Ever heard the saying, “Jack of all trades, master of none”? It’s appropriate for most freelancers who are busy not only doing their main job, but also trying to recruit new clients, manage their financial affairs, and grow their business. The plain truth is that you can’t possibly excel at every role you take on.
So maybe it’s time to stop doing it all by yourself. Freelancers are uniquely positioned to build the kind of work life they desire, but it can take some careful planning to create the right team to support your vision.
It’s simple: handling everything yourself in an attempt to save money often ends up costing you more. And outsourcing roles to experts in their own fields creates efficiencies that have more than just financial benefits. It allows you to focus on developing your own area of expertise and lets you rediscover the joy of freelancing without the tasks you hate.
Unless you’re an accountant in your own right, here are eight reasons freelancers should be outsourcing tax preparation and financial planning to an accountant, starting today.
1. Focus on the real work
We’re guessing that if you’re a small business owner, you didn’t get into it for the money. Most freelancers do it because they love the work. If your interests and expertise lie outside of financial accounting, then you can free up valuable time by outsourcing this task.
Accountants are highly effective and can ensure you meet your financial obligations in a fraction of the time it would take you to do it yourself. Instead, use this time to build your business by focusing on the important work you want to do.
2. Access opportunities to save
Accounting is one of those rare expenses that is likely to save you money. A skilled accountant will be able to identify opportunities for you to access tax credits or deductions. They can also create efficiencies in your financial systems that will ultimately save you a lot over time.
3. Clearly identify (and deduct) your expenses
And speaking of deductions, these can get rather complicated. Self-employed freelancers are entitled to deduct a long list of eligible business expenses from their taxable income, reducing the overall amount of tax they pay.
Sure, you can read the list on your own, but an accountant will ensure you don’t miss out because you didn’t fully understand what to claim or how to claim it. This can easily offset the cost of their services … which, by the way, are a deductible business expense.
4. Stay on top of changing regulations
Part of the reason it’s so challenging for freelancers to accurately deduct expenses is that tax regulations are in a constant state of fluctuation. Remember COVID-19? It created financial havoc for a lot of small businesses.
Accountants are already staying on top of any changes that may affect you, so it’s not an efficient use of your time to do this job, too. Instead, trust your accountant to be aware of how changing regulations will affect your finances, then take their advice seriously.
5. Improve the accuracy of your financial statements
There are a few reasons that accountants are more reliable when it comes to the accuracy of financial statements. Part of this is that they’re on top of regulation changes, which we’ve already mentioned. They also love numbers. If you’re a creative freelancer, numbers probably aren’t your cup of tea.
Years of experience and depth of knowledge lead to excellency in accounting. Outsourcing your tax preparation and other financial requirements can save you from incurring penalties for false statements, omissions, or failure to report income.
6. Get solid financial advice
Accountants do a lot more than tax preparation. As a freelancer, you have the opportunity to build a lasting relationship with your accountant so you’ll have access to trustworthy financial advice when you need it.
Get general business advice that’s not limited to taxes or accounting, like the benefits of changing the legal structure of your corporation or long term financial planning tips.
7. Set up effective systems
If accounting isn’t your jam, it’s a safe bet that setting up effective financial systems for your business isn’t your area of expertise either. An accountant can help with services for bookkeeping, balance sheets, business transactions, and payroll.
If you have several income streams or need to keep personal and business expenses separate, they can help you manage this information and ensure you capitalize on tax efficiencies.
8. Find better work-life balance
Being an entrepreneur is hard work. The line between home and work is blurred when you work for yourself. When you’re able to outsource specific responsibilities to experts, you free up more time for yourself. Invest it back into your business or enjoy the freedom to pursue other interests … like making it home in time for family pizza night once in a while.
Trying to be a Jack of all trades isn’t a recipe for long term success. You’re more likely to burn out and face an increased risk of making poor decisions or financial errors along the way.
In addition to tax preparation, MMT Chartered Professional Accountants offer a full range of business advisory services to position you for success. Let us run the numbers so you can run the business.