If you work at home as a freelancer or in any self-employed capacity, you have more obligations than just making money with your business. You must also take control of the financial aspects of the business and become your own accountant to keep tabs on the financial health of your enterprise. Whether you tackle the numbers once a week, once a month or once a quarter, getting on top of your accounting gives you a terrific advantage in your business and helps you stay on top of government requirements as well.

Learn the Basics of Accounting

If you’re new to the freelance or self-employment game, you might not realize how critical it is to know the numbers. Making money online is a bit easier than starting up a traditional enterprise and many part-time entrepreneurs are caught off guard when it comes time to do the taxes at the end of the year. At the absolute minimum, you should be documenting your income and expenses. Tally these up on a regular basis to check the bottom line. Your first lesson should be in gross versus net profit.

Consolidate Expenses

Keep a single credit card for business expenses. If you prefer not to use a credit card, opt for a debit card instead, but use it as a credit card with merchants. The credit card will likely offer a bit of buyer’s protection and it will let you track all of your purchases on a single statement when it comes time to figure out your profits and expenses for the month or quarter. Pay as many of your business bills as possible out of the same account, and you’ll be eliminating that much more paperwork.

Track Payments and Invoices

It’s not enough to track just payments that come in or the invoices you send. The two must be intertwined. If you send an invoice or request payment, use an online system, such as PayPal that keeps a record for you, or print a copy of an invoice and toss the invoice into a file folder dated for the year. If you have one folder for paid and one for unpaid invoices, you can simply move an invoice to the paid folder when the payment comes in. Getting into a system like this will ensure you never forget about money owed to you and you don’t have to use your brain power to try and remember either.

Outsource Accounting

Keep an eye on your accounting and do a real-world assessment of your abilities. An accountant proficient in self-employment issues can help you save money and come up with various tax strategies to put yourself in a better position. If you’re not comfortable doing accounting yourself or the time pressures of the accounting work are too much for you, outsource your book keeping and accounting to save money and headaches in the long run.