Accounting Basics for Freelancers & the Self-Employed

The world of freelance work and self-employment comes with a fair few challenges, usually the most unfamiliar of them all is dealing with new bookkeeping and accounting responsibilities.

There’s no doubt one of the things you love most about running your own business is having control – you can set your own working hours and craft your own business strategy.

Although no one will know your business quite as well as you do, sometimes it’s important look for external help when it comes to aspects of your finances. With the assistance of an accountant you can keep up with changes in legislation and the compliance requirements of your financials without the stress of doing it yourself and the of risk of not doing the job properly.

Handing over your company’s finances to someone with more experience in accountancy, means your own productivity can increase as you gain time on focus what you do best.

Here are a few of the occasions when seeking a reliable accountant will be most useful.

When Managing your Super

If you’re self-employed you don’t have to make super contributions to a super fund for yourself. Although, it may be a good idea to consider super as a way of saving for your retirement. An accountant can be very helpful throughout this process, they can help you find out if you are able to:

  • Opportunity to claim tax deductions for the super contributions you make to yourself
  • Your eligibility for low income super contribution
  • The possibility of being eligible for super co-contribution on those that you don’t claim a deduction for
  • benefit from the additional concessions for certain invalidity payments.
Getting Help with Finances

If you do it yourself accounting for a small business can get complex, very fast.

If you begin to feel like you’re losing control of who owes you money and how much, an accountant can help you get back on track.

This can be done by measuring key business metrics, such as the ratio of salaries as well as others payments to your revenue. An accountant can also help here by managing your payroll and generating data to explore changes in ratio over time.

When your Business is Growing

A new client or a big project can mean you need to grow your business more quickly than expected and within a few weeks you can go from a steady workload to being head over heels with work.

An accountant can help you handle a few aspects of growth transitions employing new staff or expanding your office space. They’ll do thing by looking after the detail (things such as the payroll, employee tax management, utility payments, property tax, ect), this will mean you will be free to look at your longer term goals and the direction the company is moving in.

An accountant can also provide insight into how to properly grow your business through financial analysis by looking at your cash flow, inventory management and pricing. Assistance could even extend to determining the most effective time to introduce a new product or service to your business.

Tax Compliance

We couldn’t possibly leave this one off the list. The Australian Securities & Investment Commission say a common pitfall for small business is not leaving any money to the side for income tax.

If you don’t meet your tax obligations each year, you could pay hefty penalties so much so that they could even put you out of business. An accountant will help you keep your compliance costs to a minimum, while making sure they are done properly.


If you are a freelancer or are self employed in Adelaide and think you may need some financial assistance, get in contact with MC Chartered Accountants.

 

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