As an independent contractor, your accounting needs are simpler than a full-scale business. You don’t need every account in Fynlo’s default chart. By keeping only the relevant accounts, renaming where necessary, and disabling what doesn’t apply, you’ll save time, reduce confusion, and make tax season easier.
This guide will walk you through exactly which accounts to keep, rename, or disable so your bookkeeping fits your freelance workflow.
Step 1: Assets – Keep What Matters
These accounts track your money—keep the essentials:
☑ Bank – Your primary operating accounts
☑ Cash – Physical cash or petty cash
☑ Accounts Receivable – Track client invoices
☑ Undeposited Funds – Optional if tracking deposits manually
☐ Deposit – Optional if recording client deposits
❌ Disable: Inventory-related accounts, Leasehold Improvements (unless renting an office)
Step 2: Liabilities – Keep Only If Applicable
Most independent contractors have fewer liabilities:
☑ Accounts Payable – Track unpaid bills
☑ Unearned Revenue – If clients pay upfront
☑ Sales Tax (GST/VAT) – Only if registered
☑ Income Tax Payable – Track your tax obligations
❌ Disable: Accrued Purchases, Salary Payable, Manufacturing Overhead
Step 3: Equity – Keep It Simple
Equity accounts usually remain unchanged:
☑ Share Capital – No changes needed
☑ Retained Earnings – No changes needed
Tip: Don’t touch these accounts
Step 4: Income – Rename for Independent Contractors
Independent contractors earn mostly from services, not products. Rename accounts to reflect your work:
| 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 | ❌ |
Step 5: Cost of Goods Sold – Only If You Subcontract 🟢
Keep these only if you hire subcontractors or resell materials:
☑ Cost of Goods Sold – Only if you pay subcontractors or buy materials
☑ Purchases – Same as above
☑ Purchase Return – Same as above
❌ Disable if you don’t subcontract or resell materials
Step 6: Expense Accounts Independent Contractors Actually Use ✅
Focus on expenses you actually incur:
☑ Software/Subscriptions – Rename from Office Expenses if needed
☑ Marketing & Advertising – Promote your services
☑ Telephone – Business phone line
☑ Travel – Client meetings or business trips
☑ Meals & Entertainment – Only business-related meals
☑ Utilities – Keep if home office (internet, electricity)
☑ Rent – If paying for coworking space
☑ Accounting & Audit Fees – Professional services
☑ Insurance – Liability or professional insurance
☑ Bank Charges – Account and payment fees
☑ Stripe Fee – Payment processing costs
☑ 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 Independent Contractors
Keep it simple – Only maintain accounts you actually use
Rename accounts – Reflect your actual services
Disable unnecessary accounts – Keeps your chart uncluttered
Check your setup regularly – As your contracting business grows, you can adjust accounts
By customizing your Chart of Accounts for independent contracting, your bookkeeping becomes clearer and more manageable—so you can focus on serving clients, not wrestling with accounting software.