Self Employed? Here are a Few Bookkeeping Tips for You!

Bookkeeping Tips for Self Employment

It is both exciting and scary to choose the road of self-employment. Many people love the idea of working for themselves, but it can be overwhelming to handle the business financials throughout the year.

As a contractor, you don’t have to stress about having a boss looking over your shoulder throughout the day. You work as a contractor, giving you the ability to manage your time and the services that are offered. But, you don’t receive benefits, insurance, or retirement plans that are often offered through corporate employment.

Whether you already have a home based business or you are thinking about self-employment, there are a few things that you need to keep in mind:

Manage Financial Records

Are you consistent with tracking every transaction that moves through the business? The documentation is essential if you are ever audited in the future. You need to be sure that you can provide documentation of the write-offs and business expenses. Without this documentation, you might end up in a situation where you need to pay taxes and penalties.

The best thing that you can do is put together a financial tracking system. Then, have a file folder where you keep relevant receipts and anything else that applies to the costs for your company.

Don’t Mix Personal and Business Finances

Make sure that you have separate bank accounts setup so that you don’t have to worry about mixing personal and business expenses. Keeping these transactions separate will ensure that you are compliant, and it simplifies the bookkeeping process throughout the year.

To keep things clean, it is best to have a business checking account, savings account, and a credit card. All business transactions and revenue should move through these accounts. Then, you can pay yourself by cutting a paycheck for yourself or making a funds transfer from the business account to a personal account.

Hire a Bookkeeper to Help

As a freelancer, you are carrying a lot of responsibilities to keep your business running. Most freelancers don’t have bookkeeping experience, which results in a situation where the financial tracking is mishandled. Or, in some situations, no effort is put into tracking the financial details of the business.

Instead of harming the success of your company, it is better to hire a professional to help. With the right bookkeeping service, you can relax and focus on other important parts of your company. A bookkeeper will offer assistance with transaction management so that you don’t have to worry about it.

If you are a freelancer or you own a small business, then you should consider the benefits of hiring a bookkeeper to help. Call our team at Easier Bookkeeping to learn more about the services that are available: (888) 620-0770

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