3 Financial Lessons To Learn From 2016

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November 25, 2016

Taking stock of the year, you’re doubtlessly analysing what went right and what, in hindsight, could have been different. Regardless of the changes, you may have experienced, one thing remains the same as ever – our desire for protecting our finances and maximising our earning potential.

But of course, very few freelancers and contractors are perfect where accounting and bookkeeping are concerned. We’d like to remind you of lessons to take on board for 2016, and how to lessen your money woes…

No more vanishing receipts

Keeping receipts safe and secure should be a top priority for any self-employed professional; they support every expense claim you make, minimising your tax bill at the end of each financial year.

Yet, paper receipts are tough to manage. Over the year, you’ve probably made hundreds of purchases flitting between aspects of your professional life. The process of physical collection is outdated and, frankly, detrimental to your organisational skills.

Next year, why not switch to a digital receipt storage system instead? Instead of losing folders, laminated pockets and whatever else you relied on, the data will be there on your screen, accessible from any location

No more underselling yourself

The newly self-employed can underestimate what they’re worth, simply because they don’t want to lose out on work. Low fees can also haunt established freelancers, who haven’t matched their growing reputation with a price that befits how experienced they are. Whatever stage you’re at, it’s good to consider your rates for the coming year.

Do some research beforehand, gauging the reaction from fresh prospects, who might respond to the higher rates better than you’d think. Then consider how to approach your existing clientele: can you explain the increase as a natural extension of your relationship? Or would you rather delay it for your biggest income providers, giving them ‘special’ status in recognition of their loyalty?

No more cash flow woes

Freelancers and contractors must balance the twin pressures of incoming and outgoing cash, ensuring they’re always in the black with their bank accounts. During 2016, you may have found that your cashflow has been a little rocky, as mistimed expenses and late client payments have hit your take-home pay more than you’d like.

Thus, there’s probably a need for a more comprehensive approach to handling your accounts. With a team of specialist accountants to provide advice, working in tandem with bookkeeping software like FreeAgent, there’ll be far fewer surprises to cope with.

You should also make a concerted effort to chase your overdue invoices with diligence – if you’ve made a stipulation for a payment date, stick to it, or draw up penalties for late payments. In doing so, you’ll be able to better plan your cash flow.

Far from dwelling on any hang-ups you’ve had in 2016, now is the time to step up your finance skills as the New Year comes into view. Bright Ideas can simplify the process, to help you create a more sustainable business model. Call us on 0161 669 4221 or email Info@biaccountancy.com for a financial aid that’ll last well beyond the next 12 months….

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