Accounting is a hassle and maybe unpleasant for most contractors and freelancers. Accounting software can help make the process easier and more manageable. Many individuals aspire to work for themselves and be their bosses. However, spending valuable hours each week on accounting procedures is something most self-employed freelancers and contractors do not want to undertake. Being a freelancer has many benefits, including complete control over your financial tracking and reconciliation as well as creating invoice templates. The disadvantage is that you’ll be responsible for managing your self-employment taxes, something many self-employed business owners are unfamiliar with. The good news is that everyone with an online connection can now obtain guidance and handle their taxes and bookkeeping responsibilities professionally. As a freelancer or contractor, finding and adopting the proper accounting software may free up time to pursue your dream of self-employment. Most freelancers and contractors will require accounting software that allows them to track, administer, and/or report on the following:

  • Tracking your earnings and expenses
  • customers and projects
  • Tracking of billable expenses, time, and mileage
  • Estimated taxes and tax planning at the end of the year

Top Accounting Software for Freelancers and Contractors:

Before you can even consider paying taxes, you’ll need to keep meticulous records of every cost and salary you earned throughout the year. While going back through all of your bank and credit card bills when taxes are due is doable, it’s far easier to plan ahead of time to keep accurate records using modern accounting software solutions. But, again, you don’t need a degree or even much experience to make these alternatives work for you.

FreshBooks accounting software was created exclusively for freelancers and contractors. Still, it is especially ideal for those new to contract work. It’s also one of the greatest all-around option for freelancers on retainer or who need to handle numerous tasks at once. FreshBooks offers bank connectivity and multi-currency capabilities and invoicing and payment collection using its software or Stripe. The invoicing process starts with an estimate or proposal and ends with an invoice. Automated reminders and late fees are included in some FreshBooks subscriptions, and the retention function generates an automatic invoice for hours worked exceeding the retainer amount. FreshBooks has outstanding billable expenditure, time, and mileage tracking capabilities and the option to attach receipt images. FreshBooks can monitor mileage natively or import it via the MileIQ connection. The built-in time tracking function automatically associates time with projects or clients and generates invoices.

For freelancers and contractors searching for basic bookkeeping functions in accounting software, QuickBooks Self-Employed is a decent choice. The Self-Employed version is based on the QuickBooks Online platform and is tailored to freelancers. The most significant disadvantage of QuickBooks Self-Employed is that it cannot be immediately upgraded to QuickBooks Online as your company expands. QuickBooks Self-Employed lets you manage your revenue and expenses and label transactions as the company or personal, allowing you to quickly distinguish between the two. While this functionality is not unique to QuickBooks Self-Employed, the convenience with which it is managed with a single click of a button propels this programme to near the top of the list.

CloudBooks is a free accounting and invoicing programme designed specifically for small businesses and freelancers. The programme has over 2 million users and a feature set that includes invoicing, time tracking, reporting, and payment processing, among other things.

Above all, the platform is an invoicing management solution, which might be a positive or a disadvantage depending on your requirements. While CloudBooks offers capabilities that go beyond invoicing, it appears that invoicing is its major selling point; therefore, it doesn’t have as many accounting functions as the other products on the list.

Wave‘s accounting software, which is popular among small businesses in general, is particularly built for freelancers and contractors. On the other hand, Wave provides real double-entry bookkeeping and a complete feature set than other solutions tailored to freelancers. It’s also free, and it works with various online shopping and e-commerce platforms. Wave offers robust expenditure management and limitless, personalized invoicing and automated reminders and sales tax computation. You may accept payments in many currencies, which is vital for online retailers, and you can integrate with PayPal, Shopify, Shoeboxed, and Etsy directly. The accounts payable function makes bill administration straightforward, and the limitless, automated bank and credit card input makes it simple to keep track of costs. Wave also has superior reporting capabilities compared to other accounting software for freelancers and contractors. If you need to conduct payroll or use Wave’s bookkeeping service, you may pay a monthly subscription to add those features.

ZohoBooks is a full-featured accounting programme that is a perfect fit for freelancers and contractors who already use or plan to use other Zoho ecosystem products. The ZohoBooks accounting software has a dashboard view that displays critical real-time data. Zoho books offer a variety of invoice and estimate customization options and templates and recurring and pre-scheduled bills, and automatic reminders. Asset management for fixed assets is also accessible. Zoho Books helps you to track billable expenses and time per project. Both iPhone and Android users may use an app to track their mileage.