Bookkeeping for Independent Contractors: Everything You Need to Know

bookkeeping systems for independent contractors working for me

This will help you separate your financial status from your businesses. In the case of an audit, it is helpful to have everything separate, primarily if you classify yourself as a business. Different accounts will help you prove your records if your claims are in question.

  • Xero covers billing forms, inventory tracking, double-entry accounting, and independent contractor expense tracking.
  • I also downloaded the mobile apps to get a sense of how easy they were to use and to try out receipt capture.
  • With QuickBooks Online Payroll you can pay and e-file 1099s and W-2s for contractors and employees.
  • If you need a more robust accounting-specific solution, you might want to look elsewhere.
  • Freelancers often need to keep in touch with their clients from anywhere.
  • The user interface is bright and tidy, with some quotes about life and business to shake up your day.
  • Learn more about how Deel makes hiring and paying international contractors easy.

Reporting options in Xero are decent, and reporting options are continuing to improve after each product update. We’ll email you 1-3 times per week—and never share your information. You can connect Fiverr Workspace to Zapier, so you can spend more time making money and less time doing admin work.

Services and Software Guides

This approach requires different hiring processes, possibly through an employer of record (EOR). From collecting legal documents to making payments in line with locally compliant bookkeeping for independent contractors contracts, Deel does it all for you. You can also integrate Deel with your favorite accounting tools (such as Quickbooks, Xero, and Netsuite) for a seamless experience.

Simply set that client to invoice on a monthly basis after their first payment comes through and never set another invoice reminder on your phone again. The all-new FreshBooks is easy, fast and secure accounting software for self-employed professionals. Whether you’re an army of one or head up a bustling team, FreshBooks offers solutions that make accounting, time tracking, invoicing and reporting effortless. Instabooks makes general contractors very productive and efficient by turning a quote to an invoice. They will be able to reuse the existing data and also update invoices with any new information about products or services provided. This function saves data entry time and improves the probability of getting paid on time.

Track Every Second of Your Precious Time

As I mentioned earlier, if you need to shift from one accounting application to another, your existing data will have to shift too. Some free accounting solutions make that process more convoluted and frustrating than others — bear that in mind when you pick your preferred platform. Many free accounting software solutions only allow you to grant access to a fixed number of users — and that “fixed number” is often one. If you need to have multiple people within your organization regularly leverage the solution, you might want to explore the possibility of leveraging a paid option. Some users report trouble with Akaunting’s support department’s responsiveness. The application also seems to be one of the less accessible ones on this list when it comes to ease of use.

Doing this process will help reviewing your financial statements easier and make filing your tax return, federal tax, payroll taxes a breeze. Still, Brightbook is a solid option for freelancers or independent contractors — specifically creative professionals. It’s a little bare-bones, but it still covers a lot of bases that other options on this list might have stuck behind paywalls. ZipBooks is a web-based financial software with a solid suite of accounting features. The company offers a free plan called ZipBooks Starter — an option that includes basic bookkeeping functionality, along with profit, loss, and balance sheet reporting.

The 7 Best Accounting Apps for Independent Contractors in 2023

All private tax and accounting data are completely secured by Keeper. It uses the best security measures such as SSL encryption to eliminate any risk of data breaches and cyber attacks. Professional accountants can bill you hundreds of dollars for meagre tax advice. However, Keeper takes care of the entire accounting process completely for a fraction of that amount, keeping you covered 24×7. We know every form you need and every deduction you can take to pay less this year. TurboTax offers automated notifications through texting while each client of Keeper has an assigned bookkeeper to update them.

Hectic has a generous free plan—you’ll really only need to upgrade for the sales pipeline and the meeting scheduler or to add additional team members. And you can do even more with Hectic when you connect it to Zapier. When you create a project, you can add all the deliverables you have to work on. Tick those tasks as you go, track them in the to-do list or on the calendar, and pin time to each of them. As a freelancer, I know that you’re not self-employed for the love of admin work.

Akaunting: Best for Businesses Looking for a Truly One-Stop Free Accounting Software

We recognize this, which is why your independent contractor accounting services will be customized to fit your specific needs and goals. Over the years, independent contractors are constantly under scrutiny of the IRS. Because of incorrectly filed information, many of them are imposed penalties, fees, and interest. Our group of CPAs, tax consultants, and IRS experts will help you avoid unwanted IRS attention. If you’re in the market for free accounting software, odds are you’re not an accountant.

Leave a Reply

Your email address will not be published. Required fields are marked *