Free Accounting Software for Small Business and Charities 2024

In the fast-paced world of small business, every penny counts. Keeping track of your finances can be a daunting task, especially when you’re juggling multiple responsibilities. That’s where free accounting software comes in – a lifeline for UK entrepreneurs looking to streamline their financial management without breaking the bank.

Say goodbye to spreadsheets and manual calculations! Free accounting software helps you to take control of your income, expenses, and taxes. From invoicing and expense tracking to bank reconciliation and financial reporting, these tools offer a wealth of features to simplify your accounting processes and give you valuable insights into your business’s financial health.

In this guide, we’ll explore the top free accounting software options available in the UK, highlight their key features, and provide tips for choosing the right solution for your business. Whether a freelancer, sole trader, charity or small business owner, a free accounting software package can help you save time, reduce errors, and focus on what you do best – growing your business.

Why use Accounting and Bookkeeping Software?

If you run your own small business, you have two options for accounting: do it yourself or employ a bookkeeper or accountant to do it for you.

Both have advantages, and it will depend on your bookkeeping skills. Accounting software has developed over the last few years and is much more user-friendly than it used to be.

Most free accounting software packages offer intuitive dashboards and mobile apps, making it easy to create and send invoices, track expenses, and manage your finances – even on the go. By taking control of your bookkeeping, you’ll save on accounting fees, get paid faster with online invoicing.

Free Cloud-Based Accounting Software UK

Most free software options are cloud-based.

Using Cloud accounting has some advantages and disadvantages.

Cloud Accounting Advantages

• You can use the software from anywhere that has an internet connection
• The software is always up to date
• With some, you can share a link with your bookkeeper or accountant
• Double entry accounting
• Security built-in
• All will include basic accounting features, and some may have additional features

Cloud Accounting Disadvantages

• It would help if you had a good broadband speed
• Can get locked into a provider as a third party holds all the data
• Learning a new system

What are the options for Free Accounting Software for Small Businesses?

Our tried-and-tested products are Zoho Books, FreeAgent, Bokio, GNUCash, Pandle, QuickFile, Wave apps, and Manager. These are all cloud-based, but Manager can be downloaded to your computer.

Some are free, while others have an upgraded version with additional accounting features or support.

They offer it for free for several different reasons, including advertising, paid support, and upgrades.

How to Choose the Best Accounting Software

When looking at small business accounting software, start by writing down what you need from the software. This may include sales invoices, tracking expenses, stock, debtors, creditors, multicurrency support, time tracking, payroll, online payments and linked bank accounts.

You will not find some of these features in free accounting software, and you will be better off looking at a paid-for option. Some of the best accounting software options are FreshBooks, Zoho Books, QuickBooks, Xero and FreeAgent.

Most software packages are easy to set up and use. They have a simple dashboard giving an overview of the business finances and links to add new transactions.

Always check the reports available. They will all include Profit and Loss and Balance sheet, but others will consist of accounts receivable, accounts payable and trial balance.

8 Best FREE Accounting Software for Small Business

Below is a quick rundown of 8 FREE bookkeeping software packages.

• FreeAgent – Free for NatWest, Royal Bank of Scotland, Ulster Bank NI or 1 transaction with Mettle business account users
• Crunch – Choice if you want to pay for accounting support
• GNUCash – Download application, an alternative to Excel
• Manager – Download application, another alternative to Excel
• Pandle – Great for small business owners; upgrade to the paid version for more features
• QuickFile – Easy-to-use dashboard
• Wave Apps – US or Canada are the best options due to support
• Zoho Books – Will grow with your business. Please read our full review

As a business grows, the need for accounting software will change. It might be worthwhile comparing free versions to paid software.

Making Tax Digital (MTD)

Making Tax Digital (MTD) is a UK government initiative to modernise the tax system by making it entirely digital. Businesses and individuals must keep digital records and submit their tax returns using compatible software.

MTD is already in place for VAT, and starting in April 2026, a new self-assessment system for turnover above £50,000 will be introduced called Making Tax Digital ITSA. For turnover above £30,000 is from April 2027, but there are no plans for turnover below £30,000. It means you must use either an accountant, compliant software or bridging software.

Whilst looking, it is worth checking the best MTD software available and seeing if the free plans will be compliant.

FreeAgent Software for Small Businesses

FreeAgent is an excellent small business accounting software if you are a current account holder at NatWest, Royal Bank of Scotland, Ulster Bank NI or Mettle, which only requires 1 bank transaction per month. Otherwise, prices start from £19 per month for a sole trader or £33 for Limited Companies.

The advantage of FreeAgent is that if you can get it for free, it is a fully integrated, easy-to-use software package. It is a good alternative with advanced features compared to paid software such as QuickBooks or Xero.

It might even be worth looking at switching bank accounts to get the best accounting software for your business. If you are considering switching, look into it thoroughly and check out the bank charges. I had a client on the free version of Bokio. Once they started charging, they switched to Mettle Bank and FreeAgent; the process was simple, and they quickly picked up using the new software.

Features of FreeAgent

• Free if you have business banking at NatWest, Royal Bank of Scotland or Ulster Bank NI, or at least one transaction per month with Mettle.
• Easy-to-use dashboard
• Integrated Payroll
• Open banking integration
• VAT returns are Making Tax Digital compliant
• Cloud-accounting
• Lots of invoice templates and unlimited invoices on the go with the App
• Accepts online payments
• Time and expense tracking
• Good customer support
• Cashflow management
• Easy-to-use bank reconciliation
• Lots of financial reports, including Profit and Loss and Balance sheet

Disadvantages of FreeAgent

• It is only free for some business current account holders
• Pricing matches other packages
• It was reported as clunky and awkward by some users, although they are improving it

Crunch Accounting Software

Crunch was started in 2007 by its founder, Darren Fell, after he found shortfalls in accountancy firms. He decided to set up an all-inclusive service for freelancers, contractors, and small businesses.

Crunch Accounting software is ideal for self-employed individuals, freelancers, and small businesses. Its free, simple-to-use version is available.

I can not see any reports when reviewing the software, which I feel is essential as a bookkeeper and small business owner.

Crunch Accounting Software Advantages

• Easy-to-use dashboard
• Easy to setup
• Free version
• Upload bank statements
• Unlimited transactions
• Accounting invoicing on the go
• Unlimited Expenses
• Cloud-based accounting software

Disadvantages of Crunch

• No financial reports are available
• Can’t set the VAT rate
• Straightforward invoice template with no options.

If you plan to complete the accounts, I feel Crunch is not the best option.

If you need help with bookkeeping and submitting accounts, you must upgrade to £71.50 per month. This is not the cheapest software option, but its support and additional features may suit some businesses.

Visit Crunch

GnuCash

GnuCash is a free, open-source accounting software for small businesses that you download to your PC.

GNUCash is not a cloud-based software, so it will only allow a single user.

GNUCash is not as pretty as some of the other accounting software we have reviewed, but it is usable and has all the features sole traders need to manage their accounts.

GNUCash Advantages

• Downloaded to your PC; no internet connection is needed
• Open Source software
• Enter sales invoices
• Ideal for personal or freelancers
• Financial Reports available
• Alternative to Excel Templates

GNUCash Disadvantages

• Not as user-friendly as others
• Very basic invoicing
• Will calculate VAT but not Making Tax Digital compliant

Manager Accounting Software

Manager is a free accounting software package that can be downloaded directly to your PC. If you need more users, there are paid-for versions.

Advantages of Manager

• Quick to set up
• No internet connection is required.
• Easy to use
• Send invoices directly to customers.
• Most reports are available.
• Lots of on-page support topics

Disadvantages of Manager

• Full version expensive
• They are incompatible with Making Tax Digital, but they plan to add this in future editions.

Read the Manager Accounting Software review.

Pandle Accounting Software for Small Business

Pandle is free but requires the paid-for version if you want bank feeds.

I recently set up an account for a small charity in the UK; after a couple of hours of training, they were up and running the software themselves. They have used the software for a couple of years, and it does everything they need.

Advantages of Pandle

• Easy-to-use dashboard
• Issue Customer Invoices
• Keep track of outstanding invoices.
• Reports are available, and they are adding more.
• Videos on how to complete transactions
• Developed by Accountants
• Set up a credit card account

Disadvantages of Pandle free accounting software

• Bank feeds a paid-for version.
• Not as many reports as some of the more popular packages

Read our Pandle Review to see if the software is suitable for your business.

Visit the Pandle website to sign up for free accounting software.

QuickFile Free Accounting Software UK

QuickFile Free Accounting Software – Dashboard

A lot of work has gone into QuickFile over the last few years. When I first looked at it, I didn’t include it as I struggled with the layout. It now has an easy-to-use dashboard and is easy to set up. It also has some features as standard, which are paid for in other apps.

QuickFile is free until you reach 1000 nominal transactions per year. An example of a nominal transaction is a sales invoice that will be recorded in the customer account and sales account and, therefore, has two nominal transactions. Once you reach 1000, the price is £45 + VAT.

Advantages of QuickFile

• Easy to set up
• Choice of invoice design
• Upload documents
• Can handle estimates, purchase orders and delivery notes
• The clear layout of the dashboard
• At a fee, they can send out accounting invoicing by post.
• VAT Returns completed directly with HMRC
• Multicurrency
• Lots of reports to download or view on the screen

Disadvantages of QuickFile

• Automatically importing bank account data requires an annual fee.
• If your business expands, you will need to pay for the software, but it is still cheaper than other packages.

Zoho Books

Zoho Books offers a free version of their accounting software, making it an ideal starter, knowing it can grow with your business.

Zoho Books is a full accounting software package offering all the expected features, plus mileage and time tracking.

They have also developed 40 integrated apps, so if you need another solution for the business, they may have something available.

Advantages of Zoho Books

• Full accounting software
• 1000 invoices per year on the free plan
• Expense and mileage tracking
• Excellent dashboard with easy use
• Full mobile app
• Accounts receivable software
• email support
• 40 apps to integrate
• Can transfer to the paid version as the business grows
• Making Tax Digital VAT

Disadvantages of Zoho Books

• Bank Feeds are a paid option
• It can be harder to learn than others

Visit Zoho Books

Wave Apps

Wave Apps was one of the recommended cloud accounting software for small businesses. In recent years, they have concentrated in the United States and Canada.

They have closed all new UK customers and may withdraw customer support. If you are a Wave user, you will also notice that the bank feed is not working.

It is an excellent option for any business based in the US or Canada investing in new features.

Are there any other Free Accounting Software options?

We offer free Excel bookkeeping templates if you are a small business and do not need all the accounting package features.

Our templates include a Cashbook for recording simple income and expenses and a combined budget and cashbook, enabling you to compare the budget and actual figures during the year.

Paid for Accounting Software

Although a free version of accounting and bookkeeping software might be suitable for starting, if you are planning to expand the business, it might be better to use a paid version with more features from the start. In the long term, transferring the accounts might save time and money.

Please read our guide on the best accounting software for small businesses. It includes the best software for start-ups, products, and service businesses. We have listed the pros and cons for each one and included pricing.

FAQs for Best Free Accounting Software

Is free accounting software really free? Yes, legitimate free accounting software options are available, but they often have limitations compared to paid versions. These limitations might include restrictions on the number of users, transactions, or features. Some providers also offer free trials of their paid software.

What features can I expect in free software? Most free accounting software includes essential features such as invoicing, expense tracking, bank reconciliation, and financial reporting. Some may also offer additional features like project management, time tracking, or inventory management, but these might be limited in the free version.

Can free bookkeeping software handle UK tax requirements? Yes, many free accounting software options are designed to comply with UK tax regulations, including Making Tax Digital (MTD) for VAT. However, it’s crucial to confirm this before choosing software.

Is my data safe? Reputable providers take data security seriously, even with free versions. Look for software that uses encryption and other security measures to protect your financial information.

Can I upgrade to a paid plan later if I need more features? Most providers offer the option to upgrade to a paid plan with more features and higher limits as your business grows.