Delving into the world of freelancing can be a daunting experience for first timers, so it is important to understand the importance of budgeting from the outset.
Budgeting can be a tedious task for contractors, especially as so much of your time is dedicated to the role you have undertaken. However, there are certain things that can help it become an automated process:
- Accountant:A good accountant will provide proactive advice on your finances, and ensure that there is enough money set aside to cover any taxes. It is important to maintain regular contact with your accountant as this will help them to provide accurate information when it comes to your business.
- Bank Accounts:Keeping your business and personal bank accounts separate can further help with budgeting. It can provide clarity when tracking the business’ ins and outs, and makes it easier to reconcile when it comes to your financial yearend.
- Automation:Creating a set routine of when to keep track of your income/expenses/taxes can save a lot of time in the long run. By doing this, you are unlikely to miss important deadlines and it will give you time to liaise with your accountant.
- Fallback Plan:Freelancing can bring a sense of uncertainty over where the next paycheck will come from, so it is vital that you have emergency funds should you go through a barren spell. If well planned, the backup funds will tie you over until your next role.
Thinking of becoming a freelancer or contractor? Or interested in the limited company formation route? Get your finances set up and on the right track with Gorilla: professional contractor accountants and limited company formation experts.Get in touchto talk to a member of our team about how we can help!