Accounting is an important part of every business but sometimes it is also the most difficult part. This is where open source accounting software comes in, as a solution that can save your day!
If you are looking for open source accounting software to handle all of your bookkeeping and accounting activities, Appvizer will show you point by point what an open source accounting software is, its benefits, its features, and we’ll give a comparison of open source accounting software for your business.
Let's get into it now!
What's open source accounting software?
Let's go over a little reminder: The term "open source" means that the source code of the software is public and accessible. The software in question can then be modified and distributed by any individual.
The utility provided by open source accounting software is threefold: ease, efficiency, and autonomy.
- Ease, because you no longer have to multiply calculations or switch from one file to another to cross-check your accounts, synthesize them, and have a global view of the state of your company and its activity.
- Efficiency, because open source accounting software saves you a lot of time, and therefore money. In addition to saving you money, they adapt perfectly to your expectations, which is the hallmark of open source.
- Autonomy, because in a sense, open source accounting software does not require you to spend extra money, hiring a chartered accountant, for example, would cost you several thousand pounds per year. These programs are often free and require at most one download from the web.
Benefits of open source accounting software
Open source software has several advantages:
- First of all, they are freely available, and no licence is required (often at the expense of a not very modern design).
- By using open source software, you also benefit from great independence, unlike the commitment to a publisher of paid software.
- Finally, they are very flexible. You can also have tailor-made open source accounting software.
When unqualified personnel use software they don’t know, it can waste time and sometimes cause errors. In order to resolve this issue, companies sell services based on these free open source accounting software: they program them according to particular business needs, install them on-premise, and provide maintenance and support.
Limitations of open source accounting software
As for the limitations, open source software generally does not include assistance or support when learning how to use the software. Apart from forums to exchange with other users, you have to manage on your own, and therefore master the computer techniques to work on these kinds of tools. They also can benefit from rather innovative evolutions but this can take time to come about.
The key difference: open source software vs. free software
The difference between free software and open source software is not easy to establish. It lies in the values and in the vision of the world that each one carries.
An open source software is "open" in the sense that everyone has the possibility to access its source code. In addition to this, it is possible to redistribute the source code and create derived software products.
The Open Source Initiative (an organization founded in 1998 by Bruce Perens and Eric Raymond) focuses on technical considerations. It is compatible with the coexistence of software whose code is open but not free.
However, in practice, a significant part of open source software is also free.
The free software movement goes further and advocates philosophical values. Almost political, some would say.
Described for the first time in the 1980s by Richard Stallman, and popularized by his very strong campaigns (with very strong opinions) via the FSF or Free Software Foundation, the formal definition of Free Software is based on four freedoms:
- Freedom to run the program, for any purpose.
- Freedom to study the operation of the program and to adapt it to one's needs.
- Freedom to redistribute copies (underlying principle or philosophy: help others).
- Freedom to improve the program and publish the improvements (underlying philosophy: to benefit the whole community).
Two of these freedoms (the freedom to study how a program works and the freedom to improve it) imply access to the source code and thus that the software is open source.
The features of open source accounting software
There are lots of open source accounting software on the market but they always have some common features such as
- Customers/suppliers: managing invoices, credit notes, receipts, payments, and the list of all your customers or suppliers
- Bank and cash: recording of your bank statements, cash receipts, and payments
- Accounting documents: accounting entries, accounting documents, supporting journal
- Chart of accounts: chart of accounts and tax plan
- Periodic tasks: all drafts not yet validated and recorded in accounting entries
- Reports: general ledger, balance, journals, and taxes
But, what is the best open source accounting software? Which criteria should you consider while choosing the best system? Keep reading, we'll answer it in the next part.
Best open source accounting software
Akaunting is an online open source accounting software aimed primarily at VSEs, SMEs, micro-enterprises, and associations.
The tool is suitable for both the simplest needs in invoicing and the most advanced needs in accounting.
More than accounting software, it allows you among other things:
- to follow your cash flow,
- to pilot your commercial management,
- to carry out your bank reconciliations,
- to manage your accounts,
- or to follow your payments.
With these features, Akaunting will help you stay on top of your cash flow:
- Bank accounts: Create and track unlimited cash and bank accounts
- Multi-company: Have an overview of the financial health of multiple companies from one administrative panel.
- Powerful reporting: Track the insight of your financial reports to improve your business
- Client portal: The client is the key! Be transparent with the client by sharing invoices and transaction information with them.
- Recur everything: Automate all the processes in one click!
- Customer summary: Manage all the client's information in one place (invoices, address, payment, etc.)
- All-in-one platform: Various payments, taxes rates, multi-currency, unlimited attachments, transaction categories, bulk actions, dashboards, widgets, etc.
With their freemium model, the functional coverage of the tool is very good for the first familiarization with accounting software. In addition, Akaunting offers many possibilities, even for small companies whose activity is already well underway.
Apache OFBiz is a suite of applications available in open source mode under the Apache licence and using a Java framework for development. It is not only accounting software, but rather an ERP (Enterprise Resource Planning) that includes many other modules:
- CRM and order management,
- warehousing and inventory,
- manufacturing and MRP,
- project management,
- human resources management, etc.
Because of its flexibility and scalability, Apache OFBiz can be adapted to any type of company, regardless of its size or the industry in which it operates (even if there is a strong e-commerce orientation).
The accounting module is particularly complete for a free software:
- standard double-entry ledger,
- support for multiple organizations, account hierarchies, and segmentation,
- accounts receivable, accounts payable, invoices, payments, statements,
- agreement contracts and credit management,
- asset management,
- budget management, etc.
It is a scalable and flexible solution, with a common architecture so that developers can customize it according to the needs and evolution of the company's activity.
A complete demo is available to users to help them learn how to use the tool. Moreover, it is managed by a very active international community, which guarantees quality support.
Apache OFBiz is completely free and open source. With this quality-price ratio, Apache OFBiz is undoubtedly the solution that you shouldn't miss! Moreover, it is probably the most feature-rich freeware in this comparison.
GnuCash is one of the simplest, most reliable, and most intuitive open source accounting software.
Released under the GNU licence (the free software licence), it is free and downloadable online. GnuCash not only allows you to follow the evolution of your bank accounts, but also of your stock portfolio, your income, and your expenses. Note that it is based on professional accounting principles.
Its functionalities include the following:
- Double-entry accounting: This helps you set a balance between cash inflows and outflows and the sum of assets and equity.
- Personal and small business accounting: GnuCash simplifies managing a small business including tracking customers and suppliers, delivering and paying invoices, and tax and invoice deadlines.
- Charts and Reports: GnuCash has a built-in module to display graphs of your financial data and also provides a comprehensive suite of standard and customizable reports.
- Import of QIF/OFX/HBCI protocols: You can easily import protocols from GnuCash. It is the first free software to support the open financial data exchange format OFX (Open Financial Exchange) used by many banks and financial institutions.
- Transaction Planning: GnuCash allows you to create recurring transactions and customize them. You can also automatically set a transaction plan.
- Account Book Register: The software provides a simple and intuitive interface for entering financial transactions.
- Reconciliation statement (to balance your transactions against the bank's statement): It allows the user to compare the transactions entered in an account against a bank statement and avoid transaction errors.
- Multiple currencies: Different accounts may be denominated in different currencies.
- Others: Check printing, mortgage and repayment wizard, etc.
Don’t be surprised! GnuCash is 100% free software. You can support their worldwide community by making a donation.
Skrooge is a personal accounting management software under an open source licence. It integrates particularly well with the KDE environment. The philosophy of the software is to be simple to use.
On the accounting side, it has a relatively extensive functional coverage for a free application. The module allows you to manage general accounting for your business.
Skrooge gives you the basic functionalities that enable you to manage your accounting activities:
- Import accounts from many sources: With Skrooge, you can easily import transactions from many formats such as AFB120, QIF, CSV, MT940, OFX, and QFX.
- Like using a web browser: If you are a multitasking person, this solution is ideal for you! You can work with different tabs at the same time and bookmark your preferred reports, graphs, filters, and pages, ...
- Budget: Set rules and manage the budget
- Track refunds to your business: Receive the expected refunds such as medical refunds.
- Reporting: Get a quick review of your financial health by looking at the dashboard and the monthly/annual reports.
- Others: Operation schedule, payment management, multi-currency, process automation, quotes management, add all the properties you want on all types of objects (transactions, accounts, categories, etc. and include files (pdf, pictures, etc.).
The functional coverage of the tool is very good for when you’re first familiarizing yourself with accounting software.
Skrooge is single-user and on-premise use is 100% free. You can contribute to their community by donating on their website. With the freemium and the basic functionalities, Skrooge is ideal for VSEs or SMEs that want to start using an open source accounting software.
Ledger SMB is not just accounting software. It is in fact a business management tool, intended for self-employed entrepreneurs, very small businesses, small and medium-sized companies, but also for associations. It, therefore, takes care of:
- customer relationship management,
- stock management,
- project management,
- or even the management of interventions.
On the accounting side, this software offers a lot of options:
- General ledger and journal entry: Manage your different accounts and transactions, and access an overview of the financial health of your business thanks to double-entry bookkeeping.
- Sales management: Track customers' information, contacts, orders, and invoices.
- Purchasing management: Track vendors, suppliers, purchases, and invoices.
- Multiple currencies: Manage all the transactions, quotes, and payments in different currencies.
- Cash Management: Handle cash in and cash out. Write checks, track receipts, and reconcile with bank statements.
- Fixed Assets: Establish fixed assets, balance sheet, and reporting.
- Inventory management and light manufacturing: Track goods,services, and their assembly.
- Others: Reporting, budgeting, time tracking, etc.
Ledger SMB is 100% free. The main advantage of Ledger SMB is that it allows you to go beyond accounting, even though it's a free software. With this quality-price ratio, it is sufficiently complete for a start-up to understand an accounting tool.
Created in 2004, Odoo is an open source accounting software. Odoo is designed for all entrepreneurs and all business sizes. It's easy to use Odoo. Its "à la carte" formula offers the flexibility that small and medium-sized businesses need in management software.
If you have a chartered accountant, they can also access your Odoo space. The number of users is unlimited without any extra charge. If your package includes other modules it becomes a paid software, then the number of users also impacts the price.
Odoo provides lots of powerful accounting functionalities:
- Accounting entry: All invoices created in Odoo are automatically categorized. It is possible to download the PDF of supplier invoices, they will then be decrypted by the software which will suggest an accounting reconciliation.
- The bank synchronization allows the automatic import of transactions from your bank. All you have to do is validate the proposed categorizations.
- Follow-up tables indicate the balances and transactions that still need to be reconciled in order to be up-to-date with your accounting records.
- Cost accounting: Thanks to the numerous dashboards, Odoo allows you to closely monitor the financial situation of your business.
- Billing: With Odoo, you automatically benefit from the invoicing module. Odoo allows the edition of invoices and credit notes.
Odoo is a pay-per-use software, theprice is based on:
- the number of users
- the number and type of applications chosen
The price starts at €22 (about £18) for a single user per month.
|Akaunting||VSEs, SMEs, micro-enterprises, and associations||Free||Online||Ease of use|
|Apache OFBiz||Any type of company||Free||On-premise||ERP and CRM integrations|
|GnuCash||Any type of company||Free||On-premise||The first free software to support the open financial data exchange format OFX|
|Skrooge||VSEs, SMEs, micro-enterprises, and associations||Free||On-premise||Ease of use and basic functionalities to start|
|Ledger SMB||Self-employed entrepreneurs, VSEs, SMEs, associations||Free||On-premise||ERP and CRM integrations|
|Odoo||Any type of company||£18/ user per month||On-premise||Ease of use and functional coverage|
Open source accounting software can vary, but should be chosen according to the size of your business: small, medium, large, or multinational.
Other criteria to keep in mind includes the sector of activity: some software might be more specialized in your field of work.
But, what is the best open source accounting software?
This question depends on the needs of the individual or business. Some solutions are more comprehensive than others, but that doesn't mean they are right for you: you may not need all the services, so make sure to choose the software solution that fits your company best!