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Keeping your finances in order can be challenging, especially when you’re running a contracting business. That’s why finding the best contractor accounting software is crucial for managing your day-to-day financial operations. In this article, we’ll explore the top accounting software options available in 2023, along with their features and benefits.
Why Contractor Accounting Software Matters
As a contractor, managing your finances can be a nightmare. This is where having the right contractor accounting software comes in. Not only does it save you time and resources, but it also ensures compliance and reduces errors. Let’s explore these benefits in more detail.
Streamlining Financial Management
Contractor accounting software helps you track your finances, including expenses and invoices. This helps manage your cash flow properly, thereby allowing you to handle your finances with confidence. With features like real-time updates, you can keep your financial data up-to-date and take informed financial decisions at the right time.
For example, contractor accounting software can integrate with your NorthOne bank account, automatically categorize transactions, and generate reports. This saves you the hassle of manually entering data and reconciling your accounts, freeing up time to focus on other aspects of your business.
Ensuring Compliance and Reducing Errors
Filing taxes and regulatory compliance can be time-consuming and overwhelming. With contractor accounting software, you can manage your finances in line with regulations and avoid hefty fines. Additionally, accounting software reduces the likelihood of errors that can result in financial losses or damaged reputations.
For instance, some software can automatically calculate and file your taxes, ensuring that you meet deadlines and avoid penalties. It can also generate reports that show your compliance with regulations, making it easier to provide evidence to auditors or regulatory bodies.
4 Best Contractor Accounting Software Options
Running a contracting business can be a challenging task, especially when it comes to accounting and managing finances. Fortunately, there are several accounting software options available in the market that cater to the specific needs of contractors. In this article, we will review the top five accounting software options that can help contractors manage their finances and streamline their business operations.
Quickbooks for Contractors
Quickbooks is a popular choice for small-to-medium-sized contractor businesses. Its features, including job costing and project management, make it easy to track your income and expenses. QuickBooks also offers great invoicing and billing capabilities, among others.
One of the most significant advantages of using Quickbooks is its ease of use. The software is designed to be user-friendly, making it easy for contractors to manage their finances without any prior accounting knowledge. Quickbooks also offers a mobile app that allows contractors to track their finances on the go.
Xero for Construction
Xero is an ideal choice for a contractor business with mobile functions in mind. The software makes use of cloud technology to provide you with access to your accounts from anywhere. Xero provides excellent invoice creation features and can manage employee expenses.
Xero’s mobile app allows contractors to manage their finances on the go, making it an ideal choice for those who are always on the move. The software also offers a range of integrations with other business tools, making it easy to manage your finances alongside other aspects of your business.
FreshBooks is an ideal accounting software for contractors thanks to its user-friendly interface and time-saving features. With its intuitive design, contractors can easily navigate the software without extensive accounting knowledge. FreshBooks automates tasks like invoicing and expense tracking, freeing up valuable time for contractors to focus on their projects rather than administrative burdens.
The software offers customizable invoice templates, online payment options, project management capabilities, and seamless integration with third-party applications. Contractors can access their accounting information on the go through the mobile app, and reliable customer support ensures a comprehensive solution for organizing and simplifying accounting processes.
If you’re a contractor looking for a budget-friendly and user-friendly accounting software, Wave is an excellent choice. It’s great for contractors who want to manage their finances without breaking the bank. Wave offers basic accounting features for free, including creating invoices, tracking expenses, processing payments, and generating basic tax reports.
One of the best things about Wave is its easy-to-use interface. Even if you’re not an accounting expert, you’ll find it simple to navigate and understand. It also connects with your bank accounts, making it easy to reconcile transactions and keep your records up to date. Wave also provides a receipt management feature, helping you stay organized with your expenses.
While Wave may not have as many integrations as some other software options, it does support popular payment processors like PayPal and Stripe, which can be helpful for contractors who receive payments online.
Top Features to Look for in Contractor Accounting Software
Choosing the right contractor accounting software can be daunting. Here are some of the features you should look for when making your decision.
Invoicing and Billing
Invoice creation and billing are crucial for businesses that depend on payment from customers to function. With contractor accounting software equipped with robust invoicing capabilities, you can create invoices quickly and accurately.
Additionally, many contractor accounting software programs offer customizable invoice templates, so you can tailor your invoices to your business’s unique needs. You can also set up automatic reminders for unpaid invoices, which can help improve your cash flow.
Tracking expenses is a vital aspect of running a contracting business. You can reduce manual labor by using contractor accounting software to automate expense tracking. This will give you a clearer view of expenses, including when and why expenses occur.
Some contractor accounting software programs also offer mobile apps that allow you to capture receipts and expenses on-the-go. This can save you time and help ensure that all expenses are accurately recorded.
Contractor accounting software can make payroll management easy by automating payroll processes, including calculations, tax deductions, and direct deposits. This helps ensure that your employees are paid accurately and on time.
Additionally, some contractor accounting software programs offer HR management features, such as time tracking and benefits administration. These features can help you manage your employees more effectively.
Project Management and Job Costing
Keeping track of costs for projects and jobs is critical for profitability. Contractor accounting software with job costing and project management capabilities will help track costs and profits across multiple jobs.
Some contractor accounting software programs also offer scheduling and resource management features, which can help you manage your team and resources more effectively. This can help improve your project timelines and profitability.
Tax Preparation and Reporting
Tax time can be particularly stressful for small business owners. With contractor accounting software, however, tax preparation can be streamlined. The software will automate important tax processes, provide tax tips, and allow you to file your tax returns electronically.
Additionally, some contractor accounting software programs offer tax planning and forecasting features, which can help you plan for tax liabilities and minimize your taxes owed.
Integration with Other Tools
Integrating accounting software with other business tools – e.g. project management software, CRM, and ERP – can make your operations more effective than ever before. This allows you to operate with a single, connective system across your business.
Many contractor accounting software programs offer integrations with popular business tools, such as Salesforce and Microsoft Office. This can help you streamline your workflows and improve your overall productivity.
How to Make the Most of Your Contractor Accounting Software
Contractor accounting software can be a valuable tool for managing your business finances. However, simply having the software is not enough. To get the most out of your accounting software, you need to use it effectively. Here are some tips to help you make the most of your contractor accounting software.
Regularly Update Financial Data
One of the most important things you can do to make the most of your accounting software is to ensure that your financial data is up to date. This means entering all transactions in a timely manner and reconciling your accounts regularly. By keeping your financial data current, you can track your financial situation effectively. This will allow you to make sound financial decisions when evaluating budgets and cash flows.
It is also important to ensure that your accounting software is set up correctly. This means choosing the right accounts and categories for your transactions and setting up any automatic transactions or recurring payments correctly. By doing this, you can ensure that your financial data is accurate and meaningful.
Utilize Reporting and Analytics Features
Contractor accounting software often comes with powerful reporting and analytics features that can help you evaluate your business’s financial health. These features can provide you with insights into your revenue, expenses, and cash flow. They can also help you identify trends and patterns in your financial data.
To make the most of these features, it is important to understand what reports and analytics are available and how to use them. Look for financial or analytical reports that provide you with the insights you need to better run your business. For example, you may want to track your profit and loss statement, your balance sheet, or your cash flow statement.
Integrate with Other Business Tools
Integrating your accounting software with other business tools such as CRMs, HR and payroll software, procurement solutions, and more, can provide exceptional visibility into different areas of your business. It can also ensure that all of your business information is centralized and up-to-date.
For example, if you use a CRM to manage your customer relationships, integrating your accounting software with your CRM can give you a complete view of your customer interactions and financial transactions. This can help you make better decisions about how to allocate resources and prioritize your activities.
Stay Compliant with Industry Regulations
Financial regulations and requirements change all the time. To avoid falling afoul of regulatory authorities, it is important to ensure that your contractor accounting software is compliant with the latest government rules and regulations.
Make sure that your accounting software is regularly updated to ensure that it is compliant with the latest regulations. You may also want to consult with a financial advisor or accountant to ensure that you are meeting all of your regulatory obligations.
By following these tips, you can make the most of your contractor accounting software and ensure that your business finances are managed effectively.
Pair your new accounting software with the right business bank account
NorthOne connects to your new contractor accounting software to take the stress out of bookkeeping. You won’t have to worry about manual data entry and duplicate transactions when you connect your NorthOne account to any of these software options, allowing you to focus on growing your business. Apply for a NorthOne in as little as 3 minutes: