Do you run a small business or as a self-employed worker? If so, you have probably been thinking about starting to use accounting software to help manage your money. It is not hard to see why; if done right, accounting has obvious benefits for businesses that do not require outside investment and can often be the difference between success and failure. Using accounting software can offer increased control and increased profits, along with giving you more time for things like sales and marketing.
Small businesses have a lot of things to worry about, and accounting just isn’t one of them. That’s why accounting tools exist. The market for this kind of software is crowded though so it can be hard to decide on the product that’s right for your business. In this article, I’ll look at the main features of the top accounting software for self-employed people so you can make an informed decision when choosing what to go with.
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.
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.
Xero (Web, iOS, Android)
Best accounting software for freelancers who need a highly customizable and scalable app
When you’re starting out freelancing, you only need to send invoices and track expenses for a few clients. Eventually, you’ll get a business bank account and want to track expenses separately—and perhaps will need to make custom documents for clients, track time spent on projects, and more.
Xero is an accounting app that can grow as you do. You can start out using it to send invoices, monitoring payments as they come in on Xero’s dashboard. Then, you can connect it to your bank and payment services to manage all of your finances. Upgrade later if you hire team members and need to manage payroll from Xero as well.
If your accountant uses Xero, you can share your financial data with them directly. And if you need more tools over time, you can add a wide variety of integrations and extra features to extend your accounting app as your work grows. Xero integrates with more than 700 apps—like Shopify, PayPal, Stripe, and Gusto—through its app marketplace.
Xero Price: From $9/month for the Early plan that includes five invoices and quotes per month and reconciliation of up to 20 bank transactions.
Expensify (Web, iOS, Android)
Best accounting software for freelancers who only want a way to keep track of receipts
If your accounting goal is just to have a way to keep track of your business receipts throughout the year so you can hand them off to your accountant during tax season, Expensify may be the best solution for you. Unlike the other apps on this list that offer more full-suite accounting solutions, Expensify focuses on a single goal: helping you keep track of your receipts.
With Expensify’s mobile app, quickly capture clear images of receipts, and the app will automatically categorize expenses, parse the amounts and merchant names, and save all the transaction details to your Expensify account. Add entries for mileage and hours worked, if needed, to track all of your business expenses in a single view. And if you connect your credit card to Expensify, that’s also an easy way to select expenses and turn them into emailable reports or PDF files.
Expensify is the simplest app on this list to use, but it doesn’t have some of the options that will help if you’re filing your taxes yourself—such as auto-calculations of quarterly taxes owed or categorizing expenses based on how you’ll file them as deductions. However, if you plan to work with an accountant, Expensify probably has all the features you need.
Expensify Price: Free for expense tracking and up to five SmartScans of receipts each month; from $4.99/month for the Track and Submit plans that include unlimited SmartScans.
Shoeboxed (Web, iOS, Android)
Best accounting software for freelancers who need simple receipt digitization
Shoeboxed is another great option for freelancers who want to hand off expenses and receipts to an accountant at the end of the year. Use it to digitize your business receipts in many different ways:
- Capture pictures of receipts on the go with the Shoeboxed mobile app.
- Forward email receipts to Shoeboxed.
- Set up auto-sync to have Shoeboxed automatically pull receipts from Gmail.
- Mail a pile of receipts to have them scanned and saved by Shoeboxed.
Because Shoeboxed offers so many different options for digitizing and saving receipts, you can record every business expense—regardless of how the receipt is delivered—within seconds. It’s particularly helpful if you have boxes or file folders filled with business receipts but no time to scan them in and want to outsource that job to a service.
Shoeboxed Price: $29/month for the Startup plan that includes one prepaid envelope for sending paper receipts and 25 receipts (paper or digital) per month.
AND CO (Web, macOS, Chrome, iOS, Android)
Best accounting software for freelancers who need to manage both accounting and legal tasks
As far as accounting tasks go, AND CO has everything freelancers need. Connect your bank/credit accounts to record business expenses, track your time, create and send invoices, accept payments, and even see when clients have viewed invoices you sent. Forward email receipts or take a picture of physical receipts and upload them using AND CO’s mobile app.
Where AND CO stands out is with its legal features. Protect yourself with AND CO’s standard freelancing contracts, written by the Freelancers Union. Turn sections of the contract on and off as needed, and collect client signatures with e-signing functionality. And when clients don’t pay, send a prewritten physical demand letter directly from the app.
AND CO Price: Free
OneUp
OneUp offers accounting software that integrates a free CRM and invoicing option, which is why we chose it as the best option for small sales teams. OneUp has a mobile-first solution that many self-employed business owners who are constantly on the go will love, and you can close your books in as little as a single minute. The only drawback is that, while it’s a great business option, the software doesn’t focus on some of the most important features for the self-employed, such as calculating quarterly tax obligations.
Here’s a more detailed breakdown of OneUp’s accounting software:
- Pricing: $9 to $169 per month, based on the number of users
- Ease of Use: Easy, mobile-first software that inexperienced accounting users will love
- Self-Employed Features: Invoice management, bank automation
- Free Trial: Free for 30 days
- Add-Ons: None, but can integrate with many leading software options in the POS, CRM, and payroll spaces
OneUp has one of the best customer review ratings of all the options on our list. When the automation features work, customers seem very pleased with the software. Customers also like their interactions with the customer support team overall. This is a solid option that’s a good fit if you need an integrated CRM.
Conclusion
So you’ve gone out on your own, started your own business, or found yourself freelancing for various companies. Great! Want to make sure you don’t get caught with your pants down (figuratively of course)? A good way to ensure this is by using accounting software that ultimately can help you manage your books far easier than relying on Microsoft Excel.
Do you want your business to start taking off? If yes, then I recommend that you try any of the software listed. This software gives you all the necessary reports to help you grow your business. It becomes easy for you to be successful in managing your finances.