Reasons for Freelancers to Keep Track of Their Bookkeeping Records

Reasons for Freelancers to Keep Track of Their Bookkeeping Records

When you think of freelancing, the most thrilling aspects are undoubtedly enjoying flexible working hours, having the right to manage problems in the way you like, as well as developing your client base on your own. Meanwhile, watching and handling your books is perhaps the only thing you do not find it interesting being a freelancer. 

As a freelance graphic designer, mobile app developer or social media coordinator, you have to acquire the fundamentals of bookkeeping as well as accounting. Every person must report their income to the Lembaga Hasil Dalam Negeri, and freelancers are not excepted from this. Furthermore, LHDN doesn’t accept records which are not properly prepared, and they have issued some general rules to assist you in filing your income taxes correctly.

Staying clear of the rage of LHDN is only one of the reasons why freelancers need to keep track of their bookkeeping carefully. Listed below are a few other factors freelancers has to stay well-informed of their bookkeeping records consistently.

You Can Save Time and Money

Keeping excellent records and tracking your books will ease the process of managing your books for you or the accounting firm (Also see Ways to Manage Accounts Payable Aging Reports). By making this as your habit, you will not have to spend much time to work through piles and piles of messy records even though you are managing the books all by yourself. Thus, you have more time and energy to concentrate on what you have to do. When you employ an external bookkeeper or accountant, they can allocate more time on more vital components of your finances, rather than being stuck in chaotic books (Also see Difference Between Balance Sheet and Profit & Loss Account).

To Understand the Condition of Your Business Thoroughly

You will always be on top of your business, or in this instance, your work-related financial resources if you never stop keeping track of your books. You will be able to know whether you are growing or standing still by keeping a close eye on your finances (Also see Ways to Run an Evergreen Business).

It is wonderful if you are well equipped with the skills to complete the accounting tasks on your own. However, do you have enough time for it?  Are you passionate to put in your time and energy into such chores?

Therefore, here is where accounting services in Johor Bahru can be beneficial to provide you with constant updates and make you be better prepared for your business.

The Audit Process Will be Easier

The process of getting audited can be very stressful. The only way to ensure a smooth auditing process is to have your financial accounts recorded neat and tidy (Also see Accounting for Manufacturing Setup Vs Other Industries).

Recording irregular income and making many errors with returns are some common practices of most of the freelancers. This makes them more subjected to an LHDN audit (Also see What You Need to Know About Record Keeping). Hiring accounting firm in Johor Bahru can assist you in keeping excellent financial records, providing outstanding profits as well as keeping you away from being audited by LHDN.

Legal Problems May Arise If You Do Not Track Your Books

It would be best if you had read the general rules for reporting taxes to LHDN, but you have taken no action to get yourself prepared with that. However, if you don’t monitor your books and report your income taxes punctually, it will not only affect your business, but you might be subjected to penalties, fines as well as prosecutions. If you are not a fan of bookkeeping, working with reputable accounting firm in Johor Bahru to assist you on that will be a wise decision.

Although bookkeeping is not everyone’s favourite, it is essential for a successful freelancing business. Keeping track of your bookkeeping will guarantee the constant development of your business and prevent you from getting into troubles.