Freelancing gives you many freedoms. You can work when and how you want for who you want, providing you’re earning enough to pay the bills. But one unfortunate freedom it gives you is to ignore the pesky paperwork and finances. It’s fine, though. You’re not really ignoring it. You’ll catch up at the weekend… Easter… on your summer break…
Be honest. You’ll catch up in a mad panic when your tax return is due, and not before. But that’s not the best way to handle your tax return – or your finances, full stop.
So, here are our four simple steps to get back on top of your finances.
File It Away – NOW
You don’t need a complex filing system if you can’t handle it. Even a box file will do. But if you can bear to file away paperwork month by month, it may make it easier to handle! Scrabbling around for receipts and invoices is a nightmare when you accountant is waiting for your paperwork and/or it’s tax return time.
Keeping your digital records backed-up and easily navigable is important too. If your only records are on your computer and it goes wrong, completing your tax return or establishing who owes you what could be tricky!
Automate Your Processes
Use technology to do the thinking wherever possible, whether it’s for reminding you when invoices are due or doing the maths. Cloud book-keeping programs are the most comprehensive and stress-free way of automating your financial records.
Build in Time to Deal with Your Finances
Dealing with the financial nitty-gritty may not be your favourite task, but even if you can just squeeze in ten minutes every Friday to put things in order, it will help. It’s tempting to think that the time is better spent earning money, but it’s vital that you remain aware of your current financial health and keep track of unpaid invoices.
Things can go wrong very quickly if your cashflow isn’t as healthy as you thought it was.
Get an Accountant!
Accountancy software is great, but there’s no substitute for an accountant. They can handle your book-keeping if you want them to, but they also offer far more than that. They can advise you on loans, business plans, VAT registration and what you can claim against tax – not to mention completing and submitting those pecky tax returns for you.
Clients outsource to you because they value your expertise, so it’s not hard to see that outsourcing your financial record-keeping to an accountant is a great idea too! Any accountant worth their salt will offer cloud book-keeping services these days, meaning you can access your records anytime, anywhere. Check out our Freelancer Accountant section for more information on finding or changings accountants
Keeping your books in order will save you a great deal of stress and time in the long run and will ensure you stay aware of your financial health. It’s an essential part of running your business, and as a freelancer, you are a business – so don’t be tempted to ignore it. HMRC certainly won’t!