Self-Employed? The Bookkeeping Skills That You Need to Know
It is imperative that those who are self-employed have some basic bookkeeping skills, regardless of whether or not they have an accountant that works on their taxes. Indeed, by having this skillset, self-employed workers can make sure that all of the right information is saved, making it a whole lot easier to create proper books when the year ends.
Bookkeeping software is very helpful for those who aren’t able to do their own taxes. Indeed, bookkeeping software can assist you in recalling every single type of record that must be kept as well as in the creation of a running log that contains information regarding both your income and your expenses. As a result, you won’t make any mistakes as you try to recall your income and expenses towards the end of the year. It can also help you create reports for your accountant that are more detailed, decreasing the amount of time that your accountant ends up spending creating your books which, in turn, decreases your bill.
You want to make sure that you keep track of the things that you do not receive receipts for by logging them. A good example of this would be travel mileage; each time that your own vehicle is used for company activities, you have the right to a tax write-off for every mile. Since you want to keep everything all in one place, we suggest that you store your log information using the same tool that you use to save your receipts.
Make sure that you hold onto each receipt that you received from the purchases and activities that you paid for. This includes receipts from business lunches, dry cleaning for suits, as well as hotel rooms for business trips. Then, save them onto an accounting software such as QuickBooks. To take a photo or scan your receipts, you can use the QuickBooks Mobile app, for example. However, there are many other receipt management applications that can be integrated with QuickBooks that you can choose from including Hudboc, and Receipt Bank. All of your receipts will automatically get added to the correct expense category for you that way you can keep everything all in one place. In addition, you never have to worry about losing or damaging the physical copies as you will have all of the information that you need on your device.
You are going to want to have different bank accounts, credit card accounts, along with any other type of business services separate from your own accounts. By keeping your own expenses separate from your business ones, it will be much simpler to monitor your business activity as well as get your books balanced as soon as the year has come to an end. Therefore, hold onto each business statement and account invoice from every month and then file them as backups with the same tool that you use to file your receipts.
START YOUR BOOKKEEPING JOURNEY WITH US TODAY