Best tips on bookkeeping for freelancers.
Having your own freelancing business can be quite attractive especially since it entails that you will have free reign over your own schedule and working hours. However, one downside to being a freelancer is that you’re the one to handle your own finances as well.
Accounting can be such a problematic thing to encounter especially if you do not know where to start. Fortunately, here are some tips that can help you get your finances and bookkeping in order if you really want to have a career as a freelancer.
Basic bookkeeping Tips for Freelance Website Designers
1. Fix Your Accounting
First, you have to make sure that you are able to keep your accounting on track. Try to be aware of the monthly payments you receive for each project so that you may be able to keep track of how much you earn.
It would be best to hire an accountant if you are handling a group of freelancers as part of your own company.
The problem with this is that some accountants only handle annual expenses. You have to hire someone who will be able to keep track of the regular accounting needs if you want to remain updated.
2. The Importance of Bookkeeping and Setting up an Effective System
Bookkeeping is also a significant aspect of freelancing that you need to be aware of. Seek professional advice if you want to handle it on your own for a while. There are many available types and brands of bookkeeping software you can use to keep track of your expenses and earnings online.
You just have to be aware of where to officially obtain them.
This way, you will be able to establish an effective bookkeeping system that will remain up to date even if you don’t supervise it that much.
3. Be On Track with Everything
It is also important for you to track everything. From your files to your working hours and especially your expenses, it is imperative that you are able to be aware of regular movement as much as possible. This way, you will be able to see if there is an unauthorized financial movement that you need to pay attention to.
Here are some of the elements that you need to track.
- Track work hours as a professional freelance website designer
- Payments from clients
- Business expenses
- Project expenditures and costs
It doesn’t matter how large or small these expenses are, what is important is that you are able to keep regular records of these elements so that it will be all accounted for in the final sum.
You can also include your own personal expenses in the list.
- Travel expenses
- Utility bills (phone, electricity, Internet)
- Website hosting and design expenses
- Rents (office space/building, workspace sharing). If you work from home, this can correspond to your house or room rent.
4. Set Money Aside
You have to learn to set aside cash for any additional payments that may come along. As a freelancer, you will be tasked with paying for your own taxes and benefits. This is why you have to have a significant amount of savings for these eventualities.
Generally, freelancers are required to save up to 30% of their actual earnings for emergencies and taxes. Any reliable online accounting software can help you calculate these rebates with ease.
These can help you keep track of the following:
- Payments owed to you
- Payments you owe
- Client payments and schedules
5. Additional Benefits of freelancer web designers Bookkeeping
Bookkeeping can also allow you to be paid faster. If you keep records, it will be easier for you to get loans when necessary. You will have proof of income to show the bank just in case, if you keep your books well. You will also be better prepared for annual audits.
Additionally, you can also create customized invoices for your clients as well as notifications for payments. You will also be able to identify anyone who’s late in paying their invoice.
As a freelancer, it is important that you are able to keep track of all your spending and earning. Proper bookkeeping and the right software will be able to help you do this without a hitch. Go ahead and give it a try. You will not regret this decision.