6 Accounting Programs for the Self-Employed. Advantages and Disadvantages

One of the most important and often one of the most stressful parts of becoming self-employed is staying on top of your finances. It can be very easy to put this off, but if you do, you could end up landing yourself in hot water.

We have decided to create this complete guide of different options for accounting software for self-employed, so that it is easier for you to decide which one will work best to keep track of your inputs and outputs.

In this guide, we provide you with all the information you need about some of the options for most popular accounting software for freelancers, comparing their key features and the pros and cons of each option.

Maybe you may be interested: 20 Best Budget Templates in Google Sheets

Accounting software for freelancers

We've compiled a list of some of this year's most sought-after accounting software options, comparing pros and cons, features, and more. Let's take a look:

1. Quickbooks

Quickbooks is a great option for freelancers and small business owners. The software has a wide range of features, including the ability to view a 90-day cash flow forecast and access taxes, reports, invoices, mileage and expense tracking, all in one place.

You'll also receive free live chat messaging support, so if you ever have any issues with the software, you'll get the help you need. With an average rating of 4,6 out of 5, Quickbooks Self Employed It is undoubtedly one of the best accounting programs for freelancers.

Advantages

• It's easy to use.
• It makes it easy to track income and expenses.
• Unlimited bills.
• Quarterly income tax estimates.

Disadvantages

• There is no way to track time spent on projects.
• There is no way to set up recurring transactions.

download now.

2.Xero

Accounting with Xero gives you access to a range of useful features, such as reconciling bank transactions, submitting VAT to HMRC to make taxation digital, and capturing invoices and receipts with Hubdoc. However, it is a little more expensive than other options.

With an average rating of 4 out of 5, many users say that this is another of the best accounting software for freelancers. Xero is easy to use and has a variety of useful features. for both independents and small businessesHowever, most of the negative reviews focus on their support team and the cost of their packages.

Advantages

• Easy to use.
• Automatic IEC calculations and reports.

Disadvantages

• Limited to 20 invoices and quotes per month.
• Additional charge for expenses.

download now.

3.Freshbooks

This is one of the most cost-effective accounting software packages for freelancers. With Unlimited custom invoices, expense entries, a wide range of useful features such as time tracking and mileage tracking, this option is perfect for freelancers, because it allows them to have everything they need in one place.

Freshbooks has an average rating of 2.6 out of 5, with many reviews praising the system for being easy to use and having a great user interface. However, some users have been disappointed by bugs when using the system and have found it difficult to get support.

Advantages

• Unlimited bills.
• Unlimited time tracking and estimates.
• More than 200 integrations.

Disadvantages

• No tax estimates.
• Limited to up to 5 billable clients.
• There is no way to set up recurring transactions.

download now.

4.FreeAgent

With an excellent rating of 4,7 out of 5, FreeAgent has a package designed specifically for sole traders. It also offers unlimited users, clients, and projects, which can't be said for many other freelance accounting software. Plus, If you pay a monthly fee per monthYou will also have access to support from accountants who will help you get the most out of the software.

FreeAgent users praise the customer support team and ease of use, although some people have experienced some limitations, for example not being able to set special VAT rates to account for services that also contain zero-rated items.

Advantages

• Unlimited clients and users.
• Unlimited bills.
• Easy to use.

Disadvantages

• Personalization limitations for VAT.

download now.

5. Sage Business Cloud Accountin

Sage Business Cloud Accounting, top rated accounting software In our roundup, it has an average rating of 4.8 out of 5, with many users citing its excellent customer support. The software itself has a variety of useful features for freelancers, including tracking, invoicing, reporting, and submitting VAT returns all in one place.

Advantages

• Cancel at any time.
• Good customer support.
• Various special offers and regular promotions on the website.

Disadvantages

• User limit.
• Quotations and estimates cannot be established.
• No CIS processing.

download now.

You may want to know: 7 Best Programs to Organize Tasks

6. Wave

The best part about this software is that it's free. If you're just starting your freelance business and are watching every penny, this may be the option for you. It offers payroll services, so it can grow with you as you grow your business.

The design and user experience are impressive. The program has some glitches and you will miss transactions. You can avoid this by manually entering transactions. Otherwise this is a great accounting program for freelancers or small businesses.

Advantages

• This is a free tool.
• It has an attractive design.

Disadvantages

• To avoid problems, you must enter transactions manually.

download now.

7. Bench

If you're looking for software that comes packaged with an accountant, Bench is the one for you. For a monthly fee, you can get the accounting software and a bookkeeper to do your books. Keep in mind that you must work with one of your accountants in order to use the software. If your business is at a stage where you're ready to outsource your accounting, Bench could be the solution for you.

Advantages

• Provides tools to work with your accounting books.

Disadvantages

• You must pay for specialized tools.

download now.

Why it is important to keep your own accounts

Whether your goal is to grow your freelance business to six figures or a multi-million dollar empire, you'll need to learn how to organize and manage your books. While everyone can benefit from working with an accountant, you should wait to hire one until you're earning enough to cover minimum monthly expenses. Ideally, you'll cover your minimum expenses and save a percentage of your income. Until that time, it's wise to do your own bookkeeping for two main reasons:

1. Managing your business finances will improve your financial literacy and give you the skills you need to achieve your personal financial goals.
2. It will be much easier to hire an accountant. You will have a deep understanding of the work you need done and you can easily train them on the nuances of your freelance business.

As soon as you spend your first euro on your business, I recommend you pick up one of these self-employed accounting software. Start using it during your weekly pay dates. These will get longer as you get the hang of the software, but you'll soon feel as comfortable using it as you do with your phone. Before you install the accounting software, here's a quick checklist of the features you need and don't need:

What you absolutely need from your software

Your software should offer the following:

• Automatic bank feeds.
• Billing.
• Profit and loss report, also known as income statement.

What you don't need

This is not essential:

• All financial reports (such as the cash flow report).
• A million software integration options.
• These features are nice to have, but they are not absolutely necessary:
  • Receipt capture.
  • Payroll.
  • Automated billing.

Known: The 7 Best Billing Programs

Final thoughts

Self-employed accounting software is intuitive and digital. Digital tools are great because they allow you to send an invoice while you are on vacation. We hope this summary has been useful in helping you decide which accounting system to choose. Remember to take into account the list of features mentioned above.