Starting a new business or jumping into the freelance world is a big step with all kinds of perks. The exciting part is that you get to spend the bulk of your time doing something that you genuinely enjoy and have the flexibility to work on it at your pace. For most people making that transition, this is the easy and fun part.
After you start to get a few clients and have some real opportunities materializing, there get to be so many different things that need to happen in order to keep your business organized and in order. You have to keep in touch with your clients, keep looking for that next project, get quotes and proposals out, manage your team, track all of the finances and take care of the bookkeeping and accounting, process payroll and pay vendors, manage credit card, and then you can FINALLY get to actually performing the work you enjoy.
This is the common challenge for new business owners and freelancers: there are so many different roles you need to perform to keep your business running. There are all kinds of ways you can automate and streamline different systems, but a lot of that is hard to do when you are just starting out and getting all of the different things moving out of the gate.
For most new business owners and freelancers, especially in the creative space, the most intimidating thing is accounting. What do I need to have in place? How much detail do I need to keep? Do I need to save every receipt? What about bank reconciliations? On and on.
When it comes down to it, there really are some very easy tools to get started out of the gate or to streamline the accounting for your existing small business or freelance operation. The one we recommend most is Xero.
- Create your Xero account (Click here)
- Follow the on-boarding process to get your business all ready to go
- Connect your bank accounts and credit cards
It really is that easy! Once you have everything all setup, all you need to do is spend a few minutes reviewing transactions on a regular basis to ensure that everything is entered correctly and current. The bulk of the value here is having it largely automated so all you have to do is periodically approve transactions and you can review real-time the accounting information you need to make your business profitable.
One final note. Getting the initial balances all setup and everything started correctly can be a intimidating. So, if you feel like you are not sure how to get that all squared away by yourself, go ahead and get your account setup, then you can have your CPA or even another freelance accountant help you make sure everything is setup correctly. If nothing else, it will help give you some peace of mind!