I searched for a long time before deciding on a business accounting software. Various solutions such as Wave were tried, but the results were less than impressive.
Being a long time Quicken (affiliate) and iBank (Banktivity) user, I looked for something simple to use, feature filled, but did not cost a lot of money to own. I also wanted a stand alone package that lived on my computer. Control over personal data is a concern and a priority.
The ability to track buys and sells for stock and mutual funds, calculate cost of goods sold, and create budgets were required.
The software must also be good on all operating systems, and not function completely differently on a Mac vs a Windows machine. This has long been a contention for Quicken who quite frankly has a sub par Mac version.
Turns out that GnuCash for desktop met the objectives without an overly steep learning curve. Data resides locally and can be easily encrypted. The price can’t be beat either because it’s free.
What is GnuCash?
GnuCash is free open source accounting software package. It runs on Mac OSX, Windows, and Linux.
The software uses a double accounting method that is feature filled and easy to use.
A double accounting system means that all money is tracked to and from each account. There are no categories like in Quicken (affiliate) or iBank, but it works in a similar fashion. It’s just a different way of thinking about how money flows from one place to the next.
Think of this like this. Money flows into an account, say your checking account, and is distributed somewhere. That place could be;
- transferred to savings
- transferred to pay a credit card bill
- or wherever
Put more simply, a double accounting system can be summarized by these 3 points.
- Money flows to and from at least 2 accounts, but it could be more.
- Accounts are in balance meaning all money must flow somewhere and must be accounted for.
- In general accounting – the total credits must equal the total debits, however they are distributed.
Is GnuCash Right For You?
GnuCash works for most, but not everyone.
Yes – Small businesses who need an accounting package for inventory cost, payroll, balance sheets, and profit and loss tracking.
Yes – Individuals who need to track their money and are willing to learn a double accounting method of tracking.
No – Large businesses.
No – Technically challenged users.
What it won’t do
It will not calculate payroll costs automatically. You can track known payroll costs but to quickly calculate the values there are better programs for this purpose.
There is a mobile Android version but there is not one for IOS. The mobile version does not snyc with the desktop, but transactions can be exported to the desktop application.
How To Install
Go to the installer page and download the correct package for Windows, Intel and Power PC Macs, and Linux operating systems.
Advantages Of Open Source Software
These days it’s getting harder and harder to find stand alone software packages. The trend is to move towards monthly subscriptions.
To make matters worse, companies like Quicken force you to purchase updates after a certain amount of time. This is annoying and expensive.
Fortunately there are alternatives such as open source software.
Open source developers freely distribute the software and don’t have corporate greed driving their decisions. They have a strong drive to create useful and secure software for anyone to use on their preferred operating system.
Features of GnuCash
Double accounting method so that every cent is tracked. There are no un-categorized transactions that get lost in the mix.
Robust Reporting Capabilities
GnuCash comes standard with a robust reporting system. It has these 5 categories with multiple reports for each category.
- Assets and Liabilities
- Income and Expense
- Sample and Custom
Business reports include things like aged account payables, balance sheets, and P&L statements. Expenses are tracked such as COGS or Cost of Goods Sold, payroll, and taxes.
Personal reports include things like budgets, cash flow, transactions reports, assets, and liabilities.
Many of these reports overlap, but the point is that it is powerful enough to run a business, yet easy enough for personal finance.
Flexibility is important with an accounting package.
Works flawlessly on a Mac with 100% accuracy. We did not test other operating systems because we don’t have any access to them.
Can utilize online banking or download QIF or OFX data. Basically, if your bank can export to Quicken, it works in GnuCash.
Simple interface that is quick and easy to learn, even for non accountant types.
Budgets can be created based on past purchases or manually, whichever you prefer.
For those unaccustomed to a double reporting software, then the interface may be difficult to get used to.
Certain features require some technical skills. For example. GnuCash can download online quotes, but it uses a Perl module that needs to be installed on your computer. On a Mac, you need to be comfortable using terminal in order to get this to work.
The Bottom Line
If you have basic bookkeeping skills, need a low cost accounting software, and want control of your data, then GnuCash is your best choice.
However, if the thought of debits, credits, and accounts is not your thing, then you might be more comfortable with a category based system like Quicken or iBank.
One thing about it though, the cost and risk to try GnuCash can’t be beat.
Go ahead and give it a try, you might just like it.