Best Accounting Software for Small Businesses & Freelancers

One of the most overwhelming things when you’re starting your freelance career or launching a small business is wondering about how to do your accounting. For some people, they find it easier to outsource this to an accountant and worry about working on their business. But in the modern age, this isn’t really necessary as there’s a ton of different accouting softwares out there which can enable you to do things yourself.

But to the naked eye, many accounting softwares look the same. And whilst they are all pretty similar. there are some differences between them that might make one a better option for you. So, let’s quickly run through some of the best options if you’re going to start your own business or you’re looking for a freelancer accounting software.

Best Accounting Software for Small Businesses & Freelancers

Quickbooks – Best for Small Businesses

Quickbooks is one of the biggest, most well known names within the accounting software space. And there’s a good reason for that – they have a ton of happy customers and their reputation speaks for itself.

Quickbooks gives you the ability to track your income and outgoing expenses very easily, and with it’s SmartScan feature, it makes it really simple to set up your VAT return ready for April. You get unlimited invoicing, and the ability to set it up with all of your banking accounts. When you upgrade to a more premium account, you also get the ability to take payments in multiple different currencies, as well as having 3 different users, which can be good for a small team.

Another of the main reasons why Quickbooks is a top option for SMB’s is that it’s very easy to integrate and take payments from different sources. You can easily set up Quickbooks with Square, PayPal or Shopify if that’s how you accept payments and it can make the whole process a lot easier.

The only downside I can see with Quickbooks is that it isn’t as intuitive as some other softwares out there. If you’re a complete beginner to accounting, then I can see it getting a little overwhelming getting things set up. Quickbooks does have a wide array of sources that you can use to learn more about accounting and it gives you all the information you need to set things up. But, you will have to put a bit of effort in yourself to learn things if you’re completely new to accounting.

As well as this, Quickbooks also comes with 24/7 Support from their helpful team, which can help you especially in the beginning if you’re not 100% confident with what you’re doing. Overall, if you have a growing small business and you need to get your finances in order, then Quickbooks proves to be one of the best accounting softwares currently available.

Freshbooks – Best for Freelancers and New Businesses

I’ve been using Freshbooks as an accounting software for a few years now as a freelancer, and I’ve got to say it’s pretty awesome.

The best thing about it is probably it’s ease of use – you can have next to no accounting knowledge and still create invoices very easily. You can navigate through Freshbooks very easily on the desktop version, but the app is even better and you can do everything from your phone if needs be.

It’s very easy to customize each individual invoice to your liking and add in any details that you need to. You can split your invoices out by Payments, Retainers and other income, which is good for any bonuses you might receive. There’s also the ability to add your expenses as you go throughout the year, so when everything is said and done, you can easily see how much money you owe in tax.

Although it isn’t easy to see, Freshbooks actually does support the ability to add UK VAT and date formats. So, it’s easy to set things up if if you’re based in the UK. Plus, it’s very easy to set up estimates based on how many hours you think something might take for a client, and it has a neat time tracking feature which you can use to play out your week.

The only possible issue with Freshbooks is if you’re looking to take payments through their payment providers too. If you’re only looking to send simple invoices and track all of your expenses, then there’s no doubting that Freshbooks is a great accounting software for that. But, Freshbooks payments is actually powered by WePay, and they can be quite slow to process payments (although you will always get them eventually!).

Another thing that they could add to make Freshbooks even better would be the ability to categorize your invoices, so you can easily segment your income based on it’s source.

Zoho Books

Zoho Books is another option that not as many people are aware of. but if you’ve used any other Zoho products in the past, then you’ll probably already be aware of how competent they are.

I recommend Zoho as a good place to start if you’re looking for a new accounting software for a small business. it’s available at a decent price, it has a neat user interface that’s easy to navigate and and it offers multiple different payment gateways. It’s also a good choice for those who want a software which has a responsive app, and the app for Zoho Books is very good and intuitive. There’s no long term contract with Zoho either, so you’re not bound to stay forever like with some softwares.

Zoho Books is probably used best with some of the other Zoho products. For example, if you need a software for inventory management, then you can link Books up with Zoho Inventory, which easily allows you to manage boths of them seamlessly. You don’t necessarily need to pay for these other Zoho products either, as many of them have a lower free tier to use, like Zoho’s Business email service. You also get free weekday support with Zoho Books, too.

One reason why Zoho Books might be attractive to you is because of their pricing structure. The cheapest Books account starts at just £6 a month, and this has the ability to have 2 users and up to 50 different contacts. If you need more than this, then for £12 a month you’ll get the ability to set up 500 different contacts and you can have 3 users in your account. So if you are looking for a cost effective option, Zoho Books is worth your consideration.

Sage

Sage has been around for a long time, and it’s still heralded as a top accounting software by many. Whilst it’s not as popular as it once was, there are a lot of new competitors on the market that it has to contest against.

Sage is probably best for people who have some experience with accounting and are looking to move over from a similar software. It’s very easy to import all of your customers into Sage’s system, so if you already have a customer base, then it’s easy to get started. You can also easily view and aged debtors to see how much you are owed already.

In terms of payments, you can either use Sage Pay or you can set it up with Stripe to take credit card payments. Unfortunately it doesn’t accept Paypal, which is rather annoying for those who take payments from abroad. You can use Sage on both IOS or Android, and to be fair, the app is very intuitive and easy to navigate. It’s easy to see your contacts and statements, and if you want to create a quote for a client on the go, then you easily can.

It’s very easy to set up British banks with Sage, however the worst thing about the software is that it doesn’t have the capabilities to support currencies aside from GBP. This makes it awkward if you’re trying use euros or dollars, and this is something that most other accounting softwares out there do have. Another negative about Sage is that they don’t have the support for timesheets either, which will be frustrating for anyone who has employees or freelancers working with them.

Overall, Sage is very popular, but this is typically with big companies who have an in-house accountant to work with the figure. For small businesses and freelancers, there are better and easier options out there to pick from.

Accounting Software – Common FAQs

What is the most commonly used accounting software?

If we’re talking about across both small businesses and corporate businesses, then Quickbooks is probably the most commonly used by most people. Another accounting software that’s heavily used is Xero, which is primarily used by larger businesses. Then at the smaller end of the spectrum you have Freshbooks, which is mainly used by small businesses and freelancers.

What are the most common mistakes made when doing your own books?

If you’re doing your own books for the first time, then it can pay to use an easy to use accounting software. The most common mistakes people make are; not getting everything done by the end of the month, not tracking your expenses accurately, keeping your personal expenses separate from your business expenses & definitely making sure that you have a backup of all your financial records too.

How difficult is it to use an accounting software?

If you’re not entirely confident on your ability to use an accounting software, then don’t worry too much. Things have evolved a lot in the last decade, and nowadays many of these softwares are designed with beginners in mind, so you should be able to do everything pretty easily. And if you do find anything confusing, then you can always use Google to help you along the way!

Do I still need an accountant if I get an accounting software?

It really depends on how competent you are on doing your own taxes. Most freelancers are able to do everything themselves, however it is more difficult to do the books for a business, even if it’s a small one. Some people might still need to use an accountant at the end of the day, but it will be much cheaper if you have everything lined up for them.

How long should I keep my tax records?

You should keep your tax records for five years after each financial year. You need to do this, because the government might ask for your records at any time as proof of what you’ve submitted.

Conclusion

These are just a few of the different options that are currently out there for people looking for a solid accounting software. Whilst there might be more choices out there, I think this is a pretty good list of some of the easiest to use options currently available.

About Jon

Hey, I'm Jon. I'm an engineer by trade, so it makes sense that I'm obsessed with anything technology related! On the weekends, you can find me playing around with my computers or fixing something around the house. Feel free to leave a comment if you want to get in touch.

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