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Keeping the books

From: Freelancing Fundamentals

Video: Keeping the books

Accounting is a huge field in itself. Some people study it their whole lives. In this video, we'll only scratch the surface both in terms of its concepts and the tools available, but let's start with some basics. First, accounting is just numbers. Although money has a big effect on how you live, you can use math to stay in control of it. That ties in with the second point. You can't beat math. If you have a $1000 and you need to pay $1500, you'll have to find that other $500 somewhere or make some other arrangement.

Keeping the books

Accounting is a huge field in itself. Some people study it their whole lives. In this video, we'll only scratch the surface both in terms of its concepts and the tools available, but let's start with some basics. First, accounting is just numbers. Although money has a big effect on how you live, you can use math to stay in control of it. That ties in with the second point. You can't beat math. If you have a $1000 and you need to pay $1500, you'll have to find that other $500 somewhere or make some other arrangement.

Let's move on to the tools you'll use to do that math. First, I assume that you already have a bank account as I discussed earlier. You'll probably have other accounts such as credit cards, a savings account and perhaps a loan. Because a lot of these account records will be on paper, you should have a paper filing system. But the paper is mostly just for your archives. In day-to-day use you're going to use accounting software. All the systems I'll mention here can handle multiple accounts just fine. In truth, you could do what you need on a simple spreadsheet.

But there are some really good programs out there that are worth considering. The big one is QuickBooks, which is designed for small businesses and it costs a few hundred dollars. I actually get by with the same company's personal finance software Quicken, although it doesn't have all the business functions of QuickBooks. lynda.com has great videos about both programs. There are also free accounting programs. The best known of which is GnuCash at gnucash.org. Wikipedia has a long list of such programs under the rubric Free Accounting Software.

Once you have an accounting system, the basic procedure is simple. You record income as it comes in and expenses as they go out. If all goes well, your accounting system will tell you exactly how much money you have at your disposal at any given time. The proof comes when you check your own accounting against statements from your bank and lenders. Then you have an opportunity to correct any errors. After you've been running your business for a while, you'll have created a record of actual income and expenses and can start making budgets and plans for growth.

No amount of accounting will solve the puzzle of getting enough money in the door, but when you have a good handle on your finances you discover how many problems that you thought were caused by a lack of money are solved by good bookkeeping. It prevents you from making ill-advised purchases, it helps you work with your bookkeeper, and it relieves the pressure that comes from uncertainty.

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This video is part of

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Freelancing Fundamentals

42 video lessons · 25151 viewers

Tom Geller
Author

 
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  1. 10m 50s
    1. Welcome
      1m 53s
    2. What is freelancing?
      2m 53s
    3. How freelancing and employment differ
      2m 33s
    4. Preparing your mindset
      3m 31s
  2. 9m 24s
    1. Defining career goals
      2m 48s
    2. Sharpening your market focus
      3m 18s
    3. Transitioning to freelancing
      3m 18s
  3. 16m 11s
    1. Preparing your portfolio
      3m 11s
    2. Estimating costs
      3m 10s
    3. Funding your startup
      2m 42s
    4. Establishing your workspace
      3m 35s
    5. Building your professional network
      3m 33s
  4. 8m 51s
    1. Getting licenses, permits, and insurance
      2m 15s
    2. Creating contracts
      4m 23s
    3. Finding professional service vendors
      2m 13s
  5. 12m 54s
    1. Setting prices
      3m 13s
    2. Establishing payment systems
      1m 36s
    3. Invoicing and getting paid
      3m 50s
    4. Keeping the books
      2m 32s
    5. Managing taxes
      1m 43s
  6. 14m 41s
    1. Announcing your availability
      3m 16s
    2. Finding work through agencies
      2m 2s
    3. Onboarding clients
      2m 59s
    4. Avoiding scams
      3m 25s
    5. Choosing assignments
      2m 59s
  7. 11m 27s
    1. Interacting with clients
      2m 11s
    2. Delivering quality work
      2m 28s
    3. Getting referrals and recommendations
      2m 34s
    4. Losing and firing clients
      4m 14s
  8. 10m 48s
    1. Deconstructing big jobs
      3m 34s
    2. Adopting time-management tools
      2m 35s
    3. Creating schedules
      2m 30s
    4. Turning off the clock for "me time"
      2m 9s
  9. 20m 6s
    1. Staying motivated
      3m 3s
    2. Increasing your rates
      2m 52s
    3. Marketing beyond your professional network
      2m 56s
    4. Growing through hires and partnerships
      3m 30s
    5. Building passive income
      3m 48s
    6. Changing focus
      3m 57s
  10. 4m 52s
    1. Case study: Publishing a book
      2m 47s
    2. Next steps
      2m 5s
  11. 12m 42s
    1. Freelancing Q&A
      12m 42s

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