Finance & Accounting Articles

5 Top-Rated Accounting Software Apps for Independent Contractors

by Abhishek Singh
Published on 26 January 2018

As an independent contractor, you may hop from one employer to another, with contracts lasting just a few weeks or months. This means you don't enjoy the luxury of having the payroll department handle your tax withholdings.

You're also on your own when it comes to expense tracking, invoice management, etc., and things can fall through the cracks if you're using paper and pencil or spreadsheets alone to manage your accounts.

You may have considered hiring an accountant-but that can be expensive.

Or, you can take control of your own financial records and automate your accounting tasks at the same time by using dedicated accounting software, which could be a less expensive option.

In this article, we're looking at the some of the best accounting software for independent contractors based on ratings and feedback from GetApp reviewers. We'll take a look at what users like about each platform, as well as their suggested improvements.

(Please note: The feedback given in each of the "Common user feedback trends" sections are the opinions of GetApp's reviewers, and do not represent the opinion of GetApp. Read more about our methodology at the bottom of this article.)

*Clio is not a dedicated accounting tool; it specializes in legal practice management. However, based on our analysis of user reviews data, a majority of reviewers who are independent contractors have rated the solution highest for managing their accounting tasks. Clio offers either an accounting module or features that specifically cater to accounting and financial management for independent contractors.

1. QuickBooks Online: Automatic mileage tracking for easy expense management

QuickBooks Online is cloud-based accounting software that lets you manage payments, view and send invoices, manage financial reports, and more on desktop and mobile.

In addition to its small business-focused application, QuickBooks Online offers a dedicated app for independent contractors, so you can decide which plan best fits your business needs and budget.

Key features of QuickBooks Online include:

  • Estimates and proposals: Create and send pricing estimates, proposals, bids, and quotes. Turn estimates into invoices once they're accepted.
  • Customizable invoices: Brand invoices with your business logo and colors and customize form entry fields.
  • Car mileage tracking: Records and stores vehicle mileage information through GPS tracking on a mobile device to automatically track transport expenses.
  • Tax estimation: Takes into account various financial parameters to calculate estimates for quarterly tax payments. There is also a TurboTax integration feature for help filing federal taxes.
  • Manage projects: Multitasking between various projects can lead to bottlenecks. QuickBooks Online helps to resolve these bottlenecks by adding each project as a subcustomer.

Dashboard and user interface for car mileage tracking in QuickBooks Online (Source: QuickBooks Online)

Common user feedback trends

Based on analysis of user reviews on GetApp from accounting software users that are independent contractors, here's an overview of the areas of QuickBooks Online they like best, as well as those they feel could use improvement.

What users like

  • Car mileage tracking is an added bonus: GetApp reviewers like the solution's online mileage tracking module, which uses their mobile device's GPS. They specifically like that they can create invoices based on actual miles covered instead of estimates.
  • Categorize expenses for easy tax reporting: GetApp reviewers like that QuickBooks Online lets them categorize their expenses by project and client, making it easier to invoice customers and file taxes at the end of the year.
  • Easily link your bank account to manage transactions: GetApp reviewers say that linking their bank accounts with the software is easy and doesn't require any technical know-how or support from customer service. Once the account is linked, they can view their expenses based on credit card transaction on the expenses dashboard.

User recommended improvements

  • Make it easier to learn for first-time users: GetApp reviewers feel that initially, the software can be difficult to use, and feel that it requires some basic understanding of bookkeeping and interpreting financial reports. They say they've had to invest time studying the training modules before they can use the system comprehensively.
  • Subscription-based pricing is a little costlier than average market price: GetApp reviewers state that the price of the subscription-based product is a little steep compared to the average price of other accounting software. Upgrading the current version of the solution to a new version is costly and reviewers would like to just pay a one-time fee.

Who should consider QuickBooks Online?

QuickBooks Online offers plans for self-employed individuals as well as tiered pricing plans for small businesses. So, any independent contractor looking for core accounting features should consider QuickBooks Online. In particular, independent contractors that track mileage expenses such as trucking and supply chain contractors and independent businesses that make house calls, including construction contractors, electricians, plumbers, etc. could find the features of this product useful.

2. FreshBooks: Dedicated accounting for self-employed workers

FreshBooks is cloud-based accounting software that helps you manage invoicing, expenses, payments, and project estimates. FreshBooks caters specifically to independent contractors, as it offers a dedicated accounting platform for self-employed individuals with a 30-day free trial.

Key features of the solution include:

  • Automated recurring invoices: Schedule regular invoices for repeat customers.
  • Mobile expense capture: Users can take a photo of receipts on mobile devices and bill the expense directly to clients.
  • Time tracking: Accurately capture billable hours and automatically pull them into invoices.
  • Reporting: Access reports about your business expenses with color coding for different types of spending, as well as reports on payment collection, profit and loss, sales tax summaries, and more.

Expense management dashboard in FreshBooks (Source: GetApp.com)

Common User Feedback Trends

Based on analysis of user reviews on GetApp from accounting software users that are independent contractors, here's an overview of the areas of FreshBooks they like best, as well as those they feel could use improvement.

What users like

  • Easy invoice management: GetApp reviewers say that managing invoices from a central location on the solution's dashboard keeps them more organized. They like that they can set up recurring invoices for automatic billing.
  • Handy automatic notifications for payment receipts: GetApp reviewers like that they receive an email notification whenever a transaction is made to verify that a client has reviewed or paid an invoice.

User recommended improvements

  • Clean up financial reports; offer more reporting options: GetApp reviewers feel that the solution does not generate detailed enough reports for payments and billing, and they'd like to see more filtering options to view payment reports.
  • Add more integrations with other tools: GetApp reviewers would like to see integrations with other third-party software tools such as Authorize.net, Toggl, or TSheets.

Who Should Consider FreshBooks?

Consider FreshBooks if you're looking for a solution that offers simple core accounting functions and that caters specifically to self-employed professionals.

3. Xero: Process payments faster

Xero is a cloud-based accounting solution that can help independent contractors process payments and streamline their expense and invoice management processes.

Key features of the software include:

  • Payment processing: Use customized online invoices and online payment options such as PayPal and Stripe.
  • Document storing and sharing: Store financial documents in one place and grant access to bookkeepers and accountants to collaborate in real time.
  • Financial data security: Data is encrypted and stored online and login is secured through two-step authentication. Users also have access control.
  • Multicurrency accounting: Send invoices and accept payments in over 160 currencies and assign currencies to specific clients.

Xero contacts dashboard that shows all customer balances (Source: GetApp.com)

Common User Feedback Trends

Based on analysis of user reviews on GetApp from accounting software users that are independent contractors, here's an overview of the areas of Xero they like best, as well as those they feel could use improvement.

What users like

  • Ease of use through multiple integration options: GetApp reviewers find the solution easy to use, as it integrates with their bank and other bookkeeping systems.
  • Streamlined user interface: GetApp reviewers like the user interface, saying they find it to be streamlined. They like that it provides a real-time visual representation of expense and payment details.
  • Mobile app: GetApp reviewers like Xero's mobile apps, which are available for both Android and iOS mobile devices. They especially like that they can take photos of receipts and store them for processing later while on the go.

User recommended improvements

  • Add more payroll options: GetApp reviewers indicate that they'd like to see more payroll options for the different state payroll and tax laws.

Who should consider Xero?

Consider Xero if you want the flexibility of processing payments through online payment gateways such as PayPal and Stripe. The solution also streamlines payment processing by storing contacts in a database, where you can view processed and pending payments.

4. Clio: For independent contractors in the legal profession

Clio is a cloud-based practice management solution designed for lawyers. It offers dedicated accounting and financial management features ranging from client billing, payment management, and integrations with accounting software. Key features of the solution include:

  • Trust accounting: Stay compliant while managing client funds collectively or in separate trust accounts, according to Interest on Lawyer Trust Accounts (IOLTA) arrangements and based on industry regulations.
  • Billing: Create and approve invoices through the solution's secure client portal. Use the portal to track unpaid bills, apply discounts, and automatically add interest calculations to late payments.
  • Integrations with accounting apps: The solution also integrates with dedicated accounting software platforms such as QuickBooks and Xero for managing income statements and balance sheets in greater detail.

Finance and accounting dashboard of Clio with budget forecasting (Source: GetApp.com)

Common User Feedback Trends

Based on analysis of user reviews on GetApp from accounting software users that are independent contractors, here's an overview of the areas of Clio they like best, as well as those they feel could use improvement.

What users like

  • User-friendly billing features: GetApp reviewers indicate that the software is great for billing, since it keeps track of time, costs associated with a file, and invoicing of clients.
  • Easy to learn through training and webinars: GetApp reviewers like that Clio offers many on-demand training webinars for new users to help them learn the billing features of the software.

User recommended improvements

  • Add more integrations: Although the software does offer options for integrating with accounting software, GetApp reviewers say that it lacks integration with email or contact management software, and they'd like to see more integrations for other features.
  • Simplify expense management: GetApp reviewers indicate that the expense management feature is difficult to understand for new users, as it requires some accounting knowledge.

Who should consider Clio?

If you are an independent contractor working in the legal profession, and you're searching for software that meets both your law practice management needs as well as your accounting needs, then this software could fit the bill.

5. Wave: Single entry for recurring invoices and billing

Wave helps independent contractors with income and expense tracking, customized invoices, quick payment processing with saved credit card details, and tax filings.

Key features of the solution include:

  • Recurring billing: Automatically bill, receive, and process payments from repeat customers with no need to add billing details more than once.
  • Receipt scanning: Scan receipts on your phone and send them to clients for billing purposes.
  • Expense management: Monitor the daily expenses of your business to stay on budget.

Recurring invoice dashboard feature in Wave (Source: Wave.com)

Common User Feedback Trends

Based on analysis of user reviews on GetApp from accounting software users that are independent contractors, here's an overview of the areas of Wave that they like best, as well as those they feel could use improvement.

What users like

  • Easy to process credit card payments: GetApp reviewers indicate that the solution makes it easy to accept credit card payments and e-checks, and they like that they can select clients from a drop-down menu that are eligible to pay electronically.
  • Cost effective compared to other accounting software: GetApp reviewers say that the software is much more cost effective compared to other popular accounting software since it's free and additional services such as payment processing and payroll are pay-as-you-go.

User recommended improvements

  • Improve slow load times: GetApp reviewers indicate that after adding a lot of financial data, payment processing slows down noticeably.

Who should consider Wave?

If you bill multiple clients-especially repeat clients-you should consider Wave to help automate redundant tasks related to billing and invoicing with recurring billing and credit card and bank payment processing.

Next steps for choosing accounting software

Check out more resources on GetApp to help narrow down the best accounting software for your independent contractor business:

  • See how QuickBooks Online, FreshBooks, Xero, and Wave stack up side-by-side on our comparison page.

Methodology

The solutions highlighted in this article are the accounting software solutions with the highest average overall user rating from independent contractors. For this article, we evaluated five accounting software tools with approximately 483 user reviews on GetApp (exclusively from independent contractors).

The criteria to shortlist the top five products is:

  • We analyzed reviews from users in GetApp's accounting directory and shortlisted those products that had 4+ out of five stars with a minimum of 20 user reviews.
  • The "common user feedback" sections include "what users like" and "user recommended improvements" for each product, based on feedback from users who left reviews.
  • The "who should consider this software" section is a summary of analysis conducted on the general comments from software users. This section highlights the most popular features of the software product and recommends who should consider buying that product and why.

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Apps mentioned in this article