When choosing accounting software for a small business, the top choice is often Quickbooks and for good reason. No other software is available that makes accounting seem so simple. Intuit’s software has by far the best interface and is the only one set up for use by people who are not accountants.
Out of curiosity, I spent a day trying out open source accounting software, searching for those that are suitable for small businesses. Open source software means that it is free and open to public input and additions, similar to Wikipedia. Quickbooks, although it is simple and user-friendly, has lots of extra features that a small business may never use. Plus, it costs money and requires the owner to learn new software. After searching, I found that Quickbooks is still the best option, but there are some surprisingly good free alternatives.
Gnu Cash is promising. The software functions similarly to Quickbooks, but I found a few problems with the user being able to easily alter data by accident. With a little bit of training from the user, this could be overlooked, but the glaring issue is that it does not support cash accounting. Gnu Cash has a forum on this topic to update the software, but until this is fixed, I do not see it as helpful for a micro-business. If you are using accrual accounting, Gnu Cash could be useful to you.
Fresh Books is not open-source, it is actually a net ledger (think online accounting), but I liked the interface enough to include it here. It is free for the first 30 days and then requires payment. Fresh Books is similar to Quickbooks Online in that it is very simple to use and has a good interface. There is less to offer than Quickbooks which in many ways is good for small businesses and is a bit cheaper than Quickbooks Online. Fresh Books is a great alternative to Quickbooks Online.
Manager surprised me. It uses cloud computing (kind of similar to Fresh Books, but the interface is installed on your computer) so that you enter the information on your computer and it is saved on both your computer and their cloud servers. I suppose this could help in that it does not require backup on your end, but I’m nervous about someone else holding onto all of my information. I emailed the developers and they said they are working on creating an auto-recovery system in case anything gets messed up with your data. One shortfall is that you are limited to one user similar to Fresh Books, so if you have an accountant, you would have to share login information. The major upside is that the program is incredibly easy to use and they are working on beefing up the software to include multi-dimensional accounting, ability to copy invoices for multiple transactions and more. This may be the best option for a self-employed entrepreneur who does not need all the bells and whistles of Quickbooks and doesn’t mind having to create invoices separately from their accounting software.
If none of these work for you and you have a little bit of accounting experience, OpenOffice is a great tool to create Microsoft Excel-like spreadsheets so that you can set up your general ledger and accounts. With a little bit of education, using a spreadsheet is incredibly easy to manage your accounts and publish reports. We often forget that accounting was once done by hand. It is still possible for the thousands of small businesses out there that do not have many transactions to have a simple accounting system.
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