Online accounting for Freelancers

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We all know that when working as a freelancer, your finances will always be somewhere in the forefront of your mind, nagging away at you and distracting you from your important tasks. 

For many freelancers, especially creatives, the last thing you want to be thinking about is your accounting. 

Unfortunately, it is necessary and it’s best to instil an attitude of ‘This is my job’ and the price for your creative freedom and not having to answer to a boss is that you have to do a lot of the paperwork yourself.

Plan

One of the best things you can do as a freelancer is to plan. Just because you are self-employed and living life your own way does not mean that you need to be cavalier about your organisation. The good news is that nowadays you don’t need to pour over endless sheets and documents to get an idea of your finances, as things are now entirely online. 

Using online organisation tools can also get overwhelming, so try and stick with one. Keep your documents backed up, and spend a certain amount of time each week just organising. You need to see it as part of your actual job and you need to turn it into a habit rather than a chor. Potentially rewarding yourself by doing something you enjoy afterwards. 

Separate finances

It is important that you separate your finances between your personal account and your business account. This will make setting up your tax payments and business expenses easier. A business account is free to set up and you will not need to worry about HMRC audits. It is one of the most important first steps in organising your finances as a freelancer. 

Business expenses

Figure out your operating income and expenses

The best way to do this is to remember the sum: sales income – expenses = taxable profit. Once you have figured out what your taxable profit is going to be, you can estimate what your “worst-case” tax bill might end up as.

Tracking your income and expenses will help you when creating your budget. Having a budget is essential to operating any business and is integral to accounting for freelancers. You should keep all of this information on a budget sheet that you update regularly. 

Bookkeeping

Bookkeeping is keeping track of all your expenses and income. Remember to record and categorize your expenses so as to keep track of your potential expenses and deductions. You will also need to keep bookkeeping if you want to get a business loan. Banks will want to see a detailed record of your financial history as a precaution, so good bookkeeping is essential. 

A part of bookkeeping is also planning for potential periods where you may not have too much work. Whether you are a contractor, artist or designer there may come times when the business will not be booming as usual. 

Bookkeeping and having a clear idea of your financial situation will allow you to better weather these periods and allow you to get right back on track when business starts again. The lockdown is a perfect example of how vast exterior forces can significantly change your situation. 

Bookkeeping services

Run a schedule

Having a schedule, whether it’s for your bookkeeping or for tax payments is very important in online accounting for freelancers. If you have a schedule you will know exactly when and to whom your payments are going, and you don’t have to track down each individual payment. This makes accounting for deductibles much easier. 

You can also do this with your customers’ debts, so as to have a precise idea of when you need to be paid and if they are late on any payments. 

Get professional advice (if you need it) 

Sometimes you may have too many accounts to keep track of to do it yourself, or you simply do not feel comfortable or able to do it yourself. If this is the case you don’t need to worry as there are many services that help provide financial advice and accounting services to self-employed people. 


We at Steele financial are specialists in small business accounting and have years of experience doing it. We can provide you with a free consultation here if you are concerned about setting up your business accounting but are not sure where to begin. Everything from bookkeeping to payroll, we can help.

Make accounting easy

Whatever your accountancy needs, we are here to take care of everything, reducing the time and effort you need to spend on your books.

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