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 income and setting the groundwork for good habits and record keeping.
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 for 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 sorted
I always say to start out how you wish to go on. You’ll 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 important stuff in your business. 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. Consider choosing a software platform which allows you to record your time spent on projects, it’ll make sending those invoices that much easier! There are many fantastic add-on apps that are now available giving you an end to end solution for all your needs.
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 instalments. You will need to set aside a percentage of business income to cover income tax, GST if registered, and ACC levies.
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! It's also good practice to put aside a little extra to cover your holidays and any quiet periods.
Talk to us about setting up a system that takes the headache out of your finances. We can help make the process easier and set you on the right path from the get go.