If there’s something every freelancer should take into account when dealing with their own business, this is bookkeeping and the general subject of accounting. If you’ve already found the best invoicing tool and the best project management tool for your freelancing business, it’s now time to look at accounting software. This guide will give you information on The Best Accounting Softwares For Freelancers in 2020, with brief reviews to help you make an informed decision.
Most of us tend to rely on accountants for the tax management of their business. This has a cost that very often, especially if you are organized, you can avoid it. Just choose the perfect software for the tax management of our business, a software that must be simple to use and manage and that does help to automate routine operations.
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What’s the difference between an Accounting Software and an Invoicing Software?
You may be a bit confused at this stage, thinking that accounting software and invoicing software are basically the same things. Well, they are not.
Accounting software helps you track your expenses and your invoices but it doesn’t necessarily help you in sending your invoices and in getting paid. On the contrary, invoicing software helps you sending out bills and getting paid.
Software for invoicing can also be an accounting tool and vice versa, but this is not a given feature: some tools are just for invoicing, others just for accounting, others can do both.
How Do You Choose the Best Accounting Software Tool for You Freelancing Business?
In choosing the best accounting software, you need to ask yourself a few questions:
- How many clients do I have?
- Do I need the software to be integrated with other tools?
- How much time and money am I interested in investing on this tool?
- Am I really committed to this, or do I prefer to delegate?
As soon as you’ve answered all these questions, your mind will be ready for the next step: finding the best accounting tool for your freelancing business.
The 4 Best Accounting Tools for Freelancers in 2020
Aside from being considered one of the most boring things to do, accounting is something we all have to do. For this reason, we’ve tried a few accounting software to find the best one and we’ve decided to give you the list of the best accounting tools for freelancers in 2020.
Some are more complicated, others are extremely easy to use. Keep reading to make up your mind and decide accordingly.
1. QuickBooks Online
We have to start from the standard in the industry, the tool everyone uses when it comes to accounting: QuickBooks. Despite being quite scary at the beginning, QuickBooks can be easily managed after initial training. QuickBooks Desktop is the traditional version of this software but QuickBooks Online is definitely the best choice because it’s easier to use and, despite some minor problems with the interface, it’s faster to learn.
QuickBooks Online has four pricing tiers and you can also add extra features (that are sold separately) such as QuickBooks Payments to accept payments from your customers or Payroll in case you need to pay contributors. The best additional tool you can buy is definitely the Tax E-Filing that automatically fill and file your tax forms but if you want to go even deeper you can avail of QuickBooks Live Bookkeeping: this service will match you with a personal Certified QuickBooks Advisor and accounting expert that will help with your tax needs.
Remember that if you set up QuickBooks Online in the right way, you can file your taxes without any help from an external accountant and you can also create your reports.
Learn how to use QuickBooks online:
- Mastering QuickBooks Online is a comprehensive and understandable course on Udemy.
- If you’re looking for a more comprehensive course, we recommend The Ultimate QuickBooks Pro Training Bundle – 60+ Hours.
FreshBooks is almost unanimously considered the alternative to QuickBooks and even if it’s younger than the rival, it has a large following. FreshBooks offers three different pricing levels that support just one user. One of the best elements of FreshBooks is the adaptability to the market so if you’re a user from Europe, for example, you can use the VAT Return Report to file your VAT directly within the software and transmit to your Government.
FreshBooks is one of those accounting tools that can also be used as an invoicing tool and that’s why we recommend it: it’s an all-in-one solution that will limit the waste of time and will allow you to keep track of everything in just one place. It’s also customizable and easy to learn, and this makes FreshBooks one of the best accounting software out there.
Wave can really be considered a disruptor in this list. First of all, it is completely free and it includes all the basic invoicing features; you only pay if you need to add payroll or professional bookkeeping.
Wave offers two payroll options: tax service payroll and self-service payroll. Tax service payroll means Wave handles your payroll and payroll taxes for you.
Self-service payroll means that Wave will calculate your payroll for you but you have to file your taxes.
You can also avail of the Wave Advisors service to be paired with a professional accountant or an expert that will handle bookkeeping tasks for you.
Keepertax has been created to help freelancers from the US who are 1099 contract workers: it’s not a proper accounting software, but it acts as a repository of your receipts and facilitates your filing. It’s so easy and intuitive, that you can literally start using it the minute you buy it. Keeper Tax monitors your purchases for write-offs you would have missed; every freelancer is assigned to a human bookkeeper who monitors purchases throughout the year. No more than once per day, the freelancer will get a text with a simple question just to confirm they’ve filed the receipts and how much they will get back from what they’ve spent.
So it’s up to you to add the receipts of your purchases but when it’s time to file your taxes, you’ll everything organized and ready to be shared with the tax authority. In order to set up the service, you need to grant KeeperTax access to your bank and credit card accounts but this will allow the service to give you customized advice on how to save money based to your business
Keepertax offers 30 days for free so you can try their service.
Tax Software Vs. An Accountant: What’s Best for Your Business?
If you’re wondering whether you should use tax software or hire an accountant, there’s no simple answer to that.
On a general note, freelancers can save a lot of money by preparing their own taxes but if you have a lot of things to do, your business is flourishing and you don’t want to waste time doing things you don’t know how to do, hiring an accountant may be the best solution. In both cases remember that the cost of an accountant and the cost of accounting software is deductible from your freelancing expenses.
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