If you work as a freelancer or are self employed then your accounting is often going to be something you do yourself – or at least for some part anyway. The question of whether you should go it alone or hire a professional when it comes to your bookkeeping is something that you would have to consider for yourself but in some industries they lend themselves more towards going solo due to the unique circumstances in which they happen.
For example, wedding photographers are a rare breed of self employed/freelancer who does not have a massive amount of outgoings and only works with a handful of clients each month. In fact, most wedding photographers will only ever max out at around 5 clients per month and that is even if they have a fully booked Saturday schedule each week of the year.
This combination of low expense, high ticket (but low volume) clients means that doing you own bookkepping can be possible if you get it right.
How to prepare your accounts
Before we get to the full on preparation of accounts you need to get the basics right first. First up, you should make sure that you are keeping all your professional and personal finances completely separate. That might mean a business and personal PayPal account, definitely a business bank account that is used solely for business and you should have a means of tracking your finances.
To track your finances you can use a simple online tool such as Quickbooks to keep a track of what is coming in and out of your accounts. It is also recommended to use an online platform such as Zoho (or again you can use Quickbooks) to invoice your clients and collect payments. Zoho allows your clients to pay by credit or debit card through Stripe (which is handy if you are just married and on a budget) and will allow you to easily track the payments your clients make as well as be convenient for them.
This will mean that all of your income and outgoings are in one place once you import them in to the software you are using. Quickbooks allows you to import your bank transactions too so this is a really time saving method and worth the £50 annual investment.
Whether or not you should get an accountant in to check over your business finances or not is up to you – if you are a limited company then it is advisable to get an accountant as HMRC are more strict on this and you will be expected to have everything nailed on. The same is true if you are a sole trader or partnership but the documentation is a little easier to navigate. Again, the investment of a few hundred pounds in a good accountant is probably worth the peace of mind you will get in return.
When it comes to accounting, there are no shortcuts and you should do whatever it takes to get it right. Just like someone’s big day – you want it to be just perfect.