How to Hire the Right Bookkeeper for Your Small Business Bench Accounting

Each year, all employee taxable income is The Significance of Construction Bookkeeping for Streamlining Projects proven on a W-2 form and filed to the IRS. As you shop around, try to find out whether the remote service you’re considering is able to work with accountants. If you’re worried about not having someone you can count on everyday, and don’t mind paying a bit more, a bookkeeping firm is a smart choice. This typically comes at the end of the financial year, when clients’ books need to be “closed” for tax season.

Keeping Track of Taxable Income

Having a clear picture of their financial figures will help any independent contractor understand their business better. They will be able to pay their taxes to the IRS with more accuracy. They will better understand how to charge for their services by understanding their expenses.

How Bench’s Bookkeeping Can Help You Prepare For A Recession

• As a business, you will need to pay taxes and keep up with your bookkeeping as well.
• Your bookkeeper should be well-versed in popular accounting software like QuickBooks, Sage, or Xero.
• I suggest asking your accountant so you are sure you are in compliance with your local regulations.
• To manage your books, the software will automatically import your invoices, payments received, payments returned, and expenses.
• There are lots of places online to find a quality freelance bookkeeper, but Upwork.com is a good place to start.
• Setting financial goals and creating a budget that supports business expansion is key to long-term success.

You may invoice your customers and keep track of overdue invoices with accounting software. You should open a separate bank account for your independent contractor firm. You can more easily do this by separating your money situation from your business affairs. It is advantageous to have everything separated in the event of an audit, especially if you consider yourself to be a business.

Getting Started with Bookkeeping for Independent Contractors

If your claims are contested, you can support your records with various accounts. All independent contractors need to stay on top of their company’s accounting and bookkeeping procedures. It is different, though, when a business employs an independent contractor. Contractors are responsible for paying their taxes on time and are not dependent on businesses to deduct income tax on their behalf. Employees are people who perform standard 9 to 5 jobs for a business.

The number of accounts you’ll be tracking—and the frequency of transactions—may affect this. When someone employs you as an “independent contractor,” what precisely does that mean? Proper bookkeeping provides clarity and accuracy in your financial records, allowing you to make informed decisions and grow your business. Regular review of your books and monitoring of cash flow are important practices to stay on top of your bookkeeping efforts. Reconciling bank accounts is critical in staying on top of your bookkeeping.

How to find a good firm

The basic contract is a fantastic place to start if you’re looking for a solid template contract for an independent contractor arrangement. BooXkeeping clients, for example, have regular monthly calls to review their reports with their Chief BooXkeeping Officer. You’ve looked around, and a bookkeeping sub-contractor will charge you $45/hr for the same type of work. There are situations where you have to consider a new hire an employee. Your state, province, or planet may have specific rules about who can be considered a contractor vs. who must be considered an employee. When deciding to bring in https://www.inkl.com/news/the-significance-of-construction-bookkeeping-for-streamlining-projects a professional or not, you may ask yourself if you can afford to.

Whether it’s a minor question or a major financial concern, timely communication is essential for maintaining trust and efficiency. If you’re getting 30 hours of billable work from your employee, they’re only 75% billable. In reality, 75% is generous, but we’ll use that for today’s scenario. If you’re a contractor, you can’t bill the client for that time. This is another reason I’d recommend not billing by the hour, but I covered that in another post.