Best accounting software in Germany for freelancers

While the choice of accounting software in Germany was fairly limited only a few years ago, several new challengers have entered the market to innovate, especially for English speakers. Nowadays, everybody has access to time-saving, sweat-saving at a reasonable price.

At the end of this post, you will be able to tell which features are essential in order to remain friends with the Finanzamt. You will also know which providers best fits your use case. Feel free to leave a comment if you still have any questions.

Benefits of accounting software for freelancers in Germany

As a freelancer in Germany, it’s possible to manage your income, expenses, and invoices manually in a an Excel template, sit down with your Steuerberater, submit your tax and VAT declarations, and hope that it’s all legally correct and accepted by the Finanzamt.

Be accurate every time

The problem is that this method is slow, prone to error, and just generally sloppy. The chances that you’re going to write down the wrong VAT number, misrecord an amount, lose a receipt or miscalculate an important number is pretty high. When it comes to recording invoices and reporting finances, the German government has strict standards of what should appear on financial documents and how they should be ordered – and this can be tricky to get right alone. 

Good accounting software in Germany specifically designed for freelancers can help you ensure that all of your accounting is correct and ready for the strict scrutiny of the German tax authorities.

Spare yourself a lot of stress & time

It will also save you incredible amounts of time and effort. Rather than having to manually generate an invoice every time you complete a project, the right accounting software in Germany will do this automatically, while simultaneously keeping track of your income and expenses. It also enables you to see all of your finances at a glance, know who still owes you money, and can automatically generate a list of tax-deductible expenses by integrating with your bank account.

It basically pays itself

The best accounting software in Germany goes one step further, removing the stress from compiling and submitting regular VAT and tax returns. As you’ll see below, many companies offer English accounting services for submitting income tax reports, profit and loss statements, and VAT declarations directly to the Finanzamt. For more complex tax scenarios, it’s also possible to contact and arrange consultations with tax professionals directly through the accounting software in question.

While most of these services are available for a fee, the time and effort saved by using them far outweigh the costs. On top of that, subscriptions to accounting software in Germany are tax-deductible, so using them is a no-brainer. 

Features your accounting software should offer

Not all accounting software is made equal, and this is especially true when it comes to a niche product like accounting software for English-speaking freelancers in Germany. The accounting software you need and choose to use is going to depend a lot on the specific area that you freelance in, how big your operation is, what languages you operate in, and a number of other different factors. As a general rule of thumb, however, there are a number of criteria that accounting software for freelancers in Germany should meet. These include:

• Being able to integrate with ELSTER, Germany’s online platform for processing tax returns, for VAT and income tax declarations (among other things).
• Bank integration/reconciliation capabilities so that all of your income and expenses can be recorded in real-time.
• Operation and compatibility in multiple languages, especially English.
• Suitable for both Gewerbe & Freiberuflich.
• Available as web app & mobile app.
• Being compliant with Germany’s data regulations set out by the GOBD and GDPR.
• Compatibility with multiple countries and geographic areas.
• User-friendliness and having an intuitive interface.
• The ability to integrate with third-party financial apps and services.
• Comprehensive support should you have any tax or tech questions.
• Having a comprehensive data backup and recovery plan, and secure data protection.
  

In terms of accounting capabilities, the accounting software should also be able to:

• Automatically create invoices that are compliant with Germany’s strict legal requirements.
• Monitor open invoices and create and send payment reminders for outstanding or late invoices.
• Track income and expenses.
• Track taxes and VAT, and compile relevant reports.

Less essential, but still helpful to have, it should:

• Be scalable so that it can grow with your business.
• Have a free trial phase so that you can determine if it’s the right fit for you.

Based on all those parameters, here are a solid contenders to being the best accounting software for English-speaking freelancers in Germany.

Sorted

Sorted is a web-based accounting software for freelancers in Germany. Available completely in English, it is great for easily preparing and managing invoices, keeping track of income and expenses, and preparing and submitting tax reports. In essence, it removes the need for a Steuerberater and guides you through the whole complicated tax return process. It will even remind you when certain returns, like VAT declarations, are due well ahead of time, so you never miss a deadline and get slapped with a fine. If you need help from an actual Steuerberater, you can schedule a quick call or video call with a number of different tax professionals directly in the app.

You can use all of Sorted’s invoicing and accounting features absolutely free of charge. It’s only when you tackle your VAT declaration or submit your annual tax return that the company will start charging you. From that point, you pay either €80 per year if you earn under €22,000 annually, or €20 per month if you earn above that amount. You can also link your bank account directly to the Sorted app and automatically record your income and expenses. With this data, Sorted generates suggested tax reports, suggests deductible expenses, and is able to better track your invoices.

Features

• Comprehensive invoice management including invoice creation, sharing, and tracking
• Bank account integration
• Income tax and VAT declarations
• Profit and loss reporting
• Zusammenfassende Meldung reporting
• ELSTER integration
• Income and expense tracker
• Tax return deadline reminders
• On-demand assistance from qualified tax consultants
• Comprehensive FAQ section for various freelance tax situations
• Online chat support between 9am and 6pm Monday – Friday

Strengths

• Invoicing and financial management tools are completely free to use up until you make a tax return. If you’re not interested in using Sorted to handle your taxes, you can simply use them as a free invoicing and financial management platform.

Weaknesses

• Has a fixed unit value when creating invoices. You can charge by “hours” or “items” for example, but not “number of words.” Depending on your freelance industry, this can be frustrating.
• Only available as a web app.
• Consulting a Steuerberater via the app is quite expensive (€200 for a 60-minute consultation or €30 for a quick question).

Best suited for

Sorted is great accounting software for freelancers in Germany who want to handle their taxes themselves with little to no oversight from a Steuerberater. The app tracks and handles all of your income and expenses so that when the time comes to submit your tax returns, it’s a fairly straightforward process. More complicated business scenarios might require a tax advisor to look over your records, but if you’re just offering a single service to multiple clients without any complications like salaries paid to employees, Sorted can be an amazing time-saving asset.

Sorted reviews

Currently, Sorted is scoring an average of 4.6/5 with around 100 reviews on TrustPilot praising the value offered by the service. There are some complains around customer service that cannot handle the high volume of requests around the 31st October (date at which all freelancers should submit their tax returns).

Accountable

Accountable is a German accounting software and app designed to help the English-speaking self-employed from the very start of their freelancing journey. It guides you through the process of registering (for free) as a freelancer, helps you manage your invoices, income, and expenses, and also handles all of your taxes. Accountable has an integrated invoice builder and manager, so you can create legally compliant invoices directly from your smartphone. Like Sorted, they also offer bank integration so that they can automatically track your income and expenses; you’ll also get notified when a client pays an invoice. For expense tracking, you can upload your expenses by importing them, entering them manually, or scanning the receipt or document using your smartphone. 

In terms of pricing, Accountable offers a tiered subscription package. Their free option lets you handle basic invoicing and gives you an overview of your revenue, costs, and profit. 

Their basic option costs €7.50 per month for a yearly subscription (otherwise €12 per month), and gives you all the features of the free account, plus:

• Bank account integration
• Invoicing via the web app
• Tailored tax recommendations
• Tax reminders
• Access to an accountant
• PDFs and DATEV exports should you need to send information to your personal Steuerberater.

And finally, the Full Experience costs €15 per month for a yearly subscription (otherwise €20 per month) and gives you access to everything from the basic subscription plus:

• Full access to the web-app
• Up to five bank account integrations
• Automated VAT declarations
• Profit and Loss statements
• Income tax declaration
• Priority customer service
• Call with a tax expert to help get the best experience using the app

Accountable also offers a number of accounting services for an additional fee separate from your monthly subscription fee. You can question a certified tax advisor for €45, schedule a 30-minute call for €60, get your income tax prepared and submitted for €350, review your accounting documents for €2.50 per page, and more. All of these services exclude VAT. While they’re tax-deductible, they’re still pretty expensive all things considered.

Features

• Invoice management – creation, branding, reminders for unpaid invoices
• Income and expense tracking and management
• Income tax and VAT declarations
• Tax deadline reminder
• Bank account integration
• Notification of payment from clients
• Automatic importing of professional expenses
• Exportable documents
• In-app consultation with tax professionals

Strengths 

• Pretty decent support chat. If you don’t like chatting you can also book a call.
• The mobile app is very well-designed and lets you handle all of your invoicing and expenses directly on your smartphone
• 14 free day trial of the Full Experience plan with full accounting and tax functionality
• They have a free comprehensive online tax guide that does a good job of answering many of the tax-related questions you might have. It also helps you know what you can and can’t deduct from your tax returns.

Weaknesses

• The web app isn’t as comprehensive as their mobile app. This can be frustrating for people who prefer to do their business on a laptop or PC.
• Tax consultancy and other accounting services are very expensive, especially if you’re a new freelancer just starting out.

Best suited for

As an accounting software for English speakers, Accountable is best suited for freelancers who need a bit of guidance when getting started. They do a good job of holding your hand from the very first steps, registering you as a freelancer, and getting you grounded as you start to manage your business affairs. While their basic account offers good value for money, once you become more established you might want to outsource your accounting services somewhere else, as their extra services are quite expensive.

Accountable reviews

Accountable is a new challenger in Germany and doesn’t so many reviews, with about 40 currently across TrustPilot, PlayStore & Appstore. It scores an average of 4/5 with users loving the service and praising the customer service’s reaction time.

SumUp

SumUp is an invoicing and accounting software in Germany and other countries designed specifically for freelancers and small businesses. It enables entrepreneurs to keep track of their cash flow, create, send, and manage invoices and quotes as well as declare income tax and VAT, and generate profit and loss reports. SumUp also allows you to connect your bank account, export your financial data, and integrate with a number of third-party financial apps such as PayPal or even PoS hardware by SumUp.

Its suite of tools is inherited from Debitoor, when they bought the company. This is why it’s a little difficult to find the accounting software feature on their website right now. SumUp wants to push their PoS and card terminals system first.

If you are only interesting in the bookkeeping software, you have 2 plans to pick from. The free plan is so limited that it’s really only a trial one.

I have used this solution for a while and I can say it’s pretty robust. The website does not make it justice. The bigger the plan, the more functions you get access to. If you have a small business and you want to accepts payments online or in person, SumUp is a no brainer: it’s all integrated. However, I was using N26 for bank reconciliation and it didn’t work well because each card transaction made duplicates. I was told by customer service this was because of how N26 operated.

SumUp operates in seven main markets throughout Europe, and its website and app is available in multiple different languages. Make sure when signing up to SumUp that you do so in German, through the German website, or else you will have a version that is built for another country’s accounting and invoicing systems. Once you’ve created an account, you can then go to settings (Einstellungen), then profile (Profil), and choose the language you’d like to use the app in. 

Features

• Comprehensive invoicing capabilities including invoice designer
• Income and expense tracking
• Quotes and delivery notes
• Invoicing in different languages and currencies (helpful if you have clients in different countries)
• Payment reminders for unpaid invoices
• Bank account integration
• Income tax and VAT declarations
• Profit and loss statements
• Balance sheet reporting
• Android and iPhone app integration
• Accountant access for collaboration
• DATEV exports
• Product catalogue and importer
• Multiple language usage
• Speedy customer service

Strengths

• SumUp’s invoicing template helps you create compliant invoices that are best suited for your business or freelancing project.
• The reminders feature lets you remind customers about outstanding invoices, and also gives you the option of adding late fees.
• Importing your bank statements allows you to quickly and easily keep track of all your finances.
• Filing expenses is also a simple process. Simply take a snapshot of your receipt or input it manually and it will be stored in the cloud.
• Declaring VAT and income tax is simplified and intuitive.

Weaknesses

• When it comes to filing taxes, SumUp is only good for relatively simple situations. As soon as your business tax scenarios become more complex, you may have to consult a tax advisor or use more comprehensive German accounting software.
• No Zusammenfassende Meldung feature (when selling abroad).

Best suited for

SumUP is best suited for freelancers, entrepreneurs and small businesses across all industries. Whether you run a small graphic design studio or even have a brick-and-mortar store, SumUp has all of the accounting tools and integrations needed to keep your finances in order for the Finanzamt’s inspection.

SumUp reviews

SumUp has a good track record with around 1800 reviews on Playstore, Appstore & Trustpilot, hovering the 4/5 mark. People like the package & the experience and nothing negative stands out apart from the occasional bad customer support complaint.

Lexware

Lexware is a German accounting software company with a long history of helping entrepreneurs, freelancers, and small-to-medium-sized businesses. They’ve been around since 1989 and are one of the most popular accounting software groups in Germany. While they offer a number of different products, the one that’s most beneficial to freelancers is Lexoffice. It consists of a comprehensive array of accounting tools that easily keep track of your finances and interface directly with ELSTER for simple tax and VAT declarations. It can even help you do the yearly tax declaration. The only problem? It’s all in German, so freelancers who aren’t fluent will have a hard time using it. If you do speak the language, however, the web and mobile apps are powerful, functional, and intuitive platforms for running your business operations. This is why it still made on this list.

Features

• Invoice generation and management
• Integration with ELSTER
• Income tax and VAT declarations
• Automatically calculates the amount of tax and VAT you need to pay
• Automatic invoice sending
• Uses a web and mobile app
• GOBD and GDPR compliant
• Cash flow tracker and report generator
• Integrated online banking
• PayPal integration
• Lexware tracks incoming payments and matches them to open invoices
• Integrated DATEV interface allows for the transfer of your financial data directly to your tax advisor. This feature also allows both you and your tax advisor to access the data simultaneously and work on it online together.
• Receipt generator and profit and loss calculator
• Customer management
• Third-party integration with other financial accounting software such as Kontist and CleverReach

Strengths

• Incredibly comprehensive and powerful suite of accounting tools
• All-in-one software for managing your finances
• Dedicated support should you run into problems
• Integration with SmartSteuer to import all your data for the year to do your tax declaration.

Weaknesses 

• Not available in English
• UI is a little outdated

Best suited for

Lexware office is best suited for freelancers, self-employed, and small business owners who speak German. Their accounting software is also great for anyone looking to scale their business, as it has additional features that freelancers might not make use of, such as payroll capabilities.

Lexware reviews

It doesn’t look all rosy for Lexware as most people agree that this probably the most complete feature-set for Germany, but the interface and the bad customer service is sometimes a challenge. Average review is around 3/5 on TrustPilot, Appstore & GooglePlay.

These are providers we can’t recommend

When doing research, some providers were also considered but they didn’t make it into the short list.

• Freshbooks & Quickbooks: They don’t play nice with Germany. It lacks essential features to work well with the local system here. It’s also easy to tell: they don’t have a local website. No DATEV or Finanzamt integration, etc. Even though they are very capable solutions on their own, it cannot be recommended.
• SevDesk: The cheapest plan only has the invoicing software feature. You’d want the whole package that is only available at a more expensive tier.
• FastBill: It only offers invoicing software. If you are going to pay for a tool, you’d want something that does it all.
• Invoiz: Same as for FastBill.
• Sage: This is more an entreprise-oriented solution. A complete overkill for freelancers and too expensive too.
• Kontist: As pointed out in this Kontist review, the idea of having bookkeeping and banking in one app is very appealing. However, its implementation falls short of expectations and cannot replace a good accounting software that does bank reconciliation well with your bank.

Accounting software Germany for English speakers – FAQ