Accounting software for small business in Europe — what the law requires, what is free and what it costs

Choosing accounting software for small business takes four steps, and the price is only the last one. First your legal form decides which accounts you must keep. Then VAT registration adds records and returns. Next you decide whether you keep the books yourself, with an accountant, or hand them to an accounting firm. Only then do you compare software and prices, always with the billing condition next to the number.

There is no single European rulebook for small-business bookkeeping, and this article does not pretend there is. EU law sets the content of company accounts at directive level and the VAT records every taxable person must keep; almost everything else, from the ledger a sole trader keeps to the format of the VAT return, is national. Where that is the case we describe the mechanism and say so. We read the laws on EUR-Lex and the vendors' EUR price pages on 8 October 2026.

Which accounts you must keep: legal form comes first

What accounts you keep depends on your legal form and on national law, not on the software you pick. The EU layer is the Accounting Directive, Directive 2013/34/EU. By Art. 1(1) it covers the company types listed in its Annex I (limited-liability companies) and Annex II (partnerships whose unlimited members are themselves limited companies). A sole trader is outside it, and so are most partnerships of individuals: for them the rules are purely national. In many countries that means a simplified record of income and expenses, in others full double-entry bookkeeping. Which one applies to you, and from what turnover, depends on the member state.

For the smallest companies the Directive offers a simplification, but only as an option. Under Art. 3(1), as amended by Delegated Directive (EU) 2023/2775, a micro-undertaking is one that does not exceed two of three limits: a balance sheet total of €450,000, net turnover of €900,000 and 10 employees on average (for financial years starting from 1 January 2024). Art. 36 then says that member states may exempt micro-undertakings from some requirements, such as accruals presentation, notes to the accounts or publication. A state that does not use the option has no simplified regime, so "micro firms keep simpler accounts in the EU" would be wrong. Check your own country's rule before you assume it.

Two practical consequences for choosing software:

• Match the software to the ledger your law requires, not to the one a vendor advertises. Ask which national format the product supports for the books and for any file that your tax authority asks for.
• National laws can add documentation or audit-file requirements for the software itself. Some member states ask for an electronic ledger or a standard audit file; many do not. We found no EU rule that requires small businesses to keep their books in software at all, so a spreadsheet or paper ledger may still be lawful where your national law allows it.

What VAT adds: the one EU-wide layer

Once you are registered for VAT, EU law fixes the minimum records and returns, whatever the country. The VAT Directive 2006/112/EC (consolidated text of 14 April 2025) says:

• Records. Art. 242: "Every taxable person shall keep accounts in sufficient detail for VAT to be applied and its application checked by the tax authorities." Art. 244 requires copies of all invoices you issue and receive to be kept, Art. 247(1) leaves the storage period to each member state, and Art. 249 lets the authorities demand online access where invoices are stored electronically.
• Returns. Art. 250(1) requires every taxable person to submit a VAT return. Member states "shall allow, and may require" it to be filed electronically (Art. 250(2)). The tax period is one, two or three months, or another period of up to a year chosen by the state (Art. 252), and the deadline may not be more than two months after the period ends.
• Payment. Art. 206 requires payment when the return is submitted, unless the state sets another date or interim payments.

Small businesses can also fall below the line altogether. Under Directive (EU) 2020/285 a member state may exempt small taxable persons whose turnover stays under a national threshold of no more than €85,000; the threshold and the conditions are the state's own. If you are exempt, you keep fewer VAT records, and a simple tool may be enough. If you are registered, your software must at least keep invoices in sufficient detail and produce your country's VAT return in the format your tax authority accepts. Whether a given product supports that return in your member state is the first question to put to the vendor, because we could not confirm it for any of the products below.

Income-tax prepayments and social contributions are national as well, and so are their dates, which is why this article has no calendar. For the start-up costs that sit around the bookkeeping, see how much it costs to start a business.

E-invoices: where to read about them

E-invoicing duties differ by country and are changing, so they live in a separate article. Each member state runs its own domestic scheme on its own timetable, and the ViDA directive only harmonises the cross-border B2B layer later, with digital reporting from 1 July 2030. We cover that in invoicing software in 2026. From the accounting side one question matters: can the software receive incoming e-invoices (Peppol or your national platform) and post them without retyping?

Free accounting software: what really costs €0

Two vendors that sell in EUR across Europe offer a genuinely free accounting tier, with limits. Both are worth a look before you pay for anything.

• Zoho Books Free. €0, described as "free accounting software for solopreneurs and micro businesses", with "1 User + 1 Accountant". The vendor's FAQ sets the condition: "As long as your revenue for the financial year does not exceed the threshold of 50K USD, Zoho Books's Free Plan is available indefinitely." The figure is in US dollars, so check how your annual revenue compares at the current exchange rate. The plan covers invoices, expenses, bank reconciliation and basic reports (Zoho Books pricing, 8 October 2026).
• Odoo One App Free. €0, "one app, unlimited users". Odoo's FAQ guarantees that "you can start with any app, and we guarantee that its usage is free for unlimited users, forever, whatever the dependencies of the app" (Odoo pricing, 8 October 2026). Whether the free Accounting app includes the VAT return and localisation for your country is something we could not confirm.

Free is not the same as sufficient. A free tier is a good way to test a tool on your own invoices, but the VAT return in your country's format, bank feeds and a second user are the places where limits tend to appear.

Accounting software prices from vendors that sell across the EU

Paid plans from the two EUR-wide vendors we checked start at €10 per organisation per month for Zoho Books and €14.90 per user per month for Odoo, and the two price differently. The table shows the plans as displayed on the vendors' EUR pages on 8 October 2026. We did not confirm that the amounts are identical in every member state: Zoho also runs country editions (Germany and France among them) with local features, and Odoo's page has a country and currency selector, so confirm the price for your country before you sign. Xero, QuickBooks and other products run per-country editions or were not verified as EU-wide, which is why they are not here.

Odoo also shows lower introductory prices for the first 12 months; the table gives the regular prices. The unit matters more than the number. Zoho charges per organisation and lets several users in, so the price barely moves as you hire; Odoo charges per user, so it grows with your team but includes every app, such as CRM, inventory and invoicing. We do not chart these prices, because bars of €0, €10 and €14.90 would suggest a ranking between two different units.

Three ways to get the books done

"Online accounting" covers three different services: software you use alone, software with an accountant from the same vendor, and an accounting firm that works in its own system. The first model is the one above. In the second, the same vendors sell software and a bookkeeper together; in the third the firm uses its own tools and you supply documents or give it access to your invoicing software.

There is no EU-wide price for an accountant. Firms usually price by monthly document volume, and VAT registration, employees and foreign invoices raise the price. Whether bookkeeping services are regulated, and how the firm's liability is defined, differs by country and is set by the contract. In most systems the business owner remains answerable to the tax authority for the books, whoever keeps them. Check the contract for what the firm answers for, and ask for a quote that spells out the document limit.

Four questions usually settle the choice:

1. Are you registered for VAT? It adds returns and moves the price of every package with an accountant.
2. Do you have employees? Payroll is a separate module or a separate service.
3. How many documents do you process a month? Accountant packages are priced by volume.
4. How much time do you want to spend, and do you want to learn the rules? In the do-it-yourself model every entry error is yours.

How to choose accounting software for a small business: a checklist

Check accounting software against nine points before you buy, and verify most of them during the trial.

1. The ledger your national law requires: income-and-expense record or double entry, in the form your country accepts.
2. VAT return: produced in your country's format and filed through your tax authority's channel, if you are VAT-registered.
3. Year-end exports: the files and statements your authority expects.
4. Incoming e-invoices: can the software receive and post Peppol or national e-invoices (see invoicing software)?
5. Bank connection: automatic bank feeds for your bank. Zoho lists "Connect bank feeds" from the Standard plan.
6. Payroll: if you have employees, whether the product handles it or you need another one.
7. Access for your accountant: Zoho Books Free includes an accountant seat; ask whether your vendor charges for one.
8. Export and exit: in what format your data leaves the tool before you put it in.
9. Security and support: two-factor login, a data processing agreement under GDPR Art. 28, and the support channels in your plan (Zoho lists email support in Free and email, voice and chat in paid plans; Odoo lists unlimited support in every plan). How to protect accounts is in protecting company data, and what to ask a cloud provider is in cloud data security.

Also check the contract terms: billing period, notice period and limits that lock the product. If you keep stock or manufacture, you may need more than accounting software; when a small business needs an ERP is in a separate article.