A guest post by Finance and Business Writer, Mark James currently works in-house for small business accountants Crunch
Image – by Images_of_Money
I’m guessing that as a freelance graphic designer, doing your accounts doesn’t tickle your fancy much. I know it didn’t for me whilst I was a freelance Writer. It was rigmarole I put off and off foolishly, leading to an amalgamation of calculations, frantic form filling and debilitating stress come tax return time.
Now though, working in-house for an online accountancy firm, I’m a little more clued up on all things financial and savvier when it comes to managing finances. So, if like the old me you’re a bit suspect when it comes to managing your cash, here’s a few tips that should see you right….
Get up to speed with the tax facts
Tax is taxing. Legislation is constantly changing in line with new political regimes and frankly, it’s difficult to keep track of.
That said, if you’re without an accountant, it’s worthwhile attempting to get up to speed with the various tax return deadlines and trying to get your head around what or what you may not be liable to pay. Here in the UK the HMRC have recently introduced ‘webinars’ to clarify all of this, so that’s well worth checking out if you’re UK based and a tad clueless. Nobody wants a nasty tax fine.
Establish a routine
To those not accountancy inclined, sorting through your finances can prove unrepentantly dull and a bureaucratic nightmare. Even more so if you’re uninitiated in the process.
The longer you put it off though, the worse it’ll be later down the line. I can vouch for that personally. It’s therefore wise to put some time aside for some bookkeeping every day or at the very least once or twice a week. Subsequently, this should help keep some of the stress at bay.
Organise your paperwork
It’s important to develop some sort of system, especially where paperwork is concerned. Chuck all your documents into a disorganised draw or shoebox and you could end up struggling to find that important document when you need it most.
Establish a filing system, with different sections for invoices, bank statements and the like and you might spare yourself some financial grief come tax return time.
Online accounting has made things easier regarding the management of freelancer finances, reducing the complexity that’s often involved in using a DIY software package and a separate accountant.
This software can reconcile your outgoings with your bank statements, work out tax and produce clear graph visualisations all in a nice little package. Essentially, it provides a tidy and easy to use online environment from which to do all your accounting rigmarole.
Budget, budget, budget
A fact of the freelance life is that there’s going to be periods of feast and equally, periods of famine. This perpetual circle will obviously have an impact on your finances.
With that in mind try to keep to a budget and elsewhere, embrace financial tools like cash-flow forecasting. This should provide you with a better picture of your finances, whilst helping you to legislate for any lean periods.
Hopefully that’ll be enough to help you get your financial affairs in order. Taking control of your finances will do your mental well-being the world of good. Trust me.