Story image

The Freelancer’s Guide to Accounting

12 Sep 2011

While every small business knows accounting is a vital task, freelancers often let this aspect of their business fall by the wayside. Yet proper accounting is just as necessary for solo-workers as major corporations, so here’s a simple outline on the easiest, but most important things to keep in mind:

Never mix your personal and business accounts

Just because you’re the boss doesn’t mean you should start using your personal account for business expenses and vice versa. The 'gateway drug' for accounting is mixing personal with business. You’ll never get a full understanding of your expenses if you’re not clear about what money is going where.

Consider hiring an accountant

While this isn’t an absolute necessity, if you find yourself drowning every month, this minor business expense can prevent some major headaches. Plus, it could end up saving you money in the long run, especially during tax time.

Get great accounting software

Do your research and spend time talking to different customer support teams, downloading free trials and seeing what system works best for you. While this can feel time consuming, if the software you choose doesn’t feel easy, you won’t use it. And the most important part of doing your own accounting as a solopreneuer is taking responsibility.

Understand what you can and can’t claim as an expense

You’ve heard this before and we’ll say it again: Save all receipts! That coffee you had with a potential client? Recovering lost data? Hosting fees? Be meticulous about tracking expenses and do research into what you can and can’t claim.

Be very clear about who owes you money and when

Extracting money from clients is always a touchy subject, but remember: this is how you make your living. So when you say 'payable within 14 days' make sure you tell the client before they hire you, highlight terms on the invoice, remind your client one week and again one day before payment is due and call the SECOND that day is over. The most important bit of accounting is to have money in the bank in the first place.

Grant Hewson is managing director of Accomplish. Accomplish CashManager is small business accounting software that allows business owners to focus on their businesses. You can try it yourself by downloading a free trial of CashManager.

What accounting tips have you found useful as a freelancer? Post your comments below!

Cloud application attacks in Q1 up by 65% - Proofpoint
Proofpoint found that the education sector was the most targeted of both brute-force and sophisticated phishing attempts.
Huawei to deploy Open Rack in all its public cloud data centres
Tech giant Huawei has unveiled plans to adopt Open Rack proposed by the Open Compute Project in its new public cloud data centres across the globe.
Beyond renewables: Emerging technologies for “greening” the data centre
Park Place Technologies’ CEO shares his views on innovations aside from renewable energy that can slim a data centre’s footprint.
Interxion’s David Ruberg wins Europe’s best data centre industry CEO
The European CEO Awards took place this week to celebrate the key figures at the helm of corporations that are driving innovation.
Opinion: 5G’s imminent impact on data centre infrastructure
Digital Realty’s Joseph Badaoui shares his thoughts on how 5G will transform data centre infrastructure now and beyond.
EMEA external storage market hits record high, Dell EMC on top
IDC's recent analysis on the external storage market in EMEA has shown healthy results - with some countries performing better than others - largely fuelled by all-flash arrays.
SolarWinds extends database anomaly detection
As organisations continue their transition from purely on-premises operations into both private and public cloud infrastructures, adapting their IT monitoring and management capabilities can pose a significant challenge.
Was Citrix unaware of its own data breach until the FBI got involved?
According to a blog post from Citrix’s CSIO Stan Black, the FBI contacted Citrix on March 6 and advised that international cybercriminals had allegedly gained access to Citrix’s internal network.