One of the first things you learn when starting as a freelancer is that there is much more to the game than your service alone.
Many moving parts are involved, and bookkeeping is arguably the most crucial. Your bottom line is affected by how efficiently you invoice clients and perform detailed expense tracking, bank reconciliation, and tax compliance.
You may not have the confidence to navigate your finances efficiently, unless you’re an accountant. Fortunately, there are many software programs out there that can make freelance life less daunting.
This article discussed the benefits of using accounting software, the most prominent features to look for, and how to integrate it into your freelance business. Our list of the top five accounting software companies breaks down the key elements of each and how they measure up next to one another.
What is Bookkeeping Software?
Also known as accounting software, these programs were created to help business owners process and keep track of their business transactions. Think of it as an electronic ledger kept in a safe, well-organized place.
Many freelancers turn to bookkeeping software because they want to make performing the financial side of their business more manageable and less time-consuming. In addition to essential bookkeeping assistance, many programs can also help with tax filing and financial reporting.
What are the Benefits of Using Accounting Software?
Chances are, you didn't get into freelancing for the number crunching and all the administrative details.
Whether you're a writer or a developer, your primary goal is to provide your clients excellent service and do what you love.
You may not need a bookkeeper to keep your freelance business afloat. But even if you decide to outsource your needs, enlisting the help of accounting software will improve the experience for both you and your clients.
The following are a few ways accounting software can benefit your freelance business.
It saves you time and headaches
You have enough on your plate already. With help from a great software program, you will have more time to do the tasks you enjoy. Provide top-notch service and still invoice quickly, ensure your bank account is fed a healthy cash flow, and never worry about missing a payment.
No one likes losing a good night's sleep over poor bookkeeping. Keeping your business compliant and ensuring bank reconciliation and payroll go smoothly will keep you from having to count sheep.
It boosts your productivity
When you are productive, it's easier to crush your goals.
The amount of time saved on accounting and bookkeeping tasks with accounting software means you can book an extra client or add a service to your list. All of which represent more money in your pocket and happier clients.
It improves your organization and efficiency
Organizing invoices and expenses can be a nightmare if you aren't a number person. As a business owner, you must keep these things in line. Expense tracking is a cinch with accounting software, and your bank account will stay in the green with less effort.
It builds your confidence
Working as a freelancer can be intimidating to those new to the game. Using a software program that helps you keep your bookkeeping in check will help you confidently run your small business. Many independent contractors use these platforms and report feeling more confident and less overwhelmed.
What to Look for in Accounting Software
Not everyone will jive with the same software program. So, it's essential to take stock of the features that would help you the most when deciding on the accounting software that is right for you.
While each accounting software program we include on our list has its own strengths, it is important to know which ones are the most important for your business.
Some Important Features for Freelancers to Consider
- Mileage and Expense Tracking
- Time tracking
- Accounting Mobile App
- Payroll
- Convenient Invoicing
- Automate recurring invoices and payments
- Accounts receivable
- Accounts payable
- User Friendly
- Easy integration and support
- Financial Reporting and Projections
- CRM Capabilities
- Security
- Customization
Factors to Think About Before You Purchase Accounting Software
- Your budget
- How quickly do you need to learn the software?
- What software features are non-negotiable for you?
- What features can you live without?
Our List of the 5 Best Accounting Software for Freelancers
Quickbooks Online
This platform has reigned as the best accounting software for a while. Its affordability, support and resources, and easy-to-use features make it a go-to tool for freelancers and small business owners. You may choose between Simple Start, Essentials, and Plus. Most self-employed people go with Essential because it offers a fantastic array of features for sole proprietors.
Quickbooks Self-Employed is a more straightforward option with the same level of support and ease of use. Freelancers and independent contractors tend to gravitate toward this option if they want something simpler than Quickbooks Online.
Freshbooks
From time-tracking to online invoicing, Freshbooks is an excellent option for service-based businesses. It doesn't have the same bells and whistles as some of the other software options, but the simplicity of this platform integrates well with simple, service-based businesses.
Xero
Popular in Australia, New Zealand, and Europe, Xero is quite similar to Quickbooks with its robust support system and easy-to-navigate interface. Xero uses straightforward language for those who are not proficient in accounting jargon. Creatives and marketing agencies are particularly fond of this software.
Wave Accounting
One thing that makes Wave an excellent option for freelancers - it's free to start! Ideal for freelancers on a minimal budget, Wave gives you all the basics, and you can pay for access to their online payment feature.
Zoho Books
Like Freshbooks, this platform works better for less complex businesses. It is easy to integrate if you already use Zoho for other business tools, such as CRM, but the language is more technical and less user-friendly.
Steps to Implement Accounting Software in Your Freelance Business
From choosing the right accounting tool to transferring your data, there are several steps you will have to take to get things up and running. Consider these four steps as you go through the onboarding process.
Prerequisites
- Decide what features are most important for your business.
- Assess each of the factors (listed above) as you consider your options.
Choose accounting software
- Choose an accounting software program with all the needed features that is within your budget.
- Make sure the accessibility and usability are at your level.
Data migration
- Transfer all customer and vendor information
- Setting up the software
- What assistance, if any, will you need to get the program running?
Key Takeaways
- If you don't have the budget to hire a bookkeeper or an accountant, software is a great option to help you keep your business finances in order.
- Easy integration is essential. Make sure you choose software that meets your business needs.
- Five of the best bookkeeping programs for freelancers include - Quickbooks Online (or Quickbooks Self Employed), Zoho Books, Xero, Freshbooks, and Wave Accounting.
Would you like more help streamlining your freelance business?
You've implemented a bookkeeping program and started researching all the apps to help you boost the functionality of your freelance business. Now what?
Practice was created to help freelancers streamline their business and provide a simple all-in-one CRM solution for them and their clients. From scheduling to sharing resources with clients, freelancers find convenience and connection with our software.
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