Freelancing is on the rise, whether that’s instead of regular employment, or as well as. Alongside the ability to drum up business, bookkeeping is an essential key skill for any freelancer. Accurately recording and monitoring business accounts goes a long way towards reducing stress when that Self Assessment tax return rocks round. So, what with being a free cloud accounting software and all, we’ve put together some tips to help freelancers manage their finances.
Record absolutely everything
Every single transaction, and every scrap of a receipt to do with your freelance work should be recorded and stored. It even helps to take notes on conversations with clients and suppliers whilst it’s all still fresh in your mind. You never know what you might need to refer to further down the line.
Life is incredibly busy, and remembering every little bit of information is near impossible. Recording things as you go reduces a lot of stress, and saves a lot of time later on. As a freelancer, you’re the boss, and the one responsible for keeping track of your finances.
Find an efficient way to keep your freelance bookkeeping organised, so the accounts information you need is always available. It’s never too late to get a system in place, but the sooner, the better!
Complete your bookkeeping regularly
We know that spending time on the basics means less time actually freelancing. But, regularly spending time on your accounts is well worth doing. You’ll have more control over your finances if you know exactly what is going on, and have everything up-to-date.
Bookkeeping apps such as our very own Pandle Mobile make it easier to record and maintain bookkeeping on the move. That said, it’s still important for freelancers to sit down on a regular basis, and go through the accounts.
It will help to ensure that you don’t get behind on anything, and that all of your transactions are recorded correctly. If you use bookkeeping software, then it may be possible to automate some of the processes to speed things up. For instance, setting up Bank Rules helps users by allowing Pandle to automatically categorise transactions.
It helps reduce the amount of admin required for your freelance business, so you can concentrate your time on building it up.
Review your freelance finances
Half-forgotten bills and clients who are late paying are the stuff of freelance nightmares. This is where easy-to-use finance reports can save the day (and probably your sanity). Keeping track of your payables helps to make sure you always know exactly what to pay and when.
Meanwhile, an organised approach to client payments means you’ll be able to follow-up on anyone not paying you. You can even create automated payment reminders to help customers pay their bills on time. It can help you get the cash in, without the need for feeling awkward on the phone. After all, freelance doesn’t mean the work is free!
Be prepared for your tax bill
Regularly reviewing your freelance accounts also helps when it comes to submitting your tax return. Completing a return is a much more straightforward process if all the figures are accurate and at your finger tips.
The other big freelance fear is actually having the money to pay your tax bill. You can use your accounts records to make sure you’re putting enough money aside to pay tax and National Insurance. That way, there’s significantly less stress involved in paying everything on time without the danger of incurring penalties.