Accounting software helps business owners understand how money flows in and out of their businesses. You can use it to track expenses, manage cash flow and accounts receivable, and forecast future profitability. The Wave app also tracks your time spent on tasks, making it easier to see how much you have left to accomplish. Whether you’re a business owner with multiple team members or are a sole proprietor, we specialize in servicing independent contractors with all of your accounting needs.

They safeguard sensitive information, which is particularly important in industries like healthcare and finance. The integration capabilities of software with other tools are essential for streamlined workflows and increased productivity. A robust integration framework allows different systems to communicate, ensuring data consistency and reducing manual intervention. This seamless interaction between tools can lead to enhanced operational efficiency. At Business.org, our research is meant to offer general product and service recommendations. We don’t guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Small business software

This can range from a physical filing system to digitally organizing receipts through a program like Quickbooks. Doing so can save headaches and stress during tax season and help prevent any potential penalties or issues with the IRS. Without this tool, we may overlook important deductions or miss out on receivable accounts.

If you make under $50K USD, Zoho Books’ free plan gives you features comparable to QuickBooks Online, FreshBooks, and Xero—all at no cost. And Zoho’s paid plans are similarly comprehensive with even more integration, accounting features, and client collaboration tools. Once you integrate Xero with your preferred ecommerce or inventory management app, the software automatically pulls in and categorizes your financial data to give you an accurate financial snapshot. It includes inventory management with each plan—even its cheapest, which costs just $13 a month. The platform provides a polished and consistent payments experience for both clients and contractors. They use major payment providers like Wise, PayPal, Payoneer, and Revolut to offer withdrawals in the currency of the contractor’s choice.

Support & Tools

• It’s simple and straightforward and has many nifty features that make life easier for a growing business like you.
• Integration with banking systems and tax preparation services is also common, streamlining the financial management process.
• I chose Buildertrend because it offers a complete set of financial tools tailored for contractors.

This includes expenses related to training, implementation, and potential downtimes during the transition period. By anticipating these costs, one can plan more effectively and avoid unpleasant surprises. For instance, detailed documentation or customer support might mitigate some of these concerns. Navigating the multitude of options can be daunting, especially for those new to self-employment. That’s why we’ve done the heavy lifting, analyzing various platforms to highlight those that excel in simplicity, functionality, and value.

The Best Accounting Software Services for Contractors in 2025

An independent contractor is an individual who may run their own business but also performs work for other businesses. Individuals classified as independent contractors are not considered employees of your business. AMS products can help increase accounting accuracy and efficiency, whether you need construction payroll software, nanny software, or other independent contractor support. FreshBooks is a cloud accounting software designed for entrepreneurs who are serious about running their businesses. It’s made to help you take total control of your cash flow without having to worry about any of the complicated details that go with running a business.

How Much Should an Independent Contractor Put Aside for Taxes?

It also offers coverage for potential compliance risks, helping businesses avoid costly mistakes related to labor laws and misclassification. Managing job costs, budgets and profitability is a challenge for contractors of all sizes. Whether it’s handling overlapping timelines, tracking expenses or avoiding unexpected overruns, the financial side of construction projects can be overwhelming.

• If you manage other contractors as part of your own contracting job, most freelance accounting software includes 1099 contractor management with their basic plans.
• Record and keep track of daily contract spendings and expense transactions using simple voice commands then let Instabooks automatically categorise them in expense related accounts accurately.
• You must file 1099-NEC forms with the IRS and the state (if applicable), as well as provide a copy to the recipient.
• FreshBooks also offers double-entry accounting and real-time financial reporting, which is essential for maintaining accurate financial records.
• You might use an independent contractor to perform work or complete a specific project at your business.
• Specialized tools to streamline quarterly estimated payments and annual filing for self-employed taxes are a must.

Tax Preparation Made Easy

For independent contractors and sole proprietors, managing finances doesn’t have to be stressful. Fire off estimates and invoices, snap receipts, and track expenses—even on-the-go—with Wave’s simple money management solutions for contractors. Wave’s expense tracking features come with the option to categorize, add notes, and search past transactions. Make sure your contracting business is as solid as your work by understanding the costs of your labour, materials and supplies.

You can generate reports such as profit and loss statements, balance sheets, and cash flow statements. These reports can be customized to focus on specific projects or time periods, providing valuable insights into your business’s financial health. Advanced analytics features can also help identify trends and areas for improvement.

In addition, regularly reviewing them can reveal patterns in late payments that may require action from collections or a change in payment policies. Accurate records not only help ensure that you receive proper payment for your work, but they can also serve as important proof in case of an IRS audit. With robust invoicing functionality, freelancers can professionalize billing interactions with a standardized process. Of these capabilities, receipt scanning and automated tax form population are especially vital for simplifying freelancer finances.

But even the Standard version, priced at just $15 per month billed annually, which offers up to 5,000 invoices a year should be enough for most part-timers. We reviewed accounting apps on a variety of platforms, for mobile devices and desktop computers accounting software for independent contractors alike, so you can assess which features meet your needs as an independent contractor. LYFE Accounting has extensive experience in servicing independent contractors. We manage books, file tax returns and project and budget future sales and expenses. Notable features include the ability to convert billable expenses into invoices, track mileage, and integrate with payment gateways. You likely bill your clients per hour of work that your team performs on your projects.

With construction-specific dashboards, tools like Sage Intacct Construction allow contractors to access detailed reports in minutes. These dashboards can also be used in client presentations or team meetings to highlight progress and key performance indicators (KPIs). Imagine processing dozens of invoices manually every week, only to discover a major billing error that delays supplier payments and disrupts schedules. Accounts payable (AP) automation eliminates this headache by digitizing workflows. If you’re a freelancer and want simple accounting with a focus on your needs, FreshBooks is a solid choice.

How can accounting software aid in financial reporting and analysis for contractors?

Yes, ZarMoney offers a 30-day free trial, allowing you to explore all the features before committing to a subscription. With a Pro Plan subscription, you can connect your bank account with Wave and automatically import your transactions. “Wave makes your life a whole lot easier and takes that worry off you. I’ve tried Quickbooks—it’s a bit more complicated and technical, and takes more time to set up.”