There are many wonderful things about being self-employed. You’ve got the freedom, the flexibility, the autonomy… and a whole lot of bookkeeping to do. 

Financial admin isn’t every self-employed person’s favourite part of the job. But love it or loathe it, bookkeeping is a legal requirement, and a super important part of running your own business. Luckily, there are plenty of things you can do to make bookkeeping feel more manageable. 

In this article, we’ll be breaking down our top ten business bookkeeping tips to help the task fit neatly into your routine:

1. Keep your personal and business finances separate

Our first bookkeeping tip for the self-employed is to keep your personal and business finances as separate as you keep your work and personal life. 

The easiest way to do this is to open a dedicated business bank account, and use it only for business transactions. This makes it easier to track your business expenses and income without sifting through your personal spending. 

Was the money you spent at Tesco Extra the other week on your family’s groceries or office supplies? With separate accounts, you won’t even have to try and remember! 

2. Keep records of absolutely everything!

Think of bookkeeping as your business diary, where you record every bit of your income, expenses, receipts and invoices. 

The key is to be meticulous, so always include details like dates, amounts and descriptions. And to stop you from forgetting, it’s good to get into the habit of recording all payments as quickly as possible. This might mean snapping a quick photo of a business receipt in case you lose it later, or having a specific drawer in your desk where you store all of your invoices.

Not only will this habit make filing your Self Assessment tax return less stressful, but it will also help you keep an eye on your cash flow and avoid those "Where did all my money go?" moments. It’s easiest to do this using bookkeeping software, but even a simple Excel spreadsheet can work. 

3. Choose the right bookkeeping software

Speaking of software, it’s well worth investing in a great accounting and bookkeeping tool, which will automate almost all of your bookkeeping tasks. Doesn’t that make life sound easier? 

These types of tools are like having a personal assistant who never forgets a detail and always has the latest numbers at their fingertips. Plus, there are plenty of affordable options out there for self-employed people and small business owners. 

CrunchONE is a great example, as its smart software lets you upload and organise vital documents quickly and easily with receipt capture, as well as managing invoices and expenses with bank reconciliation from one unified platform linked to your bank account.

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4. Send invoices promptly

Cash flow is king, especially when you’re self-employed. That’s why it’s so important to invoice your clients promptly and accurately. 

Remember to include all the necessary details, like due dates, payment terms and a clear breakdown of what you’re charging for. And don’t be shy about following up on late payments! Think of it as gently nudging your clients to keep your business running smoothly.

5. Set aside money for taxes

Taxes can sneak up on you if you’re not prepared! This is especially the case when you’re self-employed, and responsible for paying your taxes to HMRC yourself. 

We recommend regularly setting aside a portion of your income for taxes each month, and keeping them in a separate savings account. That way, when Self Assessment season rolls around, you’re not scrambling to get your funds together.

Check out our article on how to pay yourself as a sole trader and how much to put aside for tax for more information!

6. Reconcile your accounts every month

Make a date with your books once a month to reconcile your accounts. This means comparing your records with your bank statements to check whether there are any discrepancies. We’d recommend setting this up as a recurring event in your calendar, so you’re sure to never miss out on reconciliation day! 

7. Get your head around tax deductions

If you’re self-employed, you should absolutely learn about the common deductions available to you, such as home office expenses and business travel, as these deductions can significantly reduce your taxable income.

If you need a little more guidance on which expenses are tax deductible, we recommend speaking to a tax professional to make sure you’re taking full advantage of these benefits.

Check out our articles on what expenses you can claim as a sole-trader and as a Limited business for more information. 

8. Create a budget

Creating a budget is a great way to manage your expenses, set goals and make sure you’re not overspending. Just remember to regularly review and adjust your budget to reflect changes in your income and expenses. 

9. Work on your time management and stick to strict deadlines

Just as sticking to your budget is key to managing your finances, great time management is key to keeping your books in order. We recommend setting aside regular time each week or month to update your records, review financial reports, and reconcile accounts. Remember - consistency is your best friend when it comes to staying on top of your bookkeeping.

Plus, it goes without saying that missing the Self Assessment deadline is an absolute no-go, which can lead to late payment charges and unnecessary stress. Always keep track of important tax dates and set reminders to ensure you file and pay on time. We always recommend filing your Self Assessment tax return early, and if you’re prone to forgetting, getting help from a professional accountant can help keep you on track.

10. Get guidance from the professionals

That brings us onto our last top bookkeeping tip: sometimes, it’s best to call in the pros. Hiring a professional bookkeeper or accountant can be a game-changer, as they can help set up your bookkeeping system, manage your accounts and provide valuable financial advice. This frees up your time to focus on what you do best as a self-employed person - running your business.

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Ready to tackle your bookkeeping?

Bookkeeping might not be the most glamorous part of being self-employed, but it’s definitely one of the most important. And with the right practices and tools in place, you can keep your finances in check without any unnecessary stress. 

For more top business bookkeeping tips, read our ultimate guide to setting up your bookkeeping system as a self-employed person, or get in touch with one of our professional accountants and bookkeeping experts here at Crunch for more tailored guidance and advice. Good luck, and happy bookkeeping!