When people talk about the 9 to 5 workday, most freelancers laugh. Running your own business offers schedule flexibility, but it also means that the work never ends.
This chapter focuses on the area of work that often hurts freelancers the most: managing your business. Administrative tasks are often the lowest priority. They tend to get pushed further down the task list until (or even after) it’s critical to complete them.
We want you to use this chapter to get your business needs in order. In the last section, we’ll also show you how Hectic can help you stay on top of your business so you can prioritize other tasks without risk or stress, killing it at that #bosslesslife.
If you have filed paperwork to operate one of the three official business types we discussed in chapter one, you may have annual legal requirements to continue running your business.
For most states, you will need to file an annual report to keep your company active in official records. The fee amounts, processes, and deadlines vary by business type and location, so research your own state’s requirements.
You should get several email reminders at the beginning of the year so you don’t forget. Late fees are typically high, so it’s also a good idea to schedule it into your yearly calendar.
Properly handling your business’ funds can protect you and your company from legal issues, such as tax audits. Use these tips to keep your freelancing funds organized and your business afloat.
The first thing you need to do is set up a business account that is separate from your own finances. This is generally a requirement for setting up a business anyway, but it’s essential for any freelancer.
To set up your new account, contact the bank of your choice. Using the same bank as your personal accounts is easier since you can link your accounts, but not necessary. Work with a representative to open the account and submit the appropriate paperwork. It’s a fairly painless process, but it will require a little time and effort.
When you use the same account for everything, your expenses get jumbled. During audits or paying taxes, trying to separate transactions is a nightmare.
Simplify your finances by keeping everything separate. Charge all of your business expenses to a company debit or credit card. <tweet-link>Pay yourself from your official account, either through transfers or checks. Get professional checks printed. Treat your funds like the business assets they are.<tweet-link>
Paying and filing your taxes is the most important part of managing your business. To keep your career legal and avoid jail, keep up with your payments and filing.
If you expect to pay more than $1,000 in taxes, you’ll need to make quarterly estimated tax payments on the 15th day of April, June, September, and January of the following year. These payments should equal about 30% of your taxable income (gross income minus expenses).
While we’re talking about expenses…
The government allows you to deduct the business costs you pay from your taxable income. This lowers your total income, lowering the amount of taxes you will pay as well. As exciting as that is, keep this in mind: you can deduct a small amount from your taxes, but the deduction will always be less than the amount you’re paying for the expense in the first place. Avoid spending money needlessly to keep more in your pocket.
Filing your taxes isn’t easy. Adding a business into the mix only makes it harder. We highly recommend using a tax tool or hiring an accountant to help. These resources can often find deductions you wouldn’t even consider. Plus, time is money as a freelancer, so don’t be afraid to ask for help when you need it.
We made this its own section to emphasize its importance. Every cent that hits your bank account is yours, but not necessarily to keep. Unlike your typical paycheck, which is yours to use as you please, your business income also goes toward:
The last point is something you might not consider until you’re in trouble. Freelancing rarely offers a dependable monthly income. As your projects and clients change, the amount you make will shift as well. You may also have slow seasons where you struggle to make the money you need.
<tweet-link>Setting money aside for savings protects you from this ebb and flow. Rather than taking any job you can because money is tight, you will have the freedom to pursue the best projects.<tweet-link> Anything is better than nothing, but experts recommend holding three to six months worth of expenses for your emergency fund.
There are an endless number of business tools available today. Unfortunately, very few were made with freelancers in mind. Often, independent contractors have to use a variety of tools to keep up with business needs. Nothing is connected, you have to deal with numerous subscription fees, and bouncing between tools wastes valuable time.
Another common mistake for freelancers is buying too many tools and software. When you don’t know what you’re doing, it’s easy to fall into the trap of buying every recommended resource you see.
Thankfully, you don’t have to deal with these problems when you use Hectic.
Become a business expert with tools made to simplify and strengthen your everyday efforts. From managing projects to getting paid faster, Hectic solves every freelance need.
Too many independent workers lose money to unsent invoices, poor bookkeeping, and inconsistent time tracking. Our platform helps you claim your true profitability in everything from expense tracking to quick invoicing.
Use the built-in time tracker to invoice all of your billable hours — not just the ones you remember. The app automatically displays tracked time through charts and your calendar to help you understand where your time is going. You can show clients exactly how your time is spent, avoiding conflicts. As you use this feature more, you’ll be able to optimize your work hours for growth and results.
When it’s time to invoice, easily add recorded hours and project costs right to your pre-generated bill. If you have any expenses, you can include them in your next invoice or request reimbursement right away.
When tax season rolls around, you’ll already be prepared. Hectic gathers everything you need to pay your quarterly taxes and file annually. Follow our built-in checklist to ensure you never miss an important date or payment. Best of all, our tax center links directly to your preferred filing tool to make tax season a breeze.
Never miss another deadline or lose track of your progress. Our clean, visually focused boards quickly show project status and details, giving you at-a-glance control over your work. Get a high-level view of your business in your comprehensive calendar before moving to project deliverables for greater detail.
Hectic allows you to store everything you need within the system, linking all relevant resources and collaborators to the tasks involved. You can stay on top of every project and task in one place, crushing it like the boss you are.
People weren’t meant to spend every day stressing about money and work. When you use Hectic, you won’t need to think about your business until you start your workday. You’ll know that everything is exactly as it should be.
Our notifications keep you up to date, bringing important information to you so you’re never caught unaware. Schedule your days with our Google calendar integration and a daily tasklist. Set reminders, take notes, and keep an eye on your business — all within the same space.
Freelancing can be stressful. Hard. Hectic.
With us, it doesn’t have to be. Get started now, adding your first client to the platform is free — no credit card, no contracts, and nothing held back.