Open Source Bookkeeping

As a leading fintech company, at Pulse we are well aware of the monumental task that comes with organising and recording every single transaction across the course of a financial year. The detailed bookkeeping required to keep track of every penny that goes into and out of a business was once a time-consuming endeavour, wrought with the risks of human error, though within recent years, and the rise of cloud based accounting, things have become easier and more accurate for both businesses and accountants.

From the late 2000s and now through to the early 2020s businesses and the open source community have witnessed a maturation of cloud based bookkeeping software. With constantly improving user interfaces and enhanced functionalities, these developments have made the software more appealing to an ever growing range of enterprises. The UK’s open source community has played a significant role in this timeframe, and has contributed to both local and global projects. 

With open source bookkeeping software, due to its expansive customisability, businesses gain the ability to tailor their Ecommerce accounting systems to their own specified requirements. Bespoke dashboards can be arranged, and various spreadsheet programs integrated depending on your business’s usage. To help gain an understanding, suggest choices, and look at some ways that enterprises implement it, here is an overview of open source bookkeeping software. 

Understanding Open Source Bookkeeping 

Open source, by definition, means the underlying code of a program is available to the public and can be readily modified. Be it an individual entrepreneur or an expanding SME, open source bookkeeping software can be tailored to suit the needs of its user, unlike other proprietary brands such as QuickBooks that cannot be personalised. While such names are excellent accounting tools, when a niche business has very specific needs, it becomes necessary to turn to open source software to meet them. 

The ongoing management of open source software also presents a transformative approach to business operations and bookkeeping, thanks to its typically free accessibility and adaptability. With open access to the source code, users can view, modify, and redistribute the software, allowing for unique innovations and customisations for individual businesses bookkeeping. 

Central to this concept is the open source philosophy of transparency, collaboration, and communal development. Over time, both users and developers have built upon the principle that diverse perspectives and skills can, and have, significantly enhanced many products. These contributions and modifications have created more versatile and user focused tools over time, encouraging and transforming users to be active troubleshooters and developers themselves.  

Benefits and Features of Open Source Bookkeeping Software 

Choosing the Right Open Source Bookkeeping Software 

There are many brands that offer open source bookkeeping software, many of which are completely free to use, with some more reputable names charging a small fee. It is strongly advised to do your due diligence, and consider what your business realistically requires, its current size, and where you imagine your enterprise to be in the future. 

Factors to Consider 

Implementing Open Source Bookkeeping in Your Business 

Getting Started 

To begin with, when moving over to open source bookkeeping software, your business should thoroughly assess its unique aims and needs by evaluating the size of the enterprise and future projections, the complexity of your financial transactions, and any number of factors that are unique to your niche. Once these factors are established, you can start researching reputable open source software brands that align for your needs. 

While the purpose of open source bookkeeping software is to streamline your finances, and the ability to simply chart accounts and integrate the software seamlessly with systems like POS or payroll amongst others, ensuring the brand has a strong user community with a demonstrable history of positive reviews and evidence of ongoing development should not be dismissed. If a software does not have an active support system, not only does it mean innovation will fade, but should future minor issues arise you will be stuck with an obsolete and potentially vulnerable financial system. 

Training and Resources 

Effectively implementing open source software into your business, and integrating it with current programs and systems is not just a matter of the initial technical setup. Select members of your team will also need to be proficient in using the new system if it is to be utilised to its maximum potential. To achieve this you can consider a number of options, and if your chosen brand’s community support is strong enough, the process will be a lot cheaper and easier. Online tutorials and webinars will likely be the most desired option, however if necessary you may need to hire an inhouse professional for a duration to fully setup, integrate, and then train your team up. 

Best Practices for Maintenance and Security 

Maintaining the integrity and security of your open source bookkeeping software will be crucial for the ongoing safeguarding of your business’s financial data. One of the most important things you can do is to regularly update your software with the latest available version to ensure you have the most up to date security patches and features. Regularly backing up your bookkeeping data is also advised, and leveraging automated cloud backup solutions should be strongly considered to give peace of mind over thoughts of data loss incidents. 

Robust security procedures should also be implemented, and can be easily achieved by enforcing complex passwords, enabling two factor authentication, and restricting access to sensitive financial data to certain authorised personnel only. Regular audits of your bookkeeping data will help maintain accuracy and consistency of your numbers, and help identify anomalies in your records, helping to maintain business health across the board. 

The Future of Open Source Bookkeeping 

Since the late 2000s, open source technology has continued to provide bookkeeping software with innovative advancements, from addons and integrations as more communities and developers worked on improving them, to the modern day, where artificial intelligence (AI) and machine learning are taking the reins, and are set to revolutionise how financial data is managed and analysed. 

AI-Driven Automation 

AI algorithms are becoming increasingly efficient at automating routine bookkeeping tasks such as transaction categorisation, reconciliation, and even invoice processing, and reconciliation. As more and more processes shift to AI automation, the risk of human error via manual data entry falls to nil, ensuring more accuracy when creating strategic financial plans. 

Machine Learning for Predictive Analysis 

Along with AI automation, integrated machine learning models can use historical data to provide predictive, actionable insights for your business. Capable of accurately forecasting future trends, machine learning can preemptively identify potential cash flow problems while simultaneously suggesting optimal financial routes. Such capable predictive analytics can be used in conjunction with a businesses active budget planning and financial forecasting. 

Enhanced Fraud Detection 

Machine learning and AI algorithms are highly efficient at detecting anomalies within a system, and will significantly improve the fraud detection capabilities of any open source bookkeeping software. Learning through transaction patterns, these systems are capable of alerting a business to potential fraudulence quickly and accurately. 

Personalised Financial Insights 

Once integrated and familiarised with its financial metrics, machine learning can start tailoring financial advice and insights to the specific context of a business. By analysing a company’s financial data over time, these systems can provide customised recommendations for cost savings, investment opportunities, and other financial strategies. 

Integrating Pulse With Your Open Source Software 

Pulse is a fintech tool that utilises AI driven machine learning with open source software, namely open banking and open accounting, to produce accurate financial data presented on a bespoke dashboard. Through a mixture of advanced technology and user-centric design, business owners and professionals who sign up can gain access to monthly financial reports. Through combining the machine driven strengths of Pulse with the flexibility of open source bookkeeping, businesses can enjoy a more dynamic, insightful, and proactive approach to their financial management, ensuring they are well equipped to tackle their financial responsibilities effectively.