As an accountant or bookkeeper managing freelance clients, you know that most default charts of accounts include accounts freelancers rarely use. Simplifying your clients’ accounts makes bookkeeping cleaner, reporting more accurate, and tax preparation much easier.
This guide shows how to tailor Fynlo’s Chart of Accounts for freelancers, including which accounts to keep, rename, or disable.
Step 1: Assets – Keep Only Essentials
Freelancers usually need just a few asset accounts:
- ☑ Bank – Main operating account
- ☑ Cash – Physical cash or petty cash
- ☑ Accounts Receivable – Track client invoices
- ☑ Undeposited Funds – Optional if clients track deposits manually
- ☐ Deposit – Optional if clients record deposits
❌ Disable: Inventory accounts, Leasehold Improvements (unless your client rents an office)
Step 2: Liabilities – Keep Only Relevant Accounts
Most freelancers have minimal liabilities:
- ☑ Accounts Payable – Track unpaid bills
- ☑ Unearned Revenue – If clients pay upfront
- ☑ Sales Tax (GST/VAT) – Only if registered
- ☑ Income Tax Payable – Track their tax obligations
❌ Disable: Accrued Purchases, Salary Payable, Manufacturing Overhead
Step 3: Equity – Keep It Simple
Equity accounts typically remain standard:
- ☑ Share Capital – No changes needed
- ☑ Retained Earnings – No changes needed
Tip: Leave these accounts untouched—they reflect the freelancer’s ownership and accumulated profits.
Step 4: Income – Rename for Freelancers
Freelancers earn mostly from services, not product sales. Rename accounts to reflect their actual income:
| Default Account | Suggested Name | Action |
|---|---|---|
| Sales | Client Services Income / Design Income / Consulting Income / Retainer Income | ☑ Keep |
| Other Income | Keep relevant categories | ☑ Keep |
| Interest Earned | Keep | ☑ Optional |
| Gain/Loss on FX | Keep if invoicing internationally | ☑ Optional |
| Sales Return | Disable | ❌ |
Tip: Clear income categories help you and your client see exactly where revenue is coming from.
Step 5: Cost of Goods Sold – Only If Applicable
Include these accounts only if the freelancer hires subcontractors or resells materials:
- ☑ Cost of Goods Sold – Subcontractor costs or materials
- ☑ Purchases – Same as above
- ☑ Purchase Return – Same as above
❌ Disable if your client doesn’t subcontract or resell materials.
Step 6: Expense Accounts Freelancers Actually Use
Keep only what is relevant for a freelancer’s day-to-day operations:
- ☑ Software/Subscriptions – Tools for their business
- ☑ Marketing & Advertising – Promotion costs
- ☑ Telephone – Business phone line
- ☑ Travel – Client meetings or business trips
- ☑ Meals & Entertainment – Only business-related meals
- ☑ Utilities – Home office or coworking space
- ☑ Rent – Office or coworking space
- ☑ Accounting & Audit Fees – Professional services
- ☑ Insurance – Professional or liability insurance
- ☑ Bank Charges – Account and payment fees
- ☑ Stripe Fee – Payment processing fees
- ☑ Bad Debt – Clients who don’t pay
- ☑ Miscellaneous Expenses – Small uncategorized costs
❌ Disable: Manufacturing Overhead, Freight In/Out, Workers’ Compensation (if solo), Inventory Adjustment / Finished Goods Inventory, Cleaning (unless office), Write-Off Fixed Assets (if no assets)
✅ Pro Tips for Accountants & Bookkeepers
- Keep it client-focused – Only maintain accounts freelancers will actually use.
- Rename accounts clearly – Helps clients understand their financial reports.
- Disable unnecessary accounts – Keeps bookkeeping simple and uncluttered.
- Regularly review accounts – As a freelancer grows, adjust accounts to match their evolving needs.
- Set up templates – For multiple freelancer clients, create a Fynlo template with pre-configured accounts to save time.
Customizing a freelancer’s Chart of Accounts in Fynlo reduces confusion, streamlines reporting, and ensures that bookkeeping is both accurate and manageable for small service businesses.