Record-keeping is a tricky beast when you’re running operations solo.
These are some random tips and tricks I’ve learned over the last year:
- Use the Google Drive app on your tablet/iPhone to snap photos of your receipts and store them automatically in a special folder. You’ll need an internet connection for this, but a good alternative is to simply snap the photo then transfer it to your computer. Photos, as opposed to paper receipts, are a legitimate, accountant-approved way of keeping this important record of your expenses, and there’s no risk of cheap ink fading before you need to show it to the tax man.
- “Good records” mean proving an expense in triplicate, quadruplicate, or even quintuplicate: your bank statement, photo or physical receipt, an entry in your accounting record, and an entry in your day planner/calendar should all show the same purchase was made for the same reason. Keep these around for the past 5 years (if you live in the US).
- Track the start and stop numbers on the odometer of your car for business trips. I’m terrible at this. A little notebook in the glove box might help me.
- For those of you who haven’t yet switched over to freelancing full time: if you keep records of your expenses related to ramping up your business, you can deduct them gradually over several years after you start operations. This is true in the US, at least. What about in other countries?
If you really don’t like keeping track of all this, consider finding an accountant to help you. They’re not as expensive as you might expect, especially considering the headaches you’ll avoid. Many offer quarterly checkups, too, so you’ll only have to pay for an hour or so of their time, four times a year. Less than a thousand bucks a year to pass it on to someone who actually understands numbers? Not a bad tradeoff!
What are your best accounting and record-keeping tricks? How do you take care of the financial side of things? Feel free to share your favorite, rock-star accountant’s details below! Don’t forget to tell us the city/region he or she operates from.