HomeMake Money OnlineFreelancingHow (and why) to automate your bookkeeping

How (and why) to automate your bookkeeping

(Artwork credit score: Pedro Gomes)

You stop your salaried job to grow to be a full-time freelancer. Hooray! You’re the boss of your personal time and your corporation.

Now you will have quite a bit happening, from dealing with purchasers to managing the initiatives you select to work on.

However wait, there’s bookkeeping!

You realize fellow freelancers who type their paperwork by identify, sort, and date and assume, meh, they’re simply unusual souls who worth inflexible order quite than maximizing their artistic time.

So, you pull out a shoebox and throw in all of your receipts, financial institution statements, deposit slips, and invoices. That ought to work, proper? Till it doesn’t.

Why? As a result of “shoebox bookkeeping”:

  • Makes it onerous to trace who owes you cash and when it’s due
  • Frustrates tax preparers attempting to determine your taxes and file returns
  • Prices you extra for your corporation tax return than somebody who retains correct information

Bookkeeping doesn’t need to be a time-consuming chore. You possibly can automate the method and degree up your tax and monetary recreation in an environment friendly and scalable means.

However first, let’s see how bookkeeping can add worth to your corporation.

Why bookkeeping is essential

It’s simple to assume that bookkeeping issues only for taxes. Er, kinda, however it’s greater than that.

Bookkeeping is the record-keeping arm of your corporation that gives a paper path of your cash, so you understand how a lot you made and spent.

Listed here are a number of causes bookkeeping must be a precedence:

See? Bookkeeping is a lifesaver on your freelance enterprise.

Now let’s discover how know-how will help you automate this tedious, headache-inducing, but unavoidable process.

How know-how will help your bookkeeping

You’re a freelancer, not an accountant. So, chances are you'll not have all the talents wanted to crunch numbers, compile monetary paperwork, and make choices from them.

You might rent somebody to do the bookkeeping and different duties past the fundamentals. Nonetheless, many bookkeepers cost hourly, which turns into an additional expense.

You possibly can do your bookkeeping, minimize prices, and save a whole bunch of {dollars} with cloud accounting software program.

However don’t take our phrase for it. Right here’s how such instruments will help you automate your bookkeeping.

Financial institution syncing

Cloud accounting software program is your ally: It’s user-friendly and integrates along with your banking for simpler record-keeping.

You now not must go line by line via financial institution statements after which enter that information right into a ledger or spreadsheet — it’s pointless and time-consuming.

The software program connects on to your checking account and downloads transactions and key data like dates, quantities, and descriptions from the financial institution into this system.

Your half is to inform the software who you paid or who paid you. No extra typing a bunch of numbers or data — simply enter the payee’s identify and revenue/expense class, and also you’re carried out.

Cloud accounting software program can bear in mind your spending patterns and enter payees or classes for you. However you’ll nonetheless must evaluation what the software does simply to verify that every part is right and alter the place mandatory.

Don’t wrestle to key in your transactions right into a spreadsheet or ledger manually every month. Swap to a cloud accounting software and shave off hours, automate financial institution syncing, and scale back your stress ranges.

H3: Digital invoicing and accumulating funds

Right here’s what invoicing used to seem like for a lot of freelancers:

  • Create a Google Doc or Phrase doc
  • Insert a desk and enter your billable hours
  • Manually add up every line
  • Convert the doc to a PDF
  • Electronic mail the bill to your consumer

Sounds acquainted? That’s the previous handbook means of invoicing, which was time-consuming, tedious, and liable to errors. Nevertheless it doesn’t need to be that means anymore.

You possibly can automate the way you invoice your purchasers and acquire funds straight from the bill and into your checking account with cloud accounting software program.

Simply enter the service you’re billing for, amount, and your charge — the software program will do all the mathematics for you. When you hit ship, your consumer will obtain a digital bill by way of e mail, and so they can view and pay for it on-line.

A latest examine by Wave, a cloud-based accounting software program, discovered that enabling immediate digital cost will increase getting paid on time by over 15%.

Automating the invoicing and cost assortment saves you and your purchasers the trouble of making invoices, writing checks, and depositing them manually.

The software program retains tabs on unpaid/overdue, open, and paid invoices. It’s virtually unimaginable for any bill to slide via the cracks. Oh, and you'll ship bill cost reminders with only one click on.

Expense monitoring

The extra you automate your bookkeeping, the extra time you’ll need to focus in your consumer’s initiatives.

Cloud accounting software program integrates with different apps that automate and simplify your expense monitoring so you possibly can:

  • Monitor your time
  • Create invoices
  • Snap images of receipts
  • Reimburse expense experiences

The outcome: Decreased admin work, price financial savings, and also you keep on price range, too.

Make bookkeeping give you the results you want

As a freelancer, getting paid is certainly one of your high considerations, regardless of what number of purchasers you will have. Bookkeeping helps you monitor your revenue and bills so you possibly can rapidly see the state of your money stream.

When you discover you run out of time for normal bookkeeping, automate the method and free your self as much as do extra of what you're keen on.

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