Starting to work online full time is exciting and can feel highly liberating. Now you’re no longer tied to an office you will have the freedom to start working from where you want, organizing your tasks as you please so that you can focus on what’s important to you, and getting that great sense of reward that comes from being truly self-sufficient.
But unfortunately working online also comes with some complications – particularly as it means you’re going to be self-employed now. Chief among these problems is the challenge of organizing all your own finances, and dealing with some of the more complicated accounting issues that are going to start coming your way. Before you begin it’s important to be prepared for these challenges, so read on and we’ll go over how you need to ready yourself for working online full time.
Get An Accountant…
The first piece of advice I can impart is to get an accountant. The main job of an accountant is to help you handle your tax returns which means you won’t need to worry about them, and which means you won’t get caught out later and get into trouble. At the same time, accountants understand all the various things you can claim back on as expenses, which allows you to make the maximum possible savings. In theory, having an accountant will save you more money than you pay for having them.
But that’s not the only reason that it’s worthwhile getting an accountant. The other big benefit of an accountant is that they can now act as your reference which is highly useful when you want to rent a flat, or when you want to take out a loan or a mortgage. Unfortunately if you’re your own accountant then the banks aren’t going to just take your word that you’re good for the money – which is why having an objective third party is very valuable.
Have Separate Accounts
Another important way to save yourself time and money is to keep a separate account for your business. This is the account where all your money should come in whenever you’re paid by a company, and it’s also the account where all your expenses should go out when you’re buying things you need for work.
This then makes life much easier when it comes to filing your tax returns again (your accountant will thank you), but it also means you’ll be able to keep track for your own purposes and to avoid complications arising when your rent goes out at the same time as your hosting costs…
Have a Wet Weather Fund
When you’re self-employed you rely completely on yourself to bring in the cash each month. If you can’t find work, if you lose a client, or if your product stops selling, then you’re just not going to get paid that month – there’s no contract in place to protect you. And even when things go well you’ll find that your cash flow is far more irregular than that of most employed individuals.
Thus it’s very important to have a wet weather fund that you can turn to in times of crisis, and this will greatly help you to weather those storms when they happen.
This is a very general and arguably ‘obvious’ tip, but it’s also very important that you get into this state of mind. Simply, if you’re going to run your own business then you need to take that seriously and you need to be much stricter with your organisation.
This means setting everything up so that you have the best chance possible to keep on top of things – clean your computer so you can find the files you need, create habits and routines so that you can remember to update your cashbook etc., and create an accounting sheet to work for. Make sure your home office is organised too and even just the sight of a cleaner desk will make your finances much easier to stay on top of.