Small businesses can save money by keeping their accounting and bill paying in-house. However, many small business owners do not have the time or expertise to learn accounting software programs. Thankfully, there are free tools available online that can simplify your accounting tasks.
The small business owner market is hot. With the advent of the recession, free software and free online tools have become popular. Especially among small business owners looking for ways to cut their costs.
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.
Wave Accounting is one of the more tested, reliable options listed here. It’s an accessible, intuitive program that doesn’t require much — if any — training to understand.
Its entire suite of accounting features is available for free — including unlimited income and expense tracking, the ability to run multiple businesses from a single account, and unlimited bank and credit card connections.
Most of Wave’s issues are relatively nit-picky. For one, it doesn’t allow users to track accounts payable. It also doesn’t have a comprehensive mobile application for its accounting features.
Still, the program is one of the sounder, more robust free accounting applications available, and it’s scalable enough to accommodate everyone from independent contractors to sole proprietors to small business owners.
Wave’s Key Benefits
- Accessible setup and interface
- Unlimited bank and credit card connections
- Unlimited income and expense tracking
- Exportable accounting reports
Wave’s Key Drawbacks
- Can’t track accounts payable
- No comprehensive mobile application
ZipBooks
Another top free accounting software for small businesses to consider is ZipBooks. ZipBooks offers all the crucial features of an accounting software—reports, bank syncing, billing, expense management, and invoicing—in one free account.
If you want to offer online payments to your invoiced customers via ZipBooks, you’ll need to do so via Square or PayPal. You’ll pay the standard PayPal rates and Square rates for those transactions.
ZipBooks offers an integrated payroll add-on option with Gusto. Gusto starts at $39 per month, plus $6 per person per month. For a limited time, you can get the Core plan for a discounted price of a monthly $19 base cost for the first six months. Gusto also has a new option for contractor-only employers, who simply pay the $6 per employee rate and no base price.
ZipBooks is a web-based financial software with a solid suite of accounting features. The company offers a free plan called ZipBooks Starter — an option that includes basic bookkeeping functionality, along with profit, loss, and balance sheet reporting.
It also covers certain invoicing and quote-related bases — plus the ability to accept payment via credit card or PayPal. It’s a powerful, easy-to-use solution, but its free plan is extremely free plan-ish.
The program’s features you can access with a free plan are restricted to the point that it might be easy to outgrow. You can only link one bank account and view basic reports with its starter option. Should your needs extend beyond that, you’ll need to upgrade to one of its premium plans.
And while those upper-tier plans are reasonably priced, they’re obviously not what someone who wants a free plan is looking for. Again, the solution itself is sound, but if you want a free program that will remain free as you scale, you should look elsewhere.
ZipBooks’ Key Benefits
- Unlimited Invoices
- Ability to manage unlimited vendors and customers
- Accepts digital payments via Square and Paypal
ZipBooks’ Key Drawbacks
- Only allows you to connect one bank account
- Only lets you view basic reports
Xero
Xero is the best in our review for micro-businesses that are looking for very simple accounting software. This software has a clean interface and also fully integrates with a third-party payroll service. Businesses can collect payment online from customers through Xero’s integration with Stripe and GoCardless.Pros
- Cloud-based
- Mobile app
- Payroll integration with Gusto
- Third-party app marketplace
- Simple inventory management
Cons
- Limited reporting
- Fees charged for ACH payments
- Limited customer service
Xero was founded in 2006 in New Zealand and now has over 2.7 million users worldwide. This accounting software is popular in New Zealand, Australia, and the United Kingdom. Xero has over 3,500 employees and is growing rapidly in the U.S., as well.
Xero offers three monthly subscription options and a full-service payroll add-on: Early at $11 per month, Growing at $32 per month, and Established at $62 per month. The full-service payroll option is offered through Gusto and is an additional $39 per month, plus $6 per employee. The company offers a 30-day free trial and a promotion for 50% off for two months.
The Early plan limits usage and only allows entry for five invoices or quotes, five bills, and reconciliation of 20 bank transactions per month. This limited plan may be suitable for a micro-business with high-ticket transactions, but only a few per month, such as a consulting or small service provider. Both the Growing and Established plans offer unlimited invoices, bills, and transactions. The only difference between the two is that the Established plan has additional features like multi-currency, expense management, and project costing. All three plans offer Hubdoc, a bill and receipt capture solution.
Conclusion
Business owners who need to stay on top of their finances have lots of options, including going out and buying accounting software for their computer or laptop. Alternately, free accounting software can be used in a browser window, with some websites offering their tools for both PC and Mac users. Many accounting websites produce trial versions of their programs, but the best accounting sites offer a free version you can use indefinitely to help learn how to use the program.