Working for yourself can mean having a lot more freedom than being employed by somebody else, but there’s still plenty of day-to-day admin stuff to take care of. Central to that is keeping your books up to date and covering all of your own accounting tasks.
The solution? Make use of online accounting tools for sole proprietors, or sole traders as they’re referred to outside of the US.
While it's obviously possible to pay a Certified Public Accountant, or CPA to take care of your accounts, it’s also pretty straightforward to do them yourself. You can do just about anything online nowadays and, using online accounting tools it’s also possible to stay on top of your bookkeeping in much the same way as any other internet-related task.
Running your own business as a sole proprietor is much simpler than having a business with employees. This is mainly because it’s not so much the business as you that will be responsible for paying taxes due to the fact that the sole proprietorship delivers all of your income.
Armed with the right accounting tools it’s therefore easy to stay on top of your bookkeeping and your tax affairs too.
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Technology lies at the heart of working for yourself and online accounting tools not only let you manage your taxes but they also allow you to keep track of incomings and outgoings, get an overview of cash flow along with keeping track of expenses.
Better still, its possible to do all of this from just about any location, thanks to cloud-based accounting.
Using a cloud-based accounting package means that you can work from anywhere, by logging into your account and working on the go. Even the unavoidable tax return can be prepared in this way, which is mighty useful.
Cloud-based accounting software can be used via a laptop or tablet, but many packages let you take care of day-to-day chores using your smartphone too.
Of course, you might already be a reasonably seasoned user of something like Microsoft Excel, but using this or any other spreadsheet application doesn't offer anywhere near the same degree of flexibility as a dedicated online accounting tool.
While basic accounts can be carried out using spreadsheet software, it's nowhere near as quick or convenient as picking a dedicated cloud-based application.
Aside from its appeal of offering access from anywhere, online cloud-based accounting software will offer many simple and easy to use features and functions. You’ll be able to enjoy automated data entry for numerous tasks and there might be the ability to sync with bank and tax accounts.
An added bonus is bona fide accounting software packs in plenty of security into the equation too. On top of that, there’s plenty of freedom and flexibility offered by cloud-based packages, with the capacity for sharing data with your CPA if need be.
Another convenience factor is that most packages can be tailored so that you only pay for what you need.
Choosing the right online accounting tool is actually pretty straightforward. We’ve got a wealth of reviews in ours buying guides that can help pinpoint the right cloud-based package to suit your needs.
You can get accounting packages that are aimed specifically at sole proprietors, freelancers and in fact anyone working for themselves who doesn't employ anyone else.
However, it's worth have a look at online accounting packages that are scalable. After all, you might have a desire to expand at a later date, so knowing you’ve picked accounting software that can be added to in order to include growing business interests and also some employees is worth considering.
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One of the advantages of growing competition between software publishers is the way that many, if not most of them make trial versions of their packages available. This lets you dip into a few to try them out before you commit to any specific one.
And while there are free accounting packages on the market, the majority are paid-for.
Therefore you want to be sure you’ve picked a cloud-based accounting package that fits the bill. Some trial versions of accounting software don’t always include all of the features and functions, but there should be enough inside the application to let you make a reasonably informed decision.
We’ve reviewed most of the major players in the market, plus a few of the underdogs too.
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Pick a package
If you’re a sole proprietor then there are lots of different online accounting options, as you’ll see from our best accounting software guides. The guides actually contain a combination of applications that are paid for, along with several free options.
Keeping on top of tax is your main priority, and lets face it, this is at the core of staying on the right side of the law, then you’ll want to get yourself some best tax software. The likes of H&R Block, TurboTax, FreeTaxUSA, TaxAct, TaxSlayer, Jackson Hewitt Online and Credit Karma Tax are all well-known and widely used names in the US.
If you’re in the UK you’ve also got plenty of buying guide options including FreshBooks, QuickBooks, Xero, Sage Business Cloud Accounting, Kashoo, Zoho Books and Kashflow to name but a few. There are free options too, such as ZipBooks, Money Manager Ex, GnuCash and Wave.
Some software packages straddle geographical boundaries, so it doesn't really matter where you’re based. Generally these applications and their price tags are tailored to suit the market you’re in. Again, picking through our guides will get you off on the right foot. All you need to do then is decide which one is going to suit your needs best.
- Also take a look at our roundup of the best tax software for small businesses