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The 6 Best Small Business Accounting Software 2023

July 12, 2023
Bill Kimball

Others have an inventory feature that can manage product sales and inventory levels. Accounting software is a computer program that helps businesses track income and expenses. The software can also be used to generate reports, such as profit and loss statements and balance sheets.

bookkeeping software for self employed

Wave lets you attach your receipts to expenses, so you have everything in one place, but it won’t extract data for you—you’ll have to input it manually. It also has some useful extra features, including Wave Checkouts, which allows you to accept payments from your website with a payment link. If you’re looking for good accounting capability at a price you can afford, look no further than Wave Accounting. A perfect choice for self-employed individuals and sole proprietors, Wave is 100% free, with no costly plan you need to upgrade to in order to access additional features. Once you sign up for Wave, you have complete access to all of its features. If you’re looking for accounting software for your small business, remember that not all software applications are created equal.

What Is Accounting Software?

In this plan, Wave will process payroll and prepare payroll tax calculations, but the user is responsible for manually completing payroll tax forms and submitting tax payments. The second plan is $40 per month plus $6 per employee or contractor. In this plan, payroll is full-service, meaning that all tax filings and payments are managed by Wave. Accounting software helps small business owners track accounts receivable and accounts payable, have a clear understanding of their profitability, and be prepared for tax season. Small businesses can often use out-of-the-box accounting software without requiring extensive customization. However, as a business grows, its accounting needs may become more complex, and a custom enterprise resource planning (ERP) system is often needed.

  • The major differences for self-employed business owners are almost entirely tax-related.
  • You can also run multiple businesses in one account, and they have a simple mobile app.
  • For freelancers and self-employed people who charge a fixed fee per service, though, it should be sufficient.
  • ZohoBooks provides an excellent value for an accounting service at low costs, which is ideal for startups, freelancers, and small businesses.

It is a highly accessible self employed bookkeeping software with plans that cater to businesses of different sizes and models. The right accounting software can act as a reliable substitute, helping you with your personal and business finances, including taxation. Your numbers need to be accurate for you to know how much you’re earning, spending, and investing. Our partners cannot pay us to guarantee favorable reviews of their products or services. The website doesn’t have that “serious accounting app” vibe, but there’s a pleasant surprise for you as you land on the dashboard.

For more details on our process, read the full rundown of how we select apps to feature on the Zapier blog. You can track your time, invoice clients, and keep track of all appropriate business expenses so tax time becomes easier. If you do need to upgrade, there are two plans to help you manage payroll and get bookkeeping support, as well as a plan for payment processing. Xero’s customer service is more highly rated than QuickBooks’, and experienced bookkeepers find the software easier to use than much of the competition. But some users report that the pricing for Xero’s plans has consistently gone up. However, if you choose to use Wave Payments, you’ll have to pay a small fee for credit card processing, which is the same fee you’d pay with any application.

In a service-based business, a time-tracking application could integrate with the accounting software to add labor to a client invoice. QuickBooks Self-Employed is an Intuit product with a cloud-based online interface and a mobile app. This software was created to help freelancers stay organized each year for tax season. Features of QuickBooks Self-Employed include tracking mileage, sorting expenses, organizing receipts, and estimating and filing taxes seamlessly through TurboTax. Here are our top five picks for the best accounting software for small businesses. NerdWallet’s accounting software ratings favor products that are easy to use, have a robust feature set and can grow with your business.

However, if you’re planning on remaining self-employed, you can probably find a more affordable choice. Another asset of AccountingSuite is its ability to integrate with e-commerce platforms. One feature that sets AccountingSuite apart is its budgeting capability, which allows you to create a current or future year budget with the ability to choose the accounts you wish to include. To see how accurate your budget is, run the Budget report, which compares budgeted totals to actuals. But no matter what type of business you own, the following should always be taken into consideration when looking for accounting software, or any software application for your business.

NerdWallet’s Best Accounting Software for Freelancers and Self-Employed of July 2023

Most accounting software programs include features for invoicing, tracking payments and managing inventory. Want accounting software that minimizes the amount of time you have to spend on finances? (Pricier plans let you set automatic recurring bill payments too.) Like FreshBooks, Zoho Books includes a client portal so your customers can quickly approve estimates and pay invoices. With Wave’s free accounting software, you can send invoices, scan receipts, and accept online payments. And unlike FreshBooks and Xero, Wave doesn’t limit your invoices, bill payments, or customers.

We analyzed 13 providers across 20 metrics to rank the best accounting software for small businesses. Our ratings consider factors such as transparent pricing, variety of features, availability of support and customer ratings. QuickBooks Self-Employed can work for freelancers and solopreneurs, but its main selling point is its built-in mileage-tracking feature. If you don’t travel frequently for work, QuickBooks Self-Employed doesn’t have much to offer. You can still track expenses with a third-party app, of course—Xero syncs with more than 1,000 other apps, which outpaces even QuickBooks—but built-in expense tracking is undeniably simpler. Customer payment processing and payroll are considered premium services that cost extra, but all of the bookkeeping, invoicing, and reporting features are entirely free.

The only difference between the two is that the Established plan has additional features like multi-currency, expense management, and project costing. All three plans offer Hubdoc, a bill and receipt capture solution. It’s best practice to separate your business and personal finances. But if your business is very small, a side hustle or brand new, you might not want to open separate business banking and business credit card accounts right away.

Ratings are based on weighted averages of scores in several categories, including scope of features and integrations, customer support and cost, among others. OneUp offers accounting software that integrates a free CRM and invoicing option, which is why we chose it as the best option for small sales teams. OneUp has a mobile-first solution that many on-the-go self-employed business owners will love, and you can close your books in as little as a minute. Many small business owners love the software but struggle with its customer service. If you know you’re going to need customer help based on your accounting or software experience, you might consider other options on the list that have a better customer support reputation.

bookkeeping software for self employed

Neat is a good choice for self-employed entrepreneurs who need an easy-to-use accounting software to manage their business finances. NetSuite’s accounting software is a good choice for businesses that need help with financial compliance and those that want to automate as many accounting tasks as possible. The five accounting software picks listed above are our favorites, hands down.

Tools for separating personal and business finances

The best way to determine that is to download demos of the applications you’re interested in and give them a test drive. Accounting software should make accounting and calculations more accessible to perform, understand and analyze. We looked at dozens of third-party user reviews to see if the providers live up to their marketing claims. This helped to gauge the quality of each product further and provide deeper insights into what each does well—and where they fall short. The Forbes Advisor Small Business team is committed to bringing you unbiased rankings and information with full editorial independence.

AccountingSuite is not as well-known as its competitors, but it offers many of the same features designed for the small business owner, including self-employed individuals and sole proprietors. A great fit whether you’re selling products or services, AccountingSuite includes excellent sales and inventory management capability, plus a time-tracking feature. Sage Business Cloud Accounting is a good choice for microbusinesses because it offers a variety of features and integrations, yet is still relatively affordable.

  • Freelancers and solopreneurs typically don’t have that luxury, especially at the beginning of their ventures.
  • Frankly, if you do make less than $50,000 a year, we can’t recommend Zoho Books highly enough.
  • And for self-employed attorneys or accountants, FreshBooks includes a retainer feature that makes it easy to bill your clients a retainer fee.
  • It’s important to note that we provided the regular monthlypricing, but each plan except for the Select plan are discounted by 50%for the first four months and includes a 30-day free trial.
  • Accounting software is a computer program that helps businesses track income and expenses.

The best bookkeeping app will save you a lot of time and headaches, while making you look like the pro that you are. You can upload via the web or mobile app, or send an email to the address shown on that page. FreeAgent feels more serious, like it’s aimed at folks who are more established in their careers, handling larger projects and bigger financial decisions. The cash flow section and the tax features are a testimony to this—but let’s start at the beginning.

Best for Startups

If you feel like hiring someone for your accounting needs, consider interviewing OneUp’s Business Assistant and seeing if they’re right for the job. Not to mention, let’s hope you’re catching this article early because FreshBooks has a 60% off sale for the next 6 months. They regularly have promotions going on, so keep your eyes peeled for the next one.

Here are a couple of examples to get you started, but Zapier works with any app in your tech stack. You can upload as many receipts as you need, and QuickBooks will extract all that data into the app using OCR, leaving little manual work for you. In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes. Reporting options are limited in Wave Accounting, with only 12 reports available. You can export reports in a CSV format available for customizing if desired.

Freelancers and self-employed people who don’t need accounting software might consider free invoice software instead. OneUp is another accounting software application that is less well-known than its competitors. A good fit for self-employed business owners and sole proprietors, OneUp offers lead management and a solid inventory management module, making it a particularly good choice if you’re selling products. Having reliable accounting software should reduce the time a business owner, accountant, or bookkeeper spends on data entry and other trivial tasks.

Universal accessibility

Accounting software can improve productivity by automating time-consuming tasks, such as invoicing and tracking payments. This frees up your time so you can focus on running your business. Plus, software can help keep your books in compliance, which can save you time and money in the long run. Xero is a good choice for small businesses that are looking for an accounting software with payroll capabilities. The software is also a good fit for businesses that are growing quickly and need to track projects.