Open-source accounting software allows businesses to customize their accounting program to meet their unique needs by going beyond a one-size-fits-all solution.Here’s what you need to know about open-source accounting software, plus how to select and get started with the right software for your business.
What is open-source accounting software?
Open-source accounting is a tool for financial record-keeping and analysis that uses an open-source framework. Open-source accounting software, like other open-source software, allows you to access and alter the underlying code of the software, which lets you customize the software to meet your specific needs.
For example, you might want to adjust the software by adding your own security encryptions or customize the dashboard of your general ledger. Like other types of open-source software, such as Linux and Mozilla Firefox, the underlying computer programming is accessible to the public, and coding communities can come up with open-source solutions to fix glitches and errors. This type of software is also often free.
Open-source accounting vs. traditional accounting
Open-source accounting software allows users to change the underlying code of the software to suit their business needs, whereas traditional accounting software such as QuickBooks or Sage don’t allow modifications. Unlike traditional accounting software, open-source software typically requires more technical know-how, such as the ability to read and work in the software’s code. Because open-source software is accessible to the public, it could make your data more vulnerable to hackers.
Open-source software vs. free software
Most open-source software is free, but not all free accounting software is open-source. To be open-source, the software must make its underlying code modifiable and available to the public. Some free accounting software companies do not publicize their underlying codes. Some open-source software also charges users to download it.
Find the right accounting app for your Shopify store.
4 advantages of open-source accounting
- Ability to correct glitches
Open-source accounting software offers four distinct advantages, including potential cost savings, the ability to customize, transparency in your accounting practices, and the ability to correct any of the software’s technical glitches
- Cost. Open-source software often is free or relatively inexpensive. Other popular accounting software like QuickBooks and Sage can charge hundreds of dollars a month for some plans.
- Customizability. Open-source software can be edited and tailored to fit your business’s specific needs.
- Transparency. Because the source code can be seen by anybody, it can provide more clarity to both your own employees and potential investors about your accounting practices. However, the openness can potentially make open-source accounting software more vulnerable to hackers.
- Ability to correct glitches. If you notice a bug in your open-source software, you can edit the code to fix it. Other users of the software also may work together to make corrections.
7 popular open-source accounting software options
GnuCash is a free, flexible accounting software designed for small businesses and sole proprietors. It is compatible with Windows, MacOS, Linux, BSD, and Solaris and has the ability to display graphs based on your data, perform double-entry accounting and track individual stocks and other securities for companies that make outside investments. However, GnuCash is not accessible via web browsers, which can make it difficult for business owners to access their data on the go.
ERPNext is another popular accounting software. In addition to its core features, ERPNext has a journal entry feature that lets users track information that might not fit within traditional sub-ledgers like bank payments, invoice amounts, and more. It is highly versatile and was designed with businesses of all sizes and nonprofits in mind. The software is compatible with mobile devices, MacOS, and Windows. However, some users have complained that the warehouse management feature, designed to help track inventory, is not easily scalable.
Akaunting is a web-based open-source accounting software. The free version of Akaunting is designed for sole proprietorships, while paid plans exist for small to medium-sized businesses. Akaunting saves backups of your data hourly, daily, weekly, and monthly, so you don’t have to worry about forgetting to press the Save button. Akaunting is a relatively new software that launched in 2017, so there’s less data available on the company’s history. If you do choose Akaunting, make sure you update to the latest version. One Akaunting update in 2021 removed some security features that could have allowed hackers to exploit the software’s “Forgot your password” feature.
In addition to the common features most programs offer, FrontAccounting also gives users features like the ability to make journal entries and track multiple currencies, as well as various language and calendar options. It is both accessible via web browser and compatible with MacOS, Windows, and Linux operating systems.
Openbravo is a cloud-based accounting software designed for medium to large businesses. It offers warehouse management to help keep track of inventory and a promotions engine to help you offer discounts to customers. Openbravo can also be integrated with Shopify. Openbravo recommends using its website with Google Chrome, Safari, Mozilla Firefox, or Microsoft Edge.
The free version of TurboCASH helps a business perform tasks such as send invoices, track inventory, calculate sales tax, and more. If you want multiple users to access your TurboCASH account, you can subscribe to TurboCASH’s premium multi-user feature, which costs $200 a year. TurboCASH can be accessed online via web browsers or offline using Mac or Windows. Note that users have reported TurboCASH sometimes has glitches when used on Mac operating systems.
Odoo offers dozens of applications, from accounting software to timesheet trackers. It touts ease of integration between these applications and even has a forum for users to discuss problems and solutions. To integrate the app with Shopify, you can install the Odoo Connector app through the Shopify store. Odoo users have said they sometimes have a significant learning curve, especially when it comes to setting up the software.
How to integrate open-source accounting software with Shopify
The process of integrating open-source accounting software with Shopify will vary depending on which software you use. If the software is downloaded as an app, you can open the app in Shopify by following these instructions. Online forums may show how other users in the open-source community integrated their software.
3 best practices for using open-source accounting in ecommerce
- Set up an organized accounting system. Before you begin using open-source software, it is important to have a basic accounting system in place. You should create a general ledger and choose the sub-ledgers you want to track.
- Track sales and expenses. A successful accounting system will accurately record accounts receivable and accounts payable. Make sure you stay up to date on these accounts, because falling behind and playing catch up can increase the likelihood of data entry mistakes.
- Use financial data to make informed business decisions. Many open-source accounting software programs can help you analyze large amounts of data. This can give you new insight into budgets and expenses, helping to maximize what you can get out of your software.
Open-source accounting FAQ
What is open-source accounting?
Open-source accounting is a tool for financial record-keeping and analysis that uses an open-source framework. Open-source accounting software allows you to access and alter the underlying code, which lets you customize the software to meet your specific needs.
Why should ecommerce business owners use open-source accounting?
The advantage of open-source accounting is that it is customizable, letting each business tailor the code as needed. Many open-source software programs are also free or cost less than non-open-source accounting software.
What are some popular open-source accounting software options?
Some popular open-source accounting software includes GnuCash, ERPNext, Akaunting, FrontAccounting, Openbravo, TurboCASH, and Odoo.
Can open-source accounting software be integrated with ecommerce platforms?
Yes, most open-source accounting software can easily be integrated with popular ecommerce platforms such as Shopify.