As a freelancer, you’re responsible for every aspect of your business. Not only do you need to deliver a great product, but you also need to manage your expenses, invoice clients, and handle your own taxes.

And as a freelancer, time is money. Instead of juggling spreadsheets and files yourself, we have made your accounting easy for. So, check out these five accounting tools that are completely free and other tips to help you better manage your accounts as a freelancer.

• 5 Essential Accounting Tools for Freelancers
• Top 9 Invoicing Tools For Freelancers
• What is the Best QuickBooks for a Small Business?
• What is the Difference Between QuickBooks Online and QuickBooks Self Employed?
• What are the 3 Major Areas of Accounting?
• What are the Tools for Financial Analysis?
• How does Accounting Software Help in Business Growth?

5 Essential Accounting Tools for Freelancers

Being your own boss and manager means you are your own accountant as well. Each project will be charge different fees which will result different billing or invoices flying to your way and that can be painfully messy if you did not do it right.

Read Also: 10 Best Accounting Apps for Small Businesses

To avoid such disaster, we will be sharing some of the best invoices insurance and accounting tools available around the Internet.

1. Zoho

Zoho is one of the most robust bookkeeping platforms out there. With the free version, you can invoice up to five customers a month. And you can track expenses, customize your invoices, receive online payments, and manage timesheets.

2. Due

If your business is growing and you need to be able to accept credit card payments rather than just cash or check, Due may be the solution for you. Due is free to use, and you can send invoices and get paid online. Due charges a processing fee of 2.8%, and promises to match any lower offer.

3. PocketSuite

For people running smaller businesses, such as dog-walking services or housecleaners, some of the bookkeeping software can be overwhelming with unnecessary features. And many of them don’t offer essential features those freelancers need, such as scheduling or client contact options.

Pocketsuite is a mobile app that allows you to connect with clients and manage your business finances all in one spot.

With the free “Pro” version, you can schedule appointments with clients, send professional invoices, accept credit card payments for a flat 2.5% processing fee, send messages to your customers, and even accept tips.

4. PayPal

PayPal allows users to upgrade to a free business account in order to receive credit card payments for purchases and create invoices as needed.

You won’t pay a transaction fee for shopping through your personal account, but upon receiving funds for goods or services, you will pay a 2.9% fee, plus $.30, of the total amount received. PayPal also lets you run reports on all funds coming and going, so you can seamlessly track your professional finances.

5. Wave

Wave’s bookkeeping and accounting services are completely free; you only pay a fee if you add employees. They also charge a 2.9% processing fee if you accept credit card payments from clients.

You can track your expenses and income, and with the easy-to-use platform, it’s easy to manage even if you don’t have experience in accounting. Everything is cloud-based, so you can check your account and update your information from any computer or mobile device.

Best of all, Wave generates tax reports that will save you time and money at tax time, making your life — and your accountant’s — much easier.

Top 9 Invoicing Tools For Freelancers

These invoicing services will handle your billing systems and invoices and some of them are even free.

Freshbooks

Freshbooks is one of the best invoicing services available online. With over 2 million users, it offers amazing invoice interface and ability to add and manage a list of clients, it enables you to track your expenses in real-time which comes handy if you work on an hourly rate basis.

With Freshbooks, you can send your clients user id and password so that they can access their invoices online. It has a free 30 day trial pack with which you can handle 3 clients at max.

The paid plans start from $19.95 per month which offer great additional tools and benefits.

WorkEtc

WORKetc goes a step ahead from other invoice solutions available by serving as not only an invoice solution, but as a total business management tool. It works as a SaaS (software as a Service) tool and gives emphasis on CRM too.

Since WORKetc doubles up as an invoice solution plus CRM, it solves many frustrations that freelance designers face with an invoice billing systems.

For instance, over the time, the resources and billing cycles of freelance designers can increase exponentially. In such situations, WORKetc may offer many advantages to its users.

Pricing starts from $29.95 per month.

LessAccounting

Less Accounting is a minimalistic approach to invoicing. A sleek user interface with no confusing options and menu settings, a plain, minimalistic and usable interface is what Less Accounting is all about.

The dashboard is sleek, elegant and simple and provides insights to everything being done in your invoice account. Being minimalistic in design, Less Accounting also integrates expense tracking functionality. And the best part? They also have an iPhone App!

With a free 7 day trial, pricing starts from $12 per month.

Zoho

Zoho is another hallmark in invoice creating services. One thing in which it clearly wins is the user interface. The painless and intuitive dashboard with tabbed interface really provides a great user experience.

Zoho has many invoice templates integrated that would make the process of creating personalized invoices even easier. Another great feature is that Zoho integrates PayPal and Google Checkout seamlessly in the invoice creation.

The service offers a free version of its services where you can manage up to 5 invoice/estimates per month with a maximum of 2 users. After that, the price goes from a basic package of $8 per month to the elite package of $35 per month

PaySimple

PaySimple is your virtual accounts receivable specialist, as they put themselves. PaySimple combines as a recurring bill setup and invoice sending system which also accepts credit cards and ACH/echecks online.

In addition to that, PaySimple also stores your data securely and also have functionality to automatically deposit funds.

With a free setup, PaySimple will cost you $34.95 per month.

SimplyBill

SimplyBill provides a wide array of options when it comes to online invoicing for freelance web designers. With SimplyBill you can also automatically create PDFs of your invoices and can also track payments online.

Pricing plans include 3 different categories and range from $5 to $25 per month.

Invoicera

Invoicera is a very cool invoice service with many amazing features and integrated services. Multiple language and currency support, customized invoice templates, sending invoices to multiple contacts and multiple payment gateways integration are some of its hot features.

In terms of pricing plans, Invoicera offers a free trial account and the paid plans range from $9.95 per month to $49.95 per month.

Invoice2Go

Invoice2go is the fast and easy way to invoice, estimate, bill, collect and report. There are over 300 Templates to choose from. Even better all these templates can be customized to your own needs.

With Invoice2go you can add your logo, move fields – you can even create your very own business forms. It has got a windows application plus an iPhone app too. With a free 30 day trial, Invoice2go looks like a decent software to play with.

BlinkSale

Blinksale is perfect for anyone who needs to invoice clients for services or products sold. Blinksale is an excellent choice for attorneys, accountants, designers, IT professionals, software developers, journalists, contractors, engineers, architects, videographers, and more.

Blinksale however does not have any trial or free plans. Its plans start from $6 per month and go up to $99 per month.

What is the Best QuickBooks for a Small Business?

Every small business has different needs. Since the QuickBooks software scales up well, but doesn’t provide backwards-compatibility, it’s important to choose the software that fits your situation.

If in doubt about the software you require, choose the software that supports the features you need and buy the next version only if your current software isn’t getting the job done. QuickBooks provides a full 60-day return policy for products purchased through the Intuit website.

QuickBooks Online

The online version of QuickBooks works well for businesses that prefer the convenience of not having software to update, backup or manage. The online version doesn’t include the Collections Center, Inventory Center or Lead Center.

QuickBooks Search and the Calendar view to show invoices, billing and other tasks also aren’t provided. QuickBooks online doesn’t support multiple customer invoicing, batch invoicing or the ability to scan and deposit checks.

QuickBooks Online doesn’t support setting inventory reorder points. Sales and expenses are available in one currency only and business plans, sales or expense forecasts aren’t supported.

Businesses with basic accounting needs may find the online version suitable. Carefully evaluate whether you need the missing features when choosing a version.

QuickBooks Pro

QuickBooks Pro doesn’t provide an online backup option, but you may purchase online backup for a fee. The Inventory Center isn’t included, you can’t work with more than one company file at a time and the program supports up to three user licenses to allow multiple user access.

Unlike the online version, the Collections Center and Lead Center are included. Additionally, support for international sales and expense tracking, along with a convenient customer snapshot view, are available.

You won’t be able to create business plans, track balance sheets by class, forecast sales and expenses or use advanced inventory tracking features that are only available in the Enterprise Solutions option.

QuickBooks Premier

QuickBooks Premier provides advanced options suitable for most small businesses. The ability to view customized sales and profitability reports provides options to track your biggest sources of income.

The Inventory Center makes it simple to access, edit, delete and manage all of your inventory in a single location. Additionally, balance sheet tracking by class provides support for using classes to track your data by office location, department or service type.

Multiple billing options are supported that allow you to track charges by job phase. Finally, you can efficiently manage and track your time and expenses by category, including employee, project, client or services.

QuickBooks Enterprise Solutions

QuickBooks Enterprise Solutions provides the most features of all the programs and allows you to work with your business in whichever manner best fits your situation. For companies with basic accounting needs, the Enterprise Solutions version may provide more features than necessary.

QuickBooks Enterprise Solutions provides an ideal solution for companies that need to combine reports from multiple files, use granular access control for multi-user environments and provide support for up to 30 simultaneous users.

The product provides free online backup for the first year and technical support not provided by other versions. For businesses with multiple branches or departments that need advanced reporting and tracking options, the Enterprise Solutions version provides the most features.

What is the Difference Between QuickBooks Online and QuickBooks Self Employed?

Who should use QuickBooks Online?

Small business owners who pay employees or contractors, who need to track accounts receivable, accounts payable, and view extensive reports about their business.

With QuickBooks Online – the goal is to manage the financial aspects of your business. You can get up to 65 built-in business reports.

With QuickBooks Online, you can customize income and expense categories, you can customize the settings to your specific business needs, and you can integrate it with apps to add functionality.

A business with employees should use QuickBooks Online. Industry-specific businesses like product-based business, medical, e-commerce, trade contractors, and restaurants should use QuickBooks Online.

Who should use QuickBooks Self Employed?

People who work for themselves can greatly benefit from QuickBooks Self Employed. Like – freelancers, coaches, creatives, solopreneurs, mompreneurs, bloggers, social media strategists, and more.

A good example would be Uber drivers, Upwork freelancers, independent salon owners, life and business coaches, independent massage therapists, personal trainers, creative freelancers, etc.

With QuickBooks Self Employed – the goal is to track freelance or solopreneur business income and expenses, capture all expense deductions for tax time, track business mileage, estimate quarterly tax payments, and make tax time really simple and easy.

With QuickBooks Self Employed – you connect QBSE to your bank and credit card accounts and you categorize business income and expenses using “Schedule C” categories. That means that everything is categorized to make filing your taxes simpler. QBSE offers limited reporting capabilities – including a profit & loss report, and a Schedule C report.

With QuickBooks Self Employed you can snap pictures of receipts and categorize them using the mobile app. You can track mileage automatically and swipe on your phone to indicate whether it’s business or personal. You can also use it to estimate quarterly tax payments.

Perhaps the greatest feature of QuickBooks Self Employed is that it’s designed to simplify tax time. You most definitely do 5 Minute Bookkeeping with QuickBooks Self Employed – just work on your business finances once a day for 5 minutes a day.

What are the 3 Major Areas of Accounting?

Accounting and finance are integrally connected to each business firm. Accounting is the study of how information is gathered and distributed inwards and outwards. Finance is the study of how firms make the investments and financing decisions they make operate their business.

Finance relies on accounting information to operate, and accounting must have financial experts in order to translate accounting information for the general use. There are three major areas of accounting:

Financial Accounting

Financial accounting is where accounting deals with external parties interested in the business firm. According to the Financial Accounting Standards Board (FASB), it provides the most important financial collecting and reporting functions for business firms.

Financial statements produced for the benefits of your external investors. Investors need to be able to get the review of financial statements such as the income statement, the balance sheet, and the statement of cash flows in order to decide whether they should invest in this business firm or remain invested in the company, or not.

Financial statements are of interest to another group of external individuals- the creditors of the firm. Creditors are the bond-holders of the firm or they could be the debt-holders of the firm. Creditors are individuals who loaned money to the firm, and interested in receiving a return on their investment and, eventually, a return of their principal.

Managerial Accounting

Managerial Accounting is where accounting associated with gathering and articulating the financial information for inside organizations such as managers and staff.

You may compare it to the financial accounting which is concerned with information for external individuals. The Institute of Certified Management Accountants states that management accountants are the ‘value creators’ among accountants, thereby taking their place between the finance people and the financial accountants in the business organization.

Managers use financial information to take better business decisions. They use a variety of techniques such as variance analysis, risk management, and cost-volume-profit analysis to predict the best forward-looking information as possible.

Cost Accounting

Some professionals consider Cost-Accounting as a part of Managerial-Accounting and some think that Cost-Accounting is a different functional area of accounting. Cost-Accounting and Managerial-Accounting surely overlap.

Cost-Accounting looks at the costs of production for a business by looking at the fixed costs of the products and services, they sell and their input costs. Input costs compared to output cost for the measurement and better understanding of the financial performance of a firm with directly regards to the production costs.

Elements often used: indirect costs, or overhead, raw materials, as well as labor. Managers use the information from Cost-Accounting to establish the cost control programs for their business firms.

What are the Tools for Financial Analysis?

Financial statements are essential tools used to analyze a company’s performance. Management utilizes several techniques to determine a company’s financial condition and make decisions regarding improvements.

1. Comparative Statements

Comparative statements deal with the comparison of different items of the Profit and Loss Account and Balance Sheets of two or more periods. Separate comparative statements are prepared for Profit and Loss Account as Comparative Income Statement and for Balance Sheets.

As a rule, any financial statement can be presented in the form of comparative statement such as comparative balance sheet, comparative profit and loss account, comparative cost of production statement, comparative statement of working capital and the like.

2. Comparative Income Statement

Three important information are obtained from the Comparative Income Statement. They are Gross Profit, Operating Profit and Net Profit. The changes or the improvement in the profitability of the business concern is find out over a period of time. If the changes or improvement is not satisfactory, the management can find out the reasons for it and some corrective action can be taken.

3. Comparative Balance Sheet

The financial condition of the business concern can find out by preparing a comparative balance sheet. The various items of the Balance sheet for two different periods are used. The assets are classified as current assets and fixed assets for comparison.

Likewise, the liabilities are classified as current liabilities, long-term liabilities and shareholders’ net worth. The term shareholders’ net worth includes Equity Share Capital, Preference Share Capital, Reserves and Surplus and the like.

4. Common Size Statements

A vertical presentation of financial information is followed for preparing common-size statements. Besides, the rupee value of financial statement contents are not taken into consideration. But, only percentage is considered for preparing common size statement.

The total assets or total liabilities or sales is taken as 100 and the balance items are compared to the total assets, total liabilities or sales in terms of percentage. Thus, a common size statement shows the relation of each component to the whole. Separate common size statement is prepared for profit and loss account as Common Size Income Statement and for balance sheet as Common Size Balance Sheet.

5. Trend Analysis

The ratios of different items for various periods are find out and then compared under this analysis. The analysis of the ratios over a period of years gives an idea of whether the business concern is trending upward or downward. This analysis is otherwise called as Pyramid Method.

6. Average Analysis

Whenever, the trend ratios are calculated for a business concern, such ratios are compared with industry average. These both trends can be presented on the graph paper also in the shape of curves. This presentation of facts in the shape of pictures makes the analysis and comparison more comprehensive and impressive.

7. Statement of Changes in Working Capital

The extent of increase or decrease of working capital is identified by preparing the statement of changes in working capital. The amount of net working capital is calculated by subtracting the sum of current liabilities from the sum of current assets. It does not detail the reasons for changes in working capital.

8. Fund Flow Analysis

Fund flow analysis deals with detailed sources and application of funds of the business concern for a specific period. It indicates where funds come from and how they are used during the period under review. It highlights the changes in the financial structure of the company.

9. Cash Flow Analysis

Cash flow analysis is based on the movement of cash and bank balances. In other words, the movement of cash instead of movement of working capital would be considered in the cash flow analysis. There are two types of cash flows. They are actual cash flows and notional cash flows.

10. Ratio Analysis

Ratio analysis is an attempt of developing meaningful relationship between individual items (or group of items) in the balance sheet or profit and loss account. Ratio analysis is not only useful to internal parties of business concern but also useful to external parties. Ratio analysis highlights the liquidity, solvency, profitability and capital gearing.

11. Cost Volume Profit Analysis

This analysis discloses the prevailing relationship among sales, cost and profit. The cost is divided into two. They are fixed cost and variable cost. There is a constant relationship between sales and variable cost. Cost analysis enables the management for better profit planning.

How does Accounting Software Help in Business Growth?

1. Optimized Business Processes

With the use of the latest accounting software, you can optimize your business processes to a great extent. These software make you work smarter and not harder. The time and effort you invest in managing bookkeeping, and other accounting tasks can be utilized in focusing on core business activities.

Apart from this, it lets you speed up the accounting process, along with providing a single screen view of entire financial data.

2. Secure & Accurate Accounting

The accounting software provides excellent security to the financial data by eliminating any possibility of unauthorized access or uninformed sharing with third-parties, along with zero scope of data loss due to its paperless structure. Accuracy is achieved with perfection through accounting software with its potential of handling complex mathematical calculations during tax preparation and otherwise.

3. Workload Sharing

The accounting workload is complicated as there are multiple tasks that need to be addressed by people with different expertise. Assigning these tasks to various team experts like a bookkeeper, auditor, preparer, CPA through login is much easier than manually taking care of the same.

4. Terminating Guesswork

Due to the manual management of the huge financial data, accountants were unable to gain clear insights like profit/loss, revenue trends, cash flow, asset/liability into it, relying more on guesswork. However, accounting software provides you with analytical tools to show you the present financial scenario and make financial decisions based on real facts and figures.

5. Relaxed Accounting Work

The manual paper-and-scale method of accounting is hardly used in the present times. Every business is looking to streamline its accounting operations through automation using accounting software which comprises of the latest features like automatic invoice processing, updating tax-related information regularly, graphics features for a better interface, complex calculations handling, and more.

6. Generates Quick Reports & Saves Cost, Time

Through accounting software, creating balance sheets, ledgers, and cash books become effortless, making you save a lot of time on the work to be done. Reducing human efforts mean saving considerably on the manual and infrastructure costs. The financial reports are generated quickly, providing a clear view of your income and expenses, eventually helping you to make better financial decisions.

7. Streamlined Invoicing

Cash management is indeed a top priority for businesses with invoice processing forming an integral part of it. An invoice system which is integrated lets you collect cash by automating invoice reminders to the customers, saving you from financial loss due to any non-payment.

8. Uncomplicated Tax Compliance

Invoices require taxes and accounting software to provide you with a platform that automates the tax amount on every invoice generated. This makes the audit and tax preparations extremely easy, along with the option of integration in order to compare ITRs and making calculation changes as per the latest policies.

9. Multiple Integration

The automated accounting software lets you integrate with other systems such as e-filing and online banking. This definitely saves you an enormous amount of time and effort as you get to make different financial executions on a single platform itself.

10. Boosting Client-Employee Relationship

With automated accounting, there is no scope of payment delays and invoice reminders. Information is conveyed, on the other end, quickly and timely, providing enough time to the clients for payments. This structured transaction processing leads to a better relationship between clients and employees.

11. Tracking Inventory

It is imperative to know how much stock you have in hand, and the accounting software helps you track exactly the same, even when the orders are processed. This removes any kind of vulnerability of going out of stock as you always have the option of ordering more in advance.

Selecting software for accounting constituting inventory management demands both money and time. It is essential to carefully assess your business needs before choosing any software, with a key focus on your present tracking process for inventory while buying.

12. Multiple Currencies Dealing

Dealing with multiple currencies, along with managing a plethora of accounting tasks manually is like asking a lot. With efficient accounting software, you can trade in multiple currencies and get relaxed for the changes related to the exchange rate.

13. Overseeing Cash Flow

Overseeing cash flow is a tough task as one needs to keep track of every cash transaction that is going outside or coming inside the business. The software lets you track invoices, incoming cash, and overdue payments, making you aware of any important financial transactions.

Read Also: Save your Business by Outsourcing your Accounting Needs

Future cash flow forecasts can be made since the accounts payable feature tracks bills upon arrival. So, let’s see which all software have the potential to provide you with all the above-mentioned benefits.

Final Words

As a freelancer, you already have a lot of things to worry about, and your accounting should not be one of them. So to make your work easier, use the accounting tools mentioned above and effectively manage your accounting needs.