If you are just going into freelancing then perhaps one of your biggest questions (unless you are already a financial management expert) is how you should handle the financial aspects of your freelance business. Perhaps one of the first things you should consider is getting someone to help you with the bookkeeping and accounting aspects of your business. You may want to get someone you know to help you with this or if you do not know anyone who has the necessary expertise then you can use the same freelance jobs boards you use to get a freelance bookkeeper or accountant. Start by collecting all your invoices for any purchases you make. As you go into freelancing you will discover that there are many items that you would not have normally worried about in the past but that you can now claim from tax as business-related expenses so keep all invoices you receive. You should also keep a book where you write down everything you buy, all money expended and all money received. Speak to your bookkeeper about what books you should be keeping and how you should go about filling them in but before you speak to them start now by just writing down every cent that leaves or comes into your hands. The next aspect is to budget your expenses as far as possible. Although freelancers often find it hard to determine exactly how much money they are going to be receiving on a monthly basis try to budget each amount that comes in so that you know where your money is going. Another thing you will probably want to do is to set yourself financial goals. How much do you want to make this month? Next month? Six months time? In a year? Write down these goals and then see how you can go about improving your income to meet these financial goals. Also work out how much you want to save and how much you are going to be spending. If you have not already registered as an independent agent for tax purposes you will also want to do this as soon as possible. You should speak to your accountant about this and ask him what is required and how you should go about doing this if you do not already know. It is important that this is done within the first three months of starting your freelancing business. In conclusion then, to manage your finances effectively as a freelancer you should begin by finding yourself a reliable bookkeeper or accountant, collect all your invoices and write down all money that comes into or goes out of your hands. Register for tax as early as possible (within the first three months) and set yourself financial goals that you would like to reach to help you manage your money more effectively. |
