Are you wondering what the best accounting software for self employed is?
Look no further, because we’ve compiled five of the best ones out there. But, before that, let’s talk a little about what accounting software is and why it’s important.
What is Accounting Software?
Accounting and bookkeeping software are tools that allow individuals and companies to manage their finances.
These programs allow you to do the following, and more:
- Link bank and credit card accounts
- Record financial transactions
- Track and manage expenses and revenue
- Generate financial reports and analyze metrics
- Create and send purchase orders, invoices, estimates, and proposals
- Track inventory
- Bill clients
- Manage payroll
- Collaborate with your accountant
Why Do the Self-Employed or Freelancers Need to Use Accounting Software
Every business needs to keep track of their finances, no matter the size. For one thing, freelancers tend to take on multiple projects or clients at once. This means that they have multiple streams of income. Trying to track all that by hand is not only time-consuming, but it can also be difficult to manage.
That being said, we think that the best accounting software for self employed people is the one that takes care of this. It chould automate certain tasks in order to save you valuable time and keep all your records accurate. This tool should also allow you to generate reports so you can track how well you’ve been performing. Additionally, your accounting software should allow you to do accounting on the go to cater to even the busiest individual.
Can I Do My Own Accounting?
DIY bookkeeping has several pros. For one thing, it’s the best thing to do if you’re just starting out. It allows you to get a good idea of how much you are spending, and is more cost-effective. It also allows you to stay in control.
In fact, the best accounting software for self employed mentioned below are purposefully designed to be intuitive. This means that anyone can use any one of them. They don’t have to be an accountant, or even have a background in bookkeeping. That’s one of the reasons why we recommend them.
However, there are also a few cons to DIY bookkeeping. For one thing, you need to learn how to do your own bookkeeping the right way. Every business must comply with any local regulations and tax law. This includes all self-employed persons, like freelancers.
Speaking of taxes, it can potentially take you a longer time to do all the filing yourself. If you are a busy person, it might be difficult to set aside time to do your books each week, then get everything filed with your local tax office. Lastly, if you don’t have someone double-checking your work, there’s a chance you could miss a few things. Making mistakes on your taxes could get you fined or audited. After all, the revenue service doesn’t know that you made mistakes by accident, and you can’t expect them to cut you any slack.
Best Accounting Software for Self Employed & Freelancers in 2023
1. QuickBooks Online
QuickBooks is probably the most popular accounting software out there. They are known for having flexible plans and robust features to handle even the most complex of bookkeeping needs. They even offer a free guided setup to get you up an running with account connections, task automation, and advice on best practices.
- Great for small businesses
- Widely used and known
- 24/7 customer support
- Flexible pricing plans for all business sizes
- User friendly
- Easy implementation and integration
- Many in-depth features
- Hundreds of integrations
- Easy to search for what you need via the search bar
- Plans can be costly compared to alternatives
- In-depth support can be lacking
- There is a learning curve to get started
- Limited users on all plans
QuickBooks pricing has four tiers:
- Includes access to one user, income and expense tracking, receipt capture, mileage tracking, cash flow management, sales and sales tax tracking, access to basic reports, 1099 contractor management and the ability to connect a sales channel
- All of the above features plus 2 more users, time tracking., bill management, more reports, and ability to connect 2 more sales channels
- All of the above with the ability to add up to 5 users, project profitability tracking, inventory tracking, more substantial reports, and the ability to connect all of your sales channels
- All of the above plus access to up to 25 users, batch invoicing, employee expense management tools, expense creation, exclusive apps, dedicated account team, online training, workflow automation, data management and restoration, comprehensive reports, and more customization
Another one of the best accounting software for freelancers, Xero is used by over 3.5 million users across the globe. Xero is a software created for the people, so that anyone from beginners to expert accountants can use it with ease. Xero even offers to connect you with financial advisors if you ever need guidance.
- Many integrations and easy to implement
- Accounting on the go via mobile app
- Easy to set up and operate
- Simple and beginner-friendly UI
- Cloud based
- Unlimited user support
- Limited entry-level plan
- Hard to transfer to other accounting software from Xero
- Limited customer support
They have three plans:
- Includes all the basics of receipt capture, reconciliation, short-term cash flow snapshots, and limited bill entry and limited quote and invoice sending
- All of the above but removes the limits of bill entry and quote and invoice sending; includes bulk reconciliation
- All of the above plus multiple currency handling capabilities
They also have add-on services like expense management for $4/mo, project and job tracking for $7/mo, and Analytics Plus for $7/mo after a 4-month free trial.
FreshBooks is an accounting software that makes on the go accounting easy and affordable. Not only do they provide the software you need to manage finances, they also offer award-winning, personalized customer support to back it up.
- Useful beginner templates
- Simple but effective
- Easy to use UI
- Works well with other applications
- Good customer support
- Limited users
- Limited entry-level plan
- Limited customizations
- Limited auditing functionality
They have 3 regular pricing tiers with the offer of 50% off the first 6 months. For this article, we will list the regular prices.
- Unlimited invoices to up to 5 clients, unlimited expense tracking, unlimited estimates, credit card and bank transfer payment capabilities, sales tax tracking, view reports, mobile app
- All of above plus up to 50 billable clients, automatic expense tracking, recurring billing and client retainers, unlimited proposals, business health and double-entry reports, collaborate with accountant, mobile milage tracking
- All of the above plus unlimited clients, project profitability tracking, Accounts Payable to track bills, bill payments, and vendors, customizable emails and signatures, automatic payment reminders, automatic late billing, get paid with checkout links, run financial and accounting reports
They also have custom plans for more complicated needs.
Wave is one of the more unique entries in our list of the best accounting software for self employed people. They offer their invoicing and accounting tools for free. This US-only banking software also offers optional paid payroll, payment processing, personalized bookkeeping, and coaching.
- Free Invoicing and Accounting
- Great for people just getting started
- Great features
- User friendly and easy to navigate UI
- Mobile app
- Unlimited users
- No third-party integrations
- Limited functionality
- Limited auditing functionality
- Need to pay for some support options allowing for subpar service
Wave is unique in that both their invoicing and accounting software are completely free.
- Includes customizable, professional, unlimited invoices, automated reminders, pay directly from invoices using card, bank, or Apple Pay
- Includes unlimited income and expense tracking, unlimited users, view insights via dashboard, access helpful reports
They also have paid add-on services:
- $20 or $40/mo
- Includes, easy payments, employee portals, access to tax forms and documents,
- $129/mo for bookkeeping support; $379 one time fee for Accounting and Payroll coaching
- Includes access to bookkeeping, accounting, and payroll experts that can help you with your books, coaching, year-round access to advisors, tailored insights to fit your business
They also charge per-transaction fees for processing payments through Wave.
5. Zoho Books
Zoho Books is one of the Zoho collection of apps. They offer end-to-end financial management. They keep updated on the latest changes in tax regulations and compliance and any other finance trends. This combined with the fact that it allows you to integrate with the other apps in the Zoho suite, makes this one of the best accounting software for self employed individuals who want to optimize other areas of their business management.
- Has a free plan
- Easy to use and configure
- Access to the Zoho suite
- Flexible and affordable pricing
- Many features
- Good customer support
- Easy integrations
- Limited users
- Limited integrations
You can use Zoho Books for free and they also have 5 pricing tiers on top of that.
- Includes access for 1 user + accountant, up to 1,000 customizable invoices/yr in multiple languages, recurring invoices, customer portal, expenses & mileage tracking, multiple bank and card accounts, reconciliation, automate payment reminders, import back and card statements, chart of accounts, journals, reporting and scheduling, , email support, Zoho and other app integrations
- All of the above plus, 3 users, predefined user roles, up 10 5,000 invoices/yr, recurring expenses, connect bank and card feeds, invoice and expense tracking, project tracking, bulk updates, more customization, reporting tags, billing and timesheets, custom reports, Zoho People and Zoho Project integration, and additional voice and chat support
- All of the above plus 5 users, custom roles, recurring bills, retainer invoices, approve sales and purchases, vendor credits, create sales and purchase sales orders, basic multi-currency handling, stock trading, tracking project profitability, recurring journals and templates, up to 10 workflow rules, 25 custom reports, timesheet approval, landed costs
- All of the above plus 10 users, a custom domain, vendor portal, budgeting tools, up to 200 workflow rules, 50 custom reports, cashflow forecasting reports, Zoho Sign and Twilio integrations
- All of the above plus unlimited custom reports, advanced multi-currency capabilities, advanced inventory control, warehouse managements, serial number tracking, batch tracking, shipping label printing, shipment tracking, Shopify Store integration
- All of the above plus up to 15 users, Advanced Analytics, real-time customizable reports and dashboards, metric tracking and data analysis, collaborative reporting, embed reports in sites and apps
What Is EcomBalance?
EcomBalance is a monthly bookkeeping service specialized for eCommerce companies selling on Amazon, Shopify, Ebay, Etsy, WooCommerce, & other eCommerce channels.
We take monthly bookkeeping off your plate and deliver you your financial statements by the 15th or 20th of each month.
You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.
Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.
And here’s some free resources:
- Monthly Finance Meeting Agenda
- 9 Steps to Master Your Ecommerce Bookkeeping Checklist
- The Ultimate Guide on Finding an Ecommerce Virtual Bookkeeping Service
- What Is a Profit and Loss Statement?
- How to Read & Interpret a Cash Flow Statement
- How to Read a Balance Sheet & Truly Understand It
There you have it! We hope our list of the best accounting software for freelancers and other self employed individuals gave you the information you need to start organizing and taking control of your finances.