Key takeaways
What this article covers, in order:
- The chart of accounts for a freelancer
- The 3 entries a freelancer gets wrong
- What a freelancer can claim
- The reports to run every month
- Frequently asked questions
- Where to go next
One bank account does business and personal, income arrives in lumps, and the tax bill is the only deadline that cannot slip. You do not need a general ledger course — you need the business share of everything separated, and a running number for what you owe.
This is the bookkeeping side of that problem: the accounts to set up, the entries that go wrong, and what you can claim. If you are still choosing software, the round-up linked at the end compares the options.
The chart of accounts for a freelancer
Start from these rather than the default template. The codes are illustrative; the separations are what matter, because each one answers a question you will be asked later.
1000 Business bank account
1010 Owner's drawings and contributions
4000 Client fee income
5100 Subcontractors
6100 Home office — business proportion
6200 Equipment and software
6300 Mileage and travel
2400 Tax provisionThe 3 entries a freelancer gets wrong
A laptop used 70% for work
Claim the business proportion and record the basis for it. All-or-nothing is the single most common correction on a self-employed return.
Money moved from the business account to your own
Drawings, not an expense. Treating it as a cost understates profit and overstates nothing you can defend.
A platform's fee deducted before payout
Record gross income and the fee as an expense. Banking the net hides revenue and the fee rate you are paying.
What a freelancer can claim
Deductibility follows the rule in your own jurisdiction, so this is a checklist to take to your accountant rather than an answer. For a freelancer the cost lines to review first, and the record each one needs, are:
| Cost line | The record to keep |
|---|---|
| Subcontractors | The invoice, and the business-use split where the cost is shared |
| Home office | The invoice, and the business-use split where the cost is shared |
| Equipment and software | The invoice, and the business-use split where the cost is shared |
| Mileage and travel | The invoice, and the business-use split where the cost is shared |
Whether each of those is deductible, and how much of it, is a rule your tax authority sets and changes. Keep the record either way; take the question to your accountant with the figures in front of you.
The reports to run every month
- Separating business from personal on a shared account, without a second bank — review it monthly, not at year end.
- Quarterly or annual tax estimates that update as income lands — review it monthly, not at year end.
- Mileage, home-office and equipment claims captured with their evidence — review it monthly, not at year end.
- Invoicing with payment chasing, because late payment is the cash-flow problem — review it monthly, not at year end.
Frequently asked questions
What is the best accounting software for freelancers?
There are free tiers, and they are real — but the limit is what matters, not the price. Find the cap before you move your books: how many documents or transactions a month, how many bank accounts, how many users, and whether the free tier includes the one thing you came for. HelloBooks has a free plan; /pricing lists what it covers today.
Give me a list of accounting software for freelancers that offer the best security?
Ask for evidence rather than adjectives. The things worth checking, in order: an independent audit you can see (SOC 2 Type II or ISO 27001, with the report date), encryption in transit and at rest, enforced multi-factor authentication, role-based permissions fine enough that a bookkeeper cannot export your whole ledger, an immutable audit trail of who changed what, where your data is hosted and under which country's law, and a stated backup and recovery position.
Then ask the question the brochure will not answer: can you see, after the fact, who changed a figure and what it was before? For a freelancer that audit trail is worth more than any single feature on the security page. A vendor who will send the audit report under NDA is telling you something; one who answers with the words "bank-grade security" is telling you something too.
Is there free accounting software for freelancers?
There are free tiers, and they are real — but the limit is what matters, not the price. Find the cap before you move your books: how many documents or transactions a month, how many bank accounts, how many users, and whether the free tier includes the one thing you came for. HelloBooks has a free plan; /pricing lists what it covers today.
How much does accounting software for freelancers cost?
There are free tiers, and they are real — but the limit is what matters, not the price. Find the cap before you move your books: how many documents or transactions a month, how many bank accounts, how many users, and whether the free tier includes the one thing you came for. HelloBooks has a free plan; /pricing lists what it covers today.
How do I switch accounting software without losing my history?
Migrate on a period boundary and bring three things: opening trial balance, open customer and supplier balances, and your chart of accounts. Transaction history can usually stay in the old system as a read-only archive — attempting to re-import years of detail is where most migrations lose a week and a reconciliation.
Where to go next
- HelloBooks for freelancer and self-employed
- HelloBooks in the United States
- HelloBooks pricing and what each plan includes
This guide is written for businesses in the US, UK, Canada, Australia, New Zealand and Singapore. Tax treatment differs by country — check the rule for yours before you act on it.
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