Within the modern day, it is no surprise that more people opt for working as a freelancer or a sole trader, particularly in the context of BOOKKEEPING SERVICES IN UK.
The promise of better work-life balance, control over workload, and increased earning potential are large factors contributing to this shift in employment.
However, working as a free agent produces new concerns and challenges; mainly related to getting paid. In general, freelancers rely on multiple different clients, which can make it difficult to manage finances and keep track of payments.
This may be daunting for some, and so it is recommended that one of the first steps a freelancer should take is to hire a freelance accountant to ensure good accountancy is maintained from the beginning. In addition, accountants can provide you with valuable tips and even recommend useful applications, which will be integral to you developing organized records, such as online accounting software such as FreeAgent, xero, sage and QuickBooks.
The Importance of Bookkeeping for Freelancers
Bookkeeping is an essential skill that provides an instant overview of your business, especially when changes occur regularly. Many freelancers opt to hire expert accountants to manage central records, ensuring financial stability.
Advantages of Updated Accounts
While maintaining precise accounting may seem time-consuming, it facilitates quicker payments. Thorough books help freelancers track payments efficiently and stay informed about the financial state of the company.
Easy Tips for Effective Bookkeeping
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Set Up an Organized System
- Choose a suitable accounting program like FreeAgent, xero, sage and QuickBooks, offered in comprehensive accounting packages.
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Regular Record Updates
- Dedicate time each week to update records manually or use accounting software to track expenses and payments.
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Customized Invoice Emails
- Utilize FreeAgent, xero, sage and QuickBooks to create and send personalized invoice emails to each client. Set up reminders for overdue payments.
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Identify Late Payers
- Leverage aging reports to highlight overdue invoices and quickly identify problematic clients.
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Track Key Business Aspects
- Use accounting software to record operational hours, client hourly rates, business costs, and payments.
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Expense Offset Against Tax
- Keep accurate records of business-related expenses to offset against taxes. Consult a professional accountant for complex tax laws.
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Set Aside Tax Payment
- Freelancers should set aside money for tax payments, as it is not automatically deducted. Work with an accountant or use software to determine the correct percentage.
Account Ease – Your Specialist Partner
Account Ease is a specialist accountancy firm exclusively for Contractors and Freelancers operating through a Limited Company or Umbrella Solution. For more information, contact our New Business Team at 0208 133 4599 or email askus@account-ease.co.uk
