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Financial Planning Small Business Accounting

Bookkeeping tips for freelancer workers

 

As befitting of a profession as it may seem, freelancing is not all roses and unicorns.  Even though you get to be your own boss, there are a zillion things you need to take care of in the process.  Work execution, client management and filing company taxes for freelance workers are all part of this job description.  It is of utmost importance that freelance workers keep their books up-to-date.  This not only streamlines their work, but also ensures that filing taxes by the end of the year is a hassle-free task.

Hire a CPA to file your company taxes for freelance workers.  A professional can also provide you with better strategies to manage your accounting and can help strengthen your financial gains.  Nonetheless, hiring an accountant is only beneficial if the scale of work is high enough to accommodate the need for an accountant.  Otherwise, it can be just another expense.  There are multiple considerations you need to make when hiring an accountant for freelancers.

If you just

started as a freelancer, then it is advisable you manage your accounting on your own for a while.  This will give you a good understanding of your business.  Work on your business’ growth and try to cover different projects, then hire an accountant to file your company taxes for freelance workers.  This implies that in your initial years, you will be on your own.  The first and foremost way to keep up with your finances is by ensuring your bookkeeping skills are on point.  Excellent bookkeeping skills allow you to account for every little profit you earn, as well as for the corresponding expenses.

Here are some tips and tricks from experts to help you stay on top of your accounting.

  • Stay organized

When you are the only person managing everything about your business, it can actually be easier for you to stay organized, as there is no middle man and potential miscommunication risk.  Bookkeeping is all about keeping track of your financial transactions.  It is really important you have a sound filing system.  For digital filing, have properly labeled folders and for offline management of documents, do the same physically.  If you find it difficult to do this on your own, then yes, it is time to hire an accountant – organization is the fundamental aspect of bookkeeping!  Something you can do to make sure your filing system works is opting for online invoicing software that will manage your invoice statements for a small monthly fee.

  • Make copies

It does not matter whether it is just a receipt or a lot more; every document is necessary and you might end up needing them at some point in time.  Tangible documents may not be prominent among millennials, but they can prove to be a lifesaver when filing company taxes for freelance workers.  Make sure that you have hard, as well as soft, copies of all documents and receipts.  This will ensure that, even if a file crashes on your system due to malfunction, you have a backup copy of every document that you might need to either file your taxes or for an audit.  Alternative: place your documents into cloud storage such as on the Google Drive, the iCloud, Dropbox, etc. 

  • Monitor your expenses

It is of great importance for freelancers to keep track of expenses.  People tend to focus on their income, but it is their expenses that play a critical role in managing their finances.  For freelancers, it can be difficult to track expenses as they are numerous and you are all on your own.  However, every penny you spend towards building your business is an expense.  So, detailed and thorough monitoring of your expenses will allow you to manage your finances and, consequently, prevent the squandering of your hard-earned income.

  • Plan ahead

Planning ahead for tax filing gives way to preparing and organizing in a better manner.  It ensures that you get enough time to streamline your documents and to make essential corrections in your accounting, when needed.  If it seems that you are falling behind in tax filing, then planning ahead can prevent any possibility of carrying over tax debt.  A rough estimate suggests that taxes cost you almost 30% of your income.  Make sure you build up to this amount adequately by planning ahead.

  • Transparency

Since you don’t need to answer to anyone, you might get tempted to sweep a few paychecks “under the rug.”  Yet make no mistake, the Internal Revenue Service (IRS) can audit any individual.  If the IRS concludes that you are trying to hide some of your income, then it can lead to big-time repercussions for you.

  • Keep track of your due payments

The way a freelancer earns money is through the projects they work on.  Once a project is completed and approved by the client, the agreed-upon amount should be paid and the freelancer moves on to new projects.  However, there always seem to be a handful of clients that take the term ‘freelancer’ too literally and create problems when it is time to pay up.  Do not shy away from sending emails to such clients, reminding them their payment is due.

It does not matter how small the projects you work on are: if you do not keep track of your accounting, it will eventually pile up and, by the end of the year when it comes time to file your company taxes for freelance workers, you will find yourself sitting on a pile of poorly-kept documents.  Well, fret not!  It is not too late to manage your accounting efficiently. 

Agro Accounting CPA is an online CPA platform that provides convenient and hassle-free business formation and tax services, along with taking care of your bookkeeping needs.  Visit the official website, www.agroaccounting.com, to find out more.  And hopefully, this article was helpful in guiding you through the essentials of bookkeeping.

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Financial Planning

6 Steps To Finance In Right Direction For Progress In Every Aspect

Talking about the stream of planning your daily expense, there are times which you must consider cutting the shape in your business. It is the type of understanding which every people living in your house should have. The benefit gives you to handle the management of finance in the given prospect to settle a career. When you know that if you proceed with proper planning, then you can sit with adequate funding.

What about those individuals who are new to explore the section of money? For them, it can be an essential step that helps you to take the beneficial towards better working. If you are looking for some aspect that gives you much interesting way you should think before you start.

Therefore, the effect it produces in the making of financial stability is that it gives better career options. There are times which you should handle the charge of beneficial finance, but in the lack of experience, you stand in trouble. But do not worry, you can think of option creating a business towards better progress.

When is finance alarming for you?

With the beneficial factor of maintaining the finance, there are times which you must consider where you can only win management works. Another amazing point to discuss is that when and how come to know finance is not working as plan.

To know about the secret of making the beneficial way of managing the situation, you must first check with the financial history. After that or you can say with a successful checking, you can count on the case towards progress.

TIME TO READ SOME GOOD REASON TO FINANCE THE MONEY IN A RIGHT WAY.

  • Take calculative measures

When it comes to handling finance, there are times where you must proceed with calculative steps. It is because running with your innocent might can give you a false belief of achievement. You must be practical and assertive in your actions so that your mind and body execute in the fulfilment of the dream project you are aspiring for. Besides, you should also be knowing of alternative in finance such as online borrowing. It can be a saviour in your project because you can avail money within installment loans for bad credit to avoid the financial halt.

  • Budget stuck

Sometimes the role of income can become the advantage or hindrance. It is because when you plan something, then the most important thing you need to divide the money wisely. With the smartest way of distribution in income, you can track down towards the best decision. Not only that, if you take the help of alternatives sources towards better managing prospect, but you must also consider every way towards progress. Also, to address the feature of online borrowing, you can set flexible features which can be easy for you to deal with funds.

  • Planned investment

Everything should be planned, and every step should be taken with full advice. It is because dealing with money in every aspect is not an easy task. You might get drown, and you might fall in the trap of loan sharks. If you are looking to keep yourself safe and worthy, then only planned investment may work in favour of the successful completion. The benefit of working on a strategic trick also gives you confidence, and the making of situation flourished in the best way possible.

  • Financial conduct

Have you ever wondered that the pointers mentioned above could give you the best space to work because all of it will handle by you? Yes, you have guessed that right that your behaviour in dealing the entire task is essential. If you get distracted and do not pay attention, there can be chances of you losing everything. Investing is all the time hard task rule to follow up, and you must be vigil and working in its progression.

Therefore, there are times which you must think upon and their situation where you have to be wise. The mentioned pointers are examples to make you understand that finance your money is not an easy task.

Conclusion

The programme of making your every move is the progress of your work. You should also be aware of the situation towards a better understanding of finance. Therefore, if you are wise, then you may win the challenge of winning the task of funding. But if you think that managing the given situation with ease which is only possible when you have a strategy to perform.

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Financial Planning

Financial Planning Checklist for Your Small Business

Financial Planning Checklist

The financial management strategy of your business determines your growth in the competitive market. When you want to attract potential investors towards your business, it is first important to start with solid business planning.

Note that the financial section of the business is made up of three important elements: they are the balance sheet, cash flow projection, and income statement. The financial planning checklist must include a valuable analysis and a brief explanation of all these elements.

Considering stock of expenses:

There are two main categories of business expenses; they are operating expenses and start-up expenses. The cost that is required to set up your business is named start-up expenses; it includes the registration fee, inventory, rent deposits, licensing, permits, utility setup fees, and down payments of the equipment, etc. This list may expand when you start with proper planning.

The second important element is operating expenses, and it includes the cost that you need to spend to run your business. They can be better defined as monthly expenses, and the list includes rent payments, salaries, raw materials, distribution utilities, promotion, maintenance, and office supplies, etc.

Here are the three important elements of financial planning checklists:

The income statement:

The income statement defines your expenses, revenues, and profit for a specific duration of time. This snapshot may help you understand whether your business is moving in a profitable direction or not. You should subtract the expenses from revenue to calculate the loss and profit. The established businesses prefer to produce their income statement once in the fiscal year; however, experts advise to generate it monthly during the first year of business.

The cash flow projection:

The cash flow projection determines how cash is expected to flow within and out of your business. It is considered as an essential tool for analyzing cash flow management. This analysis can help you check if your expenses are growing too high or you have enough cash flow surplus. The cash flow projection will show the level of capital investment required by your business. Investors may also consider this statement to decide whether it is safe to invest in your business or not. Hence, one should be careful while designing this statement.

The balance sheet:

The balance sheet is useful to report the net worth of your business at a specific point of time. It presents the summary of financial data of your business while dividing it into three different categories: assets, equity, and liabilities. There is an important relationship between these three parts of the balance sheet; it can be expressed using this equation: Assets = Liabilities + Equity.

While developing your business plan, you should create a well-analyzed balance sheet that provides a clear summary and information about cash flow projections and income statements. The small business owners need to prepare a balance sheet once in the year. And as soon as your balance sheet is complete, it becomes easier to write a brief analysis of all these three financial planning checklists.

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Financial Planning Small Business Accounting

You don’t need a finance guy to your finance, you can use tools

A preconceived notion that most entrepreneurs fall prey to is that in order to resort to a powerful and beneficial financial planning, one will have to seek assistance from a professional. Evidently, hiring a financial advisor would imply that he will also have to be paid at the end of every month and this is what persuades the businessmen to drop their plan of delineating a budget and let things be as they are. However, in this article, we will be busting this myth for you. Far from consulting a business specialist, you can chalk out the business plans all by yourself using tools, some of which are even available for free.

 

Thereby, the answer to do you need a financial advisor as a small business owner would be no. Also, let’s not forget the fact that nobody is as familiar with the intricate notches of the business as you and this perspective can be capitalized on for fruitful financial planning. It is you who has been the closest witness of its past success and failures and are now sticking out hopes for the future. If you are baffled about where to start from and how to go about it, here are some ideas.

Reassess your strategic plan

First things first, to build a solid business plan you will have to be certain that your strategic policy is at its place. Ask yourself a series of questions like:

  • Is there enough cash flow?
  • Do I need to expand my business and resultantly hire more staff?
  • Should I invest in more efficient equipment to boost production/supply?
  • Do I need financing? If yes, for which areas exactly and how much?

When you have an answer for all of these queries, note them down and outline a realistic estimate for all of them and how the amount is going to affect the next 12 months (6 months) of your business expenditures.

Compare them with the past records

Because all these expenses will be borne by none other than the funds of your business themselves, pull out as many records as you can and compare your targets with them. Use tables, spreadsheets and means of calculation to form neat registers that will weigh your company’s performance so far and furnish you with the clean insight into how much you can risk spending, even if it is for the welfare of the business this year. For instance, if you gather that the average profit from the last five years is not as much as the sums that you are looking forward to financing this year then don’t succumb to the risk. Either spread out your plots to be attended over the next few years, or cut on the extras that you can possibly do without at the moment.

Consider the unforeseen emergencies

While carrying out the business planning do not forget to take the unforeseen emergencies that can hit your business into account regardless of how distant or erratic they are. Market analysts always recommend small business owners to have an emergency fund ready which they can fall back on during a contingency. The prospects include having room for enough line of credit or saving cash for the odds.

Examine

Lastly, like all other businessmen, you too must have a number of expectations from your company. Therefore, all you will have to do is examine whether or not these targets are being fulfilled in reality and if not, what are the feasible adjustments that you can implement to make ends meet.

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Financial Planning

Every small business must do financial planning, here’s why?

Considering the economic turbulence that has been encapsulating the market for quite some time now, it wouldn’t be completely wrong on our part to qualify economic planning as an indispensable factor for all businesses alike, regardless of their mode of trade and size.

Financial planning, or what is more commonly known as budget is the process of delegating a fixed amount of money for the cumulative expenses that will be carried out during the course of the business thus, guiding its day-to-day process of decision making. Predicting numbers for the upcoming year and comparing them with the average configurations of the past will assist in determining the overall efficaciousness and health of the business even if the organization is single-handedly run by the owner. In the following section, we will be jotting down the chief reasons that elucidate why every business needs a financial plan to help you form a clearer insight into the same.

Helps you plan a quick response to financial crisis

The fact that a small business doesn’t have a reserve of voluminous funds to fall back on when crisis strikes cannot be steered away from. However, the vulnerability of the business to market instabilities cannot narrow down owing to this truth. In fact, if the company fails to delineate effective business planning, the repercussions are likely to deteriorate its permanence further. Possibly, there is a string of issues that can pop up such as property ownership and loss, illness, interruption in the business, lawsuits and the like. Thus, in order to come out clean, your business should have the specialized insurance protection that most importantly, safeguards the interests of the business and provides coverage for all employees’ compensations. Apart from this, the potential risks stemming from the volatility of the industry too can be tackled by strapping financial planning before it’s too late.

Separate business and personal funds

Most small business owners, in the face of a monetary crunch, tend to engage their personal funds to fill in the vacuum thereby, deliberately stepping into the vicious cycle of borrowing and returning. Bear in mind that no matter how worse the situation gets, you should always think of the future where you and your family will be able to lead a stress-free life after your retirement. This is why having a budget for your business is imperative as it will help you set realistic goals for your business.  For instance, if you are looking forward to investing to expand your business but, do not have funds at the moment, you can be swayed in believing that rolling out your personal savings here will be a wise recourse to resort to. Nonetheless, it is not; instead of taking the leap of faith and moving ahead without tracking and analyzing your past experiences, invest only when the financial steadiness and planning allows you to do so.

Develop a formidable tax strategy

Business planning is particularly advantageous when you are on the verge of submitting your tax returns or want to sell your company altogether. If you believe that you have been paying a lot of tax, your budget and past records will aid you in outlining the prospects of superannuation contributions that are at hand. For small businesses, the tax requirements differ as per their legal standings. Thereby, to comprehend your tax obligations as a business owner, get in touch with your attorney or accountant to get acquainted with the federal commitments and strategies. Your personal income and expenditure can be coupled with that of your business to maximize the benefits for the company.

Comply with the sales trends

A business owner’s dubiousness, when asked to identify which of his decisions worked in the favor of his company from a humongous pool, is nothing unusual. Nevertheless, if your financial plan contains a documentation of the sales targets and their respective performances, concluding which of your yields complied with your anticipations and which of them need to be worked on will not be difficult. Moreover, this picture will facilitate the effectual illustration of marketing policies that keep up with the latest sales trends hence, boosting the returns of your company.

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Financial Planning

5 Tips to Create Financial Plan for Your Business Quick and Easy

In order to lead a successful brand, the first step is to create a solid business planning. Many small businesses find this step crucial, and they need some professional guidelines to complete it. And the important part is that you should do it ahead of time so that everything can stay under control.

Here we have highlighted five important tips to help you create quick and easy financial planning for your business:

  1. Plan regular cash flow:

Whether you own a big brand or are running a small business, it is important to understand that businesses cannot always boom. The sales keep on fluctuating up and down month by month. The variations may be more if your business is offering seasonal services and products. Experts advise saving some funds for the rainy days so that you can stay prepared to handle the losses. Make sure you have prepared your emergency funds in advance so that they can be utilized during the dry spell.

  • Go paperless with your accounting:

For the past several years, you might be using papers to manage your financial systems. But the scenario is changed now with the advancements in technologies. It is now possible to streamline things with online accounting systems. There are plenty of options in the market, such as Zero or QuickBooks Online. One can also manage other digital files like Payroll, Banking, and Invoices, etc. with this system. The software can make it easier to manage all the records, and the calculations can be easier at the time of tax compilation.

  • Keep retirement funds:

It may appear a very basic thing, but make sure you plan it well. The small business owners usually target their immediate needs, and they fail to create solid plans for the long term. But it is important to understand that your business must support your future as well. So, look for some healthy retirement options around and set up your financial planning accordingly.

  • Create separate business and personal finances:

There is no doubt to say that your business is an integral part of your life. But it should be separated when we talk about bank accounts and financial aspects. When you mix your personal and business accounts, it becomes difficult to track the transactions. Experts advise keeping separate accounts for both so that you can build legitimacy for your business. It will also be easier to manage your tax details.

  • Check business insurance options:

The world of business is growing continuously; in this situation, it is better to re-access your business insurance plans. Spare some time to evaluate your current insurance plan and check if it makes sense for the changing scenario. If not, we advise you to look for new options around.

Once you follow these simple financial plan tips, it becomes easier to maintain a proper cash flow in the long run. Business owners that have solid business planning can take potential decisions at the time of risk as well.