I still have a 9 to 5, but have started moonlighting as a freelancer and eventually want to build up enough business for that to be my main income! What do you suggest I do about the whole financial side of things? I know I need to keep track of stuff, but I’m not sure what the best way to do it is. I do plan on hiring an accountant to help with taxes, but I can’t really afford to hire someone to do monthly bill paying, invoicing, etc. at this early stage! I’m guessing this is stuff I can handle on my own for now, But what kind of stuff do I need to be keeping track of? Do I need to buy Quickbooks? What do you use?
More Money More Problem
Day to day finances is something that most freelancers keep track of on their own. When your business grows to the point where managing this takes more time away from you WORK, it will be beneficial to hire someone to help manage this – but for me, day to day cash flow stuff is really easy to do on my own and I really only spend a few short hours a month on it! Check out my full video response below…
This is really all about finding what works for YOU – my system is really simple and streamlined for me, but it’s not going to be the right solution for everyone. When you’re first starting out and don’t have the work flow to justify hiring a bookeeper to do day to day things like emailing invoices or balancing your checkbook, you’re going to end up doing it yourself. This doesnt have to be scarey, just stay organized, keep clean records and with the money you save doing your own expense tracking you can invest in hiring a pro to prepare your taxes!
There is a helpful article on FreelanceSwitch, which is a good place to start: Accounting Basics for a Freelancer. There is also some good advice for those of you starting out in the book My So-Called Freelance Life.
Oh and should I just remind you, I am NOT a financial advisor — this is how I handle things and what I have learned from my advisor, you can use this as a jumping off point or to get an idea of the steps involved, but PLEASE – talk with the accountant who will be doing your annual taxes to find out how they would like to receive your numbers!
What’s your advice?
Am I missing something? Do you have experience with a similar situation and would like to share how you handled things? Leave a comment and tell us about it!