Exceptional user interface and navigation. Easily tracks expenses and income. Automatic mileage tracking. Can assign business transactions to Schedule C categories. Estimates quarterly income taxes. New invoices and reports.
Lacks direct integration with e-commerce sites. No data records, time tracking, project tracking, or recurring transactions.
- Bottom Line
Accounting service QuickBooks Self-Employed helps users track income and expenses, and estimate quarterly taxes. Though it lacks some standard accounting tools, it might be all many freelancers need.
By Kathy Yakal
QuickBooks Self-Employed is a simple, inexpensive small business accounting service. Designed for freelancers, independent contractors, and home-based entrepreneurs, it really only does a few things. QuickBooks Self-Employed connects to your financial accounts and imports transactions, tracks mileage, creates and send invoices, and estimates quarterly taxes, all for $10 per month. Since I last reviewed the site in 2015, QuickBooks has revamped the service's user interface and added reports, accountant access, and invoices. It doesn't do a lot, but it's very good at what it does.
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QuickBooks Self-Employed doesn't offer true double-entry accounting like Editors' Choice Wave does, but considering it has an excellent companion app, it could serve many of today's mobile microbusinesses well. Like other Intuit financial applications, QuickBooks Self-Employed uses an easily understandable navigation system and offers an exceptional user experience. if you've ever used TurboTax, you know what I'm talking about.
QuickBooks Self-Employed offers a very brief tutorial. That's all that's needed, really, because the first thing you'll want to do is go to the Settings page that's accessible by clicking the small gear icon in the upper right. You then click Bank Accounts and enter the user name and password you use on your financial institutions' sites. After a few minutes, a list of your most recent transactions appears (most banks only allow 90 days' worth).
Once you've entered login information for one or more accounts, you're halfway there. QuickBooks Self-Employed uses the transactions it's downloaded to help you track income and expenses, and to estimate your quarterly taxes. The only other site that shares this combination of capabilities is GoDaddy Bookkeeping.
The New Transactions Page
The last time I reviewed QuickBooks Self-Employed, income and spending were represented by separate links in the left vertical tool. They've since been combined on the Transactions screen.
This table is quite thorough, though not as comprehensive as that of Wave. Its columns display Date, Transaction, Amount, Type, and Category. The Category designation is important, since the category you select eventually appears on your Schedule C report, as also happens in GoDaddy Bookkeeping. Any income or expense that doesn't appear in your downloaded bank statements needs to be manually entered. You'd click Add Transaction in the upper right to begin the process.
Here's how it works. Let's say one of your downloaded transactions is a monthly subscription fee for a web service. The name of the vendor appears first, after the date. The amount appears in the next column. To the right of that are three boxes marked Business, Personal, and Split. Since it's a business expense charged by one vendor, you click Business. By default, the Category column displays Other Business Expense.
You can be more specific than that if you so desire. Click on Business Expense, and a box opens containing your most often-used categories. If it's not there, click Show All Categories and select the correct one from that list. Click the right arrow to attach a receipt or add a note. FreshBooks is much more successful at automatically assigning categories that it thinks are appropriate, however.
A small link marked Add Rule appears once you select a category. Click it, and a small window opens, helping you to easily teach the site how to categorize that transaction whenever it appears. You can even have the rule apply to past transactions, which is unusual in accounting applications, though Less Accounting supports this ability, too.
There's a 12-month bar chart at the top of the Transactions page that displays your business income, spending, and profit. Below that are three filtering tools. You can view all your transactions, only those of one type (business, personal, or unreviewed), and your accounts. To the right of those filters is a search tool.
If you drive for work and can deduct the mileage, you can enter that specific expense by clicking the Miles link in the left vertical toolbar. Then click the arrow next to the Add Trip button in the upper right corner and describe your vehicle. When that's done, click Add Trip and enter your starting and ending addresses, the total miles, and the trip's purpose.
The QuickBooks Self-Employed website keeps track of your mileage deduction. However, this is much easier to manage using the service's mobile app, which tracks your mileage for you automatically as you drive. No other accounting service I've reviewed does that.
Calculating Estimated Taxes
Here's where your categorization and data entry work pays off. Click the Taxes navigational button to the left, and QuickBooks Self-Employed breaks down your calculated payments into four quarters. Click a payment to see the numbers for your taxable income, deductions, and projected profit for the rest of the quarter. You'll also see any estimated payments you're already paid to the IRS.
If you didn't already do this when you were visiting Settings, click Update Tax Profile over to the right. You'll need to provide some important personal details (marital status, dependents, and so on) so the site calculates your estimated taxes correctly.
QuickBooks Self-Employed has moved some of the information from the Taxes page to its three new reports. One is a simple profit and loss statement. The second displays your total profit and your deductible spending by Schedule C classification. You can also download and email these reports. The third is a downloadable Excel spreadsheet that adds more detailed transaction information that focuses on help you prepare your taxes.
Invoices and Home Base
QuickBooks Self-Employed added the ability to create and send invoices since I last reviewed it two years ago (though it had already added that feature to the mobile app when I reviewed it a year ago). You can't create estimates or recurring transactions like you can in GoDaddy Bookkeeping and Wave, and the invoice forms themselves are very basic, but I was glad to see that the tools have been added.
Click Invoices in the left vertical pane, and you'll eventually see a list of all the forms you've created. To add a new one, you click the Create invoice Link in the upper right. Add the client's name and email in the fields in the upper left corner and click Client Info if you want to enter a physical address (the site saves this information for reuse). The invoice number and date appears afterward, but you must enter a due date since you can't specify payment terms like you can in Kashoo.
You have three choices for the description of the product or service you're adding. Click Add Work and type a name in the Description field. Again, QuickBooks Self-Employed doesn't let you create records for products or services, but if you type any letter in the field, a list of anything you've entered will drop down. You can charge for the item or hours in one of three ways: Flat Rate, By Hour, and By Item. Select one and enter a quantity, and click Add to Invoice. The calculated total will appear in the final field.
There are two more options here. Click Add Tracked Expense, and an abbreviated transaction list slides out from the right side of the screen. You can filter this by expense type, account, and date range. Find the right one and move it into your invoice by clicking on it. Click Add Tracked Trip to do the same thing with your saved trips. Attach receipts and add a note if you'd like, and then preview the invoice, save it as a draft, or send it. Your customers can pay using the site's merchant services. QuickBooks Self-Employed's invoicing capabilities are far less flexible and robust than Wave's, but they would suffice for an individual who doesn't sell a wide variety of products and services.
Once you've started entering data, the site's dashboard (home page) gives you the overview of your finances that you need when you first log in. It displays small graphs showing your profit or loss, expenses, invoices, mileage, and current estimated tax. Click on one, and the site takes you to the screen containing underlying data. You also see balances for your cash, credit cards, and other accounts. This screen seems just right considering the site's capabilities.
A Simple Service
QuickBooks Self-Employed lacks some of the features that competitors offer, such as project tracking and time tracking, item and contact records, sales data exchanges with sites like eBay, and recurring transactions. Still, the service has carved out a niche for itself as an inexpensive, easy-to-use set of tools for a growing market: full-time employees driving for Uber or selling for Etsy on the side, and freelancers or independent contractors who work for themselves full time and who need to watch their income and expenses carefully, as well as preparing for estimated taxes four times a year.
QuickBooks Self-Employed has a user experience rivaled only by that of FreshBooks, and it climbs in our rankings this year. Wave gets our Editors' Choice award for online accounting for freelancers however, because it offers true double-entry accounting and the most commonly used features that could serve both a sole proprietor and a small business well, and it does so for free.
Kathy Yakal has been annoying computer magazine editors since 1983, when she got her first technology writing job because she tagged along with her ex-husband on a job interview. She started freelancing and specializing in financial applications when PCs became financial tools for consumers and small businesses (after a stint at a high-end accounting software company). She’s written for numerous publications over the years, and about the only one that’s survived her besides PC Magazine (where she started writing in 1993) is Barron’s. When she… More »
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