What Are Payroll Taxes? And How Do You Calculate Them?

The post What Are Payroll Taxes? And How Do You Calculate Them? appeared first on Merchant Maverick.

“”

What Are Debits And Credits?

The post What Are Debits And Credits? appeared first on Merchant Maverick.

“”

These Top 7 Invoicing Tools Are Your Answer To Sending Small Business Invoices

The post These Top 7 Invoicing Tools Are Your Answer To Sending Small Business Invoices appeared first on Merchant Maverick.

“”

Cash VS Accrual Accounting: Which Is Better For Your Business?

The post Cash VS Accrual Accounting: Which Is Better For Your Business? appeared first on Merchant Maverick.

“”

Everything You Need To Know About Small Business Payroll

The post Everything You Need To Know About Small Business Payroll appeared first on Merchant Maverick.

“”

What Is A Sole Proprietorship?

Before you launch your business, you have to check a few items off your to-do list. Perhaps you have to purchase inventory, find a commercial building to lease, and explore different types of business software. Maybe you operate a home-based business so your list isn’t as extensive. No matter what type of business you plan to open, though, there’s one thing all business owners must do: select a business structure.

There’s no getting around choosing your business structure. The way your business is set up determines both how you’ll file your taxes and how much you’ll pay. Your business structure may provide you with personal liability protection against the debts and obligations of the business. It will also determine specific requirements for your business, from registering with your state to ongoing requirements (like holding meetings and recording meeting minutes).

If your business has just one owner, one business structure to consider is the sole proprietorship. But before you make that critical decision, it’s important to understand what a sole proprietorship is, registration and paperwork requirements associated with this structure, and the benefits and drawbacks of being a sole proprietor.

While the business structure you choose should ultimately be what’s best for your business, we hope to make the decision process a little easier by breaking down exactly what to expect as a sole proprietor. Keep reading to find out more.

Sole Proprietorship Definition

Merriam-Webster defines a sole proprietorship as “a business owned and controlled by one person who is solely liable for its obligations.”

Let’s break down this definition. A sole proprietorship is a business that belongs to and is run by only one person. If your business has multiple owners, you’ll be unable to operate as a sole proprietorship.

In a sole proprietorship, the owner alone is liable for the obligations of the business. A sole proprietorship is not a separate legal entity. This means that the owner  — you — is responsible for the debts, obligations, and liabilities of the business. Your personal assets may be seized to fulfill debts, and lawsuits can be brought against you personally.

Many people choose this structure because a sole proprietorship is the quickest, easiest, and most inexpensive way to start and operate a new business. A sole proprietor is not required to register with the state. Simply engaging in business activities legally establishes a sole proprietorship. However, the sole proprietor is still required to apply for the appropriate business licenses and permits needed to legally operate in their state.

Sole proprietors can operate under their own legal names or can create a fictitious trade name when doing business. Using a trade name does not establish a separate legal entity, and the business owner will still be held responsible for the liabilities of the business.

Sole proprietors do not have to file separate tax returns for their businesses. Instead, these business owners report business profits, losses, and expenses on a Schedule C form. Self-employment tax for the sole proprietor is reported on a Schedule SE. The Schedule C and Schedule SE are both filed with the business owner’s Form 1040.
We’ll dive deeper into the benefits and drawbacks a little later in this article.

Next, we’ll compare sole proprietorships to other business structures so you can better determine which works best for you.

How Is A Sole Proprietorship Different From A Partnership?

The biggest difference between a sole proprietorship and a partnership is the number of owners of the business. A sole proprietorship has a single owner. A partnership has two or more owners.

Comparing a sole proprietorship with a limited partnership (LP) and limited liability partnership (LLP) reveals a few additional differences. With these types of partnerships, limited partners are protected from personal liability. These partnerships are also more expensive and more complicated to form because they require registering with the state.

Other than the number of owners, a sole proprietorship and a general partnership (GP) are very similar. Neither has to be registered with the state to exist. The profits and losses for a sole proprietorship and general partnership are also filed on personal tax returns.

How Is A Sole Proprietorship Different From A Corporation?

A sole proprietorship is very different from a corporation. A corporation is the most expensive business entity to form, whereas a sole proprietorship is very inexpensive. Corporations must be registered with the state. There are also multiple ongoing requirements corporations must meet, such as holding meetings and having a board of directors. Sole proprietors do not have to register and there are no ongoing requirements.

Corporations may have multiple owners, whereas a sole proprietorship has just one owner. Corporations can also raise capital through the sale of stock — something a sole proprietor can not do.

Corporations also offer the best personal liability protection for its owners. As previously discussed, sole proprietors are held personally responsible for the liabilities of the business.

Another big difference between sole proprietorships and corporations is how each business structure is taxed. Sole proprietors are able to report business profits and losses on their personal tax returns. Corporations are taxed differently — a corporation is the only business structure that must pay separate income taxes. If dividends are paid to shareholders, shareholders must report this on their personal tax returns, resulting in double taxation for the corporation.

How Is A Sole Proprietorship Different From An LLC?

A limited liability company, or LLC, combines benefits of different business entities. An LLC must register with the state, and there are some fees associated with starting an LLC. This is in contrast with sole proprietorships, which are not required to register and are the least expensive to start.

Another difference between the two is that LLCs have liability protections in place to protect the personal assets of the owners. Sole proprietors do not receive these same protections. LLCs may also have multiple owners, whereas a sole proprietorship is limited to a single owner.

There may also be differences in how the LLC is taxed. Owners of an LLC can choose how they are taxed. In some cases, they may opt to be taxed as a sole proprietorship. In other cases, however, owners may choose to be taxed as a partnership or corporation.

What Types Of Businesses Are Sole Proprietorships?

A sole proprietorship is best for businesses with one owner that wants full control of the business without complicated requirements or additional expenses. Self-employed business owners, home-based businesses, independent contractors, and even some franchise owners may choose this business structure.

Any business can be a sole proprietorship provided there is just one owner and the owner is aware of the benefits and risks of this business structure. Smaller businesses are better suited for sole proprietorships. Companies that plan to grow much larger and want to take out business loans or raise large amounts of capital in the future would benefit from another business structure, such as a corporation or LLC. Some common small businesses that are sole proprietorships include:

  • Home Healthcare Businesses
  • Catering Companies
  • Housekeeping Services
  • Virtual Assistants
  • Freelance Writers, Editors, Or Designers
  • Tutors
  • Computer Repair Technicians
  • Landscapers
  • Bookkeepers

Regardless of what type of business you operate, the business structure you select should be based on the long-term needs and goals of your business.

Benefits Of Sole Proprietorships

After breaking down the definition of a sole proprietorship, you should have at least some idea of why business owners would choose this structure. However, let’s take a closer look at the full list of benefits of operating your business as a sole proprietor.

  • Less Expensive: Sole proprietorships are the easiest and least expensive forms of business structures. This is ideal for business owners that aim to keep their startup costs as low as possible.
  • No Registration Required: Sole proprietors simply need to participate in business activities to exist. No state registration is required. However, any applicable permits and licenses will need to obtained to legally operate in your state.
  • No Ongoing Requirements: Sole proprietors are not required to hold meetings, record meeting minutes, or have a board of directors.
  • Full Control Of The Business: As a sole proprietor, you will be the sole owner of your business. There are no additional owners or shareholders to consider. You get to make all business decisions and you receive all of the profits.
  • Easier Tax Returns: Sole proprietors can file their business profits, losses, and expenses on their personal tax returns with just two additional forms.

Drawbacks Of Sole Proprietorships

While being a sole proprietor definitely comes with its benefits, there are also drawbacks to consider when you’re weighing out your decision. Those drawbacks include:

  • No Liability Protection: As a sole proprietor, you will be held responsible for the debts, obligations, and liabilities of your business. If you default on a loan, lenders can come after your personal assets, such as your bank account, vehicle, or real estate. If your business goes bankrupt, your personal finances could be affected. Finally, lawsuits can be filed against you personally, which would also put your assets at risk.
  • Financing Challenges: As a sole proprietor, getting business financing can be a challenge. Most lenders — from traditional lenders like banks to online alternative lenders — only provide financing to registered entities. Sole proprietors also can’t sell stock in the business as a way to raise capital. As a sole proprietor, you may have to get more creative with your financing, such as launching a crowdfunding campaign or taking out a personal loan for business.

Final Thoughts

For many aspiring business owners, operating a sole proprietorship is the right path to entrepreneurship. However, what works for some doesn’t always work for others. After weighing out the pros and cons of a sole proprietorship, consider consulting with an accountant and/or attorney to help determine if a sole proprietorship will meet the needs and goals of your business.

Ready to learn more? Download our free beginner’s guides for business. You can also learn more about the different types of business structures to help you further pinpoint which option is best for you.

The post What Is A Sole Proprietorship? appeared first on Merchant Maverick.

“”

How To Find The Perfect Accountant For Your Small Business

How To Find The Perfect Accountant For Your Small Business

Everyone wants their small business to succeed, which means everyone needs a small business accountant. Yes, even if you use accounting software and do your own bookkeeping, a professional accountant is indispensable.

But how do you even find an accountant? And once you do, how do you know if they’re any good?

In this post, we’ll provide five easy steps for finding an accountant for your business. We’ll teach you where to look and how to tell a good accountant from a bad accountant. We’ll also give you the top tips and tricks for choosing the perfect accountant.

How To Find An Accountant For Your Business
Step #1: Pinpoint Why You Need An Accountant
Step #2: Choose the Right Type of Accountant For Your Business
Step #3: Know Where To Look
Step #4: Learn What To Look For
Step #5: Ask The Right Questions

Know When & Why You Need An Accountant

How To Find The Perfect Accountant For Your Small Business

The first step is knowing when to hire an accountant. Spoiler alert: the answer is now.

Sure tech-savvy business owners can use accounting software to manage their own bookkeeping, but when it comes to actual accounting, you’ll want the many advantages of having an expert onboard. As a small business owner, you should do everything you can to set yourself up for financial success; the best way to do that is to hire an accountant.

Accountants do so much more than just help you file your taxes. An accountant can give sound business advice when you’re setting up your business, analyzing your cash flow, trying to improve efficiency, facing an audit, and much more. Read our full post When Should You Hire An Accountant For Your Business to learn every instance when an accountant can help.

When beginning the process of hiring an accountant, it’s important to pinpoint why you want help and exactly what you want your accountant to do for you. Common tasks accountants can perform include:

  • Basic bookkeeping tasks
  • Verifying your bookkeeper’s work
  • Setting up your business
  • Offering business advice
  • Creating reports
  • Analyzing your business’s finances and assets
  • Cash flow management and projections
  • Providing tax advice
  • Filing tax returns
  • Maximizing your tax deductions

It’s important to know which tasks you want your accountant to perform before starting your search as services vary from accountant to accountant.

For example, if you just want tax advice and help filing your tax returns, you may want an enrolled agent (EA) instead of a full-on accountant. If you want business advice and tax advice, a certified public accountant (CPA) with expertise in your business industry may be a better way to go.

Take a careful look at your finances and your business’s current situation and create a list of problem areas where you would like help from a professional. Do you need help managing your cash flow? Are you worried you aren’t taking all of the deductions you’re eligible for? Are you simply overwhelmed by finances and need a helping hand with the day to day work? Pinpoint these concerns and write them down in a list. Later, when you interview prospective accountants, you can return to your list and determine if their services would be a good solution to address your business’s needs.

Why Picking The Right Accountant For Your Business Matters

How To Find The Perfect Accountant For Your Small Business

As a business owner, you pick tools all the time that help your business — accounting software, a new ecommerce site, a file organizer for your office — you name it. One, if not the, most important tool you can pick is a good accountant. A good accountant will help you successfully manage your finances so that your business can be successful and grow.

But there isn’t a one size fits all accountant. The second step in finding the perfect accountant for your small business is knowing which type of accountant you need. There are three main types of accounting professionals: bookkeepers, accountants, and CPAs.

Type Definition

Bookkeeper

Bookkeepers handle the day-to-day finances and bookkeeping tasks of a business. Tasks can include invoicing, reconciling accounts, managing accounts payable and receivable, creating reports, entering data, and running payroll.

Accountant

Accountants offer business and tax advice and handle the big picture finances of a business. Tasks can include bookkeeping, business advice and planning, tax advice, tax filing, cash flow management, creating reports, and analyzing business financials.

Certified Public Accountant (CPA)

A CPA, or certified public accountant, is and accountant who has passed a certification exam. Often considered more knowledgeable and trustworthy because of the education and work it takes to get and maintain their licensing. Tasks can include everything an accountant can do, plus the ability to create audit reports and represent your business legally before the IRS.

If you are overwhelmed by daily financial takes and looking to save time, a bookkeeper might be the best way to go as they are often cheaper than accountants. However, that doesn’t mean you should hire just a bookkeeper and call it good. You still need an accountant. An accountant will provide insightful business and tax advice that a bookkeeper can’t.

So the real question becomes, does your business need an accountant or a CPA?

All CPAs are accountants, but not all accountants are CPAs. Here’s how accountants and CPAs differ and what advantages each can offer your business:

Certified Public Accountant (CPA) Accountant

Must have a Bachelor’s and have successfully passed the CPA certification exam

Generally has a bachelor’s degree, preferably in accounting

Offers advice and insight about the big picture finances of a business, and can often offer deeper knowledge of tax codes

Offers advice and insight about the big picture finances of a business

Can create audit reports and review reports

Can only create compilation reports

Can legally represent a client

Cannot legally represent a client

Often an experienced CPA will charge more than a traditional accountant, but because of their rigorous education and certification, many business owners view CPAs as more qualified and trustworthy. Plus, a CPA can legally represent your business before the IRS in case of a tax audit. If these are qualities your business requires, you can narrow your search down to CPAs specifically.

Another thing to be aware of is that accountants can specialize in certain areas.

Type Definition

Forensic Accountant

An accountant who analyzes books for fraud, inaccuracies, and discrepancies. Often tasked with figuring out if an employee is stealing from the business.

Management Accountant

An accountant who helps businesses understand how certain decisions affect their finances. Tasks include planning, budgeting, business strategy, and risk management.

Cost Accountant

An accountant who focuses on current costs and how they can be improved. Tasks include cost analysis and budgeting.

Project Accountant

An accountant hired on a project-by-project basis to manage and oversee a specific business project. Tasks include management, approving expenses, project invoicing, job costing, and maintaining budgets.

Knowing which type of accountant you need and what you need them to do will help guide your search.

Where To Find An Accountant

How To Find The Perfect Accountant For Your Small Business

Step three: where can you find an accountant?

Well, there’s always the good ol’ Internet, but let’s face it — there are just some things you shouldn’t Google and an accountant is one of them. The best way to find an accountant is by getting a referral.

Ask your friends and family if they know of any good local accountants. See what accountant your fellow business owners use. Ask your local Chamber of Commerce or other local small business organizations and clubs if they have any recommendations. One tip from the accounting software provider Patriot Software is that oftentimes if you are a member of your local Chamber of Commerce, you’ll have access to accountants who partner with the organization and provide discounts for their services.

A personal referral is one of the best ways to find a trustworthy accountant, but if this doesn’t work, there are some trusted sources you can use to find and vet a potential accountant including:

  • The American Institute of Certified Public Accountants (AICPA)
  • The IRS Directory
  • CPAdirectory.com
  • Accountant-finder.com

If you use existing accounting software, you can often find referrals to certified accountants through your accounting software company. The nice part about this is that the accountants will already be familiar with the software you use.

Factors To Consider When Choosing An Accountant

How To Find The Perfect Accountant For Your Small Business

The fourth and most important step to finding the perfect accountant is knowing what to look for. Here are some of the key factors to consider.

Credentials

Pay attention to the prospective accountant’s credentials. Are they a certified public accountant? Do they have any additional credentials such as a CMA (certified management accountant) or CFE (certified fraud examiner)? Are they licensed to practice in your state? Find an accountant whose credentials you value and trust.

Experience

In addition to credentials, an accountant’s experience speaks volumes. Learn where they went to school, how long they’ve been in business, and what area they specialize in. Do they have experience with your specific type of business and industry? This expertise will be key in choosing an accountant who will help you grow.

Services Offered

Every accountant specializes in different areas and offers a variety of services from basic bookkeeping to taxes to audits to business planning and more. Learn exactly which services and tasks a prospective accountant will perform and make sure their work lines up with your business’s wants and needs.

Location

Ask yourself if location matters. In the past, a local accountant was the only way to go. Now, with the rise of the internet, you could opt for a remote accountant. Ask yourself how important face-to-face interaction with your accountant is so you can find the right fit for your business.

Cost

As with anything, the cost can make or break your decision. Take a careful look at your budget (or take this time to create a small business budget if you don’t already have one) and see how much you can afford to spend on an accountant. When interviewing prospective accountants, ask them about their fees and pricing structure. You want to get a good deal, but more importantly, you want to get a good accountant, so don’t sacrifice quality for cost.

Reputation

When choosing an accountant, analyze the prospective accountant’s reputation. Ask for referrals and speak to current clients. Do a little LinkedIn stalking and see how the prospective accountant interacts with their clients. Are they nice? Do they seem excited about their work? Are the customer reviews positive? These are all good signs.

Personality

As a business owner, you’re going to be working closely with your accountant so personality matters. Make sure a prospective accountant is someone you can talk with, work well with, and get along with. Figure out if they are fiscally conservative or aggressive. You want an accountant who pushes your business to grow, but you don’t want someone who is on the completely opposite end of the spectrum from you and makes you feel uncomfortable about your finances.

These factors will help you evaluate how well an accountant will fit your business and its needs.

Characteristics Of A Good Accountant

How To Find The Perfect Accountant For Your Small Business

In addition to the key factors for evaluating an accountant, you also want to look for the qualities that make a good accountant.  A good accountant should be:

Trustworthy

Above all else, a good accountant should be trustworthy. Not only will you be turning to them for wisdom and advice, but they will also have access to sensitive information about you and your business. You want someone who you can trust and communicate with easily. You should feel confident in their ability to keep your information protected and private.

One of the best ways to gauge this is by asking about the accountant’s privacy policy and/or asking existing clients about their experience with the accountant.

Good Communicator

When looking for an accountant, you’ll want to focus on hiring a good communicator that will keep you posted on the status of accounts, taxes, and business reports. Since accountants often have to explain confusing accounting concepts, you’ll also want someone who is a good teacher and skips the accounting jargon so you can easily understand your business’s finances.

Timely

An accountant should value your time and perform the services you ask of them in a timely manner. A good indicator of this is if they show up on time for your consultation/interview with them. You can also ask existing clients about the accountant’s track record.

Detail Oriented & Organized

When it comes to accounting, it’s all in the details. Accountants have to be incredibly organized and detail-oriented to handle bookkeeping tasks and successfully analyze every aspect of your business’s finances.

Personable

A good accountant should be friendly and have a personality that you get along well with. You’ll be spending a lot of time with your accountant, so you want someone that is a good fit for your business.

Committed

Your accountant should be committed to their job as well as to your business. You want someone who is dedicated to his or her work and who is invested in the success of your business.

Knowledgeable & Wise

As accountants are a source of business advice, you want an accountant who is knowledgeable and wise. CPAs are often the most knowledgeable when it comes to accounting and taxes as they have to meet education requirements every year and stay up to date on the latest tax laws. You also want someone who is knowledgeable about your specific type of business and industry so they can offer sound advice to help your business succeed.

When you meet with a prospective accountant, try to get a feel for how well they display these key characteristics and be sure to talk to existing clients about their experiences with the prospective accountant.

Key Questions To Ask Before Hiring An Accountant

How To Find The Perfect Accountant For Your Small Business

The fifth and most crucial step to finding an accountant is actually meeting with them face to face. You’ll want to set up a consultation to get a feeling of who the accountant is, what services they offer, and if they’re a good fit for your business. Accountants want you to work with them, so most offer free consultations.

Treat the consultation like an interview. Just as you’d perform a job interview to see if a potential employee is going to work for your business, interview a prospective accountant to see if he or she can fill the role you need for your business.

Here are fifteen key questions to ask before hiring an accountant:

What experience and credentials do you have?

Ask the accountant what experience, credentials, and licensing they have. Are they a CPA? Do they have any extra credentials like a CMA? And do these certifications match up with the needs of your business?

How long have you been an accountant?

Often, you’ll want a seasoned accountant who has a lot of experience with accounting and your business’s industry.

What made you decide to become an accountant?

This question allows you to get a feel for the accountant’s priorities and personality. Did they go into accounting because they love their work and want to help businesses or did they want a good paycheck? The answer to this can speak volumes about a person and be a good indicator of how well you’ll get along with them.

What types of clients and size of business do you work with?

You want an accountant who has experience working with your business size and type. For example, if you’re a freelancer, you don’t want an accountant who has never had to file Schedule Cs. The more experience an accountant has with businesses similar to yours, the better they’ll be able to help you succeed.

Do you have experience working with the IRS?

If having a CPA who can represent you before the IRS is important to your business, you’ll want an accountant who has previous experience with audits.

What services can you provide my business?

This question is key. Different accountants may perform different services and tasks. Before hiring an accountant, you’ll want to be 100% clear about what they can do for you. If their services match up with your list of business needs, great! If not, you’ll want to move on to the next prospect.

Which accounting programs are you familiar with?

This could be a make it or break it situation for your business. Not every accountant will work with every accounting program. Some require you use QuickBooks, some only work with Xero. Others may be more willing to work with your existing software. If you’re incredibly attached to your accounting software, you’ll need to find an accountant who works with it.

How much do you charge for your services, and how do you bill your clients?

This is probably one of the first questions that come to mind. It’s important to have a clear understanding of exactly how much an accountant charges and how they bill their clients. Some charge per hour, some charge fixed fees for tasks, and others use monthly retainers. Make sure you know exactly how much to pay ahead of time, but also remember that cost isn’t everything. The accountant’s experience and valuable services they can provide your business are just as (if not more) important than the cost.

Will you be doing all of the work or do you delegate or outsource tasks?

Oftentimes, accountants will delegate certain tasks internally to other members of their firm or even outsource certain tasks. Ask who you will be working with most often and what privacy policies they have in place for their outsourcing. As always, never do anything you don’t feel comfortable with, so if you want an accountant who will be doing all of the work themselves, that’s totally okay. There are plenty out there who do.

Will you work directly with my bookkeeper?

If you already have a bookkeeper, ask if your accountant is willing to work with them. Oftentimes accountants will have specific instructions for bookkeepers about how certain transactions should be recorded, and the two should work closely together to ensure your books are balanced and accurate.

When are you available to your clients and how would we communicate with you?

Make sure you know how and when you can reach the accountant if you need them. Choose an accountant whose availability and response times match your wants and needs as a business owner.

What is your privacy policy?

Accountants have access to sensitive information about you and your business, like your social security number. Ask what security procedures they have in place and how they protect your privacy. Verify that they will not share your information with third-parties.

How can you help me grow my small business?

This question can give you an idea of what the accountant can do for your business and how they can help your business succeed.

Do you have any references I can contact?

Contacting current clients and asking about their experience with a prospective accountant is one of the best ways to gauge the accountant’s reputation and work.

Is there anything else I need to know about working with you?

This question allows your accountant to mention anything you may have forgotten and gives them a chance to explain why you should work with them.

Do you have any questions for me about my business?

If they say “no,” it’s a red flag. You want an accountant who is interested and invested in your business. This question gives them a chance to demonstrate that care.

Tips For Finding The Perfect Accountant

How To Find The Perfect Accountant For Your Small Business

Here are some of our tops tips and trick to help you in your search for the perfect small business accountant.

1. Ask For Referrals

Networking isn’t just about gaining potential clients but also accessing more resources. Put those networking skills to good use and ask friends, family, and other businesses for accountant referrals. This is often the quickest way of finding an accountant you can trust.

2. Cheaper Isn’t Always Better

We all like to save money, but sometimes cheaper isn’t always better. For example, an accountant just starting out might charge less to file your tax return, but an experienced accountant who charges more could get the tax return done in half the time. When choosing an accountant, don’t just look at the numbers. Look at quality as well.

3. Do Your Research

Choosing an accountant is one business decision you don’t want to rush. Don’t be afraid to take your time, meet a prospective accountant face to face, and ask questions. Check out the accountant’s reputation on LinkedIn and Yelp to see what customers have to say. View how they interact on their social media accounts. Do as much research as you can so you can feel confident in your decision.

4. Treat It Like An Interview

Choosing an accountant can seem daunting, so treat it like something you already know. Hiring an accountant is just like hiring an employee. You’re interviewing them to see if they’d be a good fit for your business. If you like them, great! If not, there are plenty of accountants in the sea.

5. Negotiate Your Fees

It’s always worth a shot. Test the waters and see how movable your accountant’s fees and pricing structure are. Try negotiating for lower fees or ask the accountant’s advice on how you can keep the fees low. Maybe they won’t change the rates, but they might tell you certain bookkeeping tasks you can perform to make their job faster (since most accountants charge by the hour, this can help save you some money).

Bottom Line: Trust Your Gut

When choosing an accountant, it all comes down to trusting your intuition. Trust your gut, listen to your instincts, follow your heart, and so on (don’t make us sing a Disney song about it). Seriously though, if you have a bad feeling about someone, or even if your personalities just don’t mash up, move on and look for an accountant you can trust and work well with.

The Hunt Is On

It’s as simple as that!

  • Step 1: Know what you need your accountant to do for you.
  • Step 2: Know which type of accountant you need.
  • Step 3: Know where to look for an accountant.
  • Step 4: Know what to look for in a good accountant.
  • Step 5: Know what questions to ask a potential accountant.

Follow our tips and tricks to help you find the perfect accountant and read our comprehensive accounting reviews to find the perfect accounting software to work with them.

The post How To Find The Perfect Accountant For Your Small Business appeared first on Merchant Maverick.

“”

When To Hire An Accountant For Small Business

When To Hire An Accountant For Small Business

Running a business can be quite a juggling act. Between finding the right business software to getting the funding you need to buying business insurance to managing the actual day to day processes of your business, some things get put on the back burner.

Accounting and bookkeeping are often the first places business owners fall behind, but this is the last area where you want to drop the ball. Managing your finances is the key to a successful business. But when can you manage your books on your own and when should you hire an accountant?

In this post, we’ll cover when you should hire an accountant and how much it’s going to cost you.

When Should I Do My Own Accounting?

Can I Do My Own Accounting?

We all love a good DIY, but let’s face it, we don’t want your business to become a Pinterest DIY fail. Sometimes, you just need a professional. But is accounting one of those times? Can you do your own business accounting?

To answer this question, let’s first talk about the difference between bookkeeping and accounting.

Although the phrases are often used interchangeably, bookkeeping and accounting are not the same things. Bookkeeping consists of daily business finance processes, like data entry, bank reconciliation, entering sales and expenses, creating reports, etc. Accounting analyzes those reports and data and turns that information into actionable insight about your business’s big-picture finances.

Here are some of the other differences between bookkeeping and accounting:

Bookkeeper Accountant

Handles the day-to-day financials of a business

Offers advice and insight about the big picture finances of a business

Compiles reports and business data

Analyzes reports and business data in order to offer actionable advice

Often has real-world experience, and sometimes a certification, instead of a degree

Generally has a bachelor’s degree, preferably in accounting

Can assist with payroll and sales taxes, but does not file tax returns

Files business and personal tax returns

Has knowledge of the business’s finances only

Has knowledge of the business’s finances and client’s personal finances

A business owner can do their own bookkeeping, but actual accounting should be done by a professional.

If business owners have the time and want to be hands-on with their finances, they can handle bookkeeping tasks like:

  • Bank reconciliation
  • Invoicing customers
  • Making payments
  • Accounts payable
  • Accounts receivable
  • Running payroll
  • Creating reports

Accounting software makes it feasible for business owners to perform these tasks with relative ease and manage their books successfully. However, we always recommend that business owners turn to accountants for business and tax advice.

Even as someone who is very familiar with dozens of accounting programs, if I started a business, the first thing I would do is hire an accountant. Yes, I could handle my own bookkeeping and day-to-day finances, but the advice of accountants is indispensable for running a successful business and creating and achieving long-term financial goals. Accountants can verify your bookkeeping, give business advice, analyze areas where your business can grow, offer tax advice, maximize your tax deductions, and much more.

Additionally, just because you can do your own bookkeeping, doesn’t mean you should. If financial tasks are eating up your time and taking away from the success of your business, hire a bookkeeper or delegate some of the tasks to a trusted employee. This will free up your time so you can get back to growing and running a successful business.

Oftentimes, businesses have both a bookkeeper and an accountant. Bookkeepers are more affordable, so they are a better option for daily finance tasks, whereas a better use of your money and your accountant’s time is big picture finances and business planning.

Remember: If you hire an in-house bookkeeper, make sure that you divide accounting tasks. No matter how trustworthy an employee is, you should never have one person in charge of all the books as this is the easiest way for fraud to occur. Delegate accounting jobs and put strong internal programs in place to prevent fraud, or consider outsourcing your bookkeeping instead.

When Should I Hire An Accountant?

Signs You Need To Hire An Accountant

As a business owner, you can handle your own bookkeeping, but when should you hire an accountant? What are the signs your business needs an accountant? And if you already have an accountant, when are the times you should turn to them for help?

Here are fifteen cases when you should hire an accountant for your small business:

1) When Starting A Business

The early stages of business are incredibly important. Put your best foot forward and set your business on the path to success by hiring an accountant as soon as you start a business. An accountant can help you:

  • Choose the right type of business entity (like a sole proprietor, partnership, LLC, etc.)
  • Set up your business EIN and any state licenses or requirements
  • Choose the right accounting software for managing your business
  • Create a business plan
  • Create a tax plan and explain which deductions you need to record through the year

And more importantly, they’ll be able to advise you on how to run a financially successful business.

2) When Incorporating Your Business

If you are starting out and want to become an LLC or if you want to make the jump to incorporating your business, an accountant will guide you through that process.

3) When You Need Business Advice

We said it once and we’ll say it again, one of the biggest benefits of hiring an accountant is the business expertise and knowledge you gain access to. Turn to your accountant when you need business advice. Is your cash flow lower than you’d like? Are you losing money on COGs and can’t figure out why? Having trouble obtaining certain data about your business? An accountant can help.

4) When Filing Taxes

One of the biggest parts of an accountant’s job is preparing and filing taxes. An accountant will help you with your personal and business tax returns. They’ll know which forms you need to fill out, which deductions you qualify for, and how to appease the IRS so you can sleep easy come tax season.

5) When Planning For The Future

If you need advice on how to grow your business and prepare for the future, an accountant can offer guidance and help you create a business plan.

6) When You Need Help Managing Cash Flow

Cash flow is the lifeblood of your business. Without enough cash flow, you won’t be able to pay your bills or employees; too much positive cash flow and you aren’t investing your extra money wisely. An accountant can help analyze cash flow trends, give cash flow predictions, and offer suggestions to improve your financial situation.

7) When You Need Advanced Business Analysis & Reporting

Accountants are experts in business analysis. Not sure exactly where your money is going? Want to know where you can cut back and save money? Accountants know all of this and more. They can help create reports and give financial insight and analytics, so you can take that information and use it to improve your business.

8) When You Want To Save Time On Financial Tasks

As we mentioned earlier, if you are spending to much time on managing your finances, hiring an accountant can free up your schedule so you can focus on running your business. (If you need help with daily tasks, we recommend choosing a bookkeeper over an accountant to save money on services. Read our full post CPA VS Accountant: Which Is Right For You? to learn more.)

9) When Buying Or Selling A Business

If you are considering buying a business/franchise or expanding your current business, talk to an accountant first. They’ll be able to assess if the purchase is a wise financial move. Additionally, if you need to sell your business, an accountant will walk you through the process.

10) When Buying Or Selling Property (And Other Assets)

Along the same vein, talk to your accountant before buying or selling business assets like property, equipment, office furniture, etc. Because accountants know your business finances, they’ll be able to tell you if the purchase is a wise investment.

For example, they’ll tell you if you have the cash flow to buy all new computers for the office or if you should wait until next month when the cash flow trends predict more sales. Accountants will also help you manage your assets, track depreciation, and properly write off the tax deductions you’re eligible for. When selling property or other assets, accountants will know how to records this on your taxes properly.

11) When Applying For A Loan

Believe it or not, having an accountant can help improve your chances of getting a loan. Lenders want to see that you are fiscally responsible and some lenders, like Fundbox, require that you’ve been using an accounting solution for a certain amount of time in order to be eligible for the loan. Accountants can also offer insight into how the loan will affect your business finances.

12) When Facing A Tax Audit

No one wants to be audited by the IRS, but in business, you have to prepare for the worse and hope for the best. And if the worse does happen, you want an accountant — a CPA to be exact — on your side. A CPA, or certified public accountant, can legally represent you and your business before the IRS in the case of an audit. Read our post on CPAs VS Accountants to learn which is best for your business.

13) When You Suspect Someone Is Stealing From You

This is another worst-case scenario, but if you suspect someone is cooking the books and stealing money from your business, you’ll need to hire a forensic accountant to investigate the fraud.

14) When Going Public

If you have a public corporation or want to go forward with an IPO (initial public offering), you’ll need an accountant. Public corporations are required to have audit reports to show to investors. Only a CPA can prepare these reports for you.

15) Whenever You Feel Out Of Your Depth

Bottom line: If you aren’t sure about some aspect of your business or its finances, ask an accountant. Accountants are invaluable resources that can help you whenever you feel out of your depth or like you don’t know what you’re doing.

Benefits Of  Hiring An Accountant

When Should Your Hire An Accountant For Your Small Business

Hiring an accountant will allow you to sit back and relax. You can trust that your finances are in good hands and get back to running your business with the advice and time you need to grow successfully.

Here are some of the biggest benefits of hiring an accountant:

  • Business advice
  • Quality assurance
  • Save time on bookkeeping
  • Tax support
  • Reporting and analytics
  • Managing cash flow
  • Peace of mind

Another important benefit of accountants (CPAs in particular), is that a certified public accountant can legally represent you and your business if needed. This peace of mind is priceless.

How Much Does Hiring An Accountant Cost?

Cost of Hiring An Accountant

It may seem contradictory that to manage your money, you have to spend your money on hiring an accountant, but the cost is more than worth it. Which probably leaves you asking, how much is this going to cost me anyway?

There is no set answer for how much an accountant costs. The price is going to vary significantly depending on:

  • Your business
  • The complexity of your accounting
  • The services you require
  • Whether you hire a bookkeeper, accountant, or CPA
  • The accountant’s experience
  • Location

Most accountants charge by the hour and will give you an estimate of how much the services you require will cost. The best way to figure out how much an accountant will cost is by deciding what you need your accountant to do and then searching for the right fit. Get quotes from multiple accountants and CPAs, ask if they do free consultations, and gather information and referrals from other business owners.

Also, remember that cheaper isn’t always better. A more experienced CPA may charge more than an accountant who’s just getting started, but your business may prefer the expertise of a CPA. Or, maybe one accountant charges a lower monthly fee but another, more expensive accountant is faster — the time saved could be money saved as well.

The real question isn’t how much an accountant will cost, but, can you afford not to have an accountant? That’s a rhetorical question. This is no time to be a Scrooge. The benefits of hiring a professional accountant far outweigh the cost. And, if you choose to forgo an accountant, your business and its finances may suffer. Plus, you’d have to do your own taxes, and let’s be honest, who wants that?

Next Step

It’s true! Behind every good business is a great accountant. Accountants offer financial wisdom and business insight, They make sure your books are balanced and that you get the most out of your tax returns. They walk you through business plans, cash flow management, and can even represent you before the IRS in case of an audit.

Accountants give you the tools to help your business succeed and are an important asset to have. Now that you know when to hire an accountant read our full post CPA VS Accountant: Which Is Right For You? to help you find the perfect accounting professional for your business. Then hop on over to our post How To Find The Perfect Accountant For Your Business to take the next step.

The post When To Hire An Accountant For Small Business appeared first on Merchant Maverick.

“”

How To Find Your Business EIN Number

EIN

Tax season is upon us, and if you are a small business owner, there is a good chance that you will need your Employer Identification Number (EIN) to file business taxes. For example, if you have an EIN for the first time this year, or are using a new CPA or service to file your business taxes, you will need to bring your EIN and other information to your accountant when you file your business taxes. There are also various other reasons you might need your EIN, such as to open a business bank account, open an online store, or apply for business financing. If you have misplaced your EIN, or aren’t sure if you even have one, you have come to the right place! Read on to learn what an EIN is, how you can find your EIN, and how you can apply for an EIN if you don’t already have one.

What Is An EIN?

An EIN (also sometimes called a “business tax ID number”) is a unique 9-digit number that identifies your company, similar to the way your social security number represents your personal identity. Specifically, your EIN identifies your business to the IRS. However, in addition to IRS-related filings such as business taxes, you might also need your EIN to apply for a business license, apply for a business loan, or open a business bank account.

The IRS requires most, but not all business types to have an EIN. For example, most sole proprietors and LLCs with no employees are not required to have an EIN and can instead use their social security number as their taxpayer identification number. As the name indicates, employer ID numbers are required for companies that employ people; if you have employees, then you need an EIN. Even if you are not required to have an EIN, you may opt to get one in order to establish your business as its own entity, separate from your personal identity. For example, having an EIN can help you establish your business credit profile so you won’t have to use your personal credit for your business.

How To Find Your EIN

If you have applied for and received an EIN in the past, then it shouldn’t be too difficult to find it. You’ll just have to do a little digging.

Method 1: Check Your Business Documents

Your EIN can be found on many of your important business documents, whether you have physical or virtual copies of these items. You should have the easiest time finding your EIN on your EIN confirmation letter from the IRS, and on your previous business tax returns.

Here are some documents where you can find your EIN:

  • Your EIN Confirmation Letter — The document the IRS issued when you originally applied for the EIN
  • Previously filed business tax returns — Your EIN should appear prominently at the top of your federal return
  • Your business credit report
  • Business licenses or permits
  • Business bank statements
  • Other tax filings, such as 1099 forms issued to independent contractors
  • Old business loan applications
  • Any tax notices from the IRS

Method 2: Run Your Business Credit Report

Okay, so let’s say you don’t have any copies of the above documents on-hand and you need your EIN, ASAP. Another option is to run your business credit report online and get your EIN that way. This is not free, but it’s a quick and easy way to get your EIN (or another company’s EIN), and it’s a good idea to check your business credit report from time to time anyway.

The three major business credit scoring agencies are Dun & Bradstreet, Equifax, and Experian. Equifax and Experian are more appropriate for smaller, less-established companies, and Experian offers the cheapest business credit report at $39.95.

Method 3: Call The IRS

You can also get your EIN by simply calling the IRS and asking them for it. Just keep in mind that they might have you on hold for a long time. From the IRS’s website:

Ask the IRS to search for your EIN by calling the Business & Specialty Tax Line at 800-829-4933. The hours of operation are 7:00 a.m. – 7:00 p.m. local time, Monday through Friday. An assistor will ask you for identifying information and provide the number to you over the telephone, as long as you are a person who is  authorized to receive it. Examples of an authorized person include, but are not limited to, a sole proprietor, a partner in a partnership, a corporate officer, a trustee of a trust, or an executor of an estate.

Method 4: Ask Someone Else

IRS hold times too long? Call someone else who might know your EIN.

Here are some people who should be able to look up your EIN and give it to you over the phone:

  • Your account manager at the bank where you do your business banking
  • Your accountant (or you can consult your accounting software)
  • Your CPA
  • Any organization that you have a business license or permit from

Method 5: Use Other EIN Lookup Options

There are a few other places where you should be able to look up your EIN online:

  • Your online account with the bank where you do business
  • For publicly traded companies, the SEC’s online database
  • For nonprofits, the free Melissa database

As a last resort, you could also try a paid EIN database, but I would only recommend this if you’ve exhausted all other options. And if you’ve gone through all the other options and still can’t find your EIN, well … are you sure you even have an EIN?

Don’t Have An EIN? Here’s How To Get One

If you’ve read all the way to the end of this post without finding your EIN, odds are that you probably don’t have one. Or, you may have discovered that although you have an EIN, you need to apply for a new one. This may be the case if your ownership or business structure has changed, or you are subject to a business bankruptcy proceeding.

Fortunately, an EIN is actually pretty easy to apply for and obtain.

As long as your company is located inside the United States or a U.S.-owned territory and you have a taxpayer ID number such as your SSN or ITIN (Individual Taxpayer Identification Number), you can apply for an EIN on the IRS’s website.  The application is short and sweet, and you will receive an EIN immediately upon successful form completion and validation of your information.

Note that while you will receive your EIN immediately online, it will take up to two weeks before your EIN becomes part of the IRS’s permanent records. You will have to wait until this happens before you can use your EIN to file an electronic tax return, make an electronic payment, or pass the IRS Taxpayer Identification Number matching program.

The IRS’s online EIN assistant is secure, but if you’re not comfortable submitting sensitive info online, you can download a PDF of Form SS-4 (also from the IRS’s website) and apply via snail mail.

Final Thoughts

For just about any business owner, an Employer Identification Number, or EIN, is a very useful thing to have. It’s useful for completing various legal tasks related to your business, such as filing taxes. You also need an EIN to build your business credit profile or apply for a business loan.

If you already have an EIN and need it in a hurry, don’t panic; it shouldn’t be too difficult to find. If you need to apply for an EIN, either for the first time or because you need a new EIN, this is also a quick and easy process. Once you have an EIN or have rediscovered it after doing some digging, please keep track of it because it will likely only be a matter of time before you need to retrieve it again.

The post How To Find Your Business EIN Number appeared first on Merchant Maverick.

“”

Best Accounting Software For Freelancers

Best Freelance Accounting Software

There are over 55 million freelancers in the US. With perks like being your own boss, setting your own schedule, and the flexibility to work from anywhere, it’s easy to see why freelancing is becoming such a popular choice. Whether you are self-employed full-time or are freelancing on the side to earn some extra income, there are key software tools that can help you run a more effective and profitable business — the most important being accounting software.

As a freelancer, it’s easy to focus on growing your business, finding new clients, creating marketing campaigns — anything but accounting. However, having a strong accounting process and being in control of your business’s finances is the key to running a successful business.

Luckily, there are plenty of easy to use, affordable accounting solutions that will help you manage your freelance finances and taxes quickly so you can get back to doing what you love.

In this post, we’ll share the top accounting software for freelancers. We’ll also share some other great freelance tools that you should know about to help your business succeed, including everything from email marketing software to website builders to mobile payment apps and more. We’ve spent hours researching and testing software so that you can find the perfect software solutions to run your freelance business.

heading QuickBooks Self-Employed AND CO Wave

Best Accounting Software for Freelancers

Best Accounting Software for Freelancers

Best Accounting Software for Freelancers

ReviewCompare

ReviewCompare

ReviewCompare

Pricing

$10 – $17/month

$0 – $18/month

$0/month

Size of Business

Self-Employed

Self-Employed

Small

Ease of Use

Very Easy

Very Easy

Very Easy

Customer Service

Fair

Very good

Poor

Number of Users

1

1

1

Number of Integrations

4

10

4

Cloud-Based or Installed

Cloud-Based

Cloud-Based

Cloud-Based

Mobile Apps

iOS & Android

iOS & Android

iOS & Android

Characteristics Of Good Freelance Accounting Software

In terms of accounting software, freelancers have very specific needs. Most traditional small business accounting software simply won’t fit the bill. Freelancers need an easy-to-use financial management solution designed specifically for the self-employed. Here are some of the key characteristics a good freelance accounting software should have:

  • Affordable: For freelancers, every penny counts. With a slim or nonexistent accounting budget, freelancers need a solution that is free or offers affordable, low monthly payments.
  • Easy To Use: Good accounting software should be easy to use as most freelancers don’t have time to spend hours balancing the books. Many also may have little to no previous accounting experience so they need something that is easy to learn and understand.
  • Time-Saving Automations: All accounting software should feature automations, but freelancers are in particular need of any way to save time. Standard automations include automatic receipt uploading, mileage tracking, and live bank feeds.
  • Manage Personal & Business Finances: While freelancers should open a separate business banking account to safeguard against tax audits, this simply isn’t the reality for many self-employed individuals. Because of this, many freelancers need to be able to separate their personal expenses from their business expenses using their accounting software
  • Good Organization: As a freelancer, it’s easy to put finances on the back burner, but knowing your exact income and expenses is key to running a successful business. Accounting software should help you stay organized, run key financial statements, and make more informed business decisions.
  • Tax Support: With estimated quarterly taxes and ever-changing deductions, freelance taxes can be overwhelming. The best freelance accounting software will include tax support to help you manage your self-employed taxes.
  • Support Resources: Good accounting software will also provide you with ample learning materials to help you better your business.

We weighed all of these factors when selecting the best accounting software for freelancers. Each of the top three accounting options displays many, if not all, of the features listed above to help make managing your freelance finances as simple as possible.

1) QuickBooks Self-Employed

Best For…Best Accounting Software for Freelancers

Overall freelance accounting and tax support. Ideal for filing directly with Turbo Tax.

Created in 2014, QuickBooks Self-Employed was designed specifically to help freelancers manage their finances and file their taxes easily. QuickBooks Self-Employed is incredibly easy to use, offers great mobile apps, and has the best tax support of all three programs on this list. The software helps you calculate your estimated quarterly taxes, track your mileage, find other deductions like the home office deduction, and even has a Turbo Tax integration for easy filing. On top of tax support, QBSE also helps freelancers keep track of their income and expenses.

The software is ideal for freelancers looking for tax support, a way to separate personal and business expenses, and basic expense tracking.

Pros Cons

Suited for freelancers

Limited invoice features

Calculates estimated quarterly taxes

No state tax support

Easy to use

Turbo Tax integration

Pricing

QuickBooks Self-Employed offers two pricing plans ranging from $10 – $17/month. The difference between the two is that the larger plan includes a built-in Turbo Tax integration and the ability to pay estimated quarterly taxes online.

Features

Best Freelance Accounting Software

QuickBooks Self-Employed supports a good amount of features, especially where taxes are concerned. Here’s an idea of what QuickBooks Self-Employed has to offer:

  • Track income and expenses
  • Separate personal and business expenses
  • Invoicing
  • Record tax deductions
  • Fixed asset management
  • Calculate estimated quarterly taxes

Ease Of Use

QuickBooks Self-Employed is incredibly easy to use. It has a modern, well-organized UI that takes very little time to learn and offers strong mobile apps that are also easy to navigate.

Customer Support

QuickBooks Self-Employed’s customer support has its pros and cons. There’s no phone support, but there is a live chat feature if you want to get in touch with a representative directly. The good news is that QBSE provides a great selection of learning resources for freelancers including a comprehensive help center and a small business center chock full of business advice.

Takeaway

QuickBooks Self-Employed is one of the best accounting and tax support solutions out there for the self-employed. The software offers the most advanced level of tax support on the market, and while this isn’t a full-fledged accounting app, it allows freelancers to manage their income and expenses.

Read our full QuickBooks Self-Employed review to find out if this software is right for your business.

2) AND CO

Best For…
Best Accounting Software for Freelancers

Freelancers looking for strong accounting, good customer support, and the ability to create and send contracts to clients.

Founded in 2015, AND CO is an up-and-coming freelance accounting software that was recently acquired by Fiverr, one of the leading freelance marketplaces. The software is easy to use, offers great customer support, and provides traditional accounting features like time tracking and project management. While the software does not offer tax support, it does have a one-of-a-kind contract feature that allows you to create legal contracts for projects that are compliant with the Freelancers Union. This allows you to dictate who retains rights to your work and accept signatures directly from clients.

AND CO is ideal for freelancers who don’t need the extra tax support of QuickBooks Self-Employed and would rather have more traditional accounting features, contracts, and better customer support.

Pros Cons

Suited for freelancers

No tax support

Easy to use

Unsuited for product-based businesses

Good customer support

Limited integrations

Strong mobile apps

Pricing

AND CO has a free plan for freelancers with a single client and a paid plan which costs $18/month. The larger plan includes unlimited reports and more advanced proposals and contracts.

Features

Best Accounting Software for Freelancers

While AND CO may be lacking in tax support, the software has a lot of great features going for it. Here are some of the features AND CO has to offer:

  • Invoicing
  • Contact management
  • Expense tracking
  • Time tracking
  • Project management
  • Proposals
  • Contracts
  • Subscriptions

Ease Of Use

AND CO is incredibly easy to use. The software was originally designed solely as an iPhone app so the mobile apps are also easy to navigate.

Customer Support

AND CO offers great customer support. Representatives are generally kind and quick to respond to questions. The company also offers great business tools and support resources for freelancers, as well as all of Fiverr’s extensive freelance resources.

Takeaway

AND CO is a great accounting and finance management tool for freelancers. The main drawback is that there is no tax support. However, you won’t find such developed proposal and contract features anywhere else.

Read our complete AND CO review to see if this freelance tool is right for you.

3) Wave

Best For…Best Freelance Accounting Software

Freelancers looking for a complete accounting solution for free.

Wave is a free accounting software solution that offers an incredible number of features for $0/month. While the software wasn’t designed specifically for freelancers like QuickBooks Self-Employed and AND CO, Wave is one of the best accounting programs to fit the needs of freelancers. It’s affordable, easy to use, and allows business owners to separate personal and business accounting.

The software is ideal for self-employed individuals looking for a full accounting solution or those who need an affordable way to manage their freelance finances.

Pros Cons

Free

Limited integrations

Easy to use

Poor customer support

Good feature set

Limited mobile apps

Positive customer reviews

Pricing

Wave only offers one accounting package and it’s completely free. There are no user limits or feature limits. You get all of the great features of Wave for $0/month. The only extra costs are payment processing, payroll, and professional bookkeeping services.

Features

Best Accounting Software for Freelancers

Of all three options on this list, Wave offers the most features. While you won’t find tax support, Wave does offer strong accounting and is full-fledged accounting software. Because of Wave is actual accounting software, it’s the only program on this list that will allow you to actually balance the books. Here are the features you’ll find with Wave:

  • Invoicing
  • Estimates
  • Contact management
  • Expense tracking
  • Accounts payable
  • Inventory
  • Reports

Ease Of Use

Wave is well-organized and its modern UI is easy to navigate.

Customer Support

Wave offers many great support resources; however, getting in touch with an actual representative is difficult. There is no phone support and response times are slow.

Takeaway

Wave is an affordable accounting program that gives you strong accounting and tons of features without breaking the bank. The software does not offer tax support, but it does offer payroll, making it a scalable solution if you plan on growing your freelancing business. The professional bookkeeping services are also great for freelancers who aren’t comfortable doing their own accounting or simply don’t have the time.

Read our full Wave review to see if this accounting software is right for you.

Other Great Freelance Tools

Your freelancing business is your baby, and as it takes a village to raise a child, it can also take an army of integrations to run a business. There are tons of great freelancing tools that can help you manage and grow specific areas of your business, like email marketing, invoicing, ecommerce, and more. Here are some of the top freelance software tools we recommend.

The Best Invoicing Software For Freelancers

If your freelance business relies heavily on invoicing and isn’t quite ready for all of the other features included with accounting software, invoicing software could be a simpler alternative to meet your business needs.

Zoho Invoice

Best Invoicing Software for Freelancers

Zoho Invoice is an easy to use, cloud-based invoicing program with incredible invoicing features. With over 15 invoice templates to choose from and international invoicing options, Zoho Invoice has a lot to offer. Read our complete Zoho Invoice review to learn everything this software is capable of.

InvoiceraBest Invoicing Software for Freelancers

Invoicera is also a could-based program with a good feature set and attractive invoice templates. A forever free plan and over 35 payment gateway integrations are just a few of the perks of this invoicing option. Read our complete Invoicera review to learn if this software is right for you.

Visit our invoicing software reviews for more options or compare our top favorite invoicing solutions for small businesses.

The Best Receipt Management Software For Freelancers

Business owners are all too familiar with the dreaded receipt shoebox. Receipt management software or expense tracking software can help freelancers get organized and handle reimbursements with ease.

ExpensifyBest Receipt Management Software for Freelancers

Expensify is a cloud-based expense management solution with mobile receipt scanning, expense approval workflows, and next-day expense reimbursements. The software also integrates with key accounting programs for a seamless expense tracking experience.

ShoeboxedBest Receipt Management Software for Freelancers

Shoeboxed is also a cloud-based expense management solution with receipt scanning, mileage tracking, expense reports, basic CRM, and even tax prep. Shoeboxed also integrates with key accounting programs.

The Best Payment Processing Software For Freelancers

Need to accept mobile payments from your customers? Mobile payment apps allow freelancers to accept payments anywhere — whether that be at a home show, a small storefront, or even a client meeting at Starbucks. If your freelance business could benefit from accepting payments on the go, mobile payment processing is a must.

SquareBest Payment Processing for Freelancers

Square is one of the most popular mobile payment apps. It offers affordable flat rate pricing and free tools for selling online, making it easy to accept payments from your customers in multiple ways. Read our complete Square review to learn how Square could benefit your business.

Take a look at our other mobile payment processing reviews or compare our top five payment processing solutions for businesses.

The Best Website Builders For Freelancers

A website is key for many freelancers who sell goods online or who need a professional online portfolio to showcase their work to clients. Luckily, there are plenty of affordable, easy to use website builders that can give your freelance business the edge.

WixBest Website Builder for Freelancers

Wix is an easy to use website builder that is ideal for ecommerce and blogging. Wix offers a compelling free version with unlimited pages and hundreds of customizable templates to choose from. Read our complete Wix review to learn more about this affordable website solution.

SquarespaceBest Website Builder for Freelancers

Squarespace is a website builder that is perfect for ecommerce and blogs While there’s no free plan, the software offers amazing templates with a huge degree of customizability. Read our complete Squarespace review to see if this website builder is right for you.

Read our other website builder reviews and ecommerce reviews to find the perfect solution for your business.

The Best Email Marketing Software For Freelancers

One of the most challenging parts of freelancing is finding clients. Email marketing software can be a great way to market your services and target clients so you can grow your business.

MailChimpBest Email Marketing Software for Freelancers

MailChimp is an easy to use email marketing software with affordable payments. The software offers email campaigns, email automations, and even analytics and reporting. Read our complete MailChimp review to learn how this software could help your business.

BenchmarkBest Email Marketing Software for Freelancers

Benchmark is another great email marketing option that is easy to use and offers good customer support. The software has hundreds of templates to choose from and the unique ability to send video emails and online surveys. Read our complete Benchmark review to see if this software is right for your business.

Read our other email marketing software reviews or compare the best email marketing solutions to find the right option for your business.

Picking The Perfect Freelance Accounting Software

Choosing Accounting Software

Running a freelance business can be difficult, but with the right tools, you can set your business up for success. With accounting solutions like QuickBooks Self-Employed, AND CO, and Wave, you can manage your finances and gain valuable insight into your business’s income and expenses.

QuickBooks Self-Employed is ideal for freelancers in need of tax support; AND CO is ideal for legal, professional contracts; and Wave is ideal for the complete accounting package. Identifying your freelance needs and examining your current financial process can help you decide which program is the perfect fit for your business.

Then ask yourself, what other tools could benefit my business?

Email marketing software could help you grow your clientele. A website builder could help you create a professional brand. A payment processing app could help you increase your sales. Here at Merchant Maverick, our goal is to help you find the best software to help your business succeed. We have hundreds of reviews across multiple software industries so you can find the perfect software combo. Check out our comprehensive reviews and our other freelance resources as well.

Top 10 Tax Deductions For Freelancers

Loans For Freelance Businesses: Your 13 Best Options

heading QuickBooks Self-Employed AND CO Wave

Best Accounting Software for Freelancers

Best Accounting Software for Freelancers

Best Accounting Software for Freelancers

ReviewCompare

ReviewCompare

ReviewCompare

Pricing

$10 – $17/month

$0 – $18/month

$0/month

Size of Business

Self-Employed

Self-Employed

Small

Ease of Use

Very Easy

Very Easy

Very Easy

Customer Service

Fair

Very good

Poor

Number of Users

1

1

1

Number of Integrations

4

10

4

Cloud-Based or Installed

Cloud-Based

Cloud-Based

Cloud-Based

Mobile Apps

iOS & Android

iOS & Android

iOS & Android

The post Best Accounting Software For Freelancers appeared first on Merchant Maverick.

“”