How to Pick Online Accounting Software
nline accounting software can tackle one of the ugly headaches for eager freelancers: taking care of your money. We’ve talked about the ins and outs of freelance finances, but we haven’t talked about how to track those finances. Choosing an online accounting software for your freelance business can be a nightmare. Consider hiring managed it services for assistance.
Once upon a time you tracked your finances with pencil and paper. In the modern age, we upgraded to spreadsheets. If that wasn’t bad enough, someone invented desktop accounting software—bloated, excessive, overwhelming. Freelancers everywhere began to pull their hair out.
But it doesn’t have to be that bad. These days accounting has moved to the cloud and it’s opened up all kinds of opportunities for freelancers who want to track their money but aren’t exactly excited about it. Some of these online accounting software solutions might even make you enjoy accounting such as Oracle NetSuite Cloud ERP.
Wouldn’t that be a miracle?
Why Track Your Money?
Some of you get the need for online accounting software and can skip ahead. Others are just fine with what they’re doing, thank you very much. And maybe what you’re doing now works. But…
- If you’ve ever wanted to know more about how well your business is doing…
- If you’ve ever had a panic attack over your cashflow (or lack thereof)…
- If you’ve ever wondered if you can actually afford that new expense…
- If you’ve thought about hiring someone but have no idea if you can afford it…
- If you’ve ever thought there had to be a better way to run a business…
Then it might be time to upgrade your financial system. Or you know, start a system in the first place (no, just spending money is not a system).
Tracking Your Money Is Easier Today
Here’s how doing the books for your freelance business is getting easier:
- Cloud-based systems mean you can do it anywhere. Enter your expenses while watching TV. Now we’re talking progress.
- New technologies mean you can sync your bank accounts. No more manual data entry.
- Automate recurring tasks to save yourself time and sanity.
OK, so you don’t have to be limited to software on your desktop computer or a spreadsheet you can only access in one place. Good to see online accounting software joining us in the age of the app. So what are the options?
Online Accounting Software for Freelancers
Oh so many options. The choices are growing every day, but here’s a list of some of the bigger names in online accounting software:
- BuildMyBooks (claims “no accounting experience required”)
- Cheqbook (easy to use, with advanced features)
- ClearBooks (UK)
- FreeAgent (UK)
- FreshBooks (invoices)
- GoDaddy Online Bookkeeping (ecommerce, formerly Outright)
- Harvest (time tracking)
- Hiveage (online billing)
- Intacct (next level accounting)
- Kashoo (double-entry accounting)
- Kashflow (UK)
- Mint (designed for personal finance)
- MYOB (AU)
- NetSuite (ecommerce, CRM & accounting)
- Quickbooks Online (cloud version of the old desktop software)
- Sage (small to mid-size businesses)
- Sasuu (UK)
- Wave (actually free)
- Xero (good for teams)
- Zoho Books (inventory, time tracking)
And if that’s not enough help, you can buy an $80 ebook that takes 282 pages to review just seven of those online accounting software choices.
Whoa. That’s overwhelming. The real question is how do you know what you need?
What Do You Need?
Let’s look at some specific areas to help you answer that question:
- Accounting – First and foremost, these services offer basic accounting. It’s an automated step up from using a spreadsheet, but it’s a step (or two) below hiring an accountant. If this is your primary use, make sure it works the way you want, properly syncs with your bank and is something you won’t hate using.
- Invoices – A lot of these services will handle invoicing for you. It can be convenient to integrate invoicing with your accounting, but if you already have a working invoice system it might not be necessary. (And if you’re picky about how your invoices work, a third-party system might be a horrible idea.)
- Payroll – Do you have employees or contractors you need to pay? Look for a system advanced enough to handle payroll and all the accompanying issues (taxes, benefits, etc.).
- Taxes – Do you do your own taxes or do you turn to a professional? Either way, make sure your choice can deliver what you need. If you hire a professional, you might even ask if they have a recommendation. If you do it yourself, consider taking some tax planning classes.
- Time tracking – Are you tracking your hours? You should be, even if you’re not billing hourly. If time tracking is an important component for you, look for a system that includes it. There are also plenty of stand-alone time tracking options, so you’ll need to decide if it’s important to have an integrated solution.
- Receipt tracking – Do you care to snap pics of every business receipt? It’s a great way to cut down on the paper you have to track, but if you don’t bother, don’t be swayed by the fancy apps.
- Budgeting – Tracking your income and expenses is one thing, but do you need help forecasting your money? Budgeting isn’t a standard feature, so shop with care.
- Reports – Tracking all your financial data is a good step. But what can make it awesome is actually using that data. One way to make data useful is to make it visual. Graphs! A lot of these services will have fancy looking graphs, but make sure they’re actually spitting out useful data.
- Importing – Do you have an existing accounting system you want to import? Check out each service’s import options.
- Exporting – If you’re the type to take a few different systems on an extended test drive, you might care about export options. You can get your data into the app, but can you get it out?
- Bill pay – Not every service offers simple bill pay and not every freelancer has loads of bills to pay. If this is a need, look for the service with more sophisticated options for not just tracking your expenses but paying them as well.
- Inventory management – If you’re selling stuff you need to keep track of it. This is above and beyond for most freelancers, so you probably need to look for specialized software.
Made a decision yet? Probably not. It’s a lot to wade through.
Online Accounting Software Tips
Here are some tips to help you weigh the options and make your choices:
- Try it – You’ll never know if a system lives up to the hype until you try it. Sync it with your bank, enter some data, see how it works.
- Be flexible – There are a lot of different ways to track your finances and you might need to learn a better system. Don’t be too rigid as you look for a solution that can work for you.
- Ask around – Talk to your fellow freelancers, ask your accountant, put out a question on Twitter. Nobody else can answer this question for you, but it never hurts to get some input and firsthand experience. That can be a good way to counter all the claims and fancy marketing each of these services churn out.
- It’s OK to switch – You’re not getting married to your online accounting software. You can always change your mind. Try something for a while and if it doesn’t work, move on to something else.
Find What Works
The whole point of tracking your finances with online accounting software is so you can quickly see how your business is doing, make any course-correcting decisions, and not take all day.
There’s a reason you’re not an accountant. Find something that works, so you can get back to work.