Becoming a freelancer is a fantastic, but stressful time. You are now in control of your money, so you need to take charge and make sure you are getting paid on time. You need to keep on top of your accounts, so you know what is going in and out. Here is our financial guide for freelancers you can’t miss.
Keep records of everything
One of the first things you need to do to keep on top of your finances when you are a freelancer is to make sure you keep records of everything. Print out all your invoices and any paperwork you have on your computer, so you have a hard copy as well. Keep folders which are labeled correctly so you know where to find everything. You should keep records so you can go back to people if they haven’t paid you correctly. Track your time so you know exactly what you did for each of your clients. Keeping records of everything will also help you when you need to pay your tax.
Make sure you create clear invoices
Another thing you need to know about your finances when you are a freelancer is that you need to create clear invoices. It’s essential you write on them clearly how much you are owed and what work was produced. That way, you will be paid correctly and can store the invoice. Make sure you put a date on there so you can find it easily if there was a mistake. You can create your invoices online at aynax.com so that you have a professional looking invoice to send to clients.
Consider getting an accountant
You should consider whether or not you can manage your invoices yourself. If you think you won’t be able to keep on top of it, you will need to consider getting an accountant who will be able to help you with your funds. As we discussed before, you will be able to ask them questions if you need financial advice.
Make a separate business account
Another thing you need to know about finance when you are a freelancer is that you should make a separate business accountant. That way you can keep the funds separate to your personal funds. Send all your funds there that you get from clients so you know exactly how much you are getting. It will make it much easier when it comes to working out how much tax you have to pay. It will also help you when trying to chase payments.
Budget for taxes
You should also make sure you budget for tax if you are a freelancer. Otherwise, you will end up with a big bill to pay that you simply can’t afford. Most people recommend you put away 20% of every paycheck away so you can afford your tax bill. It’s best to put away more than you think in a savings account. Then if the bill is less, you can move some money back over into your account.
Hopefully, these tips will help you stay in a good financial state when you are a freelancer.