By examining your past and present, financial reports can help your organization get ready for the future and get you ready to make decisions. You are still eligible for the payment if you work as a hired contractor. Having a company entity comes with numerous tax advantages and savings. An independent contractor can keep track of their earnings and outlays in a variety of ways. It’s possible that your friend’s bookkeeping is done differently from yours.

They will better understand how to charge for their services by understanding their expenses. Bookkeeper salaries vary state by state (see our chart below), and depending on where you live, you could be paying a large difference in one place versus another. A bookkeeping certificate can help you find a bookkeeping role, either as an in-house bookkeeper or as a freelancer. Bookkeeping lays the groundwork for many accounting processes, so you can use your experience and knowledge as a stepping stone to becoming an accountant. However, you will likely need to complete a degree program and other certifications to be an accountant or move beyond a bookkeeping role. To be an accountant, you generally need education requirements like a bachelor’s degree in accounting.

Which tasks do you need help with?

You likely became an independent contractor to get away from the typical workday or have a particular skill that businesses desire. However, you may not have realized how important it is to make sure you keep up on bookkeeping and accounting as an independent contractor. Bookkeepers are bookkeeping for independent contractors not required to have certifications or specific education unless required by a specific employer. However, completing a bookkeeping certification program can teach you basic accounting and how to perform bookkeeping tasks and has the potential to set you apart from other bookkeepers.

If you attempt to reconcile your books on your own, it can be a monumental task. Using accounting software like Zero, Wave, or Freshbooks, will allow you to reconcile your bank accounts quickly. As a contractor, keeping your accounting transparent will also allow you to see your income and expenses more clearly. The clarity in financials will allow you to make smart decisions on the growth of your company. Keeping on top of the accounting and bookkeeping practices of your business is crucial to all independent contractors.

DIY or Hire a Professional for Bookkeeping and Accounting?

However, the question you should be considering is whether you can afford to forgo seeking professional assistance with such crucial information. Paying taxes and having precise estimates of your upcoming tax obligations are quite beneficial. Putting your estimated tax payments in each month or every three months will help you avoid a tax bill that isn’t expected.

Customers schedule an appointment to have a bookkeeper review their transactions, and  multiple schedules are available to choose from. You will have access to a client management portal, and can communicate with customers through video conferencing and messaging. Self-taught bookkeepers use a variety of courses, seminars, books, and other online resources to learn about bookkeeping and accounting. You can also learn how to use accounting software, like QuickBooks, which can teach you about the basics of bookkeeping as well as the technology used by many businesses. Volunteer bookkeeping jobs, such as helping a school, church, animal shelter, food bank or youth sports league, can help you generate client references and testimonials. As part of your marketing strategy create a website that includes contact information, services, and testimonials from former clients and employers.

Should you do your own bookkeeping?

If there is an audit, you won’t be able to support your expenditures if you don’t have the necessary paperwork. Talk to an attorney about incorporating and buying the correct liability insurance protect your personal assets in the event your business is sued. Find out https://www.bookstime.com/ if you need a city business license to run a business from your home, even if you’ll be doing client work offsite. Create a standard contract you can use or adapt when you sign clients. Kelly is an SMB Editor specializing in starting and marketing new ventures.

The average base salary of an in-house bookkeeper is ​​$42,000 – $46,000. (Based on data from Bureau of Labor Statistics, Salary, Payscale, Glassdoor, and Indeed.) This comes out to $3,200 – $3,520 per month, or an average hourly wage of $20 – $22. Accounting software will make it easier to do so with the ease of invoicing. Accounting software allows you to invoice your clients and keep up on unpaid invoices.

Get started

The basic contract is a fantastic place to start if you’re looking for a solid template contract for an independent contractor arrangement. For pricing, we considered whether a service offers a free trial or a free version of its software as well as the affordability of its lowest and highest price tiers. FinancePal is best for small businesses that need bookkeeping assistance, including catch-up bookkeeping, entity formation and tax filing.