The Ultimate Guide to the Best Bookkeeping Software for the Self-Employed

Understanding Accounting Software

Accounting software is like the unsung hero of the business world. It keeps your financial data in check, makes sure everything adds up, and helps you avoid those dreaded tax penalties. Let’s break down why bookkeeping software is a game-changer and why you should care about cybersecurity in accounting.

Why Bookkeeping Software is a Must-Have

If you’re self-employed or running a small business, bookkeeping software is your new best friend. It takes the headache out of managing your finances and keeps everything neat and tidy. Here’s why you need it:

• Time-Saver: Automates boring tasks like invoicing, tracking expenses, and generating financial reports. You get more time to focus on growing your business.
• All-in-One: Keeps all your financial info in one spot. No more hunting for receipts or digging through spreadsheets.
• Stay Legal: Helps you stick to tax laws and regulations, so you don’t end up with nasty fines.
• Smart Decisions: Gives you real-time financial data, helping you make better business choices and keep an eye on your cash flow.

Want to know more about how bookkeeping can boost your business? Check out our article on bookkeeping value.

Cybersecurity in Accounting: Why It Matters

With everything going digital, keeping your financial data safe is a big deal. The average cost of a data breach is a whopping $4.45 million, and it’s only getting worse. Small businesses are especially at risk, with 60% going under within six months of a cyber attack. Just ask Gustafson & Co, an accounting firm in Oregon that had to shell out $50,000 after a data breach exposed info on 1,900 people.

Remember the Capital One data breach in 2019? An employee hacked into an Amazon Web Server and stole info from 100 million credit card applications. Scary stuff, right?

To keep your data safe, top accounting software like QuickBooks and Xero have beefed-up security features:

Software	Users (Millions)	Key Security Features
QuickBooks Online	7	Advanced encryption, firewall protection, multi-factor authentication, automatic backups, regular audits
Xero	2	SSL encryption, firewall protection, multi-factor authentication, automatic backups, regular audits

Choosing software with strong security features is a no-brainer. Protect your sensitive financial data and sleep better at night. For more tips on keeping your financial data safe, check out our guide on client bookkeeping solutions.

Best Bookkeeping Software for the Self-Employed

If you’re self-employed, picking the right bookkeeping software is a game-changer for keeping your finances in check. Here are some top picks:

QuickBooks

QuickBooks is a cloud-based accounting tool perfect for freelancers and small businesses. It offers real-time access, accurate reports, automated invoicing, and customizable templates. Plus, it makes teamwork with your accountant a breeze.

Key Features:

• Track income and expenses
• Invoice and accept payments
• Capture and organize receipts
• Track mileage
• Manage cash flow
• Run reports
• Handle 1099 contractors

Pricing Plans:

Plan	Price (per month)
Self-Employed/Independent Contractor	$15
Simple Start	$30
Essentials	$55
Plus	$85
Advanced	$200

For more details, check out our article on client bookkeeping solutions.

Xero

Xero is tailored for small businesses, accountants, and bookkeepers. It automates tasks, keeps records up-to-date, and supports collaboration. Xero connects with over 1,000 third-party apps and offers tools for different industries.

Key Features:

• Quotes and invoices
• Bank reconciliation
• Mobile app
• Project and time tracking
• Document storage

Pricing Plans:

Plan	Price (per month)
Starter	$25
Standard	$40
Premium	$54

Learn more in our guide on freelance bookkeeping.

FreshBooks

FreshBooks is ideal for freelancers, startups, and growing businesses. It provides real-time accounting tools, expense tracking, tax prep, and online invoicing.

Key Features:

• Unlimited invoicing
• Track unlimited expenses
• Mobile app
• Project time tracking
• Shareable reports
• Project management tools

Pricing Plans:

Plan	Price (per month)
Lite	$15
Plus	$25
Premium	$50
Select	Custom pricing

For more info, explore our article on bookkeeping training online.

TrulySmall Accounting

TrulySmall Accounting by Kashoo is aimed at small businesses like freelancers and contractors. It automates tasks with its Smart Inbox feature and offers a customizable dashboard.

Key Features:

• Smart Inbox for task automation
• Customizable dashboard
• Expense tracking
• Tax prep
• Invoicing

Pricing Plans:

Plan	Price (per month)
Annual Subscription	$18 (when paid annually)

A free 14-day trial is available. For more insights, visit our page on online bookkeeping courses.

By checking out these top bookkeeping software options, you can find the best fit for managing your finances. Whether it’s QuickBooks for its comprehensive features, Xero for third-party integrations, FreshBooks for ease of use, or TrulySmall Accounting for automation, each one has its perks to make bookkeeping simpler.

Best Bookkeeping Software Features

Picking the right bookkeeping software when you’re self-employed can feel like finding a needle in a haystack. But don’t sweat it—we’ve got the lowdown on what really matters: ease of use, top-notch security, and wallet-friendly pricing. Let’s break it down.

Easy-Peasy Interface

You don’t need a PhD in accounting to manage your books. The best software should be as easy to use as your favorite app. Here are some top picks:

• QuickBooks Online: This one’s a crowd-pleaser. It’s got real-time access, customizable invoices, and automated invoicing. Plus, you can easily loop in your accountant when tax season rolls around.
• FreshBooks: If simplicity is your jam, FreshBooks is your go-to. It offers unlimited invoicing, expense tracking, a mobile app, and project time tracking. Perfect for small business owners.
• Xero: Need something cloud-based with a mobile app? Xero’s got you covered. It also handles payroll and basic inventory management, making it a solid choice for micro-businesses.

Lockdown Security

Your financial data is like gold—keep it safe. Here’s how these software options stack up:

• QuickBooks Online: Think Fort Knox. It uses encryption, automatic backups, and multi-factor authentication to keep your data secure.
• FreshBooks: This one’s no slouch either. It employs SSL encryption and secure data storage to keep your info safe.
• Xero: Multiple layers of security, including two-step authentication and data encryption, make Xero a fortress for your financial data.

Price Tags That Won’t Break the Bank

Let’s talk dollars and cents. Here’s a quick look at what you’ll be spending:

Software	Starting Price (Monthly)	Features Included
QuickBooks Online	$12.50	Bank connectivity, income and expense tracking, cash flow management, app integration
FreshBooks	$15	Unlimited invoicing, expense tracking, mobile app, project management tools
Xero	$11	Basic invoice and bill management, simple inventory management, payroll integration
Wave	Free	Accounting, invoicing, multiple business management, unlimited users

Choosing the right bookkeeping software boils down to what you need and what you can afford. For more tips and tricks, check out our introduction to bookkeeping and bookkeeping courses for beginners in the UK. Happy number-crunching!

Picking the Right Software

Finding the best bookkeeping software for self-employed folks means weighing a few key things, checking out top options, and getting some solid recommendations that fit your needs.

What to Look For

When you’re on the hunt for bookkeeping software, keep these in mind:

• Ease of Use: It should be simple and straightforward.
• Features: Must-haves include invoicing, expense tracking, and financial reports.
• Cost: Make sure it fits your budget.
• Integrations: It should work well with other tools you use.
• Customer Support: Good support is a lifesaver when things go wrong.
• Scalability: Pick something that can grow with your business.

Top Software Showdown

Here’s a quick look at some of the best bookkeeping software for self-employed folks:

Feature	QuickBooks	Xero	FreshBooks	Wave
Ease of Use	High	Medium	High	High
Invoicing	Yes	Yes	Yes	Yes
Expense Tracking	Yes	Yes	Yes	Yes
Financial Reporting	Comprehensive	Limited	Advanced	Basic
Pricing (per month)	£12 – £40	£10 – £30	£12 – £40	Free
Integrations	Extensive	Extensive	Extensive	Limited
Customer Support	Excellent	Good	Excellent	Basic
Scalability	High	Medium	High	Low

Best Bets for Self-Employed Users

Based on the comparison, here are some top picks:

• QuickBooks: Great for those who need a full-featured solution with inventory management, time tracking, and cash flow management. It plays nice with apps like Stripe and PayPal. Perfect if you need detailed reports and room to grow. For more info on client bookkeeping solutions, QuickBooks is a solid choice.
• Xero: Ideal for micro-business owners needing a cloud-based platform with a mobile app and payroll integration. It offers simple inventory management and is good for businesses with a few invoices and bills each month. Explore freelance bookkeeping with Xero.
• FreshBooks: Best for service-based businesses thanks to its advanced invoicing features, easy-to-use interface, and affordability. FreshBooks is great for basic bookkeeping and client billing. Check out more on bookkeeping business with FreshBooks.
• Wave: Perfect if you’re looking for a free option with basic accounting and invoicing features. It allows multiple businesses in one account and unlimited users. However, it has higher fees for credit card payments and limited payroll availability. For those starting an online bookkeeping course, Wave can be an entry-level solution.

By considering these factors and recommendations, self-employed individuals can pick the best bookkeeping software that fits their needs and boosts their financial management. For more help, check out our level 2 bookkeeping course and how to become a bookkeeper UK.