Being a freelancer and working for yourself is rewarding, but it’s not without its challenges. Bookkeeping and accounting for various finances are areas that many freelancers struggle with, especially when it comes to taxes. Fortunately, there are some methods you can use to help you simplify the process. 

How Freelancers Can Stay on Top of Bookkeeping

1. Keep Financial Records Well Organized

Freelancers can greatly reduce their yearly tax burdens by claiming deductions. Your home office, any supplies you use for work, and even computer equipment can be deducted, provided you meet the right criteria. When claiming deductions, make sure you keep receipts and other documents in case the IRS has any questions. The more organized your records are, the easier it will be to settle any issues as they spring up. 

2. Make Sure Business & Personal Finances Remain Separate

Opening a business account is another aspect of being well organized as a freelancer. When personal and professional finances become intermingled, it can make it harder to understand your cash flow and plan accordingly. This also makes it more difficult to budget properly, which is crucial for successfully managing your finances. 

3. Create Clear, Consistent Terms When It Comes to Payment

You don’t want to spend too much time tracking down money owed to you by your clients. Make sure you have discussions about payments before work gets started, so your clients are fully aware of the terms. When it comes to invoicing, keeping track of them is a must. If you have many clients, you may want to look into automating the process to ensure you don’t miss any payments. Your physical and online invoice should be extremely professional and have a concrete letterhead, your contact information, the service rendered, the company or client’s contact, and the amount owed. 

In the event you need bookkeeping help for your business, it can be beneficial to reach out to a professional. In Staunton, VA, Roy E. Carter, CPA, PC provides a range of accounting services suited to both individuals and business owners. If you have questions about accounting software, they also offer QuickBooks™ to help you get up to speed. Call (540) 886-6251 for tax or accounting questions. You can also learn more about the services offered by visiting the website.