Bookkeeping For Freelancers

Value the importance of bookkeeping in your business One of the most common concerns of freelancers is getting paid. As a freelancer, you may have many different clients. It can be hard to keep track of who owes you money, when, and how much.

That's why it's important for freelancers to understand basic bookkeeping and use bookkeeping tools. You’ll be able to keep track of outstanding invoices, so you can collect payment. You won't miss out when billing your clients. And you’ll be able to quickly see the state of your cash flow.

You probably already have an accountant. If you don't, you should hire one now. But an accountant might only review your finances once a year. Bookkeeping gives you a more immediate view, especially when you make updates every day. If you find you run out of time to maintain your accounts regularly, then investing in a bookkeeper will free you up to spend more time on doing what you love. Here's how to make bookkeeping work for you.

Create an organised system

Organisation is vital for good bookkeeping. Without it you'll struggle to manage your finances. So start as you mean to go on:

  • Begin right away, as soon as you start freelancing. Don't put it off, or you'll find it hard to remember every past transaction.

  • Talk to a bookkeeper and seek their advice. Ask them which software they use. It makes life much easier if you both use online accounting software. That way you can share data easily and securely, from anywhere.

  • Use a recognised accounting system. Good accounting software guides you through standard bookkeeping steps. All you have to do is fill in the details and, in the beginning, have it checked over by a bookkeeping or accounting professional.

  • Set aside time to do the books every week – if you fall behind, you may struggle to catch up. Hiring the right bookkeeper can make all the difference to your business.

Keep records of key parts of your business

Parts of your business you should record include:

  • your hours spent working, or the jobs completed, for each client

  • the cost per hour or per job for each client

  • your business expenses (and keep all receipts)

  • all payments you make, including bank transfers

  • all payments you receive from