4 Essential Bookkeeping Tips for Freelancers

Sep 22

Written By Jessica Jones

Bookkeeping Tips Every Freelancer Should Know

As a freelancer, it can be easy to get caught up in the day-to-day work of your business and neglect the important financial tasks that keep your business running smoothly. In this blog post, we'll explore four essential bookkeeping tips that every freelancer should know to help ensure that your finances are in order and that you're meeting your legal obligations.

#1 Make sure you’re set up legally to freelance

Before you start freelancing, it's important to make sure that you're set up to do so legally. Depending on where you live, this may involve registering your business with your local government, obtaining a business license, and/or obtaining any necessary permits or certifications. Additionally, you'll need to make sure that you're compliant with any local, state, or federal laws that apply to your business. Consulting with a lawyer or accountant can help you navigate the legal requirements for freelancing in your area.

#2 Keep detailed records

One of the most important things you can do to stay on top of your finances as a freelancer is to keep detailed records of all of your income and expenses. This includes everything from invoices to receipts for office supplies. Keeping detailed records will help you stay organized and make it easier to track your expenses and income, which can be especially helpful when it comes time to file your taxes.

#3 Be transparent about your income expenses

As a freelancer, it's important to be transparent about your income and expenses, both with yourself and with the government. This means reporting all of your income to the government, including any cash payments you receive, and keeping accurate records of all of your expenses. Being transparent about your income and expenses will help you avoid any potential legal issues, and will also make it easier to manage your finances and plan for taxes.

#4 Set aside at least 30% for taxes

One of the most important things you can do to stay financially stable as a freelancer is to set aside money for taxes. Since freelancers are responsible for paying their own taxes, it's important to make sure that you're setting aside enough money to cover your tax bill. A good rule of thumb is to set aside at least 30% of your income for taxes. This will help ensure that you're able to cover your tax bill when it comes due and avoid any financial difficulties.

Sum it up!

In conclusion, freelancing can be a great way to earn a living, but it comes with its own set of financial responsibilities. By following these four essential bookkeeping tips, you can help ensure that your finances are in order and that you're meeting your legal obligations. From making sure you're legally set up to freelance, keeping detailed records, being transparent about your income and expenses and setting aside at least 30% for taxes, you can have peace of mind that your freelance business is running smooth.

Jessica Jones

Hi, my name is Jessica Jones and I am a ProAdvisor Bookkeeper in Denham Springs, LA. Although I live in Louisiana, with cloud technology, I work with clients all over the country. I handle the bookkeeping for business owners so they can concentrate their focus on growing their business instead of being bogged down in the books.

In my early career I realized that I enjoyed tracking, organizing, reporting, and analyzing numbers. Now I am lucky enough to work with business owners and find it fulfilling to be apart of their growth and success. I streamline bookkeeping and help businesses make more profit and help ensure they do not overpay in taxes.

I was born in Arkansas, however I have moved around both the country and the world my entire life due to constant family moves when I was younger and later being a military spouse. Once my husband retired from the military after a little over 20 years of service we, along with our 3 children, settled down in Denham Springs, LA which is where my husband is originally from.

https://AliasBookkeeping.com