Freelancers and Sole Traders: do you have any advice on how to manage the finance of your business? (dealing with taxes, etc.?)

Hi there,

For some context: I'm a freelance graphic designer since last September.
I've done all the boring admin work with HMRC and I've been making sure to put 20% aside every time I've been paid for taxes.

But apart from this, I feel a bit lost.

Do you have any advice on how to manage your finances as a freelancer?

Thanks so much!


  • @Vikki Ross thank you for the mention! :) I have a 25% discount on the guide at the moment too
  • @Nikky Lyle has created an excellent guide to freelancing that might help:

    I have an accountant - couldn't do any of the finance stuff myself. If you're interested, they're here - and they look after lots of creatives so they get us:

  • @June Mineyama-Smithson Ah I love a book recommendation, thanks a lot June!
  • tax tax tax! everything else takes care of itself. Just make sure you know how to invoice each client and that you keep a record of who to invoice and who has paid. Since you money as a freelance comes a various times in the month make sure you have a small and manageble overdraft. Never over extend yourself with credit.
  • @Mandie Johnson Thank you very much Mandie for your adivice! Very helpful!
  • @Steven Haddock Thanks Steven for your message, sounds like Quickbooks is the way to go!
  • @Claire Medcalf Thanks Claire, I'll have a look at it!
  • @Laura Hurst Wow, thank you so much Laura for your message! I definitly need to follow your advice! Thanks again!
  • @June Mineyama-Smithson Ahh thank you so much June for your message! I definitly need to get informed on my pension too! I'm adding this to my to do list, thanks!
  • @Adam Gordon Thanks Adam for your message! I better found an accountant and stop procastinating on it! Thanks!
  • @Harriet Anstruther Thanks Harriet for the recommendation, I'll have a look at Xero!
  • @David Woolfall Hi David, thanks a lot for your reply! My next step would be to find a good accountant then!
  • @Katie Killip Thanks Katie for your reply! Will try to follow your advice, thanks!
  • I use an accountant for paying taxes etc. and whenever Im paid I put 20% of it to one side. Naturally you will have expences that would come off in time. I just do things this way and it kind of turns into a little savings account as you go.
    I guess you need a regular cash flow for this way of working I do understand...
  • Get an accountant! It's well worth the outlay to not have the financial stuff gnawing away in the back of your head all the time, and also great for general financial advice as well. Using some of the tech / banks available (like Coconut) definitely helps if you want visibility on stuff too.
  • I've always used an accountant. You need to pay them, but the savings you make with them, knowing what can be deducted etc - makes it worthwile. BKL was the company I used.
  • I also use Quickbooks and it works really well for me.

    I got into the habit of putting away 30% for tax and 10% in savings from each job. The tax might have been overkill but you're usually left with a nice chunk at the end, OR it covers any unexpected surprises, like payment on account (this is what happened to me and it rooked me).

    One bad habit I have is I'm using my buisness account as a current account. I haven;'t got into the habit of paying myself, and instead just take out what I need as I go. This is partly because on Quickbooks it's so easy to mark transactions as 'personal' so I don't have to worry about it messing up my books.

    I think this is an OK way to go but if you want to feel more in control of your money you might want to figure out the sum you want to pay yourself each month, and create a schedule. Maybe you want to oay yourself weekly rather than monthly, which might also help with your cashflow.

    Have a good think about why you're feeling lost and tweak your system to fit.

    Good luck (and congrats on going freelance!)
  • I find it's essential to keep a daily record in a business diary of any invoices going out and of payments coming in (always mark the date of every payment made). This way you will easily spot if someone has forgotten to pay you.

    Send a polite reminder invoice as soon as you realise a company hasn't paid you (it can often be due to an innocent oversight, always give them the beneift of the doubt).

    Also, try to keep your record of information for HMRC updated as you go along (when you have a work free day), and get your tax return in as soon as possible.

    If you have any concerns give HMRC a call you can always find someone to help you with advice.

    Hope this helps,
  • Hi! I have recently moved to Quickbooks and I am finding very easy to navigate and manage the ins and outs of my account from the dashboard. I'm yet to submit my tax return to HMRC through the software but from what I understand this can be done directly through Quickbooks with a few clicks. I still invoice seperately though - I found there was a charge for invoicing through the software. (Not found this to be problematic as I was doing this before.)

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