Review and Comparison: GnuCash vs. Other Accounting Software

By

Brendan Tuytel

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Reviewed by

on

December 27, 2023

This article is Tax Professional approved

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GnuCash is a free accounting software targeted at small business owners. Its two main selling points are the fact that it’s free and open-sourced (more on that later).

While it’s completely free to try, is it worth your time?

For busy small business owners who wear many hats and juggle daily tasks, investing time into using GnuCash doesn’t come without cost, even if it’s not costing money.

With this GnuCash review, you’ll know the ins and outs of the platform to know whether it’s right for you.

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What does the GnuCash workflow look like

GnuCash is a manual accounting process with little to no automation.

Instead, GnuCash users enter transactions manually using the double entry accounting method.

Double entry accounting means for each sale or purchase, you must create the transaction by entering the amount that changed and the accounts affected.

Contrast the manual double entry accounting process with other accounting solutions that connect directly to bank and credit card accounts. Those options import transactions automatically, cutting down the chances of making a mistake or missing something.

It should also be noted that GnuCash isn’t an out-of-the-box solution. Not only are transactions manual entry, but so is the account setup.

For a small business owner that know their debits from their credits, double entry accounting isn’t a massive learning curve. But if you’re not an accounting whiz, having a system that reviews your work and automates data entry provides peace of mind.

GnuCash features

Scheduled transactions

It’s possible to set up some automation in the form of recurring transactions. For repeat transactions with set amounts like rent costs, you can set up the platform to enter them automatically.

Scheduled transactions lets you set the timeline, the amount, the category, and an automatic remind of when the transaction is coming up.

Visual reports and graphs

GnuCash has reports and graphs that update as you enter transactions.

For reports, you get the essentials like a balance sheet and income statement.

For graphs, you have the option of displaying your finances in bar charts, pie charts, and scatter plots.

These reports and graphs are customizable. If you have a specific vision of how you’d like to display your financial data, there’s a good chance you can do it with GnuCash.

Account reconciliation and comparison

You can check the accuracy of your work by using the account reconciliation tool.

The account reconciliation tool allows you to compare your manual data entry against a credit card or bank statement. This means catching any transactions you might have missed and confirming the account balance in GnuCash is correct.

An open source platform

GnuCash is unique in that it’s an open source accounting software. What this means is the code the software is built on is available to anyone.

For users with coding knowledge, this opens up a whole new level of customizability. They can develop features or tinker with what’s already been designed to have it better suit their needs.

Tech savvy users can build the a working system for business finances, personal finances, and anything in between.

Mobile app

If you’re constantly on the go and want to record transactions as you make them, GnuCash has a mobile app for that. However, it’s limited to just recording financial transactions. You won't be able to use it to track bank accounts or make other updates to your small business accounting.

Because GnuCash isn’t a cloud platform, this doesn’t update your account. Instead, you can export all of the transactions you recorded on the mobile app to a CSV file which can then be uploaded into the desktop software.

GnuCash pricing

GnuCash is completely free to use. There are no paid add-ons, no premium features, or pricing tiers. If you have a desktop computer that can run the software, you can use it for free for as long as it’s downloaded.

The pros and cons of GnuCash

Pros

  • A fully free software: No catches, no paid features, GnuCash is completely free to use. It’s an accounting system run by volunteers (who do accept donations if you appreciate the platform).
  • Highly customizable: Once you understand how GnuCash works, there’s a high level of customizability to make it suit your business or personal finance needs. Reports, graphs, accounts, and categories are all customizable.
  • Multiple language and currency support: GnuCash supports changing languages and accounting for multiple currencies. For international teams, this is a big plus.

Cons

  • Requires accounting know-how: The manual processes are intimidating if you’re less familiar with the terminology. It’s recommended you have some prior accounting experience if you’re going to use the platform.
  • Mostly manual processes: Time is valuable for busy business owners. The more transactions you have, the more time you’re sinking into double entry accounting. This means it’s not going to scale efficiently with your business, not to mention more chances at making mistakes or missing something.
  • Not on the cloud: Despite having a mobile app, GnuCash is not on the cloud. You can only access your accounting on the desktop computer it’s installed on.
  • Outdated appearance: Don’t judge a book by its cover, but GnuCash’s interface is not easy on the eyes. The UI is unintuitive and missing out on some of the technological advances we’re used to.

GnuCash alternatives

Bench Bookkeeping: the hands-off experience

For those who want the stress of accounting and bookkeeping completely off their plate, there’s Bench.

Bench pairs you with a professional bookkeeper who completes your monthly bookkeeping for you. By connecting bank accounts and credit cards to your Bench account, information is automatically entered into the platform for your bookkeeper to categorize and review.

Your bookkeeper is available for review calls to help you understand your financial health, answer any questions, and ensure you’re getting the most value from the platform. No more uncertainty, just confidence that your books are up-to-date and tax compliant.

Wave Accounting: the other free alternative

Wave Accounting is a similarly free accounting platform that offers basic accounting functionality including invoicing and connecting bank accounts which automate account reconciliation.

Beyond invoicing, Wave Accounting is a payment processor with a $0.60 and 2.9% fee on transactions (3.4% if American Express). This makes tracking and staying on top of accounts receivable easier.

Wave doesn't limit how many bank accounts you can connect. This is makes it a fit for small businesses with one or multiple accounts.

There are paid features like payroll, receipt storage, and advisors that expand the features of the platform if you’re looking for something scalable with your business.

QuickBooks Online: the paid cloud solution

QuickBooks offers four different pricing packages ranging from $30 to $200 per month. Assisted bookkeeping gets you personalized support, but as a paid add-on of $50 per month.

Each pricing package comes with a free guided setup to get you started on the right foot. Their integrations and automation make for a simplified and more efficient workflow.

While QuickBooks is feature-packed, the way the pricing increases with your needs means the costs can add up quickly. While you’re deciding whether you want to manage your own bookkeeping, trying out a free option lets you get a taste of the experience before committing.

Essential reading for tax season
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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