A guest post by Mark James
My guess is that as a freelance writer, accounting isn’t among your favorite tasks. It most definitely wasn’t for me. It was rigmarole I foolishly put off and off, often leaving me a bundle of stress come tax return time.
Now though, working in-house for an online accountancy firm and ironically enough, writing about finance, I’m a little more clued up and a bit savvier when it comes to managing cash. So, if like the old me you’re a little bit lousy when it comes to managing your finances, here’s some tips that’ll hopefully help you get back on track.
Make sure you know the tax facts
Tax is taxing. Legislation is constantly changing 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 some of the basics, tax return deadlines and the like. The IRS offer ‘tax workshops’ and ‘webinars’ that’ll help you with this, so they’re well worth checking out if you’re a little lost. It might help you avoid a nasty tax fine.
Create a routine
To those that aren’t accounting aficionados, sorting through your finances can prove an extremely dull process, as well as a bureaucratic nightmare.
As I know from personal experience though, put it off and it’ll just get worse. It’s therefore wise to put some time aside to do some bookkeeping every day, or at the very least once or twice a week. Subsequently, this might help limit some of stress come tax return time.
Organize your paperwork
It’s important to develop a stringent system, especially where paperwork is concerned. Keep all your documents in a disorganized draw or shoe box and you could end up struggling to find the important documents when you need them most.
Instead, establish some sort of filing system, with different sections for invoices, bank statements and all the rest of your financial data. This’ll go a long way in reducing some of the stress that can result from document disarray.
Even if you’re not among the more tech inclined, its worthwhile examining some of the accountancy apps and software on offer.
Largely, this software is simplistic, especially in comparison to the pad and paper method, as it provides a tidy online environment from which to do all your accounting rigmarole. Elsewhere, creations like receipt bank mean that you can do without keeping masses of receipts.
Establish a budget and stick to it
A fact of the freelance life is that there’s going to be periods of feast and equally, periods of famine. Ed Gandia’s 2012 freelance industry report reflected this, illustrating that this circle is one of the biggest challenges facing the freelance community.
With that in mind try to keep to a budget and elsewhere, consider using financial tools like cash-flow forecasting. This should provide you with a better picture of your financial state, whilst helping you to legislate for any lean periods.
Hopefully that’ll be enough to help get your financial affairs in order. Taking greater control of your finances will do your mental well-being the world of good.
How do you keep track of your finances?
A former freelancer, Mark James currently works in-house for small business accountants Crunch and Freelance Advisor. He specializes in business and finance but writes about soccer and music in his spare time, two of his passions outside of work.