They are many bookkeeping software available in market. However Accounting software for freelancer require to have bank reconciliation feature , generate report for profit and loss , balance sheet , payable etc. Accounting software need to have blow features , readymade reports which are required.

o Bank , Credit card reconciliation
o Invoicing
o Create Bills , expenses
o Track Accounts Payable
o Track Accounts Receivable
o Generate PO , Estimate
o Budgeting
o Profit and loss statement report
o Balance sheet report
o Sales Tax ( VAT / GST ) calculations

Below are best Accounting and bookkeeping software for Freelancer.

∙Quickbooks
∙Xero
∙Wave
∙Freshbooks
∙Zoho Books

Many software have options to add payment gateway like in invoice.

1. Keep Business & Personal Account different

Being a freelancer its may happen that your using your saving account (personal) for business and personal purpose. Using same account should be avoided. Apply for separate bank account for business and do business related transaction such as receipts , payment , expenses from same account. Using sperate bank account helps to keep track of personal and business numbers.

2. Know your Profit

Being an freelancer you may be working with different clients and different portals which provide task for freelancers. Bookkeeping and accounting for freelancers is required to know sales and expenses incurred for same. Some time freelancers charge clients on basis of hours spent on project. Your time is important, you need to keep records to same for accounting propose. Summarizing monthly sales and expenses give you number of profit / loss in business.

3. Get Paid Fast

We all have bills receivables for task completed or on going tasks. As freelancer you need to ensure you raises bills to client as terms of engagement and set due date to pay bills. Also in freelancers accounting softwares you can add link to pay bills. Also you can send automatic reminders for bills due.

4. Monitor Cash flow

Cash flow in business means money coming in and going out for business. Some time business is having profit in profit and loss statement but no actual cash profit. Accounting and bookkeeping for freelancers helps to keep track of cash flow. Knowing these cash flow numbers can help you to keep company cash positive.

5. Tax Filing

Paying taxes is important as running business. When your accounting data , records are correctly done you have ready number of taxes to paid. Based on your profit you may be paying taxes between 0 to 30% appx. Every transaction of business needed to recorded with accounting proof so you ensure paying correct and lower taxes. At year end you also need to ensure pass journal entries for depreciation of capital goods , provisions , bad debts etc.

Cash Basis

Many business use cash basis of accounting under Freelances model. Under Cash basis of accounting expenses or revenue is recognized only when they cash in received or paid . This method of accounting looks simple but have its own problem. As client pays Freelances after 1-2-3 weeks of interval this don’t give real picture of accounts. Before starting accounting for Freelances you need to select correct method.

Accrual Basis

Unlike the cash method, accrual accounting records revenue and expenses when they’re earned, not when they’re paid. This offers a more realistic idea of income and expenses over time, leveling out the sometimes unpredictable swings of cash accounting.

Business which are in nature of reseller requires accrual basis of accounting. If you make a sale at the end of one month but your customer’s payment doesn’t clear until the beginning of the next, accrual accounting will pair those transactions to offer a more accurate and reliable picture of your monthly sales.