If you are about to become a freelance, there is much to consider, especially regarding your business accounts. Keeping accurate records from the very outset is vital if you want to avoid high tax bills, and you are strongly advised to talk to an accountant, as he or she can help you to set up a system of keeping records that will make it easy to do your annual tax returns.
Source an Experienced Small Business Accountant
An online search will help you to locate an EQ Financial tax accountant in Sydney CBD and from that day on, you will be able to record all your business activities in the correct way. Your accountant will know what you can claim for and what you cannot, but as a rule, you should record every expense.
Make Good Use of Available Technology
Assuming you are in some way IT capable, you should use an application like Ms. Excel, which creates spreadsheets. Of course, we all have different levels of IT ability, but even someone with little computing experience can benefit from basic accounting apps. If you are competent, there are many accounting software platforms that do all the work for you, and by asking your accountant for software recommendations, you will be starting out on the right foot.
Separate Expenses from Accounts Receivable
This is accounting at its most basic, with two main categories; income and expenditure – you should always record entries in both spreadsheets. Some entrepreneurs update their accounts on a daily basis, while others make it a weekly activity – leaving it any longer than seven days and you run the risk of forgetting transactions and losing receipts. You can refer to online guides that provide tips for the self-employed person, as it might help you get started.
Keep and Number All Receipts
This is essential if you want your accountant to spend a minimal amount of time doing your tax returns. The best thing is to get receipts for everything and let your accountant decide which can be claimed against your tax. Paper receipts should be clipped together and have concurrent numbers that match with the spreadsheet entries, while electronic receipts should be stored in a separate folder. As a rule, you should set aside an hour at the end of every day and update your accounts. Some people prefer to use a small notebook, which is fine, as long as you have a record of every transaction you make.
If in Doubt, Ask your Accountant
Whenever you are unsure about something, ask your accountant. He or she will have a system of their own and the closer yours is to this, the easier it is for the expert to do their job. Aside from crunching the numbers, your accountant should be freely available for advice and consultation, as it is their interest for you to keep clear and accurate business records.
Image Source: Unsplash
Don’t make the mistake of leaving your accounts until the end of your first year of trading, as this will likely cost you a lot to remedy. By keeping accurate records from day one, you are helping your accountant, who in turn, is helping you by minimizing your tax bill.
Image Source: Storyblocks
