The best accounting software for contractors is a tool that saves your time and effort from tedious bookkeeping tasks. If you started your own business as an independent contractor, it’s crucial to make sure you have a clear idea about the top accounting softwares for contractors. We won’t let you down – we have carefully selected a list of great independent contractor accounting software solutions worth checking out.
There are many accounting software applications designed for small businesses. When you’re planning to start an independent contracting business, you would probably be interested in getting the best accounting software that will help you manage your financial records. Thousands of independent contractor small businesses can benefit from choosing the best accounting software to keep their books in order.
As an independent contractor, you may hop from one employer to another, with contracts lasting just a few weeks or months. This means you don’t enjoy the luxury of having the payroll department handle your tax withholdings.
You’re also on your own when it comes to expense tracking, invoice management, etc., and things can fall through the cracks if you’re using paper and pencil or spreadsheets alone to manage your accounts.
You may have considered hiring an accountant-but that can be expensive.
Or, you can take control of your own financial records and automate your accounting tasks at the same time by using dedicated accounting software, which could be a less expensive option.
In this article, we’re looking at the some of the best accounting software for independent contractors based on ratings and feedback from GetApp reviewers. We’ll take a look at what users like about each platform, as well as their suggested improvements.
(Please note: The feedback given in each of the “Common user feedback trends” sections are the opinions of GetApp’s reviewers, and do not represent the opinion of GetApp. Read more about our methodology at the bottom of this article.)
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*Clio is not a dedicated accounting tool; it specializes in legal practice management. However, based on our analysis of user reviews data, a majority of reviewers who are independent contractors have rated the solution highest for managing their accounting tasks. Clio offers either an accounting module or features that specifically cater to accounting and financial management for independent contractors.
What Makes Great Accounting Software for Freelancers?
As the gig economy has grown, so have the number of options for self-employed accounting software. But not all apps are equal. We set out to discover the best among them, those that met the following criteria:
- Simple to use: A user-friendly interface makes accounting less of a chore—minimal clicks or taps to create an expense report, for example, and navigation that doesn’t require multiple, lengthy video tutorials to accomplish the core purposes of the app.
- Core features for essential tasks: Selected apps focus on the bookkeeping tasks freelancers need to complete: invoicing, tracking payments, and logging deductible expenses.
- Beginner-friendly: Users need little-to-no knowledge of accounting and tax laws to take advantage of each app’s features.
- Digitization: Each app provides a way to digitize receipts, save them, and record the expenses from your email, phone, or scanner.
After testing nearly 40 accounting and bookkeeping apps, we narrowed the list down to the following 11 tools.
How to Pick the Best Accounting Software for Self-Employed People
Not all accounting software is created equal, and it’s very important to understand your business’s needs before investing in a certain one. At minimum, answer these three questions before choosing the best accounting software for your sole proprietorship:
- What accounting functions do I need to handle?
- How often will I use my software, or reports from my software, to make business decisions?
- What do I envision for the future of my business?
Your accounting software should be able to grow with you, which will save you the hassle of switching accounting software down the line.
QuickBooks Self-Employed (Web, iOS, Android)
Best accounting software for freelancers who file their taxes using TurboTax
If you prefer to file your taxes on your own using TurboTax, QuickBooks Self-Employed will save you a lot of time when tax season rolls around. Since both TurboTax and QuickBooks are Intuit products, they’re integrated. Automatically transferring data from QuickBooks into TurboTax when it’s time to file taxes saves hours—or days—of manual calculations and data entry.
But even if you hire an accountant to prepare your taxes for you, QuickBooks Self-Employed is an excellent bookkeeping tool, particularly for tracking expenses and tax payments. Connect it to your business or personal bank and credit accounts to automatically capture all transactions. For freelancers in the U.S., QuickBooks also calculates how much you owe in federal taxes each quarter so you never overpay or underpay.
The QuickBooks mobile app provides even more features. If your business and personal accounts are combined, you can swipe left or right on the mobile app to tag expenses as either business or personal. And if you turn on automatic mileage tracking, the app records the number of miles traveled every time you drive. Then, categorize trips as business or personal later.
QuickBooks Self-Employed Price: $5/month for Self-Employed which includes expense tracking, invoicing, and mileage tracking; $10/month for the QuickBooks Online Simple Start plan that includes tips for maximizing tax deductions and sales/sales tax tracking.
Automate QuickBooks Online with QuickBooks’ Zapier integrations.
FreshBooks (Web, iOS, Android)
Best accounting software for freelancers with complex billing needs
For some freelancers, billing is relatively simple: You agree on rates, and the client pays those rates each month. But for others, billing clients is much more complicated. Maybe you charge by the hour and keep track of billable time. Maybe you pay for things out of pocket and get reimbursed later. Or maybe you hire and pay other contractors.
If you have varying invoice needs, FreshBooks is designed for you. Within the system, you can set up multiple clients and multiple projects for each client. If you have clients that are notorious for paying late, you can set up automated payment reminders in FreshBooks that remind clients of upcoming and past-due invoices so you don’t have to.
FreshBooks’ lowest-cost plan covers nearly every use case for self-employed bookkeeping, letting you track time, record general business and billable expenses, send invoices, and collect payments. And if you upgrade to a mid-tier plan, you also get tools to help you send proposals, collaborate with an accountant, and charge late fees on overdue invoices.
FreshBooks Price: $15 per month for the Lite plan that includes unlimited invoicing and estimates for up to five clients; $25/month for the Plus plan that includes proposals, recurring invoices, automatic payment reminders, and late fees for up to 50 clients.
Automate FreshBooks with Zapier’s FreshBooks Classic and Freshbooks New integrations.
Wave (Web, iOS, Android)
Best accounting software for freelancers who want free invoice tracking and bookkeeping
When you’re starting out as a freelancer, you may not have a lot of excess cash to throw around. But even if you’re not making much, you still need to keep track of your income and expenses. Wave is a free solution that provides all the tools you need to do your business accounting—from sending professional invoices (including recurring invoices) to receipt scanning on the mobile app and even payroll processing.
Like QuickBooks and FreshBooks, Wave connects directly to your bank or credit card accounts, pulling in all of your transactions so you can easily capture business expenses. You can also upload old bank statements to the system to get caught up on past expenses you failed to record. This makes Wave handy if you neglected to do your bookkeeping for part of the year.
And if you ever decide it’s time to grow your business, Wave has the features you need to scale your accounting operations. It lets you add unlimited collaborators if you bring on someone to help with bookkeeping, run multiple businesses from a single account, and even manage payroll and payroll taxes.
Wave Price: Free for accounting, invoicing, and receipt scanning; from $20/month plus $4/employee or contractor for Payroll within the U.S.
Automate Wave with Wave’s Zapier integrations.
4. Zoho Books
If you already use the Zoho platform for your CRM, mail, and/or expenses, adding Zoho Books could be the accounting software solution of your dreams. All of Zoho’s products integrate nicely with each other, giving you a true ecosystem for a relatively low investment.
We think Zoho Books works best for extremely small and simple businesses. If you often have “split” expenses (i.e., you go to the office supply store and buy not just office supplies but also janitorial supplies and have brochures printed for advertising), you might find Zoho Books a bit frustrating. That’s because you can’t easily split expenses from the bank feed.
There are some other quirks to Zoho Books, too, but again, these only really become an issue in more complex businesses.
Unlike Xero, Zoho Books sometimes uses terminology that isn’t the most intuitive to non-accountants. Still, with a little patience during the learning process, small businesses already in the Zoho ecosystem may enjoy working with this accounting software.Start Zoho Books Free Trial
5. Sage
Sage is often underrated. Its platform is competitively priced, it’s easy to learn and use, and Sage software has an international presence.
Sage is worth a good look. It’s robust enough to grow with you but simple enough to not overwhelm you as you’re getting started.
Conclusion
You are an independent contractor who wants to start your own practice, but you are also no business expert. Writing invoices is time consuming, accounting software is confusing, and you worry about making the wrong choice. But with the right accounting software for independent contractors, your business can take off without much effort.