Setting time aside to work on your finances is a key part of running a small and successful freelance business. When you can’t find the time, you need to make time, because this is what will help you stay on track and take steps towards growth. 

As freelancers, it’s easy for us to get bogged down in our work. Client deadlines tend to take priority, and we often find ourselves rushing from one job to the next, without taking a step back to look at the bigger picture. 

Recently, I’ve been running a virtual coworking session called Focus on Your Finances, which takes place once a month. We spend two hours working on something related to our business finances, with mics off and videos on (only if you want!). The freelancers who have taken part so far have found the sessions really valuable. They’ve used the time to complete tasks they’d been putting off for a while, and the extra accountability has really made a difference.

At the same time, I know that two hours can feel a bit intimidating. What should you do in that time? Where should you start? And which finance-related tasks should you prioritise? In this blog post, I’m suggesting five financial tasks you could think about doing the next time you set aside two hours to spend on your business admin. Part one of this series is dedicated to getting organised with your freelance finances!

1) Create a budget for your business expenses

Creating a budget is one of the first things I usually get my mentees to do. It’s one of those tasks that often gets overlooked but that can really change the way you approach your business and the decisions you make. 

It can be easy to think that if you’ve got money in your account, you can afford to spend it. But if you spend everything you earn, your business isn’t going to be very profitable! That’s why it’s important to plan how much you can afford to spend and what you really want to spend that money on. It’ll help you put the brakes on those impulsive business purchases that probably aren’t going to serve you or your business!

By coming up with a budget for your business, you’ll feel more in control of your finances and will be more likely to make conscious spending decisions. It will also give you an awareness of how much money you need to be making to cover your expenses without eating into your earnings too much.

If this sounds like the kind of task that might benefit you and your freelance business, I offer a free business budgeting spreadsheet that comes complete with instructions on how to use it. This download will guide you through the process of setting a budget for your business while helping you stay on top of your finances by tracking your expenses.

2) Record your income and expenditure

I’ve written a whole blog post on this task too! Recording your income and expenditure is crucial if you want to keep on top of your finances and feel in control of your business at all times. It’ll give you a clear overview of your business’s current financial health, which will help you make strategic decisions moving forwards.

Recording your income and expenditure will provide you with the data you need to analyse your results and track your progress in terms of your income goal and budget. If you realise you’re a long way off your income goal considering the amount of time left in the year, you might decide to take corrective action. Similarly, if you notice that you’re overspending, you might try to cut back on any future expenses.

Either way, while you’re recording your income and expenditure, don’t forget to check whether you’re expecting any expenses in the near future. If you are, make sure you have enough money in your account to cover them!

If you already record your income and expenditure, a free couple of hours might be a great time to look at your system and ask yourself if it’s really working for you. Is it clear, detailed, and easy for you to keep on top of? And importantly, is it ‘filterable’ so that you can analyse the data and see which services are generating the most income and how the majority of your money is being spent? If not, it might be time to put a new, improved system in place.

If you’d like to work on your system for recording income and expenditure, you can find my free income and expenditure spreadsheet here. 

3) Take a look at your business banking

If you don’t already have a separate bank account for your business, set one up! I can’t overestimate the importance of having separate accounts for your business and personal expenses. Keeping your accounts separate will make it easier for you to keep track of your business finances and prepare your tax returns. It will make you far more efficient overall, as well as making things clearer in your own mind.

Instead, if you already have a separate business bank account, it’s important to make sure that it’s working for you. Ask yourself if you’re happy with your bank, with your bank’s costs and its customer service. If you’re feeling anything less than satisfied, look into other options. Is there a different bank that could give you everything you’re looking for?

If you are happy with your bank, have you thought about the possibility of setting up multiple accounts to transfer percentages of your income into ‘pots’ for different purposes? This Profit First method is something we discuss during Charge with Confidence.

4) Prepare to submit your tax return

This is one of those tasks we all put off at some time or other! Submitting your tax return is very few people’s idea of fun. But if we keep track of our finances and keep our records up to date on an ongoing basis, we can make things much easier for ourselves when it gets to that time of year again.

If you’ve got a couple of hours to work on your admin, make sure you’ve updated all your records with everything you’ll need to file your tax return. If your system isn’t very efficient, ask yourself what improvements you could make, and implement them!

5) Look into pension options for freelancers in your country

What better way to spend your unpaid work time than figuring out how to ensure that one day you’ll never have to work again? You might choose to work when you reach a pensionable age, but at least this way it’ll be a choice rather than an obligation!

Unfortunately, lots of freelancers put off paying into a pension or making a different form of investment until it’s too late. But if we want to be able to retire at a reasonable age, we need to make sure we’ll have a source of income that doesn’t require us to sell our time.

In this blog post about saving for retirement as a freelancer, I look at some of the different options available to us: not only contributing to a pension but also investing in property. Whatever you decide to do, the important thing is that you make sure you’re saving for the future sooner rather than later!

If one (or more!) of these tasks sounds like it could be beneficial to you, why not join us for the next edition of Focus on Your Finances? At the beginning of our coworking sessions, we each say what we’re working on, and we check in with one another’s progress at the end of the two hours. 

If you’d like to make sure you set aside some time to work on your business finances, register for the next session of Focus on Your Finances by clicking on the link below and blocking out the time in your schedule!