Choosing new accounting software for your freelance writing business isn’t easy.
There are tons of options available–some free and some paid. How do you know which is trustworthy enough to handle your clients’ information, sync with your bank, and professional enough to send invoices to clients?
Instead of searching high and low for the best accounting software, we’ve compiled a list of seven great options we’ve used throughout our own freelancing journeys.
Find your accounting software 📒
- Do freelancers need accounting software?
- 9 accounting features to look for in new software
- Best free accounting software for freelancers
- Best paid accounting software for freelancers
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Do freelancers need accounting software?
The short answer is yes.
Any type of self-employed individual, including freelancers, needs professional accounting software. It’s something you use to send invoices, track income, and record expenses–meaning it’s something you shouldn’t scrimp on (even if you outsource your accounting to a professional).
The biggest benefit to using accounting software is the fact you can automate repetitive tasks:
- Waiting for a payment from a client on an overdue invoice? Have your accounting software send automatic reminders when the due date is approaching.
- Spent money on a freelance writing tool? Email the receipt to your accounting software and have it automatically attached to the transaction from your bank account.
- Filing your quarterly tax return? Have your accounting software do the calculations for you and take the headache out of taxes.
Accounting software also makes you look more professional. Clients want to know that the freelancers they’re hiring are experts. A tool that sends professional invoices, accepts online payments, and generates them a receipt gives that impression.
On the whole, it just makes your life a lot easier. (And we’re always here for that.) Freelancers manage multiple hats at once. If accounting isn’t your specialty, use proper software so you can spend your time and effort focusing on what clients actually hire you for.
Can’t I just use PayPal?
Just started freelance writing? It’s tempting to use a free payment processor, like PayPal, as your main business accounting tool.
That’s not always a smart option.
Not only does PayPal take an extortionate cut out of any money your clients pay into the account, but it doesn’t have the advanced features that’ll help you understand the financial health of your business.
(That’s jargon for how much money you bring in, the expenses going out, and reports to show how much you’ve netted.)
9 accounting features to look for in new software
Before we dive into the best small business accounting software options, let’s take a look at nine key features your new tool should have.
The ability to send invoices is arguably the most important feature to look for when you’re evaluating new software. It’s how you get paid.
Most tools have mini CRMs inside their tool. That way, you can create a profile for each customer and custom invoices for each. Just make sure you include your banking information on there so they can send payment.
There are several business expenses you can claim for when submitting a tax return to reduce your bill, such as:
- Website and domain fees
- Educational courses
- Software licences
- The accounting software itself
Good accounting software will have a feature to track these expenses. You should be able to pull a list of transactions from your bank, snap a receipt of the thing you’ve purchased, and list it as an expense.
It’s also worth checking that your accounting software has mileage tracking if you’re visiting clients at their office, driving to events and conferences, or doing any other type of business travel.
How healthy is your freelance business? Cash flow reports will tell you.
Cash flow is a financial report that shows how much money comes in, how much is going out, and what your balance will be after that happens. It’s worth checking that your accounting software offers this so you know how much money you’re left with after paying for expenses.
Bank account integration
When submitting tax returns and accurately tracking your incomings and outgoings, Check whether your accounting software integrates with your bank account.
This feature means you can use automations to pull bank statements, and attach them to invoices or expenses you’ve created inside the platform. It’s the easiest way to explain which payments came from where.
Bookkeeping is the process of making sure every bank transaction has an explanation. If your accounting software doesn’t integrate directly with your bank, check there’s an option to upload a credit card statement.
Tax and VAT reporting
Tax time is a time of dread for most freelancers (hence why most prefer to outsource their tax returns to an accountant).
But if you don’t have cash to pay for an accountants’ help, most softwares can submit annual or quarterly tax returns, and VAT submissions, on your behalf. All you need to do is approve the return and pay the bill.
Tools like FreeAgent, for example, create financial reports like:
- Profit and loss
- Balance sheet
- Year-end accounts
Accept online payments
When evaluating new accounting software, check that it accepts online payments. This functionality means you can take payments from clients via credit/debit card, or another online payment processor, rather than bank transfer.
Freshbooks, for example, has integrations with Stripe and PayPal. You can use the software to send the invoice, let a client pay by card, and track that income–all in one tool.
Are you working with clients in different countries? Chances are, you’re dealing with multiple currencies, too.
Check whether your accounting software shortlist has multi-currency features. You should be able to send invoices in different currencies (especially USD, GBP, or your main currency), and track exchange rates when converting between them.
Granted, this isn’t a need-to-have feature, but it’s worth checking whether your accounting software can track time, especially if you’re using hourly rates.
Quickbooks, for example, has built-in time tracking software. You can record whenever you’re working on a billable project and input those hours into your invoices.
Even if you’re not using hourly rates, as a small business owner, you need to know which tasks are most profitable for you.
Speaking from experience: after tracking my time, I found that some tasks (like content refreshing) are more profitable than others (like net new content). Knowing that helps me scale my freelance business and make more revenue.
Best free accounting software for freelancers
You don’t have to splash the cash on accounting software if you’ve just started freelancing. Below are two great options if you’re on the lookout for a free accounting tool.
Wave was the first invoicing software I used for my freelance business.
(The only reason I upgraded to paid software was because Wave became unavailable outside of the US and Canada. It also didn’t integrate with my UK bank.)
It’s a great, free-to-use accounting software for freelancers that’s super easy to use. You don’t need tons of financial knowledge to find your way around it, but it still gives you all of the financial data you need to know.
- Free, customizable invoices with automatic payment reminders.
- Sales tax add-ons (if you need it).
- Bank connections for explaining transactions and attaching receipts.
- Accountant sign-on. If you’re working with an accountant come tax time, you can create a login for them to sign into your Wave dashboard and collect your data.
“I like Wave. It’s really basic and makes sense to me because I only send invoices and monitor the rest of my finances in spreadsheets.”Afoma Umesi, freelance writer
Best suited to: Freelancers and small businesses in the US and Canada.
2. Zoho Books
Zoho Books is another accounting software that freelancers can use to manage their businesses. It’s totally free for those making up to $50k per year (after that, paid plans start at $10/month.)
This accounting platform is part of Zoho’s suite of products–including a Customer Relationship Management (CRM) tool and email inbox. It’s a good all-rounder if you’re brand new to freelancing and need one platform to do it all.
- Sales orders for your clients to approve pricing on a project before you start.
- Real-time alerts to see when clients view your invoices or sales orders.
- An online client portal for your clients to rate your services, give testimonials, approve invoices, and make payments.
- Automations to chase late payments, categorize bank transactions, and auto-charge a client’s credit or debit card (if they’ve selected that option).
Best suited to: Freelancers making less than $50k per year.
Pricing: Free for freelancers with <$50k revenue. Its paid plan starts at $10/month.
Best paid accounting software for freelancers
Want more flexibility than Wave? Or looking for an accounting solution that works outside of the US and Canada?
Here are five of the best paid accounting software for freelancers:
Freshbooks is one of the best accounting software for freelancers because it houses a ton of finance-related features inside one dashboard. Available for self-employed people all over the world, you can use Freshbooks to track income and expenses, track your time, and take payments from your clients.
- Estimates–similar to proposals–to get approval on projects before you start working on them. Turn those estimates into invoices in the click of a button.
- Invoicing software (with templates) to get paid for your freelance work, with the ability to get paid by your clients using their credit or debit card.
- Time tracking to see how many billable/non-billable hours you spend on each project.
- For UK freelancers: It’s Making Tax Digital compliant and HMRC approved.
Best suited to: Any type of global freelancer with clients who pay via debit/credit card.
Pricing: From $13.50/month for up to five clients. Its most popular premium plan, for up to 50 billable clients, starts at $22.50/month.
FreeAgent is a great option for UK freelancers–and the one I use both for my own freelance writing business and for Peak Freelance.
Built for LTD companies, it’s the one I’d recommend for small business owners who want a user-friendly accounting tool that has all of the features they need to create invoices, track expenses, and run financial reports.
One of my favorite features is the automatic tax forecasts. You’ll see key dates your financial reports need to be submitted by, along with an estimate of how much you’ll pay. It’s a great feature that will make sure you have enough money saved for tax time.
- Cyber Essentials certified and strong encryption to keep your business’ financial information safe.
- A mobile app (Android and iOS) to snap receipts, track expenses, and check finances on the go.
- Sales tax add-ons to add VAT to your invoices for clients in the EU.
- Bank reconciliation, which pulls your bank statements into the online dashboard for you to approve, upload a receipt, and map invoice payments.
“For me, most of the time my invoices are either net 15 or net 30 days. The invoice timeline helps me get a quick view of how much money I’m due overall and if there’s anything overdue that I can click into and check out.”Alex Boswell, freelance writer
Best suited to: UK freelancers with LTD companies.
Pricing: From £14.50+VAT/month for your first six months. It’s £29+VAT/month after that. (It’s completely free if you have a business account with NatWest, RBS, Ulster Bank, or Mettle.)
Technically, Bonsai isn’t an accounting software. Think of it more like a freelance product suite with accounting and bookkeeping software built-in.
Bonsai is described as the #1 freelance product suite for a reason. Inside one dashboard, you can send invoices, track time, manage customer relationships, send proposals, create onboarding forms, and more.
- Templates for almost everything you could need to run a freelance business–including contracts, quotes, proposals, and more.
- Stripe integration for clients to pay your invoices via credit/debit card.
- Bonsai Tax to track expenses, find write-offs, and estimate taxes.
- Project management tools, including task management and time tracking, to keep your freelance business organized.
Best suited to: Freelancers looking for an all-in-one business management platform.
Pricing: Starts from $19/month for basic features. Get advanced features, including automation, customization, and Calendly integrations, from $29/month.
Quickbooks Online is an accounting software powered by the folks at Intuit. Freelancers can use it to snap and store receipts for purchases (like office equipment). According to its website, customers using Freshbooks save eight hours per month managing their accounts.
The best part: Quickbooks offers software bundles for self-employed people. You can use Turbotax, its online tax preparation offering, with your Quickbooks account for a small extra fee.
- Automatic matching to save time on bank reconciliation. It will map receipts to expenses and invoices to income.
- Smart reporting to get a quick overview of outstanding invoices, total expenses, recent bank transactions, and profit and loss statements.
- Track mileage if you’re visiting a client’s office.
- Payroll, if you’re hiring a team or thinking of scaling up to build an agency with full-time staff.
- A mobile app to manage invoices and view reports on the go.
Best suited to: Individual freelancers or LLC/LTD company owners.
Pricing: The Quickbooks self-employed plan starts at $7.50 per month. Its small business plans start at $12.50 per month.
Xero’s accounting software is designed for advanced freelancers who need a few extra features. It’s mainly designed for accountants and bookkeepers–hence why your accountant may be asking you to use this tool for your bookkeeping. However, it’s an option worth considering if you’re planning to scale your freelance business significantly.
- Xero Projects, which shows how much profit you’ve earned on a project after paying expenses (such as billable hours, subcontractors, or software subscriptions).
- Integration with Trello to log your time against tasks in your board.
- Contact history to see a client’s email, invoice, and payment history.
- Hubdoc, which automatically gathers information from a document–such as client names, invoice amounts, and due dates–and pulls it into the software itself.
- Inventory tracking, should you ever turn your freelance business into an ecommerce one.
Best suited to: Advanced freelancers or those running a team of subcontractors beneath them.
Pricing: The Starter plan starts at $20/month for 20 invoices a month. Its Standard plan, which has unlimited invoices and bank transactions, starts at $30/month.
Get your accounting ducks in a row
As you can see, there are tons of freelance accounting softwares available to help you run your business. We’ve graded them on price, quality of customer support, ease of use, and of course, price.
But remember that accounting tools are just one piece of the puzzle. You likely need a handful of other freelance writing tools to help you run your business.
Not all tools come in software form.
Joining a community of other self-employed folks, most of which also work from home, is a tool you need to make freelancing a whole lot more fun (and much less lonely).
Luckily, we have the group just for you.
Peak Freelance is a community of established freelancers who want to scale. Your membership gets you access to expert interviews with content managers, email templates, online courses, and more.