For freelancers, bookkeeping involves keeping track of income and expenses to accurately report them to the IRS. Good bookkeeping can help with tax deductions, avoid audits, and provide an accurate view of the financial health of the freelance business.

What is bookkeeping?

Bookkeeping is the process of recording and organizing financial transactions for a business or organization. It involves keeping track of all financial transactions, including purchases, sales, receipts, and payments, and organizing them into categories such as income, expenses, assets, and liabilities. Bookkeeping is essential for businesses to keep accurate financial records and to make informed financial decisions.

What are the different methods of bookkeeping?

There are two main methods of bookkeeping: single-entry and double-entry bookkeeping. Single-entry bookkeeping is a simple method that involves recording each transaction only once, either as income or expense. Double-entry bookkeeping, on the other hand, involves recording each transaction twice, once as a debit and once as a credit. This method is more complex but provides a more accurate picture of a business's financial health.

What are the benefits of bookkeeping?

Bookkeeping provides several benefits for businesses, including:

  • Accurate financial records for tax purposes and financial reporting
  • Insight into a business's financial health and performance
  • Identification of areas where a business can cut costs or increase revenue
  • Ability to make informed financial decisions based on accurate data

What are some common bookkeeping mistakes to avoid?

Some common bookkeeping mistakes to avoid include:

  • Mixing personal and business finances
  • Not keeping accurate records of all financial transactions
  • Not reconciling bank statements regularly
  • Not categorizing transactions correctly
  • Not keeping receipts and invoices organized

What is Workmade?

WorkMade is an all-in-one banking and accounting app designed specifically for freelancers! WorkMade gives you access to: zero-fee business banking, automated bookkeeping, fast and easy invoicing, and quarterly tax estimations and payments.

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