Bookkeeping for self-employed people can seem like a daunting task; however, it doesn't have to be! With some planning and organization, keep track of your finances can become (an) effortless part of your business. First off, it's important to identify what type of bookkeeping system you'll use. There are two main options: cash basis or accrual basis. Cash based accounting works best for those who don't expect much profit each year and need simple record keeping. Accrual basis is better for larger businesses where multiple transactions occur throughout the year and there is more complex bookkeeping needs.
Secondly, set up a filing system that works best for you. This should include bank statements, credit card records, invoices and receipts - all kept in an orderly fashion. Also be sure to categorize any expenses related to the business so they're easy to find when tax time rolls around! Additionally, make sure you are regularly backing up your financial data in case something happens to the physical files and documents.
Finally, stay organized with regular reviews of your finances. Reviewing monthly (or even biweekly) statements will help you ensure accuracy of your bookkeeping records as well as detect any possible discrepancies or errors that might have occurred along the way! Plus, if done on a regular basis it won't take too long (to do). So why not save yourself some worry by staying on top of things?
In conclusion, managing finances doesn't have to be super hard - even when you're self-employed! By following these steps and developing an effective system tailored specifically to you and your business activities, bookkeeping will become second nature in no time! And remember: always back up your data just in case!!
bookkeeping for self-employed
