The cost of subscription accounting software can often be prohibitive for small businesses. Running the main-brand software won’t be cheap in the long run, and if you run a small business you probably don’t want to swamp the books with large overheads.

Don’t sweat it though. There is some free accounting software for a small business just like yours. Obviously you won’t be getting the Ferrari of balanced books – we’ll get on to the drawbacks later – but you will secure yourself a program with some basic features that’ll tide you over until your business is booming enough to upgrade.  

Here’s what you need to know.

Free accounting software features and benefits

Obviously the main benefit of free accounting software is that it’s free, but there are other benefits. Chief among these is user-friendliness. Free software is usually easiest because it’s used by people without complex accounting needs.

It is also scalable. Scalability is something we talk a lot about at Zahara. It will allow your software a longer life span. Certain types of free accounting software will offer this, usually through paid add-ons or small subscriptions. Using these can be a good way to smoothly adapt to a growing business’ growing needs.

Overall, free accounting software empowers users to maintain accurate financial records, meet compliance requirements, and make informed business decisions without a significant financial investment.

Free accounting software is also usually cloud-based. This allows users to manage their accounts from anywhere, ensuring greater flexibility and real-time collaboration. This is something you should really look for.

There are some other features you should look for in free accounting software too. These are:

• Invoice processing
• Expense tracking
• Bank reconciliation
• Basic financial reporting
• Tax preparation tools

Without the above your software won’t be of much use to you, so make sure you’re looking for these features when choosing free online accounting software. Some platforms may also provide inventory management, payroll processing, and integration with third-party apps which can also be useful, but not imperative.

So what are the free accounting systems to consider?

Accounting Software for Small Businesses

 

Wave Accounting

Best for: Freelancers, service-based small businesses.

Features:

• Invoicing, accounting, and receipt scanning.
• Unlimited bank and credit card connections.
• Basic financial reports.

Pros: Completely free for core functions; intuitive design.

Cons: No built-in inventory management; paid add-ons like payroll.

ZipBooks

Best for: Solopreneurs and very small teams.

Features:

• Invoicing, basic accounting, and expense tracking.
• Business health scores and basic reporting.

Pros: Clean interface; easy to use.

Cons: More advanced features (like smart tagging) require paid plans.

GnuCash

Best for: Small businesses needing detailed records.

Features:

• Double-entry accounting system.
• Track bank accounts, expenses, income, and investments.

Pros: Highly customizable; open-source and completely free.

Cons: Outdated user interface; steeper learning curve.

Zoho Books (free plan)

Best for: Microbusinesses with very limited revenue (e.g., under $50K/year).

Features:

• Invoicing, expense tracking, client management.
• Integrated with Zoho ecosystem for CRM, inventory, and other features

Pros: Professional templates and workflows.

Cons: Free plan only available to very small businesses (must apply).

Akaunting

Best for: Businesses wanting an open-source cloud-based tool.

Features:

• Invoicing, accounting, and client/vendor management.
• Multiple user roles and permissions.

Pros: Cloud-based; multilingual and multi-currency support.

Cons: Some features like payroll require paid apps.

Odoo (community version)

Best for: Growing businesses needing modular flexibility.

Features:

• Invoicing, payments, financial reporting.
• Connects with CRM, project management, and more.

Pros: Highly customizable and expandable.

Cons: Setup and maintenance can be complex without IT help.

Sunrise by Lendio (free version)

Best for: Service providers and freelancers.

Features:

• Invoicing, income and expense tracking.
• Basic reporting and cash flow management.

Pros: Simple setup; offers bookkeeping services for a fee if needed.

Cons: Limited integrations with third-party apps.

That might be a lot of information to digest. Here it is in brief:

Software	Best for	Key limitations
Wave	Freelancers, small services	No inventory, limited support
ZipBooks	Solopreneurs	Limited free features
GnuCash	Detail-oriented small firms	Outdated interface
Zoho Books Free	Microbusinesses	Revenue cap applies
Akaunting	Open-source fans	Paid features for extras
Odoo Community	Modular businesses	Requires technical setup
Sunrise	Freelancers	Fewer integrations

 

Limitations

While free accounting software can be a lifesaver for small businesses, it does come with limitations. One of the biggest drawbacks is the lack of advanced features. These often include things that are very useful such as payroll management, inventory tracking, or multi-currency support.

Another issue is that customer support for free plans is often limited or slower, leaving you to troubleshoot issues on your own.

Additionally, some free software may impose restrictions on use. This might be on the number of users, transactions, or something like connected bank accounts but it can get in the way of smooth operations.

Scalability can be an issue. As a business grows, it may outgrow the basic capabilities of free tools and be forced to migrate to a more sophisticated (and costly) system. This can be time-consuming and complicated. While some free accounting software will scale better than others (Odoo, for example) it’s unlikely it will be able to support your needs all the way.

Perhaps most importantly, security can also be a concern. You should make sure the software you choose has robust data protection measures.

Choosing the right software

Choosing the right free accounting software starts with understanding your business needs. Look for a platform that covers essential tasks like invoicing, expense tracking, and basic reporting.

Consider the software’s ease of use, especially if you don’t have a financial background. Scalability is important too. If you’ve got big ambitions for your business, choose a tool that can grow with it. Check if the software integrates with other tools you already use, like payment processors or CRM systems.

Finally, review security features to protect sensitive financial data. Testing a few options with free trials can help you find the best fit before fully committing.

A word from Zahara

We’ve been in the accounting software business a while. In that time we’ve learnt a thing or two. We’re sharing our knowledge through our blog and our podcast to help people like you make more informed decisions in a world that can be tough to navigate.

While our accounts payable automation software is aimed at the bigger accounting programs (Xero, QuickBooks, Sage etc.) we’re here to discuss why choosing one of those and integrating with us could also be a good option for you.

If you’re interested, give one of our specialists a call, or book yourself in for a demo. We’d love to hear from you.