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Save Time on Handling Financial Works With Our Services on Bookkeeping for The Self Employed

When you first started your business, invoices, receivables, payables, and bookkeeping, in general, were simple back then. However, bookkeeping appears to be a massive chore as your business grows. Finances on the back burner while starting a business tend to spiral out of control as your clients grow.

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Focusing more on your business can be challenging when you allow yourself to be burdened with such tasks. Good thing you can outsource bookkeeping tasks to a professional. 

Pearl Lemon Accountants have talents that will help you save time dealing with financial statements. With years of experience, you can ensure that output is error-free.

Don’t let yourself handle these things when you can outsource them. 

Book a call and speak with our certified bookkeepers today.

How Bookkeeping for Self-Employed Should Be Done

Register Your Home-based Freelance Business

Most countries require that your company be recognised as an entity for operational and tax purposes. There are various entities under which a business might operate, and as a sole trader, yours will be no exception.

You must select one (if you haven’t already) and, depending on your choice, register your legal business name, obtain practising licenses, and everything else required to function lawfully in your location.

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Because taxation and bookkeeping are different for each entity type, the tax form you must fill out will be determined by the entity you use.

You can register your business as a sole proprietor, a limited liability company, a corporation, a partnership, and a non-profit.

Since you do not have to form a corporation, your profit or loss will go on your tax return, and there are no regulations or bureaucratic administration to worry about, the sole proprietor/trader business is the easiest and cheapest to start.

However, your assets are not protected from litigation from your business or ongoing debts.

Decide A Bookkeeping System

When your business is registered, you must choose whether to use a single-entry or double-entry bookkeeping system. Single-entry accounting often includes keeping only a Cash Book (traditional accounting or Excel spreadsheet) in which you list your business income and expenses in cash or by bank card. 

Each transaction in a single-entry system is recorded to only one Account in a single Cash Book (one Cash Book per Bank account). This system is best suited for Cash Accounting.

All fully developed Bookkeeping software uses double-entry to process data. Still, it’s not obvious because you get simplified screens into which you enter your transactions. The double-entry process isn’t visible (if you’re a self-employed person or freelancer, it’s probably not necessary for you to see all that accounting stuff going on).

A transaction is a double-entry when it is entered into two accounts in the system and involves journals and ledgers.

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Use Bookkeeping Software

There’s alot of cloud accounting software available to help your bookkeeping effort. Excel makes it easier to get started and master fundamental bookkeeping. An Excel Cash Book system can do this if your monthly bookkeeping is simple, with a modest number of bank transactions.

If you own an incorporated or limited company, you must have an Accountant or Bookkeeper on staff to assist you in producing end-of-year Financial Statements that adhere to excellent accounting standards – a necessity for those sorts of organisations.

It is recommended to generate or view an Income Statement (also known as a Profit and Loss Report) at least once a month to determine whether your hard work is profitable or not. If it is not profitable, you must take steps to improve it. This is only possible after viewing an Income Statement.

Here in the UK, you will be required to use software compatible with digital tax filing beginning with VAT, to comply with the government’s Make Tax Digital initiative. You can still track your money in Excel, but an accountant will need to take your data and process it digitally.

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How Often Should Bookkeeping Be Done

A question regarding bookkeeping is how often it should be done.

Here are the bookkeeping operations surrounding business activities and an idea of when they need to be completed.

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Business Income

Prepare and send the invoice as soon as your job for a customer is completed, making sure to include any costs associated, such as goods or contractor fees

If you have access to your bank account online, check it daily for payments received from Direct Banking clients and assign money to your customer bills. Email Customer Statements to your customers once a month, around the 5th, to show them what invoices or amounts are outstanding – including a reminder of the payment due date. 

If the Customer is late in paying, send them the invoice again with a mild reminder that it is due now. If you still haven’t received money after a few days, commence your collection processes. At least once a week, follow up on these past-due payments.

Business Expense

Keep the receipt as soon as you purchase with your bank card – do it at the store as you walk out to avoid losing the receipt. Take a photo of it and save it to an online filing system; then, you can toss the original or place it in your physical file system.

Once a week – If you made credit-card purchases, enter the bills into your bookkeeping software (a single-entry Cash Book spreadsheet will only enter payments of bills).

Reconcile your creditors once a month, between the 1st and 10th. If you make credit purchases, ensure you have all of the vendor’s invoices. Then, pay your bills on time. If you can’t, give them a call and arrange the payment; they’ll appreciate your honesty, and if you don’t, you will be hassled.

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Banking

As soon as you receive a check or cash payment from a customer, mark the payment against the invoice to ensure that it is not lost and that your cash flow is healthy.

Set up bill payments to your suppliers once a month if you use a creditors approach, either by submitting checks or by setting up direct credit payments online. Most vendors have the same due date for their bills; however, some will request payment sooner or later; process payments by the due date, which may require you to pay attention to this process more than once a month.

You must reconcile your bank account at least once a month to ensure that your bank transactions match your bookkeeping software or cash book on a specific date, such as the last day of the month. Make the required adjustments to ensure that the balance in your bookkeeping system corresponds to the balance in your bank account.

Reports

Examine your business reports once a month after your receipts, payments, and bank accounts indicated above have all been entered and reconciled for the previous month (Income Statement or a Balance Sheet).

To generate an Income Statement or Balance Sheet, you do not need to have received all customer payments or paid all bills. The sum of those unpaid invoices is recorded on the Balance Sheet.

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Bookkeeping Tasks You Can Outsource With Us

People choose to be self-employed because they have control and freedom over what they do. Hence, allowing them to have more time on their hands. 

As your business grows, your bookkeeping business and tasks will slowly turn into a time-consuming chore. Not soon enough, you’ll see yourself experiencing burnout from the job burden. Avoid this from happening and start outsourcing your bookkeeping to us.

Pearl Lemon Accountants can help you with the following:

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Repetitive Task

Repetitive financial duties such as AP (accounts payable) and AR (accounts receivable) are frequently outsourced to relieve overburdened business owners of the load of tedious work. 

Our expert bookkeepers can manage ongoing financial operations and report utilising small business accounting software. They are knowledgeable enough to set up recurring AP and AR to save time where business owners may be accustomed to manually entering these items each month.

Our bookkeeper will work around platform-specific constraints or offer a new system to manage accounting activities better. Our professionals can help you with your regular financial reporting to engage with investors and partners to develop more professional reports. 

We have the knowledge and ability to set up automatic reports for continuing financial demands and pull reports on an as-needed basis to inform business choices better.

Reconciling of Bank and Credit Card Statements

It can be challenging to reconcile business records and corporate bank accounts. If you have no prior expertise reconciling bank statements, you are more likely to make mistakes. It is, nonetheless, required for effective bookkeeping. Our expert bookkeepers can help you prevent mistakes and maintain your accounts in good standing.

Maintaining well-maintained documents is also essential from a legal perspective. Furthermore, governments in various nations frequently provide good plans for entrepreneurs who keep accurate financial records. Investors are more likely to be interested in businesses with clean records.

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Payroll 

We can implement and administer payroll software to simplify payroll processing and provide concrete benefits to employees, such as a direct deposit. Depending on the quality of the payroll software, it may also feature automatic local, state, and federal tax filing to help with that. As a result, your business will benefit from increased accuracy, while employees benefit from streamlined compensation.

Tax Obligations

Because there are so many potential errors for tax issues, business owners fear preparing and filing their taxes. Even when taxes are properly filed, there is always the question of whether money was lost due to unutilised tax write-offs. Our professionals can ensure that taxes are error-free and can uncover tax breaks to take advantage of.

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Save Time on Bookkeeping; Get a Professional

Being self-employed and managing all of your finances and taxes on top of your responsibilities is difficult. Good thing Pearl Lemon Accountants have the expertise to help relieve your worry about your finances.

Our professionals will keep track of the ins and outs of your financial record and ensure that it is well organised. We will also ensure that you won’t get anxious during tax season. 

If you need more accounting services- reach us, and we will always have a solution.

FAQs

Bookkeeping is more transactional and administrative, focusing on recording financial transactions. Accounting is more subjective, providing insights into your company’s financial health based on bookkeeping data.

Yes, you can learn how to manage your books. However, we recommended hiring a professional to avoid mistakes and streamline financial operations.

A bookkeeper who assists in basic bookkeeping typically charges between £25 and £35 per hour. If you want to know specific prices, give us a call.

When you allow us to keep track of your finances, you give yourself more time to do your work and please more clients. It's a win-win situation for everyone. Aside from that, you'll also gain financial stability because your assets and liabilities are managed well enough not to cause any trouble for you in the future.

So let our experts work for you, and you won't regret it even a bit.

Book a call today to get started.