Whether you’re a freelance writer, part-time contractor, or self-employed individual of any kind, keeping track of the books can be difficult. As a freelancer, it’s easy to give most of your attention to doing your job, but pay less mind to keeping track of finances. Taking that approach, however, can be problematic in the long run, and it’s crucial to keep your books balanced to be a successful contractor. Whether you’re looking for some tips as to how to better manage your finances or you have no idea where to start with bookkeeping, here are a few financial tips all freelancers should know.
Keep Detailed Records of Everything
The more detailed your records are, the easier time you’ll have balancing the books and filing your taxes down the line. Some easy ways to implement better record keeping in your day to day life include:
- Keep track of your receipts. If tracking and filing numerous paper receipts isn’t your strong point, apps like Expensify will help you document your receipts digitally, so you don’t have to worry about filing or losing receipts.
- Consider opening an additional checking account just for business expenses, to avoid confusion between personal and business expenses.
- Implement a digital tracking system such as Quickbooks
- Set aside some time in your schedule each week to input financial data and detail your records
- Mark tax dates on your calendar, to ensure you don’t miss deadlines
Detail Payment Expectations and Ensure Clients Understand and Follow Them
Collecting payment from clients can be a huge hassle. Having a quality invoicing system with clear terms for all clients is a great way to be proactive about getting paid on time. The first step in streamlining your payment process is outlining clear terms of service on your website or contract. Outlining and discussing how your billing system works is an easy way to set expectations from the get go, and make sure your clients understand your billing system. Then, using services like Free Invoice Generator and Invoice Home will enable you to create and track invoices for free. These systems will easily outline your terms of service, when payment is due, and enable you to keep online records to you know who has paid you and who hasn’t.
Plan for Taxes Ahead of Time
The downside of receiving payment directly from clients is that taxes aren’t typically taken out of that sum. Ensuring that you put aside part of each paycheck to pay taxes when the time comes is crucial, so you don’t spend money that you’ll eventually need for taxes. Opening business savings account and putting about a quarter of each check you receive into that account should give you a good buffer for paying taxes. This practice will also help you build a budget for the year so you can figure out how much money will enable you to pay the bills when tax fees are subtracted.
Don’t Hesitate to Ask for Help
When it comes to accounting, keeping track of all financial responsibilities can be difficult. Finding a professional to help you with some or all aspects of your accounting can save you time, headache, and money in the long run. Here are some ways our accountants at Clear Accounting Solutions can help you:
- Quickbooks training, setup, and support, to help familiarize yourself with the software and get your records up and running in quickbooks
- Individual Tax Planning and financial preparation
- Full scale accounting services online, to enable you to help you keep all of your books in order without leaving your home
- And more!
At Clear Accounting Services, we believe in helping our clients keep their books in order so they can focus on running businesses. To learn more about our services, visit our website today!
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