No matter how much revenue is coming in, or how much profit we are making, when that tax bill comes due it is painful!
Contracting or freelancing requires you to wear a lot of hats. Relationship-building, keeping track of your time, marketing your skills and actually doing the work. But one of your priorities should also be establishing how you handle your money and setting the groundwork for good habits.
Understand your deductions
Before you start, it’s essential to understand what expenses you can and can’t claim. This means you’ll keep the right receipts and track the right expenses. Figuring out what’s what can be a little confusing as everyone has a different working set up and what you can claim can vary between industries and occupations. Talk to us about your business expenses from the beginning. This will also help you plan for any bigger work-related purchases that you may need to make.
Get a system in place now
We know all about scrambling to find those receipts under a tight deadline because we have been so busy working, we haven’t taken the time to put a system in place. So we do understand. But we also understand that like us, you will thank yourself later for setting up a good system now. Getting your expenses recorded and your invoices collated means you’ll be able to spend more time doing the the work that brings in revenue. It’s not just about saving time – keeping on top of your cash means you’re more likely to succeed. Do your research and choose a system that will work for you, and see how automations can simplify your life.
Stash that cash
When you’re running your own business or working for yourself, it’s important to always keep your tax obligations top of mind. Make sure you have money set aside in a separate account or consider entering into voluntary installments.
One way to budget and keep on top of your business tax is to pay yourself a wage. Keeping your accounts separate also prevents you from thinking of all your business income as spending cash! Remember to also put aside a little extra to cover your well-earned time off.
We have been there, and we can help make this process easier. Talk to us about setting up systems and automations that take the headaches out of your finances.
Schedule a chat here and as always, consultations are complementary, no-pressure, and no obligation.
