Looking After Your Business Finances When Self Employed


Being self-employed offers several benefits. You can choose which projects to work on and set your own working hours. Of course, there are certain drawbacks. One downside is that your salary payments do not include pre-paid tax, ongoing expenses, savings, or your pension. 

In the absence of an accounting department or human resources team, self-employed workers must wear multiple hats. This means you will be responsible for your own business finances whether you like it or not. Depending on your previous bookkeeping and administrative skills, this may be a major undertaking.

To get you started, we’ve created a checklist of six actions to take charge of your finances. Being proactive in managing your company’s finances increases your chances of success. You’ll also be less stressed when it comes time to pay your taxes!

Consult A Tax Expert

Accountants, like most professionals, bill for their time. This is one of those company expenses that immediately pay for itself. Find an accountant, bookkeeper, or financial advisor that can help you get started and stay on track with business spending management.

Your accountant may advise you on accounting software and show you what financial documents you must keep. If you don’t want to do your own taxes, your accountant can do them for you for a charge.

Accounting Software Selection Is Important

There are numerous bookkeeping and financial software programs developed to help small business owners manage their accounts. It’s vital not to buy software just because it’s cheap or on sale. Take the time to learn about each platform’s characteristics so you can pick the best one for your business.

If you already deal with a financial counselor or accountant, they may be able to help. If all else fails, ask friends, relatives, and other small company owners for guidance, or check internet reviews to see what others in similar situations have recommended.

Keep Personal And Business Finances Apart

A considerable percentage of self-employed people use a single bank account for both personal and business finances. There is no explicit legislation preventing this, and it may make good commercial sense for many new entrepreneurs. Separating the two operations has economical benefits. You should also find out more about how you can protect yourself from unpaid invoices, large expenses, and sickness. 

Keeping track of your finances is considerably easier with an online business bank account. While this may not seem necessary at first, reconciling your bank statements will become progressively time-consuming and complicated as your business expands. It will also be harder to distinguish between personal and corporate spending.

Make A Business Budget

Budget control is vital if you want to know how well your company is doing. Your business expenses are rising, so you must be prepared. Soldo, for example, is a software solution that allows you to track your company’s expenditure in real-time and obtain greater financial management. As a business owner, you must also budget for taxes and unexpected expenses such as equipment repairs or replacements.

This guide should help you to manage your business finances when self-employed. Do you have any other tips that might help? Please share some in the comments below.