Almost since the beginning of time, if you’re self employed you have to keep your books up to date. Whether it’s on a ledger or on paper, you didn’t have a scintilla of a choice. You had to do it yourself because there was no way out of that vault. Whether you’re an accounting or bookkeeping beginner or an experienced pro in this self-employed bookkeeping field, the software you use should be designed in such a way that would help you in keeping accurate information in order to make it easier for you.
Being self-employed can be tough. You have to do it all yourself, while also doing all the things you used to do while you worked for someone else (and then some). It’s definitely easier when you have the right tools though. If you’re self employed, you know what I’m talking about here.
QuickBooks Online
There’s a very good reason QuickBooks Online tops this list of best accounting software for the self-employed. QuickBooks is the reigning incumbent for accounting and bookkeeping software in the U.S. It’s easy to use, inexpensive, and training resources abound.
QuickBooks Online comes in three different varieties: Simple Start, Essentials, and Plus.
For the best accounting software for self-employed people specifically, Essentials is the best place to start. That’s because Simple Start is too simple for most businesses. As your business grows, you can move up to Plus. But be warned—once you upgrade your subscription, you can’t downgrade it again.
What About QuickBooks Self-Employed?
QuickBooks Self-Employed is a nice solution for freelancers and independent contractors, especially now that Self-Employed users can collaborate with their accountant or bookkeeper right inside the software. That said, QuickBooks Self-Employed lacks certain features that most sole proprietorships will need eventually—if not right away. If you’re not a freelancer, you may want to look into QuickBooks Online instead.
FreshBooks
FreshBooks’ fantastic invoices are easy to customize to your business, and its automated recurring invoices and late payment reminders help you get paid quickly and easily. Its $15 a month starting price is a bit higher than average, but if your business relies largely on invoices to get paid, give FreshBooks a hard look anyway.
FreshBooks started out as an invoicing software company in the early ‘00s. Once it transitioned into fully fledged accounting software, FreshBooks’ invoicing features remained the best of the best. Unlike QuickBooks Self-Employed, FreshBooks’ invoices are customizable with your business’s name, colors, and logo. You can also schedule automated recurring invoices, send late payment reminders, and set automatic late fees to accrue on overdue invoices.
FreshBooks has one key drawback, though. (Doesn’t everything?) With its cheapest plan, you can invoice only up to five clients a month. You can send those five clients an unlimited number of invoices each month, but that’s a perk only if you work on multiple projects with the same recurring customers. If you have a larger client base, you’ll need FreshBooks’ Plus plan, which costs $25 and lets you invoice up to 50 customers a month.
Zoho Books
If you know nothing about accounting, Zoho Books is the right software for you. A great fit for self-employed individuals, Zoho Books offers three plans, all with a ton of features. Particularly well-suited for businesses that sell products and need to manage inventory, Zoho Books also works with several online payment gateways for easy customer payment.
All three Zoho Books plans include the following features:
- Automated workflows
- Bank connectivity and reconciliation
- Custom invoicing, including company branding
- Expense tracking
- Projects and timesheets
- Recurring transactions
- Mobile app for iOS and Android devices
Zoho Books includes a dashboard, where you can view important business metrics such as accounts payable and accounts receivable totals, as well as income and expense totals for the current year. If you choose to use the Professional plan, you’ll also have access to purchase orders, sales orders, inventory, and a client portal, where you can share documents and invoice clients directly.
Zoho Books offers three plans. The Basic plan is $9/month and supports up to 50 clients/contacts and two users; the Standard plan, which is $19/month and supports up to 500 contacts/clients and three users; and the Professional plan, which is $29/month and supports more than 500 contacts and up to 10 users.
Zoho Books includes good reporting options with a variety of standard reports available, and all reports are able to be exported using a CSV format or Microsoft Excel.
One of the major benefits Zoho Books offers new users is its extensive help sections that will take you step by step through each process you need to complete. This is especially useful for those struggling to learn Accounting 101. And, with three plans available, you can also scale up should you find your business is growing.
Wave
Wave was the first invoicing software I used for my freelance business.
(The only reason I upgraded to paid software was because Wave became unavailable outside of the US and Canada. It also didn’t integrate with my UK bank.)
It’s a great, free-to-use accounting software for freelancers that’s super easy to use. You don’t need tons of financial knowledge to find your way around it, but it still gives you all of the financial data you need to know.
Features include:
- Free, customizable invoices with automatic payment reminders.
- Sales tax add-ons (if you need it).
- Bank connections for explaining transactions and attaching receipts.
- Accountant sign-on. If you’re working with an accountant come tax time, you can create a login for them to sign into your Wave dashboard and collect your data.
Best suited to: Freelancers and small businesses in the US and Canada.
Pricing: Free.
Xero
Xero tops the best accounting software lists in New Zealand, Australia, and several European countries. It’s gaining ground in the United States, too
Similar to QuickBooks Online, Xero has an extensive network of accounting professionals who support it, and it’s easy to find good online training resources. Self-employed users will especially appreciate the lack of accounting jargon that Xero uses. That means no “debits” and “credits” here—just good old-fashioned “money in” and “money out.”
If you’re in a creative industry, Xero may be the best fit for you; it’s popular with marketing firms, writers, designers, etc.
AccountingSuite
AccountingSuite is not as well-known as its competitors, but it offers many of the same features designed for the small business owner, including self-employed individuals and sole proprietors. A great fit whether you’re selling products or services, AccountingSuite includes excellent sales and inventory management capability, plus a time-tracking feature.
One feature that sets AccountingSuite apart is its budgeting capability, which allows you to create a current or future year budget with the ability to choose the accounts you wish to include. To see how accurate your budget is, run the Budget report, which compares budgeted totals to actuals.
AccountingSuite offers a rare commodity in small business software, which is excellent budgeting capability. Source: AccountingSuite software.
Other features AccountingSuite offers include:
- Advanced accounting features, such as period closing capability and recurring journal entries
- Sales quotes and sales orders
- Custom invoicing
- Cash receipts
- Purchases
- Customizable extensions that fit your business
- Inventory management
- E-commerce integration (Pro with e-Commerce plan only)
AccountingSuite also includes good reporting options, with reports easily customizable to better suit your needs.
AccountingSuite currently offers four pricing levels. The Start Up plan at $19/month is perfect for those just starting out and offers banking, accounting, projects, time tracking, and reports. The Business plan, at $25/month, also including sales, purchases, and sales tax management. A Professional plan at $55/month and a Pro with an e-Commerce plan at $129/month are also available.
Another asset of AccountingSuite is its ability to integrate with e-commerce platforms. While the Pro plan is not cheap, AccountingSuite will completely integrate your accounting platform to your online business, eliminating the need to enter information twice and saving you a lot of time in the process.
Conclusion:
When you’re self-employed, it’s your job to do everything. From sales and marketing, to bookkeeping and taxes (and everything in between!). As your business grows, the amount of time you spend on these things can become overwhelming – but it doesn’t have to be.