5 Best Online Bookkeeping Services for Freelancers 2023
Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.
Danielle is a writer for the Finance division of Fit Small Business. She has owned a bookkeeping and payroll service that specializes in small business, for over twenty years.
This article is part of a larger series on Accounting Software.
The best online bookkeeping services for freelancers prioritize tracking income and expenses for the purpose of filing an annual Schedule C tax return. Ideally, they’re also affordable and provide access to a dedicated bookkeeper or an expert who can assist with questions. Many of the top online bookkeeping firms also offer add-on services, such as tax filing and catch-up bookkeeping, which can help you make efficient use of your time.
We have compiled a list of the five best online bookkeeping services for freelancers in 2023:
- Merritt Bookkeeping: Best overall online bookkeeping service for freelancers
- Bench: Best online bookkeeping service for freelancers who want their individual tax return with Schedule C included
- QuickBooks Live: Best online bookkeeping service for freelancers using QuickBooks Online
- Bookkeeper360: Best online bookkeeping service for help with invoicing and bill pay
- Xendoo: Best online bookkeeping service for freelancers collecting sales tax
Freelancers have unique accounting needs, which is why selecting the right online bookkeeping service can make a big difference in managing finances effectively. In general, most are simply looking to track income and expenses for tax purposes, which pretty much all online accounting services will do. However, if you need help invoicing customers or paying bills, select a provider who can do that, too. You may also want to consider a service that can assist with tax preparation.
Here are some important factors that freelancers should consider when choosing an online bookkeeping service:
- Pricing: If all you want is to track income and expenses, then price, along with customer service, is what you should focus on. Some providers charge a flat fee, while others charge depending on the scope of services you need. Be aware of any additional fees, such as transaction fees or fees for extra features.
- Customer support: Look for a service that has good customer support options, including email, phone, and chat support. You might also look at reviews from current customers to see what their experience has been with customer support.
- Features: Look for a service that offers the features you need, such as invoicing, mileage and expense tracking, tax preparation, and financial reporting. Also, consider whether the service is customizable and scalable, so you can adjust as your business grows. You may be able to save money by not selecting a provider or plan that offers features you don’t need.
- Integrations: Consider the integrations the service offers, for example, a payment processor or time-tracking tool that will integrate with the software your bookkeeping service uses.
- User interface: Seek out a service with a user-friendly interface that is easy to navigate. A complicated interface can make it difficult to use the service efficiently.
Best Online Bookkeeping Services for Freelancers Compared
Monthly Price | Invoicing | Bill Pay | Income & Expense Tracking | Dedicated Bookkeeper | Tax Filing | |
|---|---|---|---|---|---|---|
 | Flat $190 | ✕ | ✕ | ✓ | ✓ | ✕ |
 | Starts at $299 | ✓ | ✓ | ✓ | ✓ | ✓ |
 | Starts at $200* | ✕ | ✕ | ✓ | ✓ | ✕ |
 | Starts at $399 | ✓ | ✓ | ✓ | ✓ | ✓ |
 | Starts at $395 | ✕ | ✕ | ✓ | ✓ | ✓ |
*QuickBooks Live’s first month costs $500 and is dedicated to the onboarding and cleanup of your books.
Merritt Bookkeeping: Best Overall Online Bookkeeping Service for Freelancers
Pros
- No set-up charges and budget-friendly flat-rate pricing
- Catch-up bookkeeping at a discounted rate
- Quick set-up and initiation process
- 100% money-back guarantee if you’re dissatisfied with its services
Cons
- No personal access to your QuickBooks files; only a client portal
- Payroll, tax, and invoicing aren’t available
- No accrual-based accounting
Pricing
Merritt Bookkeeping offers a flat rate of $190 per month, with no restrictions on the number of monthly transactions or the frequency of service. The price is the same regardless of the size of your business or the number of employees.
Merritt Bookkeeping Overview
Why We Choose Merritt Bookkeeping
We selected Merritt Bookkeeping as the best overall online bookkeeping service because it offers affordable flat-rate pricing and services that are important to freelancers, such as categorizing expenses and reconciling bank statements. You’ll have direct access to a dedicated account manager, which allows for continuity of service.
Businesses that issue 1099s can take advantage of the 1099 form filing service for an additional fee. The catch-up bookkeeping option is also affordable, and if you’re dissatisfied with the services after three months, you can request a full refund—so it’s a worthwhile risk.
Bench: Best Online Bookkeeping Service for Freelancers Who Want Their Individual Tax Return With Schedule C Included
Pros
- Access to a team of in-house bookkeepers
- Both plans support unlimited users
- No learning curve
- iOS mobile app
Cons
- Bench’s proprietary software doesn’t integrate with QuickBooks and other accounting software
- Difficult to switch to another provider
- Requires separate software for invoicing, bill payment, payroll, and inventory
- No Android mobile app
Pricing
Bench offers two pricing plans, depending on whether you want tax advice and filings included with your bookkeeping. If you elect to pay annually, you’ll receive a discount:
- Essential: $299 per month for monthly bookkeeping ($249 per month if paid annually)
- Premium: $499 per month for monthly bookkeeping, annual tax filing, and tax advisory services ($399 per month if paid annually)
Bench also offers catch-up and retro bookkeeping services to bring your books up to date with fees starting at $299 per month. Specialized bookkeeping is available starting at $100 per hour.
Bench Overview
Why We Choose Bench
We selected Bench as the best online bookkeeping service for freelancers wanting their individual tax returns with Schedule C included, which is available with the Premium plan. Bench provides bookkeeping support at a lower cost than its competitors while also offering tax assistance and specialized services, such as chief financial officer (CFO) advisory.
It even provides catch-up bookkeeping services no matter how far behind you’ve fallen with your books. Freelancers who work remotely will appreciate the iOS mobile app that provides real-time cash flow updates and financial reporting functionality.
QuickBooks Live: Best Online Bookkeeping Service for Freelancers Using QuickBooks Online
Pros
- You’ll be assigned a dedicated bookkeeper who will meet with you regularly
- Works seamlessly with QuickBooks Online and other QuickBooks products
- 100% Accurate Books Guarantee
- No contract required
Cons
- Requires a separate subscription for QuickBooks Online, which has an additional cost
- Doesn’t support accrual method accounting
- Services don’t include paying bills, invoicing, accounts receivable (A/R), and accounts payable (A/P)
- No free trial
Pricing
The first month of service with QuickBooks Live is dedicated to the onboarding and cleanup of your books, and the cost is $500. After the first month, the service is available in three pricing tiers, which depend on your company’s average monthly expenses over a period of three consecutive months:
- Low volume: $200 for up to $10,000 in monthly expenses
- Medium volume: $300 for between $10,000 and $50,000 in monthly expenses
- High volume: $400 for more than $50,000 in monthly expenses
Although there is no free trial available, there is no contract required, and you can cancel anytime.
QuickBooks Live Overview
Why We Choose QuickBooks Live
If you don’t need assistance with managing customer invoices and paying bills, then QuickBooks Live is an excellent option if you like QuickBooks Online. Although you need to pay a separate fee for your QuickBooks Online subscription, it’s reassuring to know that you’ll be working with a QuickBooks expert who will answer questions, provide bookkeeping assistance, and help with setting up your account.
Your dedicated bookkeeper also has the support of an extended team, providing a personal connection with individuals who are familiar with your business. QuickBooks Live even offers enhanced communication with many different options for meeting, including via one-way video conference.
Bookkeeper360: Best Online Bookkeeping Service for Help With Invoicing & Bill Pay
Pros
- Compatible with both Xero and QuickBooks accounting software
- Dedicated bookkeeper
- Free consultations
- Accrual basis accounting available
Cons
- Incompatible with FreshBooks
- Pay-As-You-Go plan requires a $500 initial retainer
- More expensive than other options
- Although starting prices are listed online, pricing is largely quote-based
Pricing
Bookkeeper360 offers three subscription plans, depending on the services you need and the frequency. Prices increase based on the number of monthly expenses:
- Pay-As-You-Go: Starting at $125 per hour for support for up to $20,000 in monthly expenses
- Monthly: Starting at $399 per month for cash basis accounting for up to $20,000 in monthly expenses
- Weekly: Starting at $549 per month for cash basis accounting for up to $20,000 in monthly expenses; support and advanced reporting included
- Invoicing and bill pay: Starting at $99 per month
There is no contract required, and you can cancel anytime.
Bookkeeper360 Overview
Why We Choose Bookkeeper360
Bookkeeper360 provides seamless integration with Xero’s cloud-based accounting software as a Xero Platinum partner. Although it checks all of the boxes in the comparison table, it’s more expensive and offers many features that freelancers don’t need, such as CFO advisory, payroll, and human resources (HR) management.
However, you can get invoicing and bill pay services for an additional fee, which are services that aren’t always offered by Bookkeeper360’s competitors. The cash management features are especially useful for freelancers wanting to maintain an overview of their finances and cash management insights.
Xendoo: Best Online Bookkeeping Service for Freelancers Collecting Sales Tax
Pros
- Affordable flat-rate pricing plans
- Sales tax filing available
- Integrates with Xero and QuickBooks
- 30-day money-back guarantee
Cons
- No free trial
- No phone support
- No invoicing and bill pay
- Custom chart of accounts only in most expensive plan
Pricing
Xendoo offers three subscription plans, depending on the monthly expenses of your business and the number of bank and credit card accounts connected. Custom plans are available for those with over $125,000 in monthly expenses:
- Essential: $395 for up to $50,000 in expenses and four bank/credit card accounts
- Growth: $695 for up to $75,000 in expenses and six bank/credit card accounts
- Scale: $995 for up to $125,000 in expenses and 12 credit card accounts
Xendoo Overview
Why We Choose Xendoo
Xendoo offers expert bookkeeping and tax services and one-click access to your financials via an online portal and mobile app. We selected it as one of the best online bookkeeping services because of its sales tax filing services, which include automated sales tax collection and tracking, sales tax preparation and filing, and sales tax payment processing.
It also offers income tax filing and preparation, payroll tax filing, and tax resolution services. Providing access to a dedicated team of expert bookkeepers and accountants, it’s an excellent option for businesses looking for a scalable all-in-one accounting solution.
How We Evaluated Online Bookkeeping Services for Freelancers
Freelancers are mostly concerned with tracking income and expenses to file a Schedule C tax return at the end of the year.
We determined that the best online bookkeeping services should:
- Manage their bank feeds
- Categorize expenses
- Reconcile all bank accounts monthly
- Allow the freelancer access to the software to send occasional invoices and track bills as they become due
- Produce income statements at the end of each month
- Calculate quarterly estimated tax payments
- Prepare the annual Schedule C tax return along with personal tax return, Form 1040
- Provide a dedicated account representative to contact with questions
Things that aren’t particularly important to freelancers:
- Filing of corporate and partnership tax returns
- Advanced tax consulting around entity types and more
- Generally accepted accounting principles (GAAP) or accrual accounting
- Payroll and HR management
Bottom Line
Freelancers who need to track income and expenses can do so with Merritt Bookkeeping, which costs only $190 per month, regardless of the number of transactions or the amount of your sales. If you’re using QuickBooks Online, then QuickBooks Live or Bookkeeper360 are great options, depending on the services you require. Meanwhile, Bench can add on your Schedule C tax return, which is nice if you want to keep all your accounting needs with the same company.
