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Best accounting software for freelancers and contractors (2020)

Susan Honea

Susan Honea – 8 years experience helping businesses with bookkeeping, tax preparation and auditing

Last updated: May 21, 2020

For most contractors and freelancers accounting is a chore and at times stressful. Using the right accounting software can make the process simpler and more manageable.

Best accounting software for freelancers and contractors (2020)

Many people dream of being self-employed and becoming their own bosses. What most self-employed freelancers and contractors do not dream about is spending precious hours each week on accounting tasks (unless they’re freelance accountants, perhaps!). Finding and implementing the right accounting software as a freelancer or contractor can leave you with more time to live your dream of self-employment, and we are here to help with a roundup of the best accounting software options for your needs.

Key features that most freelancers and contractors will want in an accounting software include the ability to track, manage, and/or report on:

  • income and expense tracking
  • clients and projects
  • billable expense, time, and mileage tracking
  • estimated tax and end of year tax prep

Read on to learn more about accounting software options for your freelance or contracting business. We start with a short Snapshot of each product, but then you can find a Bigger Picture of each.

10 best accounting software for freelancers and contractors:

1. FreshBooks. Best overall accounting software for freelancers and contractors. Designed originally for freelancers, FreshBooks provides the accounting, contact and project management, tracking, and reporting tools the new freelancer needs to get started. Easy to use, scalable, and affordable, it remains a popular choice.

2. QuickBooks SelfEmployed. Best accounting software with integrated tax support for freelancers and contractors. QuickBooks products are always popular, and the Self-Employed version targets users who want basic bookkeeping with the uncomplicated QuickBooks experience. Although it is a basic option, it does provide strong quarterly tax and end of year tax support.

3. Wave. Most cost-effective accounting software for freelancers and contractors. Wave is another option that targets freelancers, along with 1099 contractors, specifically. Although feature-rich compared to other products made for freelancers, Wave remains free.

4. Xero. Best mobile accounting software for freelancers and contractors. Xero’s mobility makes it an ever-popular choice for freelancers, along with its time-saving automation features. Xero provides ease of use and a simple and clear overview of a business at any given time.

5. ZohoBooks. Most flexible and scalable accounting software for freelancers and contractors. ZohoBooks provides an entire collection of apps, allowing the freelancer or contractor to pick and choose among tools as needed. The functionality of Zoho’s ecosystem goes beyond accounting to connect all business operations.

6. GoDaddy Bookkeeping. Sellers on Amazon, eBay, and Etsy will appreciate GoDaddy’s easy and direct integration with those sites. Any freelancer or contractor who wants or needs bookkeeping features without double-entry accounting functionality should look at GoDaddy’s offering.

7. QuickBooks Online Simple Start. QuickBooks Online Simple Start provides a broader range of functions than the Self-Employed version. One important difference between the two is upgrading from Simple Start to a more advanced QuickBooks offering is easy, so freelancers and contractors interested in QuickBooks who envision business growth might prefer to begin here.

8. AND.CO. Freelancers marketing their services on Fiverr and other freelancing sites might be interested in AND.CO, which was recently acquired by Fiverr. It’s an overall effective and efficient business software solution.

9. Bench. If you have no interest in doing your own bookkeeping, and you don’t need immediate reporting capabilities, take a look at Bench. Bench provides a team of bookkeepers to do the work for you, and all you have to do is provide access to the data and check monthly reports.

10. ZipBooks. Advertising itself as a FreshBooks alternative, ZipBooks is a simple and easy-to-use option with plenty of features for those with little finance or accounting experience or knowledge. Many freelancers or contractors, especially start-ups, can probably get by with the free version for a time.

Top accounting software for freelancer & contractors

1. FreshBooks

Price from $10.00/mo
Free Trial 30 days

Best overall accounting software for freelancers and contractors.

Best for:
FreshBooks accounting software was built specifically for freelancers and is a terrific choice for all freelancers and contractors, but it is an especially good option for those new to freelance or contract work. It’s also the best overall solution for freelancers who work on retainer or need to manage multiple projects at a time.

Features important for freelancers and contractors:

Income and expense tracking
FreshBooks allows invoicing and payment collection through its own software or through Stripe, along with bank integration and multi-currency support. The invoicing workflow begins with an estimate or proposal and follows through to the invoice. Some FreshBooks plans provide automatic reminders and late fee addition, and the retainer function also provides an automatic invoice for hours worked beyond the retainer amount.

FreshBooks’ bank integration makes tracking expenses quick and easy. Automatic daily updates drop your expenses directly into your bank registers, and FreshBooks learns to automatically categorize expenses for you.

FreshBooks also includes trial balance and balance sheets, which aren’t always necessary for freelancers but provide additional insight into business health.

Clients and projects
FreshBooks includes excellent contact management tools, effective team collaboration capability, and options for assigning tasks and due dates, setting up project-level budgets, sharing files and images, and designating hourly or flat rates—even from the mobile app. You can invite employees, contractors, and clients to collaborate and provide them with access to only the information they need via team permissions. The main downside here is that FreshBooks doesn’t identify the specific project on an invoice.

Billable expense, time, and mileage tracking
FreshBooks features excellent billable expense, time, and mileage tracking, along with the ability to attach pictures of receipts. Mileage can be tracked directly in FreshBooks or imported with MileIQ integration. The built-in time tracking feature attaches to projects or clients automatically with automatic invoice generation.

Estimated tax and end of year tax prep
FreshBooks does not provide tax integration or a quarterly estimate, but tax-specific reports are included. The categorization of expenses does help with end-of-year tax preparation.

Ease of use:
No accounting or even business experience is required to get started with or use FreshBooks. The software is super-simple to set up. The interface is also uncomplicated and easy to use. If you need some extra support, FreshBooks does provide it, along with helpful training materials.

Cost:
FreshBooks’s least expensive plan is limited to five clients, with plan prices increasing incrementally based on number of clients. It also allows the option to add teammates for an additional fee each month. Interested potential users can try FreshBooks free for 30 days before committing. FreshBooks allows upgrading and downgrading across plans as the business grows or changes, too.

Things we liked:

  • Affordability
  • Usability
  • Invoicing workflow
  • Expense records
  • Integrated time tracking
  • Proposal and project management capability
  • Lots of app integrations

Things we didn’t like:

  • No bank reconciliation
  • Limited financial reports
  • Limited customization

2. QuickBooks Self-Employed

Price from $8.00/mo
Free Trial 30 Days

Best accounting software for freelancers and contractors with integrated tax support.

Best for:
QuickBooks Self-Employed is a good option for freelancers and contractors looking mainly for basic bookkeeping features in accounting software. Based on the QuickBooks Online platform, the Self-Employed version is scaled down specifically for freelancers. The biggest drawback of QuickBooks Self-Employed is that it cannot be upgraded directly to QuickBooks Online as your business grows.

Features important for freelancers and contractors:

Income and expense tracking
QuickBooks Self-Employed allows for income and expense tracking, with the ability to mark a transaction as business or personal, easily separating the two. While this feature is not unique to QuickBooks Self-Employed, the ease with which QuickBooks Self-Employed manages this via a quick click of a button pushes this software nearly to the top of the list.

QuickBooks Self-Employed software also provides fixed asset management tracking. Invoicing and payment collection functionality integrates with payments by credit card and ACH, allowing partial pay, as well. You can set up recurring invoices, too.

QuickBooks Self-Employed allows you to invite an accountant to access your data and remove the accountant as needed.

Clients and projects
Currently, QuickBooks Self-Employed does not offer client and project tracking, so if these are essential features for you, consider one of the more advanced QuickBooks products and plans.

Billable expense, time, and mileage tracking
As noted above, QuickBooks Self-Employed provides for expense tracking. The mobile app provides automated mileage tracking via GPS and a snap and attach receipt feature for tracking on the go.

Intuit recently purchased TSheets time tracking software, and QuickBooks Self-Employed users can use TSheets to track their billable time and convert that information directly to invoices. The free version of TSheets only supports one user; you may incur additional fees if you add employees or contractors to your team.

Estimated tax and end of year tax prep
An important feature of QuickBooks Self-Employed is its strong tax support. It integrates with TurboTax and one bundle even includes TurboTax. It exports information directly to Form 1040 Schedule C and helps you track deductions. It automatically calculates estimated quarterly tax payments, as well, helping you stay on track with your obligations throughout the year.

Ease of use:
QuickBooks Self-Employed is designed to be uncomplicated. Users can have this software up and running in minutes. Although there is no phone support for QuickBooks Self-Employed, the live chat feature works well, and there are plenty of additional online resources to help.

Cost:
QuickBooks Self-Employed isn’t the least or most expensive option typically, but it’s possible to get it on sale at a hefty discount for a year. In addition, the savings you get with the TurboTax bundle option may make QuickBooks Self-Employed worth the monthly subscription fee. The bundle can be accessed at any time by upgrading your subscription.

Things we liked:

  • Strong quarterly and end-of-year tax support
  • Ability to track personal and business expenses
  • Easy setup and use
  • Excellent mobile app
  • Lots of app integrations

Things we didn’t like:

  • No bank reconciliation
  • Cannot upgrade to QBO as business grows
  • Invoices can’t really be customized
  • Can’t add teammates

3. Wave

Price from FREE/mo

Most cost-effective accounting software for freelancers and contractors.

Best for:
Popular among small businesses in general, Wave’s accounting software is specifically designed for freelancers and contractors. However, Wave offers a true double-entry accounting, providing a more comprehensive feature set than other products designed specifically for freelancers. In addition, it’s free, and it integrates directly with several online shopping and e-commerce tools.

Features important for freelancers and contractors:

Income and expense tracking
Wave provides strong expense management functionality and unlimited, customizable invoicing, including automatic reminders and sales tax calculation. You can accept payments in multiple currencies, which is important for online sellers, as is direct integration with PayPal, Shopify, Shoeboxed, and Etsy.

The accounts payable feature provides simple management of bills, and unlimited, automatic bank and credit card feeds help you track expenses quickly and easily.
Wave also features strong reporting features as compared to other accounting products designed for freelancers and contractors.
If you need to do payroll or want to work with Wave’s bookkeeping service, you can add those options on for a monthly fee.

Clients and projects
Wave doesn’t include project management, but it does offer contact management functionality. The client portal allows clients to view and pay invoices online.

Billable expense, time, and mileage tracking
Billable expense tracking is included in the free software, but it takes a bit more setup than other products. Time tracking is also included, but it is limited. There’s no actual mileage tracker included, so you will have to track, record, and enter that yourself.

Estimated tax and end of year tax prep
Wave offers a free invoicing add-on that can calculate sales taxes, but overall, it’s not very helpful with taxes. However, H&R Block’s recent acquisition of Wave will likely eliminate this limitation.

Ease of use:
Wave is widely considered very easy to set up and to use. Navigation is simple, and the dashboard helps you maintain a clear view of the business. The Help Center and the Wave Community on the website provide quick access to help. The other option for support is email, which is slower, of course.

Cost:
Wave is both free and ad-free, providing you with invoicing, expensive tracking, accounts payable, reporting, estimates, inventory, and contact management. Wave does offer more products that incur monthly fees, such as payroll, payment processing, and access to advisors.

Things we liked:

  • Did we mention it’s free?
  • Unlimited clients, invoicing, and expense tracking
  • Simple setup and navigation
  • Good integrations

Things we didn’t like:

  • Customer support
  • Mobile apps don’t work as well as others
  • No tax support (currently)

4. Xero

Website www.xero.com
Price from $9.00/mo
Free Trial 30 days

Best mobile accounting software for freelancers and contractors.

Best for:
Freelancers who start with just a handful of clients but are interested in growing will find Xero’s accounting software a good long-term option.

Features important for freelancers and contractors:

Income and expense tracking
While some software targeting freelancers and contractors does not, Xero offers full-fledged double-entry accounting. Xero also offers a standard and customizable chart of accounts to better meet your needs.

Bank connections and reconciliations are easy to set up and use. Inventory management is a nice feature for those who need it. Xero also includes customizable invoice templates, along with an automatic invoice reminders feature, but users report that the software doesn’t handle customer deposits or partially-paid invoices well.

The least expensive plan limits the number of bills and bank transactions allowed per month, so if you have lots of transactions, you may need to level up to a more comprehensive plan. Xero provides functionality for sales tax tracking, and it allows for accountant access.

Clients and projects
Xero allows you to track projects by time and money spent if you are using the most advanced (and expensive) plan. Xero integrates easily with Trello if you need more comprehensive project management features. Xero includes contact management, along with a feature called “smart lists,” which helps you to organize contacts in various ways to enhance marketing through email. Xero connects directly to Constant Contact, Gmail, and Office 365 to facilitate communication with your clients.

Billable expense, time, and mileage tracking
Billable expense tracking is limited to the “Established” plan, which is the most expensive option Xero offers. Time tracking requires Xero Projects (“Established” plan), but Xero also integrates with Harvest time tracker. Tracking mileage will require a third-party app like MileIQ or Expensify.

Estimated tax and end of year tax prep
Xero currently does not offer true quarterly estimated tax calculations or annual prep, but a recent announcement may change that; Xero now integrates with the CCH Axcess tax engine, allowing for easier end of year tax line mapping and tax return preparation.

Ease of use:
The setup process for Xero is simple, and it has an intuitive interface and flexible functionality. The latter could be a little confusing at first with multiple options for implementing some functions, but users can adapt quickly. The customizable dashboard is really helpful, especially for users without a lot of bookkeeping experience. User guides, training, and support make Xero accessible to inexperienced accounting software users, but a lack of strong customer support options may frustrate some users.

Cost:
Xero offers three plans at a range of prices. The basic plan is good for a freelancer just getting started, with advanced plans available to meet the needs of a growing business. Only the most advanced plan offers project-level tracking, though.

Things we liked:

  • Customizable, robust mobile app
  • Tons of app integrations (700+)
  • Powerful cash flow reporting

Things we didn’t like:

  • Difficult to edit invoices
  • Project features are expensive
  • Weak customer support

5. ZohoBooks

Website www.zoho.com
Price from $9.00/mo

Most flexible and scalable accounting software for freelancers and contractors.

Best for:
ZohoBooks is a full-featured accounting app and a natural choice for freelancers and contractors who currently use—or may want to use in the future—other products in the Zoho ecosystem.

Features important for freelancers and contractors:

Income and expense tracking
ZohoBooks accounting software provides a convenient dashboard view that shows important real-time data. Tons of invoice and estimate customization options and templates are available with ZohoBooks, along with recurring and pre-scheduled invoices and automated reminders. Fixed asset management is also available.

Clients and projects
ZohoBooks features excellent contact management for both customers and vendors. The client portal is a helpful time-saving feature that allows clients to view business transactions, reducing the need to follow up in other ways (like email). However, if you need to send email, ZohoBooks includes built-in email templates. ZohoBooks also includes project-level organization capability with a timesheet workflow. Handy project dashboards facilitate project management.

Billable expense, time, and mileage tracking
ZohoBooks allows billable expense tracking and time tracking by project. An app provides mileage tracking for both iPhone and Android. ZohoBooks even includes mileage tracking for the Apple watch.

Estimated tax and end of year tax prep
Currently, ZohoBooks does not include quarterly tax estimate calculations or end of year tax prep reports.

Ease of use:
ZohoBooks is generally considered easy to set up and learn, especially for those already using Zoho software products. Although the interface is sometimes referred to as clunky and difficult to navigate at first, users seem to adjust quickly.

Cost:
ZohoBooks offers four reasonably-priced subscription levels, but the basic plan is probably enough for most freelancers.

Things we liked:

  • Affordable
  • Excellent customer service
  • Regular feature updates

Things we didn’t like:

  • Can be difficult to navigate
  • Feature set can be overwhelming
  • Limited customizable reports
  • No quarterly or end of year tax support

6. GoDaddy Bookkeeping

Best for:
GoDaddy is a good option for freelancers and contractors who want a simple, inexpensive solution to bookkeeping without the bells and whistles of pricier accounting software. Direct integration with Amazon, eBay, and Etsy makes it a solid accounting software option for sellers on those sites.

Features important for freelancers and contractors:

Income and expense tracking
GoDaddy provides you with the ability to track and manage finances. It provides profit and loss reporting to help you maintain a clear sense of your business’s health. Users can create and send invoices, and the software imports bank and credit card transactions for you. GoDaddy also integrates seamlessly with Stripe and PayPal. If you need recurring invoices, you’ll need to subscribe to the third tier of GoDaddy’s subscription options, but it’s still quite affordable.

Clients and projects
GoDaddy Bookkeeping is focused mainly on the basics, so client information is limited, as well, focusing mainly on where and what to bill. GoDaddy doesn’t include any kind of project tracking.

Billable expense, time, and mileage tracking
GoDaddy Bookkeeping allows you to track mileage and time at all plan levels. In addition, billable expenses can be added directly to invoices and tracked through the payment process.

Estimated tax and end of year prep
GoDaddy tracks quarterly tax payment estimates, which can be paid through an Outright integration, and organizes information for the Schedule C worksheet, but these features are only on the second and third tier subscription plans.

Ease of use:
GoDaddy is very simple to set up and use. The setup includes a checklist with suggestions to help you through the process. It’s a basic bookkeeping tool, so it’s not complicated.

Cost:
GoDaddy’s basic plan is one of the least expensive options for bookkeeping software. Even the premium plan is reasonably inexpensive. Advanced features like importing bank and credit card transactions and importing sales information from Amazon, PayPal, eBay, and Etsy are limited to the second and third tier plans.

Things we liked:

  • Android and iPhone apps
  • Simple setup and use
  • Inexpensive

Things we didn’t like:

  • No double-entry accounting
  • Many limitations across the board
  • No free trial

7. QuickBooks Online Simple Start

Price from $8.00/mo
Free Trial 30 Days

Best for:
QuickBooks Online Simple Start is best for freelancers who need more functionality than QuickBooks Self-Employed can provide, solopreneurs who plan to grow their businesses over time, and those freelancers who sell products using an eCommerce platform. It’s the most limited version of QuickBooks Online, but it’s suitable for a freelancer or contractor.

Features important for freelancers and contractors:

Income and expense tracking
QuickBooks Online Simple Start is a complete bookkeeping solution with invoicing and expense management, payment processing, bank reconciliation, and reporting. The dashboard provides a convenient overview of real-time business health. The invoicing workflow includes customizable estimates. The software allows lots of app integrations, including eCommerce platforms (Shopify, BigCommerce, SendOwl, WooCommerce, UltraCart, and others) and payment processing (PayPal, Square, and others).

It will not track accounts payable, but freelancers and contractors who outgrow QuickBooks Simple Start can upgrade later to other, more robust QuickBooks Online plans. One consideration some might find important is that it does not help with separating personal and business expenses.

Clients and projects
Users can create unlimited clients, but project tracking (using classes) will require a more robust version of QuickBooks Online, such as Plus.

Billable expense, time, and mileage tracking
QuickBooks Online Simple Start provides assets and liabilities tracking. TSheets is also available for Simple Start subscribers, but it does not currently convert hours to invoices. Similarly, it’s not a good option if you need to track mileage.

Estimated tax and end of year tax prep
QuickBooks Online Simple Start helps with sales tax tracking, but there is no Schedule C assistance built in, and it does not estimate quarterly taxes.

Ease of use:
Users find its intuitive interface easy to navigate. It’s called “Simple Start” for a reason. QuickBooks is very popular among small businesses, so getting help with it is a snap. Additionally, QuickBooks offers plenty of support on its website with tutorials, webinars, and training classes.

Cost:
Users subscribe for a monthly fee, which isn’t as cheap as, say, GoDaddy, but isn’t terribly pricy, either. However, the first 3-6 months are usually 50% off.

Things we liked:

  • Good invoicing workflow
  • Robust reporting (standard and customizable)
  • Allows addition of 1099 contractors

Things we didn’t like:

  • Can’t add teammates
  • Doesn’t estimate quarterly taxes
  • Doesn’t export directly to TurboTax

8. AND.CO

Website And.co
Price from $18/mo
Free Trial 30 Days

Best for:
The freelance services market Fiverr recently acquired AND.CO, so it’s safe to say the product is a good choice for freelancers and other solopreneurs. AND.CO was originally designed as an app before migrating to the cloud, so its mobile app is excellent for those who need or want that feature.

Features important for freelancers and contractors:

Income and expense tracking
AND.CO offers a built-in task manager (My Desk), expense and invoicing management (including subscription invoicing), and good reports functionality. The invoicing process is set up as a step-by-step wizard of sorts, and it’s super-simple to use. Recurring invoices can be set up to allow you to focus on what you do, not whether you sent an invoice to that regular client.

AND.CO automatically integrates with PayPal and Stripe, and payments can be processed directly on the AND.CO platform, as well. Plus, there are custom branding features for all your client-facing elements, which makes AND.CO attractive to freelancers who are attempting to build their brands.

While AND.CO offers invoicing and expense management, users do report that it can be challenging to recategorize transactions. But, as noted, AND.CO was recently acquired by Fiverr, so updates and upgrades are happening frequently as a result.

Clients and projects
Contact management is included in AND.CO, along with unlimited clients. AND.CO also includes good project management features. AND.CO has a customizable proposal and contract creation feature (including an embeddable Freelancers Union standard contract), a built-in e-signing feature, automatic signature reminders, and flexible milestone and deposit parameters. A proposal converts to an invoice automatically after signing. If you’re a brand new freelancer, this type of project and contract management should be important to you.

Billable expense, time, and mileage tracking
AND.CO offers time tracking—online, offline, and mobile, by project or in general. The time tracking feature isn’t terribly robust, but it does allow you to attach billable hours to an invoice with a quick click of a checkbox. In addition, the time tracker doesn’t round up for billable time, either, but bills at actual time. Users have also suggested that the project management feature could be more robust.

Estimated tax and end of year tax prep
AND.CO does not offer quarterly tax estimates or specific end of year tax prep reports, other than the built-in profit and loss statement.

Ease of use:
Initial data input can be time-consuming and tedious, but once it’s set up, navigation is easy. Some users report that the process to customize proposals and the contract creation feature are confusing at first and do take some getting used to.

Cost:
AND.CO is free for the basic package, but the feature set is really limited. Monthly and annual plans are available, with the annual plan bringing a significant discount. Expect to spend a little more here than on a product like QuickBooks Simple Start.

Things we liked:

  • Built-in contracts protect users
  • Great customer support
  • Proposal process saves tons of time

Things we didn’t like:

  • Pro version is expensive for a new freelancer
  • No tax filing support
  • Not many integrations
  • May not work well for inventory-based businesses

9. Bench

Website Bench.co
Price from $139/mo

Best for:
Bench is best for freelancers who want someone else to do the bookkeeping work for them. Freelancers should know that their access to business data is slightly delayed with the month-end close by the 15th. Once you’re in with Bench, you’re in. It’s hard to switch providers because it doesn’t allow you to export your data. The chart of accounts is limited to 15 accounts, so it’s not a great choice for a freelancer needing to track expenses at a more granular level.

Features important for freelancers and contractors:

Income and expense tracking
Bench automatically downloads all transactions, and then Bench.co bookkeepers categorize them and clean things up. Reconciliations and month-end reporting are done for you. You are still in control of invoicing; however, you will need to provide a different platform for that purpose. Bench allows either cash or accrual accounting method at no cost difference. Plus, if you haven’t kept up with your bookkeeping, Bench offers a helpful catch-up service.

Clients and projects
Currently, project-level income and expenses are not tracked in the Bench platform, and neither are clients.

Billable expense, time, and mileage tracking
Bench provides expense tracking but recommends specific apps for billable expenses, time, and mileage tracking.

Estimated tax and end of year tax prep
Your Bench team can either file the taxes for you (Bench Tax service) or send you the paperwork to file.

Ease of use:
A team of three bookkeepers is assigned to each account, and regular check-ins by phone keep you in touch with your team. You only have to log in monthly to review your prior month’s reports. One thing to keep in mind is that only transactions that are downloadable will be recorded and categorized, and this process does not happen in real time.

Cost:
Bench provides a fairly advanced service, and the prices match the level of service. Bench would be a better option for a business with more income or where it doesn’t make sense for the freelancer to do his/her own accounting.

Things we liked:

  • Requires zero accounting experience
  • Efficient year-end process makes tax filing easier
  • Significant time savings for freelancers

Things we didn’t like:

  • No Android app
  • Bookkeepers can be slow to respond during peak times
  • Costly for small freelancers

10. ZipBooks

Website Zipbooks.com
Price from $15/mo
Free Trial 30 Days

Best for:
Start-up freelancers, including ride-share drivers, with a limited budget for an accounting tool might find ZipBooks an attractive option.

Features important for freelancers and contractors:

Income and expense tracking
Though not as robust as some of its competitors, ZipBooks does offer good income and expense tracking features. Multi-currency transactions are supported, as are multiple payment methods, including partial payments. ZipBooks even categorizes your transactions automatically. Recurring invoices can be set up, as well, on the second tier subscription level. In addition, reports are generated automatically; they’re also customizable, if you prefer.

Clients and projects
ZipBooks does allow for project-based billing, and it includes a contact database for managing clients at the transaction and project level.

Billable expense, time, and mileage tracking
ZipBooks includes a built-in time tracker that tracks multiple billing rates by employee or contractor. Both billable and non-billable hours can be tracked.

Estimated tax and end of year tax prep
Currently, ZipBooks does not offer quarterly tax estimates, but its profit and loss report should help you complete your end of year tax prep without too much difficulty.

Ease of use:
The setup for ZipBooks is easy. With its simple interface, it’s very user friendly and more intuitive than most other products. The online documentation is quite good, and users report that customer service is fantastic. Those with accounting experience, however, may find the functionality unintuitive.

Cost:
The free version—which includes unlimited invoices, vendors, and payment—is powerful enough for many small or start-up freelancers although it allows only one bank account connection.

The next tier—the Smarter version—includes enough features for most freelancers. This version adds recurring invoices, automatic payment reminders, multiple bank accounts, time tracking, 1099 contractor tracking, and the ability to add team members. The Sophisticated and Accountant versions add more features.

Users also have the option to take advantage of the ZipBooks Bookkeeper, but that costs more each month.

Things we liked:

  • Cost effective
  • Good reporting feature
  • Nicely organized workflow

Things we didn’t like:

  • Mobile app is difficult to use
  • Lacks advanced features
  • Limited integrations

Taking the leap into freelancing or contracting can be scary, but finding the accounting software you need to track income and expenses, clients and projects, billable expenses, time, mileage, and taxes can help to alleviate some of that anxiety. This should be an exciting time, too, and accounting software means you have one less thing to worry about as you enter an exciting new phase of your life or take your freelancing and contracting to the next level.


FAQ

Why do I need accounting software as a freelancer?

In the United States, the IRS updates requirements frequently, but as of Publication 17 in 2019, anyone earning more than $10,400 may be subject to taxes and must file a tax return. If you are likely to owe taxes, you want to make sure you’re squared away with the IRS. In addition, as a freelancer, you’re probably busy attracting new clients and completing the work you have promised to do. Time is money, and accounting software can help you save both. Accounting software can keep you organized and on track financially.

I don’t know much about accounting, so how can I use accounting software?

Knowing at least some accounting basics will be helpful, and we’re here to get you started with some basic terminology [Link to accounting terms article]. Accounting software ranges from simple and super-easy to use to more complicated and complex. Some companies offer a free trial you can take advantage of, too, and most provide training materials and other types of support to help you use their software. The key is finding a good fit for you, and with all the options out there, it’s entirely possible to do so!

Can I afford accounting software?

Many software options are surprisingly affordable, and some are even free. Free software can be limited and may not bring with it the support you need, but only you can tell if its functionality will meet your needs. Another option is to start with a free offering that can be upgraded later or provides the option to add features as needed. Again, some software is really affordable.

Which is better, cloud-based or desktop software?

Your personal preferences will be the deciding factor here, but the future of accounting software is in the cloud. Sure, the desktop offers onsite access and allows you to maintain your data onsite, but the cloud offers accessibility on the go. In addition, the cloud makes upgrades easier and provides the peace of mind knowing your data is backed up. Cloud-based accounting software providers want to keep your business and maintain their reputations, so they are dedicated to maintaining the security of your information.

Which accounting software is best for freelancers and contractors?

We can’t really tell you which software to buy, but we hope you will consider your needs and let the reviews help you make an informed decision.