Being a freelancer has its benefits, and I think the benefits heavily outweigh the downside. But the downsides can be a challenge to figure out.
One downside that has been getting me lately is how to manage certain areas of my finances as a freelancer. In particular:
- If I bill a client $50 for a WordPress theme up front, and then when I purchase the theme, I use a 10% off coupon, how to I account for the use of that coupon?
- If I bill a client $1,000 for my work, but while I’m doing the work for him, we find out he needs a $75 plugin, which I pay for and he reimburses me, how do I account for that? What if he doesn’t reimburse me and I just include it in the cost of the $1,000 project?
- For the year 2013, I billed clients in January, February, and April without having a separate bank account. I did have an LLC since Jan 15th, but all checks were written out to me, personally. Let say I made $10,000 for those three months. How should I now account for the $10,000?
- What if a client accidentally sends his payment to my personal paypal account instead of my business paypal account? What do I do with the accounting side of things, and what is the best way to move the money from my personal paypal account to either my business PayPal account or business bank account?
- How do I account for PayPal fees?
Those are some of the questions I’m dealing with right now. I’d love to know if anyone out there has any direction on one or two of them.
Maybe I need to hire an accountant…I don’t know.