If you own and run a small business alone, the administrative tasks gradually become overwhelming. Using the right accounting software will streamline a lot of your work, from tracking expenses to preparing taxes. Here are our picks of the best accounting software for self-employed, great for when you wear too many hats at once.
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Benefits of Having Accounting Software for Your Business
Using accounting software offers several advantages for businesses of all sizes:
- Time Efficiency: Automated tracking and reporting features reduce the time spent on financial management.
- Accuracy: Minimize human errors with digital entries and automated calculations.
- Tax Compliance: Track expenses and revenue effortlessly, making tax time less stressful.
- Real-Time Insights: Understand your financial health at a glance with real-time dashboards and reporting.
What Should You Look for in Accounting Software?
When choosing the best accounting software USA for your business, here are key features to keep in mind
Ease of Use
You don’t need to be an accountant to manage your finances. Look for user-friendly software that simplifies tasks like entering expenses, sending invoices, and generating reports.
Expense Tracking
The ability to track expenses, including categorizing them for tax deductions, is a must. Ideally, the software should allow you to sync with your bank account for automatic expense tracking.
Invoicing
For freelancers and small business owners, professional invoicing is crucial. Software that offers customizable invoicing templates, payment reminders, and tracking of overdue invoices is a huge plus.
Time Tracking
If you bill clients by the hour, integrated time tracking helps you keep accurate records of your billable hours. Look for software that makes it easy to track and log time across projects.
Tax Preparation
Tax season can be a headache, but accounting software designed for self-employed individuals should help you prepare your taxes, organize tax-deductible expenses, and generate forms like Schedule C for freelancers.
Cost Effective
The best accounting software for small business will give you the most bang for your buck. Whether it’s a one-time purchase or a subscription model, consider the pricing and how it fits into your budget.
5 Best Accounting Software for Self Employed
Let’s review the top 5 best accounting software for self-employed individuals in 2024 and see which offers the best solution for your needs:
QuickBooks Online
QuickBooks remains the gold standard for self-employed individuals in 2024. Trusted by millions, this software is packed with features that cover everything from tracking miles and expenses to generating detailed reports for tax time. It’s great for self-employed individuals looking for an all-in-one platform to manage invoicing, expenses, and taxes.
Key Features:
- Ease of Use: Simple interface with mobile app functionality.
- Expense Tracking: Automatic syncing with your bank account to categorize expenses.
- Invoicing: Professional invoice templates with easy client payment options.
- Time Tracking: Available through QuickBooks Time, allowing for seamless billable hour tracking.
- Tax Preparation: Includes built-in tax tools for freelancers, with automatic calculation of quarterly taxes.
Who Is It Good For? QuickBooks stands out as the best accounting software for large business. It is ideal for freelancers, consultants, and even small business owners who need a comprehensive solution. Its advanced features make it especially useful for those handling multiple clients and revenue streams.
Zoho Books
Zoho Books is not only budget-friendly but also provides a comprehensive feature set. Its suite of features integrates well with other Zoho products, making it perfect if you’re already using their CRM or other software.
Key Features:
- Multi-Currency Support: Ideal for businesses with international clients.
- Automated Banking: Real-time syncing with bank accounts for easier transaction categorization.
- Invoicing: Customizable invoice templates with recurring billing options.
- Client Portal: Allows clients to view and manage their invoices and estimates.
- Collaboration Tools: Supports collaboration with accountants or team members
Who Is It Good For? Zoho Books is perfect for solopreneurs and small business owners who need powerful tools at an affordable price.
FreshBooks
FreshBooks is a favorite among freelancers for its emphasis on invoicing and time tracking. FreshBooks stands out for its simplicity and emphasis on invoicing and time tracking, making it perfect for freelancers who want an intuitive interface without sacrificing important features.
Key Features:
- Invoicing: Easily create and send professional invoices, set up recurring payments, and track overdue invoices.
- Time Tracking: A built-in time-tracking tool that helps log billable hours for projects.
- Expense Management: Track expenses with automatic categorization.
- Project Management: Organize projects, assign tasks, and collaborate with clients.
- Tax-Friendly: Automatically generates reports needed for tax filing, including profit and loss.
Who Is It Good For? FreshBooks is a top choice for freelancers, creatives, and service-based professionals who prioritize invoicing and time tracking. It’s especially useful for project-based work where billing by the hour is common.
Xero
Xero is known for its scalability and advanced features, making it the best software for small businesses that plan to grow. Its ability to integrate with numerous apps gives it an edge for those who need a more personalized accounting solution.
Key Features:
- Expense Claims: Streamlined expense claims feature with receipt management.
- Invoicing: Send custom invoices and get paid faster with online payment integration.
- Bank Reconciliation: Automatic bank reconciliation for seamless bookkeeping.
- Third-Party Integrations: Connects to over 800 business apps, offering extensive customization.
- Multi-Currency Handling: Allows you to handle and report transactions in multiple currencies.
Who Is It Good For? Xero is ideal for tech-savvy entrepreneurs and small business owners who need flexibility and a wide range of integrations. It’s great for those who want to automate processes and create a tailored solution.
Fiverr Workspace
Fiverr Workspace stands out for its focus on freelancers, providing the essential tools for managing contracts, invoices, and expenses. Its simplicity and low cost make it a great choice for self-employed individuals who need to manage their business without the complexity of more robust software.
Key Features:
- Contracts and Proposals: Create and manage contracts and track proposals.
- Invoicing: Simple invoicing with tracking payments and overdue notices.
- Expense Tracking: Track expenses and categorize them for tax deductions.
- Time Tracking: Integrated time-tracking feature for accurate billing.
- Mobile Access: Easy-to-use mobile app for freelancers on the move.
Who Is It Good For? Fiverr Workspace is designed specifically for freelancers and gig workers. It’s perfect for creatives, writers, photographers, and solopreneurs who need basic but effective accounting tools tailored to freelance work.
Get Professional Accounting and Taxation Services
Having the best accounting software for self-employed is different from knowing how to maximize all its features to your advantage. Seeking professional support is the best option if you want more personalized assistance. Legend Fusions has a decade of experience in tax and accounting. Call us anytime to streamline your tax and financial department!
Reviewed by:
Hira Asif
Hira Asif, Client Manager (US) at Legend Fusions, brings over 11 years of tax expertise, including 8 years with Ernst & Young. Her work focuses on tax advisory, compliance, and planning for individuals, partnerships, and private equity funds. With a deep knowledge of federal, state, and local tax regulations, Hira is skilled in identifying tax planning opportunities and reviewing corporate and partnership tax returns to optimize compliance and reduce exposures.