5 Best Accounting Software for Freelancers in 2023

Are you looking for the best accounting software for freelancers to use? There are a lot of accounting software programs, but they are not all compatible with freelancers. The ones suitable for freelancers must be easy to use and contain all the valuable general accounting features, such as reporting and expense tracking, and features helpful to freelancers, such as invoice tracking, mileage tracking, and tax calculation. 

In the article, we will look at the 5 best accounting software for freelancers in 2023 and the factors to consider when choosing the best one for you. 

5 Best Accounting Software for Freelancers in 2023

Here is the best accounting software for freelancers in the marketplace. Carefully go through them and observe their features: 

1. Zoho Books: Overall Best Accounting Software for Freelancers

Zoho Books is the best accounting software program for freelancers, offering scalable and flexible features.to meet the needs of all business times, from small-scale to established businesses.

Zoho Books has a suitable mobile app that allows freelancers to carry out accounting tasks using their tablets or mobile smartphones. It offers both a free and paid plan. The free plan has limited features, and the professional plan, which is subscription-based, is the best for freelancers, whether retail or service-based. It contains features like multicurrency transactions, billing, inventory features, and recurring invoices. 

The free plan has up to 1,000 invoices, and the standard plan has up to 5,000 per year. Zoho Books’ notable features are online and offline payments, a client portal, invoice customization, manual reports and journals, expense tracking, and mileage. 

Pros

• Track project profitability
• Access to customer service by phone
• Manage sales tax collections
• Add easily to an invoice
• Supports time and expense tracking 

Cons

• It cannot calculate quarterly estimated tax pa
• It charges additional for receipt capture
• It cannot automatically transfer income/expense to Schedule C

2. QuickBooks Online: Best Accounting Software Programs for Freelancers that Deals in Small Scale Businesses 

QuickBooks Online is one of the top and most reliable accounting software for freelancers who run small-scale businesses, especially those that deal with essentials and simple business. It is also a safe pick if you need project accounting or have inventory.

Another notable thing about this software program is that it helps to keep your QuickBooks records ready and organized for tax time. Some notable features include excellent bank reconciliation features, Sales tax calculation per invoice, ability to integrate with numerous third-party services in payroll, ecommerce, and restaurant management. Also, you can easily access certified public accountants (CPAs) and ProAdvisor-certified bookkeepers. 

Pros

• Automatic miles tracking with mobile app.
• Managing sales tax with automatic sales tax rates 
• It generates transactions from uploaded receipts 

Cons

• You cannot access customer care by phone. You must send a request to be called.
• To track project profitability, you must subscribe to a pricey premium plan 
• It does not transfer information or calculate quarterly tax payments.

3. FreshBooks: Best for Service-based Freelancers Who Charge Hourly Rate

Another major reliable and best accounting software for freelancers is FreshBooks. FreshBooks is an easy-to-use software for freelancers without accounting experience. It has excellent accounting features and a built-in time tracker that makes it a good solution for tracking expenses and project income. 

FreshBooks is best recommended for service-based freelancers because this software program cannot track the cost of goods sold (COGS) and inventory. If you are a freelancer dealing with inventory, I don’t recommend FreshBooks. Instead, go for Zoho Books and QuickBooks Online. 

FreshBooks’ best features include unlimited expenses, invoices, and estimates. Other features include project management, double-entry accounting reports, client retainers, recurring billing, and sales tax tracking. 

Pros

• Offers good project management tool
• Ability to track mileage via mobile app
• Access to customer service by phone

Cons

• You must link your bank account to track checking transactions 
• You must upgrade to the premium plan if you have more than 50 billable customers
• It cannot track the cost of goods sold when dealing with inventory

4. Wave: Overall Best Free Accounting Software for Freelancers

If you are a freelancer and want free software to manage the accounting of your simple business, Wave is a safe pick to go for. Wave offers simple expenses and income tracking features but lacks advanced features like project accounting and inventory management. 

Additionally, Wave charges minimal transaction fees for card payments and bank transactions. Wave’s features include a clean interface, receipt scanning, free accounting, and invoice and bill recording. 

Pros

• Easy to use
• Lifetime free access
• Easy to set up

Cons

• It is not scalable
• Limited customer support access 
• Lacks the ability to separate income and expense by location or class

5. Bonsai: Best All-In-One Business Software Solution for Freelancers 

Bonsai is an all-in-one business software solution for freelancers that does more than accounting functions for freelancers. Unlike other accounting software programs like Freshbooks or Quickbooks that target businesses of all sizes and kinds, Bonsai is developed specifically for freelancers. 

Bonsai offers accounting features such as balance sheets, profit & loss statements, customized expense categories, and shareable accountant access and gives you access to a professional to assist you with your business. 

It offers a free and premium plan that costs $19/month. 

Pros

• It is specifically developed for freelancers
• Offers additional business features to manage freelance business
• Paid plan offers a free trial period of 14 days

Cons

• Offers basic project management features
• Missing core features like the ability to set task dependencies and various project management functions

Factors to Consider to Choose the Best Accounting Software For Freelancers

After going through the above-listed ones, you might be overwhelmed with choosing the best accounting software for freelancers. Here are some of the factors that can guide you while choosing the best accounting software for freelancers: 

1. Cost: A major factor you should consider when choosing accounting software as a freelancer. Look for affordable options that fit your budget, whether a one-time purchase or a subscription model.
2. User-friendliness: Ensure the software is easy to navigate and doesn’t require extensive accounting knowledge. Some software programs are simpler than others, and some require basic accounting knowledge. 
3. Features: Exam the software that covers your needs, including invoicing, expense tracking, tax support, and financial reporting. First, outline the needs of your business and the features you need. You can go for premium plans and more advanced software programs if you need more advanced features. 
4. Integration: Check if the software can integrate with your bank accounts, payment processors, and other tools you use. Also, check their integration with third-party apps. 
5. Mobility: Examine the app to see if it provides mobile access and apps for on-the-go management.
6. Security: This is a major factor because accounting software deals with your business’s essential data. So, you must ensure it has robust security measures to protect your financial data.
7. Scalability: Consider whether your business can grow with your business as your needs change.
8. Customer support: Evaluate the availability and quality of customer support, access, and resources. Go for software that offers a good customer support system and easy access. 
9. Tax compliance: Verify the accounting software to determine if it helps with tax calculations, deductions, and filing.
10. Customization: Assess the software program to determine whether you can customize the software to match your specific requirements. 
11. Backup and data recovery: Ensure it has reliable backup and recovery options to safeguard your data in case of loss or other uncertainties. Software programs without proper backup and data recovery options might not be suitable. 
12. Cloud vs. Desktop: Carefully decide between the cloud-based or desktop software, considering accessibility and data backup preferences. If you ask me, I would prefer you go for cloud-based software. Cloud-based software keeps your data safe and easily accessible.  
13. Future updates: Check if the software receives regular updates and improvements. Go for the ones that receive regular updates so that your features will always be up to date. 

Conclusion 

As a freelancer, you must choose the best accounting software program to manage your finances and accounting functions. Carefully outline the financial needs of your business and budget, and choose the software that suits it perfectly. If you are just starting and need a simple accounting function, use simple and free accounting software like Wave.