Tips for good bookkeeping when self-employed

Being self-employed and your ‘own boss’ can be very rewarding and worthwhile, but hard work.

With many positive benefits to be had to being self-employed and running your own business along with dire employment opportunities it is no surprise that many people dream of being their own boss.

Whether you are already self-employed or considering taking the plunge into self-employment there are many financial issues to consider such as registering self-employed with the HRMC, having the funds to start-up your self-employed venture, implementing an emergency reserve fund, and keeping on top of your earnings.

Whilst keeping on top of your finances may be a daunting task accurate bookkeeping is vital as not only will it save you time and stress when you need to file your tax return, but it also helps you keep an eye on your cash flow and whether you are making a profit or not.

To help you save a little time, make bookkeeping effortless and stress free here are a few tips on how to keep track of your earnings and finances -

Basic bookkeeping

Start basic with records of all your finances. Keep on top of your earnings and expenditure from the start with a basic system where you can record money in and out. Using a spreadsheet or if you would prefer putting pen to paper a book, record all your spending and earnings so that you can track every little penny spent and earned for your own records and for tax return reasons.

Paperwork

To save mad, panicked searches for vital paperwork or receipts make sure you keep all your financial paperwork, invoices and receipts together in a safe location. To keep track of all business paperwork it is worthwhile keeping it separate from personal paperwork especially if you work from home so that you don’t lose something crucial. When storing paperwork make sure you also keep all receipts for future reference. It is also worth noting to remember to keep all paperwork including receipts and invoices for at least six years.

Create a bookkeeping routine

To limit the risk of getting behind with your paperwork and finances it is worth creating a bookkeeping routine from day 1 of your self-employed venture. By having a regular routine each week or month set aside for bookkeeping your books will be up-to-date at all times. Being organised will ensure that you know exactly what is happening with your finances and will help you be ready for filing your tax return without having to stress or do last minute bookkeeping.

Use an accountant

Hiring the taxation services of an accountant can be worth its weight in gold. By using an accountant not only will you gain expert tax advice but save you time and stress as they can help minimise your tax bill and make sure your forms are filled in correctly and on time to save you submitting your tax return late and getting a fine.

Do you have any tips for good bookkeeping?

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