Free accounting software for small businesses

Keeping financial records is a vital part of running your own business, but with so many accounts software packages available at all sorts of prices, how do you know where to start? I have used 2 free programs to date: TurboCASH and QuickBooks Simple Start. For the benefit of anyone else who is currently looking into free accounts software, here’s a run through of what I liked and disliked about both programs.

TurboCASH was the first program I tried. On the plus side, TurboCASH is the kind of program that will suit people with an accounts background. You enter your transactions in journals, and then click a button to post to the ledger. There is also a double-entry T-account viewer available for each account that I found very handy. This use of traditional accounts terminology etc means that there is quite a learning curve for anyone without a basic knowledge of accounting. I still have a good grasp of accounts from school, but having been away from it all for a few years, I found I had to buy the TurboCASH Accounting Made Easy e-book for £14.95 to really get to grips with the program. The book goes into lots of detail on setting up TurboCASH and keeping accounts for both typical retail and service businesses. Once I worked through the tutorials, the program made a lot more sense. I also found the forum helpful when I was not sure how to treat unusual items in my accounts.

The interface does not look very slick, but I would not mind that if it did the job. My main problem with TurboCASH was that mistakes started creeping into the reports over time, particularly relating to transactions I had previously edited. Luckily, I had so few transactions that I was able to spot when reports did not look quite right and go back and fix things. When this happened a third time within 9 months, I stopped using the program, because accounting software that produces inaccurate figures is worse than having no software at all! The site does state that the software is in beta, so I realise that bugs are to be expected and that I used it at my own risk.

Before resorting to paper ledgers and red pens, I googled for alternative software and I came across QuickBooks Simple Start. Oddly, this software costs 72 euro + VAT + P&P if you look at the Irish QuickBooks site, even though it is available as a free download here at QuickBooks.com. The free version has been made with US users in mind, but the program is so basic that international users don’t really miss out on anything. Perhaps QuickBooks Ireland have added some fancy localised features for Irish users that justifies the price tag?! πŸ™‚

Unlike TurboCASH, Simple Start is suitable for anyone to use, even if you have never kept any accounts before. The interface is a lot more visual and intuitive. The main screen is a diagram showing the path of money through your business, and you just click on the icon that you want to record something for (invoices, bank account, expense etc). There is no mention of posting, contra entries or other accounting lingo here. It’s plain English all the way – just money in and money out. There is very good help within the program, although it is so straightforward and intuitive that I have not needed to call on it much. Despite the easy interface, I like the way that you can still look under the hood at the raw ledger accounts and transactions by viewing ‘Accountant Reports’. You can also quickly run profit and loss and balance sheets for each month, the year so far, last year etc which is very handy. Backing up your accounts is also very quick (less than a minute), whereas after a few months of using TurboCash it used to take about 10 minutes!

I have been using QuickBooks Simple Start for about 2 months now and so far the only disappointment has been the lack of a cash flow report. I know that the whole idea of Simple Start is to just give you the basic features and reports that you need starting off, but a cash flow report is often the key report for a start-up. A minor niggle is that you don’t seem to be able to tag certain expenses as being part of cost of sales either. If you upgrade to QuickBooks Pro, you get cash flow reports and a ton more bells and whistles that I will probably never need as a freelancer. Again, there is a big price difference between buying the Irish version (370 euro + VAT + P&P) and the US version ($199.95 or $179.95 if you upgrade from Simple Start) of QuickBooks Pro. The US price is becoming more tempting as my business grows, but I will have to find out what I will miss out on if I don’t buy the Irish version. I do my own accounts at the moment, but if I ever start handing them over to an accountant, it could be false economy buying the US version if the accountants can’t work with those files or there are other issues. All that’s a bit down the line – for now the free version of QuickBooks does the job very well and my bank balance is happy with it too. πŸ™‚

10 comments Write a comment

  1. Do you havea customer Jobs item in the Simple version? Look it up in help and if you do use that. It works very well in pro. Pro gives you a great book if you don’t understand accounts and a help line for a while.

    If your business is fairly simple, no employees and not hundeds of invoices a year then it may not be worth it to upgrade. Spend the money on something you really need – a break away from work????

  2. Thanks for the tip Kevan, I’ll look into whether Simple Start has that feature.
    How did you know I could do with a break away from work – are you psychic? πŸ™‚ No wait – perhaps blogging about finance software on a Friday evening says it all!!

  3. Hi Janine,
    I have a template that might be useful for you. It’s a cash flow forecast specifically for small businesses like yours. It doesn’t run automatically like with QuickBooks upgrade but it’s simple to punch in your numbers and get an idea of what your cash flow will look like for the next few weeks or months. You can get it free at my website under the cash flow tools section at http://www.CashFlowRollerCoaster.com .
    Best regards,
    Caroline Jordan
    from the Great State of Maine in the USA

  4. Hi Janine, good to see you back posting again.
    I have been off the radar for far too long with my blog, must start to throw a few bits back up.

    How is life as a contractor treating you?

  5. Caroline – thanks for letting me know about your template – I need all the help I can get! πŸ™‚

    Ed – nice to hear from you again – I’m not *really* back posting as you can see, but I am going to try hard to get back blogging properly. The whole first year freelancing was just too crazy to breathe, never mind blog! πŸ™‚ Still, it’s going well – thanks for asking – and it would be cool to see your blog coming back to life too.

  6. The open source world (yay linux, boo windoze) has GnuCash, which works fine for euro/irish personal/small-business finance.

    http://www.gnucash.org/

    it works fine _on_ windows, if you’re masochistic enough to use that benighted OS

  7. hi penguin,

    thanks – i had forgotten about gnucash – think i installed turbocash instead of it originally as i thought something beginning with gnu might be a bit hardcore for me πŸ˜‰ i might give it a go though.

  8. Hi Ruairi,

    Only noticed your comment now. I know that international Quickbooks Simple Start , which I use, does not do VAT returns etc. It is not localised for Ireland at all. I’m not sure about the other products mentioned, because I have not tried some of them, and in any case, I have not needed to register for VAT yet.

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