Tips for Website Book keeping and Accounting
Accounting and book keeping is boring, especially for those with the entrepreneurial spirit. Let’s face it, if you were not create, you would not be thinking of building a website. And it is no secret that creativity is completely on the other side of the spectrum with organization and book keeping. However, book keeping is a necessary evil in order to succeed in business. Here are tips that will hopefully help you make this part easier
- Use an app – whatever automated book keeping without work from you is a good thing. It frees up time to focus on other aspects of your business. Apps can handle basic sales, returns, and finances. You can even preprogram and set certain rules like emailing weekly reports. Even when there are costs involved in getting a better app, this will save a lot of time and money that could be better spent elsewhere. Make sure the app is compatible with the structure of your website. Just because it is recommended, you need to make sure the app addresses your websites needs
- Be vigilant about keeping your records up to date – Let’s face it: for most of us, accounting is never going to be the most interesting part of the week. Set an alarm on your phone for a certain time each week to remind you to do your books. Also, make sure you do some thorough research into any tax deadlines throughout the year and enter them into a calendar. This way, you’ll get into good habits and stay on top of your game. Remember, as soon as you let your accounts get out of hand, a backlog will begin to form that could deteriorate into a massive—and potentially very expensive—headache.
- Establish a system that works for you – It may also serve you well to get a bookkeeper’s advice. Does he/she use specific software? If so, they could easily and securely share financial data with you from anywhere, which is hugely beneficial for you. Plus, if it’s good accounting software, it will do a lot of the organization for you. It also goes without saying that if you decide to hire a bookkeeper to do all of these tasks, it will free up time so you can focus on more important things, like landing more clients.
- Keep it separate – Things get complicated fast, and you don’t need that headache. By keeping separate bank and credit card accounts for business and personal, you’ll save yourself hours of work and make it easy to keep track of deductible expenses in one place. Some applications can automatically handle the behind-the-scenes accounting for crossover expenses, but even so, we recommend handling business and personal finances as independently as possible.
- Be thrifty with your spending – Great, you’ve made some money—just don’t forget that some of it belongs to the taxman. Make sure you budget for this as you go, so you won’t get a shock when it’s time to pay your tax bill. Consider opening a deposit or business savings account and put money aside to pay your taxes. Saving 25-30 percent of all income you receive will put you in good shape for paying your bills through the year. The best thing you can do is make a budget and stick to it. Only dip into the cash you save for tax if it’s absolutely necessary. Always consider whether, instead of overspending, you could
- Set cash aside – It’s never a bad idea to set cash aside for your yearly tax bill. If you’re new to freelancing, you’re probably used to having an employer automatically withhold a portion of your earnings to cover income taxes. So now that you’re a freelancer, you’ll need to be prepared for the possibility of a higher tax bill, calculated a bit differently. Pay yourself a standard base but keep the base enough to survive. Be cautious not to spend it just because you had a good week. Businesses have good and bad weeks. Budget as if every week was bad. And be cautious to raise your debts just because of a few good months. An accountant will tell you that you should not make any purchase or upgrade unless you have at least 6 months of your monthly expenses in the bank. That means that if you do not have one more sale for the next 6 months, you can still operate.
- Track everything (seriously) – Filing taxes as a freelancer isn’t easy but it doesn’t have to be painful. Here are some great ways you can avoid scrambling for those write-offs at the end of the year. Use apps, emails, spreadsheets, statements, or an old fashioned journal…. But whatever you commit to, make it work for you.
If you would like more information or you would like us to install some book keeping software into your website, please feel free to contact us.