Why Freelancers Should Consider Hiring A Professional Accountant
As a freelancer, you’re in charge of your own finances. This means keeping track of your income, expenses, and taxes. While some freelancers prefer to handle their accounting themselves, it’s not always the best option. Hiring a professional accountant can help you save time, money, and stress. In this blog, we’ll explore the reasons why freelancers should consider hiring a professional accountant.
Understanding Freelance Accounting
Before we dive into the benefits of hiring a professional accountant, let’s discuss the basics of freelance accounting. As a freelancer, you’re considered self-employed. This means you’re responsible for keeping track of your income and expenses, paying taxes, and complying with any local or national regulations.
The following are some of the basic accounting tasks that freelancers should handle:
Record-Keeping
Keeping track of your income and expenses is essential for managing your finances. This includes keeping receipts, invoices, and any other financial documents.
Taxes
As a freelancer, you’re responsible for paying both federal and state taxes. This includes self-employment tax, which covers Social Security and Medicare. It’s important to keep accurate records of your income and expenses to ensure you’re paying the correct amount of taxes.
Budgeting
Freelancers should create a budget to manage their finances effectively. This includes setting aside money for taxes, savings, and any other business expenses.
The Benefits of Hiring a Professional Accountant
While handling your accounting yourself might seem like a good idea, it can be time-consuming and stressful. Hiring a professional accountant can provide numerous benefits, including the following:
1. Time Savings
Managing your accounting can take up a significant amount of time. Hiring a professional accountant can free up your time to focus on your work and clients. This allows you to increase your productivity and grow your business.
2. Expertise
Professional accountants have the knowledge and expertise to handle your accounting needs. They understand the complexities of self-employment taxes and can help you navigate any local or national regulations.
3. Tax Savings
A professional accountant can help you identify tax deductions and credits that you might have overlooked. This can help you save money on your taxes and increase your net income.
4. Financial Planning
Accountants can help you create a financial plan for your business. This includes creating a budget, forecasting your income, and setting financial goals.
5. Peace of Mind
Hiring a professional accountant can provide peace of mind knowing that your accounting is in good hands. This allows you to focus on your work without worrying about the financial aspect of your business.
When to Hire a Professional Accountant
Now that you understand the benefits of hiring a professional accountant, you might be wondering when it’s the right time to hire one. Here are some signs that it’s time to hire a professional accountant:
1. Your Accounting is Taking Up Too Much Time
If you’re spending a significant amount of time managing your accounting, it might be time to hire a professional accountant. This allows you to focus on your work and clients.
2. You’re Overwhelmed by Tax Regulations
Self-employment taxes can be complex and overwhelming. If you’re struggling to understand tax regulations, a professional accountant can help.
3. You’re Not Taking Advantage of Tax Deductions
A professional accountant can help you identify tax deductions and credits that you might have overlooked. This can help you save money on your taxes and increase your net income.
4. You’re Planning to Grow Your Business
If you’re planning to grow your business, it’s essential to have a solid financial plan. A professional accountant can help you create a budget, forecast your income, and set financial goals. This can help you make informed decisions about your business and ensure that you’re on track to meet your financial objectives.
5. You’re Facing an Audit
If you’re facing an audit, it’s essential to have a professional accountant on your side. They can help you navigate the audit process and ensure that you’re complying with all regulations.
In conclusion, hiring a professional accountant can provide numerous benefits for freelancers. They can save you time, provide expertise, identify tax savings, help with financial planning, and provide peace of mind. If you’re spending too much time on your accounting, struggling with tax regulations, not taking advantage of tax deductions, planning to grow your business, or facing an audit, it’s time to consider hiring a professional accountant.
Should I Hire A Contractor Accountant?
Our specialist team of expert and highly qualified contractor accountants are here to deliver everything you need to set up, operate and grow your freelancing business. Operating your own contracting business is highly rewarding, but it can also be financially beneficial to undertake.
However, amongst managing projects, staffing, organising premises and developing your service offering you will also have to deal with the daunting and difficult task of managing your company’s finances. Make running your business easier with MJ Kane & Co Accountants.
Learn more about our Contractor Accountants Service
Freelancer FAQs
How much does it cost to hire a professional accountant for freelancers?
The cost of hiring a professional accountant for freelancers varies depending on the complexity of your accounting needs and the level of expertise of the accountant. It’s best to shop around and get quotes from multiple accountants before making a decision.
Can’t I just use accounting software instead of hiring a professional accountant?
While accounting software can be helpful, it’s not a substitute for a professional accountant. Accountants have the knowledge and expertise to handle complex accounting issues and can provide personalized advice and guidance.
What qualifications should I look for when hiring a professional accountant?
When hiring a professional accountant, look for someone who is a certified public accountant (CPA) or has a degree in accounting. It’s also important to find someone who has experience working with freelancers or self-employed individuals.
How often should I meet with my professional accountant?
The frequency of meetings with your professional accountant will depend on your accounting needs and the level of support you require. It’s best to discuss this with your accountant and come up with a schedule that works for both of you.
Can a professional accountant help me with financial planning for my business?
Yes, a professional accountant can help you create a financial plan for your business. This includes creating a budget, forecasting your income, and setting financial goals. They can also provide advice on how to manage your cash flow and grow your business.
