5 Best Open Source Accounting Software for Small Business

There are dozens of excellent open source accounting software options for everything from simple basic ledger bookkeeping to invoicing, inventory tracking, point of sale, payroll, taxes, and reporting and forecasting, and this roundup highlights five of the best.

The main thing to keep in mind is having accounting software is not magic, and it does not turn you into an accountant, anymore than owning a hardware store turns you into a carpenter, electrician, or plumber -- you still need to know, at the least, the fundamental principles of accounting and bookkeeping.

Accounting software is evolving into an amalgam of plain, old-fashioned accounting plus enterprise resource planning (ERP) and customer relations management (CRM). ERP, in a nutshell, helps you understand the entire flow of your business: what works and what needs fixing or improvement.

CRM helps you figure out who your most valuable customers are, and provides insight into retaining old customers and attracting new customers. A lot of small business people keep a pretty good picture in their heads, but this is not scalable or replicable, and viewing the actual data often reveals surprises.

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Some of these accounting software programs include cloud options. Me, I'm old-fashioned and don't trust my sensitive data to be stored off-premises -- especially given the sad history of lengthy outages with big vendors like Amazon, PayPal, Microsoft, Intuit and Google. Cloud technologies are supposed to be proof against service interruptions, but it seems this is still theoretical.

Internationalization is becoming important as even tiny mom-and-pop shops have global reach, thanks to the Internet.

Without further ado, here are my five picks for best open source small business accounting software.

GnuCash

You may already be familiar with GnuCash, because it is both excellent and popular. GnuCash is a personal and small business financial application that uses proper double-entry accounting, and this is important because double-entry ensures that you can detect errors and track down their source.

GnuCash is extremely flexible; the more you learn about it the more you can tailor it to suit your own needs. It supports accounts receivable and payable, invoicing, investment accounts, bank, credit and loan accounts, tax statements, reporting, graphs, multiple currencies, depreciation, tax tables and a lot more. It does not have a point-of-sale or payroll module, though you can use it to manage payroll for a small number of employees by manually entering tax and other payroll variables.

GnuCash supports multiple languages. It is free of cost, and to get the most out of it buy the Gnucash 2.4 Small Business Accounting: Beginner's Guide. It is an excellent how-to written with the assistance of one of the GnuCash developers. And the publisher gives a percentage of sales to the GnuCash project. Linux, Mac, Windows, community support.

SQL Ledger

SQL Ledger is a Web-based ERP system for shops that need work and purchase orders, packing lists, point-of-sale, inventory control, check printing, multi-user and multi-location, vouchers, or time cards in addition to the usual general ledger accounting. It requires both a Web server and an SQL server, and it is cross-platform. It works best on Linux, and you really want your sensitive financial data on a secure system anyway.

There are two versions: free of cost and enterprise. An enterprise subscription buys additional features like barcode and label printing, invoice consolidation, a good payroll module, an integrated editable Help system, and premium email and phone support. Support alone starts at $130 for a reference manual. Per incident support is $140, $600 buys a year of priority support and other goodies, and there are several other support options. Linux, Mac, and Windows.

XTuple PostBooks

XTuple PostBooks is the core of the excellent XTuple ERP suite. It incorporates seven modules: Accounting, Sales, CRM, Manufacture, Purchase, Inventory and Products. There are five editions: PostBooks, Standard, Project, Manufacturing, and Enterprise. PostBooks is free, and includes high-end features like multi-user and multi-location, trouble tickets, a task manager, quotes, shipping/receiving, bill of materials, and assemble-to-order configurator.

Annual licenses for the other editions range from $400 per year to $1,500 per year. There are also perpetual license and cloud license options. More money gets you more functionality like capacity planning, asset management and depreciation, drop-ship purchasing and multi-warehouse inventory management.

xTuple is good for the small growing enterprise, because you can start small and add functionality as you need it. Linux, Mac, Windows.

Compiere

Compiere also offers an open source/free of cost version, plus commercial editions with additional features. Compiere includes comprehensive accounting features, plus ERP and CRM. The free version is packed with high-end functionality and may be all you ever need: project accounting, ecommerce, materials accounting, order management, sales and service, and way more.

The enterprise edition adds multi-server support, excellent management dashboards, PDF report writer, business intelligence and a Visual Dictionary Editor. This is a unique feature for customizing Compiere without programming, using a graphical drag-and-drop module editor. Compiere is among the best in international support: multi-currency, tax laws, accounting standards, and languages.

Compiere's professional edition is $750 per user annually, and there are cloud subscription and other support options. Linux, Mac, Windows.

Turbo Cash

Turbo Cash is a fully-featured competitor to Quickbooks Pro and Sage. It supports multiple languages and many different countries. It includes point of sale, invoicing, reporting and analysis, inventory and stock pricing, barcodes, quotes, trial balance, batch operations, VAT accounting, multi-user and access controls. It's one of the most comprehensive free accounting programs.

Turbo Cash aims for ease-of-use, and it has a clean, attractive interface. It is free of cost with commercial support options. Printed manuals, CDs, and a portable USB version are all available at reasonable prices. Windows only.

Carla Schroder is the author of The Book of Audacity, Linux Cookbook, Linux Networking Cookbook, and hundreds of Linux how-to articles. She's the former managing editor of Linux Planet and Linux Today.