Finding the right accounting software is a frustrating challenge for most freelancers.
This comprehensive review unpacks the best accounting tools tailored specifically for freelancers' workflows and budgets, whether you're just starting out or ready to scale.
You'll discover user-friendly, cost-effective solutions like FreshBooks and Wave alongside robust systems like QuickBooks that can provide end-to-end accounting as your freelance business evolves.
Introduction
As a freelancer, having the right accounting tools is essential for efficiently running your business. Whether you need to track income and expenses, create professional invoices, manage projects, or simplify bookkeeping, the accounting software you choose can make all the difference in staying organized and maximizing profits.
When evaluating accounting solutions, it's important to consider features like automatic bank feeds and invoice generation tailored to your needs as a solopreneur. Ease of use is also key - you want software that won't take up unnecessary time as you juggle clients and projects. And for bootstrapped freelancers, affordability matters too.
In this article, we review some of the top accounting tools for freelancers across a range of budgets and feature sets. We'll cover options like FreshBooks and Wave that balance power with simplicity, as well as free tools like Google Sheets templates for basic money management needs. Read on for an in-depth look at the best accounting software to simplify bookkeeping, invoicing, expense tracking, and more as a freelancer.
What is the difference between QuickBooks and FreshBooks?
QuickBooks Online and FreshBooks are two popular accounting software options for small businesses and freelancers. The main differences between them come down to the size of business they cater to and the specific accounting needs they meet.
QuickBooks Online provides more advanced accounting features like double-entry bookkeeping, making it better suited for small and medium-sized businesses selling products and services. It offers customizable reports, invoicing, expense tracking, inventory management, and robust reporting capabilities scaled for SMB growth.
FreshBooks takes a simpler approach focused on time tracking, project management, and invoicing. It works well for solopreneurs, freelancers, and service-based businesses that bill by hourly or project rates. Key features include billable time/expense tracking, mobile time capture, recurring, partial, and milestone invoicing, and project profitability reporting.
In summary, QuickBooks Online has the accounting depth for product-based SMBs, while FreshBooks provides the time billing focus freelancers need. Choosing between them depends on your business structure and size, number of users, and the specific accounting tools that best align with your operations. Both integrate with other software and offer scalable plans to meet different business requirements.
What software do freelance bookkeepers use?
Freelance bookkeepers have access to a wide variety of software options to help manage their clients' finances efficiently. When choosing the right solution, it's important to consider scalability, client management capabilities, invoicing needs, and ease of use.
QuickBooks Online
QuickBooks Online is highly recommended for freelancers due to its robust feature set and scalability. As your client base grows, QuickBooks Online makes it easy to add users and provide secure access to financial data. Key benefits include:
- Scales from 1 user to hundreds of users seamlessly
- Custom user permission levels to protect sensitive data
- Mobile app for on-the-go access
- Integration with 400+ business apps
With strong accounting capabilities, QuickBooks Online is a top choice for freelancers seeking long-term growth.
Xero
Xero stands out for its simple and intuitive interface. The dashboard provides an overview of cash flow, account balances, reconciliations, and more. As a cloud-based solution, Xero enables real-time collaboration with clients located anywhere.
Ideal for freelancers who want an easy-to-use system focused on the essentials of cash management and reporting. Top features include:
- User-friendly dashboard
- Bank feeds and reconciliations
- Fixed asset tracking
- More than 800 app integrations
Xero simplifies everyday accounting so freelancers can focus on serving clients.
Brightbook
Purpose-built for client management, Brightbook streamlines the process of working with multiple clients. Features include:
- Client dashboards
- Time tracking
- Project management
- Scheduling
- Billing and invoicing
For freelancers juggling multiple clients, Brightbook brings everything together in one place for maximum efficiency.
The best software for freelance bookkeepers depends on your business needs and growth objectives. QuickBooks Online offers unmatched scalability, while Xero provides an easy-to-use system for everyday accounting tasks. Client management capabilities make Brightbook an attractive standalone option or integration to augment other solutions. With an abundance of choices available, freelancers can build a customized technology stack to optimize their productivity and profitability.
Which QuickBooks is right for freelancers?
QuickBooks and QuickBooks Self-Employed are both accounting software options tailored for small businesses and self-employed professionals. However, there are some key differences:
QuickBooks Self-Employed is specifically designed for freelancers, solopreneurs, independent contractors, and very small businesses. It focuses on separating personal and business finances, tracking mileage, creating professional invoices, capturing business receipts, generating expense reports, filing quarterly estimated taxes, and basic accounting capabilities.
The standard QuickBooks offerings work better for established small businesses with employees, inventory tracking needs, more complex accounting requirements, or businesses structured as LLCs, S-corps, and C-corps. QuickBooks also integrates with a wider array of third-party business applications.
So for independent contractors and solopreneurs earning less than $100k in revenue per year, QuickBooks Self-Employed is likely the better choice. The simple interface, mobile app access, tax-specific features, receipt capture, and mileage tracking suit freelancer needs at an affordable price.
For larger businesses with more complex operations, multiple users, payroll, or inventory demands - traditional QuickBooks Desktop or QuickBooks Online may be preferable. However, these services come at a higher cost with features freelancers may not require.
Evaluating your business structure, revenue, client needs, and growth plans can determine which QuickBooks product best matches your priorities as a freelancer. But for most solopreneurs, QuickBooks Self-Employed strikes the right balance of accounting capabilities, tax planning, compliance, and mobility at a reasonable price point.
How much does FreshBooks cost?
FreshBooks offers three paid plans: Lite, Plus, and Premium. The Lite plan starts at $8.50 per month when billed annually, the Plus plan starts at $15 per month when billed annually, and the Premium plan starts at $27.50 per month when billed annually.
The Lite plan is best for solopreneurs and small teams that need basic invoicing, expenses, and time tracking. The Plus plan adds more robust project management plus the ability to accept online payments. The Premium plan includes everything in Plus as well as more advanced reporting.
When evaluating the pricing, keep in mind that FreshBooks often runs limited-time discounts on annual plans to help sweeten the deal. For example, at the time of writing this post, they are offering the first year of Premium at 50% off.
While the exact features vary across the plans, the core capabilities remain focused on streamlining billing and making it easier to get paid on time. Between customizable invoices, automated reminders and late fees, integrated payment processing, and flexible time tracking, FreshBooks aims to maximize small business productivity.
The platform pricing reflects the growing sophistication of capabilities as you upgrade from Lite to Premium. But even at the starter tier, you receive a full-featured solution designed specifically for freelancers and self-employed professionals managing their own finances.
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Choosing the Right Accounting Tool
To select the top accounting software for self-employed professionals, we assessed platforms across crucial criteria like cost, ease of use, core accounting features, integration capabilities, and mobility.
Cost-Effective Solutions for Freelancers
As a freelancer, every dollar counts. We looked for tools with free tiers or affordable paid plans that fit tight self-employed budgets. Products like FreshBooks and Wave provide robust free versions covering basic accounting needs. Their paid upgrades unlock more advanced capabilities at reasonable prices - for example, the FreshBooks Plus plan starts at just $15 per month. Prioritizing value helps freelancers maximize their accounting software investment.
Ease of Use: A Non-Accountant's Perspective
Accounting software needs an intuitive interface so non-accounting users can navigate it with minimal frustration. We emphasized products with simple workflows for invoicing, expense/time tracking, reporting, and other common tasks. Software like FreshBooks uses plain language over complex accounting jargon within its clean dashboards. This enables self-employed bookkeepers to use core features with shorter learning curves.
Must-Have Features for Self-Employed Bookkeeping
From creating professional invoices to tracking deductible expenses, freelancers need accounting tools with features that help organize their finances. We assessed platforms that include complete income/expense ledgers, customizable invoice/receipt creation, mobile receipt capture, tax support, and reporting. Solutions like Wave provide these functionalities in affordable (or free) packages so freelancers maintain organized books without advanced accounting know-how.
Seamless Integration: The Key to Streamlined Workflows
Integrations enable accounting platforms to effortlessly connect with other tools self-employed professionals use like Gmail, Stripe, Slack, etc. This eliminates work needed to manually export and import data across systems. For example, accounting services like FreshBooks integrate with Gmail for easy invoicing directly from your email. This saves freelancers time, eliminates data entry, and enables more streamlined business workflows.
Mobile Accounting: Manage Your Books On the Go
With today's mobile workforce, accounting tools must enable access on phones or tablets for busy self-employed bookkeepers. Cloud-based software like Wave and FreshBooks allow easy mobile functionality so freelancers can invoice clients, capture expenses, or check reports no matter where they are. This added flexibility keeps small businesses running smoothly even when owners are travelling or meeting clients outside of regular office hours.
Exploring the Best Free Accounting Software for Small Business
For freelancers watching their wallets, we review top free platforms like Wave and FreshBooks with robust capabilities given zero fees.
Wave Accounting Software: Comprehensive and Cost-Free
Wave offers a full-featured free accounting software solution covering invoicing, payments, expense tracking, payroll, and more. With its free tier, Wave provides an extensive set of tools ideal for solopreneurs and small business owners on a budget.
Key benefits include:
- 100% free, unlimited use
- Easy to use dashboard
- Invoicing and estimates
- Payment processing and bank connectivity
- Receipt scanning and expense tracking
- Payroll management
- Reporting and analytics
For those running a lean operation or just starting out, Wave enables managing core accounting functions without the burden of monthly fees. While the free version lacks a few advanced capabilities reserved for paid tiers, Wave's free offering still outpaces many competitors. For comprehensive, cost-free financial administration, Wave hits the mark.
FreshBooks Lite: The Freelancer's Starter Pack
With an intuitive, beginner-friendly interface, FreshBooks Lite offers a capable free entry point catered to solopreneurs. While only the Lite plan comes gratis, key functionalities like invoicing, expense tracking, and basic reporting make the free tier a practical choice for early-stage ventures.
Standout features of FreshBooks Lite consist of:
- Simple, intuitive dashboards
- Professional invoice customization
- Multi-currency support
- Direct bank connectivity
- Expenses and mileage tracking
- Basic financial reporting
For those new to managing their own finances, FreshBooks delivers an easy learning curve. While the free Lite plan naturally comes with some limitations, fundamental accounting tools enable solo freelancers to control their finances without paying a cent. For an accounting springboard aimed at non-accounting users, FreshBooks Lite hits the ground running.
Premium Accounting Solutions for Growing Freelance Businesses
As freelance professionals establish their business and start taking on more clients and projects, their accounting and bookkeeping needs expand. At some point, the free or entry-level tools are no longer sufficient to efficiently track expenses, invoice clients, pay freelancers, and complete taxes. Upgraded paid solutions offer advanced capabilities, integrations, and support to sustain business growth. We'll explore two leading premium accounting software tools for freelancers and self-employed entrepreneurs looking to scale.
QuickBooks Online: The Best Software for Self-Employed Professionals
QuickBooks Online has earned its reputation as the premier small business accounting software, trusted by over 3.4 million entrepreneurs and freelancers. With robust tools purpose-built for managing finances, QuickBooks helps track income and expenses, create and send invoices, accept online payments, generate financial reports, and more.
As your freelance operation grows to multiple clients or international reach, QuickBooks scales to support complex needs. The software centralizes financial data and syncs seamlessly with bank accounts. It also features over 750 app integrations with platforms freelancers already use like TSheets, Venmo, PayPal, Slack, MailChimp and Google Workspace. QuickBooks even offers easy tax tools that auto-categorize transactions, track deductions and preps schedules for TurboTax and H&R Block.
While QuickBooks Online has plans starting under $25/month, the Plus plan at $55/month unlocks advanced capabilities suited for established freelance businesses:
- Track profits and losses by individual client jobs
- Support 1099 contractors with automated forms
- Access expert support from QuickBooks advisors
- Gain insights with cash flow projections and custom reports
With robust accounting capabilities tailored for freelancers, powerful integrations, and proven scalability, QuickBooks Online emerges as the premium software standard for self-employed professionals.
Xero: Bookkeeping Software for Small Business Evolution
While QuickBooks owns the market, Xero brings some fresh energy around beautiful design and efficient workflows. As an innovative leader in cloud accounting software, Xero makes financial management simple for entrepreneurs through user-friendly tools accessible anywhere.
Xero shines when it comes to slick mobile apps, allowing freelancers to snap photos of receipts, invoice clients, or check bank balances on-the-go. The software also enables connections with hundreds of business apps like Stripe, PayPal, HubSpot and MailChimp. Xero automatically reconciles transactions from bank feeds and syncs contact/sales data across platforms.
As freelancers grow, Xero grows with customizable invoices, multi-currency support, 700+ business reports and project cost tracking. The Early plan starts at $27 but the Growing Business plan better suits established freelancers at $55/month with features like:
- Send estimates and track time for accurate quoting
- Pay 1099 contractors while filing required tax forms
- Integrate with 700+ business apps to centralize data
- Get dedicated support from accounting advisors
With the vision to reimagine small business accounting paired with robust tools, Xero presents an innovative path forward for freelancers to efficiently manage their finances.
Navigating the Self-Employed Software Landscape
With many accounting platforms available, focus on core user needs around features, budget, and ease of use when evaluating options as a freelancer.
Matching Features with Freelance Workflow Needs
As a freelancer, having the right financial workflows to manage your business effectively is crucial. Core needs often include invoicing clients, tracking expenses, managing payments and cash flow, generating financial reports, and more.
When researching self-employed accounting software options, audit which key workflows are essential to support in your freelance operations. Guaranteeing the tool provides adequate and user-friendly features in your most vital backend financial areas will ensure it can properly serve current and future needs.
For example, if you send high volumes of invoices and receive frequent client payments, prioritize solutions with robust invoicing capabilities, customizable templates, automated payment reminders, and tools to reconcile incoming payments. If your financial reporting needs are more complex, explore software with customizable real-time reporting, financial projections mapping, or exportable reports for tax prep or advisors.
Ultimately finding that sweet spot where software functionality aligns closely with your core freelance finance operations will allow it to effectively bolster your workflow.
Vision for Growth: When to Scale Your Accounting Tools
When initially launching as a solopreneur, opting for self-employed software free of charge can be prudent to keep costs low. However, consider how well free tools can support your long-term goals.
As your freelance business grows, expanded accounting functionality and increased data storage limits of upgraded paid versions better suit scaling needs. Paid plans also often come with premium features like automated workflows, real-time syncing across integrated apps, or multiple user seat options for remote staff access.
Plan for future growth by considering how well a software scales in these key areas early, despite current smaller volumes. Transitioning between platforms once established can prove highly cumbersome.
Understand how increased profit margins could justify the costs of more heavy-duty solutions down the line. Map pricing tiers based on your projected timeline, so you can seamlessly upgrade tools in pace with business expansion.
Design for Non-Accountants: A Look at User Experience
As a solopreneur without an accounting background, ease of use and simplicity in software design is paramount. Accounting software needs to be user-friendly for non-accounting users through features like simple workflows, templates, and automation.
Prioritizing an intuitive, low learning curve interface allows you to focus on core tasks rather than learning complex accounting functionalities unrelated to your service offerings.
See if the tool offers features like pre-built invoice templates, automated payment reminders, one-click financial reports, and straightforward reconciliation workflows. Support options like chatbots, email ticketing, thorough help documentation can also assist non-accounting users while leveraging the platform.
Optimizing for a user-friendly, productivity-focused design circumvents the need for advanced accounting know-how as a freelancer getting their finances in order.
Final Verdict: The Best App for Self-Employed Bookkeeping
For freelancers just starting out, free tools like Wave and FreshBooks provide solid core accounting capabilities to get your business off the ground. As you take on more clients and projects, upgrading to paid plans from QuickBooks or Xero unlocks more advanced features like automations, invoicing, reporting, and integration support worth the investment.
When choosing the best accounting software, prioritize an app that:
- Suits your business needs and budget
- Offers the features that will provide the most value day-to-day
- Has an intuitive interface you'll actually enjoy using
- Can scale as your freelance business grows over time
The good news is there are fantastic options for solopreneurs at every stage. While the best software depends on your specific circumstances, you can't go wrong starting with Wave or FreshBooks to handle income, expenses, invoices, and more. Their free plans make accounting accessible for early stage freelancers.
Down the road, QuickBooks and Xero both provide premium capabilities that make financial management easier. Though paid plans cost more, the time and headaches they save tend to be well worth it for established freelancers juggling multiple clients.
No matter which app you choose, embracing accounting software tailored to your freelance work provides the visibility and control needed to make financial decisions that fuel your business's long-term prosperity.
