makes its money on its payment gateway. To process payment from a customer, Wave charges 2.9% plus 30¢ per transaction for Visa, Mastercard, and Discover, and 3.4% plus 30¢ per transaction for American Express. These fees are slightly higher than other accounting software. Additionally, to process an ACH payment, rather than a credit card, Wave charges 1% per transaction with a $1 minimum fee. This is unique to Wave, as the majority of accounting software does not charge a fee for ACH payment processing.
Wave offers two payroll plans as an add-on service. The first plan is $20 per month plus $6 per employee or contractor. In this plan, Wave will process payroll and prepare payroll tax calculations, but the user is responsible for manually completing payroll tax forms and submitting tax payments. The second plan is $35 per month plus $6 per employee or contractor. In this plan, payroll is full-service, which means that all tax filings and payments are completely managed by Wave. This full-service payroll option is only available in 14 states.
GnuCash: Best for Sole Proprietors
Best for Sole Proprietors
GnuCash is a free, open-source accounting solution that can be downloaded for Linux, Windows, and Mac OS X. It offers double-entry accounting resources, a checkbook-style register, scheduled transactions, and customizable visual reporting.
GnuCash’s initial setup and somewhat dated-looking interface might turn a lot of potential users off. But if you’re willing to tough out its tricky installation and don’t need your accounting solution to be particularly pretty, you’re left with a solid application that covers a lot of bases for free.
That said, it’s not much of a long-term solution for businesses anticipating a lot of growth. It’s better suited for sole proprietors who need a program to get them through their day-to-day. If you fit that bill, check GnuCash out.
GnuCash’s Key Benefits
- Double-entry feature ensures books balance
- Budget management tools can help plan financial strategy
- Works on a variety of operating systems
- Can handle internationalized dates and currencies
GnuCash’s Key Drawbacks
- Installation is less straightforward than most other platforms
- Interface isn’t particularly accessible or visually appealing
- No customer support
Wave
A top free accounting software to consider from the start of your search is Wave accounting software. Through this option, you’ll be able to connect unlimited bank and credit card accounts to your books. You’ll also be able to add unlimited income tracking, expense tracking, and guest collaborators for free. Plus, you’ll be able to invoice and scan receipts for free as well.
Be sure to note, though: If you want your invoiced customers to be able to pay online directly through the invoice, you’ll need to pay for that. Wave charges 2.9% + $0.30 for each credit card payment and 1% (with a minimum of $1) for each ACH payment. You’ll also need to pay for payroll through Wave. Depending on where you do business, you’ll pay a monthly base fee of either $35 or $20, plus $4 per employee and contractor on your payroll.
Conclusion
Managing a small business is no easy task, and accounting can be a real pain. That’s where online accounting systems come in. Online accounting software can help your business by automating many tasks related to bookkeeping and reporting. In this article, you’ll find out how to find the best free online accounting system for your small business, as well as some of the top options available at the moment.
In this day and age, it is important to have a financial system in place for your business. This will help you to keep track of your expenses and earnings so you can manage your money wisely. If you want to have a business you need to know where your money is going and how much you have. These are the only way that you can maximize your profits and avoid going into debt. The best online accounting system can do just that for you. They will allow you to manage all of your finances from one place instead of having a bunch of different programs on your computer.