For the Self-Employed: What Exactly Is Bookkeeping?
<p><em>When you become a freelancer or self-employed, you quickly have to become familiar with several terms: tax credits, quick accounting method, instalments, etc. An important part of your life as a self-employed person is bookkeeping. But what exactly is bookkeeping and what is it for? Let's take a closer look.</em></p> <h3><strong>Bookkeeping: Definition</strong></h3> <p>Let's start at the beginning. Bookkeeping is the action of entering your company's money coming in and going out for a given period of time, and then balancing your books to make sure everything conforms. That's basic accounting. Company owners have a legal obligation to keep bookkeeping records that can be checked any time by government authorities. In addition, your bookkeeping can help you stay on track and understand your company's performance to ensure it is profitable.</p> <p>For example, you have to enter all your customers' payments and expenses related to your business (suppliers, stationery, travel, Internet, etc.). By doing your bookkeeping, you'll find it easier to see exactly how much money your business has. You can also see if your business expenses are more than you think. It is easy to spend money on your business, but make sure these expenses don't exceed your cash inflow if you want to be profitable.</p> <p>Just a small add-on: what is bank reconciliation? In short, it's checking that the amounts entered during your bookkeeping match the amounts you have in your bank account. If everything balances out, it indicates that everything has been entered correctly.</p> <h3><strong>A few tips on bookkeeping as a self-employed person</strong></h3> <p>Entrepreneurs and self-employed people are capable of doing their business bookkeeping. Here are a few things to keep in mind if you want to take care of this part of the accounting. With a little practice, it will become easier.</p> <p><strong>Be thorough</strong><br /> <br /> Your bookkeeping should not be taken lightly. As mentioned above, the government can request your records at any time. Therefore, make sure you enter all expenses and cash inflow for your business. Check the amounts carefully during record keeping and find a time when you won't be disturbed to avoid mistakes.<br /> <br /> <strong>Be organised</strong><br /> <br /> You can quickly end up with multiple invoices in your hand when you have a business. To avoid losing important documents or simply to help you sort your expenses, why not categorise all your invoices? For example, you might have a binder where you could separate your invoices into various categories: to be entered, already entered, supplier invoices, customer payments, etc. The important thing here is that you are able to find your way around easily. Note that you must keep all your accounting paperwork for a period of 6 years.</p> <p>Why not also leave notes directly on your paperwork like when you enter the information in? That way, you won't have to look at what the gas bill is for, saving a lot of time.</p> <p><strong>Keep a specific time in your week free to enter your bookeeping items</strong><br /> <br /> Dealing with red tape is often not the preferred task of entrepreneurs and the self-employed. It is often done reluctantly and frequently put off. To avoid finding yourself in front of a mountain of paperwork to enter, which will be discouraging, keep a specific time free in your week to enter various bookkeeping elements.<br /> <br /> As is already <a href="https://www.momenteo.com/blog/6-tips-to-better-manage-your-billing">the case with your invoicing</a>, keep time free to go through your administrative tasks. This will make it easier for you to stay up to date and avoid being overwhelmed. It's a good resolution to make in order to better manage your business.<br /> <br /> <strong>Consider doing your bank reconciliation at the end of the month</strong><br /> <br /> As is the case with the entry of cash inflow and expenses, don't forget to keep a moment free to do your bank reconciliation. Most of the time, people wait until the end of the month to do this. That way, they can confirm that the transactions made during this month correspond to their accounts. Then, they can start the next month on the right foot knowing that everything matches.<br /> <br /> It may take some time to complete your bank reconciliation, especially depending on the number of entries. It is common for the amounts not to match the first time and you have to look where the differences are. In short, it is not something that usually takes 15 minutes to do.</p> <p>If you don't have time to do bookkeeping or have no interest in accounting, you can delegate this task to a professional. Some <a href="https://www.momenteo.com/blog/interview-with-a-virtual-assistant">virtual accounting </a><a href="https://fr.momenteo.com/blogue/entrevue-avec-une-adjointe-virtuelle">assistants</a> offer this service or you can do business with an accountant. It is important to focus on tasks you like to do, would like to master, and avoid wasting time and making mistakes.</p> <h3><strong>Doing your bookkeeping with Momenteo</strong></h3> <p>You probably already know that you can use <a href="https://www.momenteo.com/">Momenteo for your invoicing</a>, but did you know that you can use our application for your bookkeeping? Precisely, since you already enter all your work and payments, you already have a good deal of the work done. All you have to do is add your business expenses. To add an expense, on the calendar choose a date and select the New Entry option of Spending instead of Work.</p> <p> Then, in the Reports section, you'll find all of your expenses and income. To access bank reconciliation, select Other Transactions in the menu on the left. It's as simple as that!</p> <p></p> <p>In conclusion, don't panic when someone talks to you about bookkeeping and bank reconciliation. This is the accounting you need to do for your business. In addition to helping you keep your paperwork in order, this will provide you valuable information about the health of your company. You can even do your bookkeeping directly on Momenteo by adding your expenses.</p> <p>On that note, we wish you happy invoicing and great conciliation!</p>