Working for yourself as a freelancer means you have to wear many hats, and one of them sees you having to deal with your business’ finances.
You need to take into consideration your wage, money for the business and how much tax you're required to pay, but don’t worry; with our helpful tips, you will easily be able to keep track of your earnings.
Give yourself a payday
Like you would have with any other job, set yourself a payday. Choose one day in the month where you will give yourself a paycheck
. This will allow you to organize personal finances, including setting the dates that your bills need to be paid. This will also help you to not take more from the business than you need, if you regularly take small sums of money from your business account, there may be a month where you take too much. This is why it's best to give yourself one lump sum to work with.
Separate your business and personal accounts
Speaking of accounts, you should ensure you have separated them. You shouldn’t mix business with pleasure as the lines between what is available to spend on personal things and what is for the business can very quickly become blurred. Instead, you should look to have a business account
purely for professional reasons. Set up a payment that moves your salary into your personal account each month. By having a business account it will make it much easier for you to understand your business expenses and organize your finances when it comes to filing your taxes.
Keep track of your expenses
There are many ways to pay for your expenses: Card, cash and check. If you prefer to pay cash this will require a bit more organization. You should keep hold of all of your receipts, these will be needed when you come to file your taxes. Paying by card makes it much easier to track your expenses as you will have a digital record on your online banking.
Stay organized if you accept cash
If you accept cash in hand you will also need to stay organized for this. Use printable deposit slips
to save time when it comes to depositing funds into your banks. You should deposit cash as soon as possible or lock it in a safe. Having large sums of cash unsecured can be a target for thieves.
Don’t forget about your taxes
Finally, don’t forget about your taxes. If you don’t want to keep the funds to pay your taxes in your business account, you should allocate a pot where you keep the money until it’s due. The last thing you want is to reach the deadline and see you’ve spent it. All of our tips lead to filing your taxes and can help make the task much easier. If you stay organized, separate your bank accounts, keep hold of your receipts and file your taxes before the deadline, it won’t be a challenge.