The 11 Best Apps for Independent Contractors + 3 Bonus Tools

accounting software independent contractors

You can use Toggl Track in the way that works best for you—online, desktop, or mobile. If you’re a passenger, then your business expense is from traveling. If you’re a rideshare driver, then your business expense is from gas mileage, car maintenance, gas, etc.

A bounced check can leave them with fees from their bank as well as delay their payment. This article will take a look at the most cost-effective ways to pay contractors while remaining tax-compliant. Each of the payment methods discussed in this article has a unique combination of strengths and weaknesses and deciding which is best for you starts with evaluating your circumstances. No worries, time tracking will help you keep track of your works and progress.

Independent contractors overview

We considered cost, scalability, ease of use, reputation, and accounting features. Intuit’s QuickBooks Online has been one of the most common accounting software programs used by small businesses and their bookkeeping and tax professionals. The cloud-based software can be accessed through a web browser or a mobile app.

Xero offers a wide range of features, including complete custom invoicing, expense and inventory management, and bill payment options, along with a multi-currency option. Zoho Books includes a dashboard, where you can view important business metrics such as accounts payable and accounts receivable totals, as well as income and expense totals for the current year. If you choose to use the Professional plan, you’ll also have access to purchase orders, sales orders, inventory, and a client portal, where you can share documents and invoice clients directly. One of the biggest benefits of using FreshBooks is that it has the features self-employed individuals need without a lot of unnecessary fluff. You can easily track expenses, bill clients, and manage your bank accounts.

Why QuickBooks

If you’re looking for the best accounting software for sole proprietors and the self-employed, there are a few features you should pay particular attention to. For example, if you sell products, you’ll want an application that offers inventory management, while those that offer services will find time-tracking capability a major plus. Freelancers often need to keep in touch with their clients from anywhere. FreshBooks, which was initially created as an invoicing solution, addresses this by letting you view invoices, respond to clients’ questions and send payment reminders all from its mobile app.

accounting software independent contractors

If you do not file your profit and expenses, you are putting yourself at risk of being audited by the IRS. However, it is highly beneficial to create your Employer ID Number. There are many tax benefits and saving that come along with having a business entity.

Stay tax-time ready, all year long

Different accounts will help you prove your records if your claims are in question. Keeping on top of the accounting and bookkeeping practices of your business is crucial to all independent contractors. Inside the accounting section, you’ll see a breakdown of your income and expenses. Both can either be automatically imported from your bank account, or manually added. The whole app has a friendly vibe, with rounded fonts and simple icons. OneUp also includes easy product and service setup, as well as the ability to link bank accounts and other financial institutions with the application.

  • We’re never paid for placement in our articles from any app or for links to any site—we value the trust readers put in us to offer authentic evaluations of the categories and apps we review.
  • Although freelancers and self-employed people do have some overhead costs, many of their expenses may also be billable to their clients.
  • Reporting options in Xero are decent, and reporting options are continuing to improve after each product update.
  • “Attachments” shows a list of files you have attached to this  contractor’s record, such as receipts or invoices from the  contractor.
  • Having an accounting system in place will increase productivity and help your business run efficiently.
  • Less scalable products are typically simpler, but diminished functionality can cause headaches down the road for growing businesses.

Explore the tool’s paid packages starting at $4/month or simply go for their free starter plan. The app’s project dashboard helps improve client communication—and speed up delivery time. Whether you’re online or offline, you can create, view, and update project details—like drawings, inspections, and timecards—on the board.

ADP Workforce Now: Generates detailed financial reports

We narrowed them down to the top seven after reviewing the most popular ones. We chose these as our best accounting apps for independent contractors based on their functions, features, and integrations. We also looked at their pricing, number of versions offered, and whether they tailor the app to the specific needs of independent contractors. Wave Accounting is a free accounting app that works both online and on your smartphone.

  • The Self-Employed plan lets you keep your business and personal expenses separate.
  • Since tax evasion is sort of a felony, filing your return every year is in your best interest.
  • The software helps send, track, and file 1099 forms for independent contractors.
  • It also has some useful extra features, including Wave Checkouts, which allows you to accept payments from your website with a payment link.
  • Once your task is finished and done with the payment calculation, it’s time to send the invoice to your client.

Download the Procore mobile app on Google Play or the App Store. It is web-based and has a mobile app for Android and iOS devices. It helps calculate and organize the expenses and taxes your business needs to file in a financial year. It also automates reporting and filing tax forms with the IRS in all fifty states in the U.S. Not only does payroll software help save time, but it also generates year-end financial reports for you to keep an eye on the money that comes in and goes out.

Bundle includes the cost for only one state and one federal tax filing. Each additional TurboTax Self-Employed federal tax filing is $119.99 and state tax filing is $44.99. Each additional TurboTax Live Self-Employed federal tax filing is $199.99 and includes live on screen tax advice from a CPA or EA, and state tax filing is $44.99. You can upload via the web or mobile app, or send an email to the address shown on that page. One thing I was surprised by was the 1040 Schedule C worksheet tab. If you’re registered as a U.S. sole proprietor, you can use this worksheet to simplify your tax season.

accounting software independent contractors

QuickBooks Self-Employed is designed for freelancers, solopreneurs and independent contractors who want to separate their business and personal expenses as well as basic accounting and invoicing capabilities. QuickBooks Online is a separate service designed for small business owners who need more extensive features such as double-entry accounting. For independent contractors on a budget, Wave Accounting is free to use at its most basic level. You can use this contractor expense tracker either online or on your smartphone for on-the-go reconciliation. Like others on the list, Wave uses live bank connections for real-time updates and can handle invoicing as well. You will need to pay if you want to handle more advanced tasks like payment processing or payroll, but for basic expense tracking it’s a winner.

You can also start a timer from within the mobile app to log hours spent on a particular project, or sync data from tools like Asana or Trello. It’s especially cost-effective for freelancers who can work within the confines of lower-tier plans’ billable client limits. Because Xero doesn’t offer automated payroll tax services, you’ll need a tax app or accountant, but all of your bookkeeping needs are covered. The software helps send, track, and file 1099 forms for independent contractors.

Do sole traders need to use accounting software?

If you're a sole trader, you'll need accounting software that fits the way you do business.

One of the main reasons for this is to make your tax reporting a lot easier and get you back to work as quickly as possible. As an independent contractor, you are responsible for paying quarterly income taxes–which can be an arduous process if you don’t know what you’re doing. Knowing how much you are paying out and bringing in will assist in getting your taxes paid in a timely and accurate manner and reduce the amount of time spent with your bookkeeper or accountant. Having an accounting system in place will increase productivity and help your business run efficiently. By keeping track of bills, receipts, your net profit and gross profit, and by maintaining a clean balance sheet, you can keep an eye on your money without taking too much time from your day job.

Do you know the minimum amount you need to earn before you must file taxes? ScanWriter assists with automated data entry directly into QuickBooks, including 100s of transactions from bank and credit card statements, bills, sales orders and invoices. A lot of independent contractors find themselves spending countless hours hand-keying data–which takes up way more time than it is worth. Instead of catching up on data entry on your day off, using an automated system will help you get data entered quickly and correctly (less user error!). Sage Business Cloud Accounting offers good product and services management so you can track both stock and non-stock inventory items or set up services that you currently offer to your customers. In addition, the inventory management feature offers multiple pricing levels and easily handles all sales tax management for products and services sold.

  • As an independent contractor, you’re going to have to learn to manage these things on your own.
  • Procore is a great customer relationship management (CRM) app for construction contractors.
  • FreshBooks offers time tracking features, which can be helpful for project management.
  • Accounting software for independent contractors works like other accounting software in that you download the app, create an account, and start entering your data.
  • If your business is especially expense-heavy, including lots of on-the-go receipts, you likely run the risk of losing receipts or failing to keep adequate track of your expenses.
  • A perfect fit for self-employed business owners is the Self plan, which supports one user and is $9/month with all features included.
  • Wave Accounting is a good solution for freelancers and self-employed people who need a simple way to invoice clients and separate business and personal expenses.