3 Top-Rated Free Accounting Software

By: Preksha Buttan on November 28, 2023

Every business needs accounting, but not all may require advanced features that come with high-end accounting tools. For basic needs such as invoicing, bank reconciliations, and reporting, small businesses or solo accounting professionals can consider adopting free accounting tools.

In this article, we’ve highlighted, in alphabetical order, three top-rated free accounting software products based on verified software reviews. Read more.

One of the listed products is an enterprise resource planning solution, while others are accounting software. However, all the tools support account receivables, accounts payable, bank reconciliations, general ledger, and financial reporting.

What is free software?

Free software refers to software that users can access and use without incurring any costs. To meet this criterion, a software solution should grant users free access to either all or some of its features. Software requiring payment after a specific time frame does not qualify as free software.

1. Odoo

Odoo is an open source enterprise resource planning (ERP) software that provides a suite of business applications, including accounting. It captures information from invoice pictures and auto-feeds the transaction details into the system. It has a smart bank reconciliation capability that leverages artificial intelligence to match transactions with bank statements and rectify incorrect entries.

Licensed under Lesser General Public License V3, Odoo’s source code is available to download for free and can be customized as per your requirements. Alternatively, you can opt for Odoos’s monthly or yearly subscription, which comes at different price ranges.

Free features*:

  • Accounts receivables and payables: Helps manage financial transactions between a business and its customers (receivables) and suppliers (payables). It facilitates easy tracking of outstanding payments and amounts owed, automates invoicing processes, and provides real-time insights into cash flow. 

  • Online payments: Lets you accept online payments for sales orders and invoices. Customers can pay directly via credit card or online payment platforms using Odoo's integrated payment gateway.

  • Budget management: Helps plan and track budgets set for different departments and projects. You can compare actuals against targets in reports and monitor business-wide expenses.

Customer support options:

Knowledge base, video tutorials, discussion forum, phone calls, and inquiries via a web form

Cost to upgrade:

$31.10 per user, per month

Billing cycle:

Annual

Who should consider Odoo?

Accountants managing a high volume of transactions requiring automated bank reconciliation capabilities can consider Odoo. It efficiently reconciles large amounts of transactions, helping accountants save time and prevent errors. The tool also supports bank statements in multiple file formats, including .csv, .qif, and .ofx, which gives users the flexibility to use raw data. This helps them avoid data conversions, which can be tedious and lead to data loss.

*Analysis performed November 2023

Odoo

Odoo

4.12 out of 5 stars

806 reviews

2. ProfitBooks

ProfitsBooks is an accounting software catering to small-and-midsize-businesses. It helps you track account payables and receivables and collect payments online. It also supports automatic, accurate tax calculations using invoice details. This feature can be used to calculate various types of taxes, including value added tax (VAT) and service tax, following jurisdictional rates and rules, helping users to eliminate time consuming manual tax worksheet preparation.

The free plan of ProfitBooks supports a single user and allows you to create up to 25 invoices per month. The tool’s paid plan supports unlimited invoices and users.

Free features*:

  • Inventory management: Manage and track inventory levels of up to 25 products and create purchase orders in real time. This feature helps ensure you have enough stock to run business operations smoothly. 

  • Expense tracking: Capture business expenditures from purchases, travel, office supplies, and more. You can upload receipts, tag expenses with details such as vendor and category, match them to invoices, and submit for approval workflows. 

  • Multi-currency support: Supports transactions in various currencies and automatically converts the data into home currency before creating accounting entries for reporting purposes.

Customer support options:

Knowledge base, video tutorials, and live chat

Cost to upgrade:

$15 per month

Billing cycle:

Monthly

Who should consider ProfitBooks?

ProfitBooks can be a viable option for individual accountants who handle a few clients and a limited number of invoices every month since this tool helps fulfill basic accounting tasks, including invoicing, inventory tracking, and tax calculations. As the client base grows, these accountants can consider upgrading to the paid plan of this small business accounting software with advanced features, eliminating the need for new system installation and data migrations.

*Analysis performed November 2023

ProfitBooks

ProfitBooks

4.46 out of 5 stars

83 reviews

3. Wave Accounting

Wave Accounting is another accounting platform for small businesses. It supports integration with unlimited banks and credit cards and automatically creates their journal entries, eliminating the manual data entry process. The software keeps track of your business’s financial health by tracking cash movement and displaying the data on a dashboard.

Wave Accounting offers all accounting features at no cost and supports unlimited accountants and collaborators. However, there are add-ons to manage payroll and mobile receipts that can be purchased to enhance the tool’s functionality.

Free features*:

  • Income and expense tracking: Records and categorizes all sources of revenues along with operational and administrative expenses. These records provide visibility into performance, helping identify areas for growth or cost reductions to improve financial health.

  • Bank and credit card connection: Enables seamless integration with financial institutions, automating the retrieval of transaction data. This simplifies the reconciliation process, reduces manual data entry, and ensures real-time accuracy in financial records. 

  • Encryption: Ensures the secure storage and transmission of sensitive financial data. It employs advanced cryptographic techniques to protect information such as bank details, passwords, and transaction records.

Customer support options:

Knowledge base, FAQs, and chatbot support

Cost to upgrade:

$8 per month

Billing cycle:

Monthly

Who should consider Wave Accounting?

Small business owners looking for a tool that allows unlimited users can consider Wave Accounting. As a scalable solution, this tool supports unlimited collaborators and accountants, allowing small businesses to grow and expand their user base without any hurdles. Moreover, this small business accounting software also encrypts all the records before saving them, helping accountants keep their sensitive financial data safe.

*Analysis performed November 2023

Wave

Wave

4.41 out of 5 stars

1585 reviews

Pro tip

Compare the number of invoices you can manage with the free version of different accounting software. This will help you ensure that the software you opt for can meet your business’s invoicing requirements.

What is the cost to upgrade from free accounting software to a paid one?

An accounting software upgrade can cost as low as $15 per month, or go all the way up to $240+ per month, depending on various factors—features, number of users, number of invoices, number of bank integrations, training availability, and deployment options. Most accounting solutions typically include the following pricing plans:

  • Free trials: No-cost trial plans ranging from 15 to 30 days, giving users access to either all or limited features of the software. These are ideal for businesses who wish to try out a tool before purchasing it.

  • Free versions: Free software plans offer basic features and/or limited premium feature access. These are ideal for small businesses or individual accountants on a budget.

  • Entry-level plans: Start at $15 per month and offer limited accounting features such as general ledger, accounts payable, and accounts receivable. These are a good option for small businesses or teams with basic accounting and bookkeeping needs.

  • Mid-tier plans: Range from $30 to $100 per month and offer advanced features such as recurring invoices, double-entry accounting reports and priority support. These are ideal for businesses that have outgrown basic accounting solutions but don’t require the full range of functionality and scalability offered by enterprise-level accounting tools. 

  • High-end plans: May cost upward of $240 per month. In addition to basic and midrange features, these offer unlimited invoices, project profitability tracking, business health reports, white-labeled accounting dashboards, and third-party integrations with multiple CRM, project management, payroll software tools, and a mobile accounting app. They are ideal for large enterprises with cross-functional accounting teams.

Hidden costs associated with accounting software

Besides the software license itself, there may be additional costs associated with the best free accounting software that you’ll have to bear as you install and use the tool over time. These costs include:

  • Training expenses: Initial training for new users and ongoing training for updates or new features can lead to additional costs.

  • Data migration costs: Migrating data from the existing system to the new tool may require expert assistance, which can add to the software implementation cost.

  • Transaction and processing fees: Some software solutions charge fees based on the number of transactions or the volume of data processed.

Frequently asked questions when selecting free accounting software

It’s important to ask the right questions to find the best accounting software that fits the needs of your small business. Some common questions include:

  • Does the free plan support activity tracking?

Activity tracking allows you to monitor user actions such as modifying transactions, accessing sensitive data, or changing configurations. Understanding the software's activity logging and auditing functions will help you ensure it meets your business's security, compliance, and operational transparency needs.

  • How much storage does the free plan provide?

Inquiring about the storage capacity of the free accounting software will reveal how much data it can hold before requiring paid upgrades. Knowing these limitations is crucial to avoid exceeding storage capacity, potential data loss, or software migrations. Asking upfront ensures the free version can align with your current and future business needs before committing.

  • Does the free plan let you customize invoices?

A free accounting solution that offers invoice customization will allow you to add your business logo, branding, and specific payment terms to customer invoices. This capability will allow you to generate invoices with professional appearance and details needed for the business. Asking about invoice customization also reveals if higher-paid plans will be required later for basic branding needs.


Survey methodology

To be considered for this list, products had to:

  • Have at least 20 unique product reviews published on Software Advice within the past two years, with an average rating of 3.0 or higher. We selected the three products with the highest ratings to feature in this article.

  • Offer a free, stand-alone version of the software (not a trial version of the software where you must purchase a product after a limited amount of time).

  • Meet our accounting software definition: Accounting software enables accounting professionals in any type of organization to manage accounts and perform various accounting and financial operations such as record keeping, financial reporting, billing, and invoicing.

*Our research team identified these free features from vendor websites (as of Nov 15, 2023) based on their analysis of what users find valuable in or expect from accounting software. This list is not exhaustive. For additional free features, refer to the vendor's website.

We select and rank products based on an objective methodology developed by our research team. While some vendors may pay us when they receive web traffic or leads, this has no influence on our methodology.

Products evaluated for the pricing calculation were taken from Software Advice’s accounting software directory. The pricing ranges exclude freemium versions of the products. The features highlighted were identified based on their relevance and the percentage of products in the Software Advice directory that offer them. Only products with publicly available pricing information, as of November 15, 2023, were considered for pricing calculation.