Money Strategy #1: Get Professional AdviceNovember 18, 2008
This article is part of a series of eleven short articles on managing money. It is aimed at freelancers and independent contractors. Before you read this article, make sure you have read the disclaimers etc. in the introductory article about my money management rules.
Strategy #1: Get professional advice
Each country has some form of corporations law and tax laws that dictate what’s legal and what’s not. Knowing what you can and can’t do is critical to the financial viability of your business and to its longevity. Making a mistake that puts you in front of a law court can wipe out any gains made, and can wipe you out professionally, personally, and psychologically. So seek professional advice. If you don’t know where to get this advice, start with your accountant.
Your accountant should be able to advise you on things such as:
- company structure
- tax implications of business decisions
- requirements under your country’s corporations and taxation laws
- accounting software that they use with their clients (see Strategy #7)
Your accountant should also be able to refer you to other professionals such as financial advisers, contract lawyers, business insurance brokers, etc.
Accountants are also handy for making sure your corporations law obligations are met, that your business tax return is submitted correctly, as well as helping you claim all the legal deductions you’re entitled to.
Don’t scrimp and save on an accountant—a good one’s advice may result in long-term profit that far outweighs their cost (remember Rule #1: Make a profit). Besides, the fees you pay your accountant are a legitimate tax-deductible business expense, at least in Australia.
Finally, make sure that the accountant you choose has experience with small businesses and/or freelance businesses. You don’t want the corner store or shopping mall tax return agent, and you don’t want the big name firms that deal with large corporations—you need someone who understands the issues facing small businesses like yours.
- The Rules
- Strategy #1: Get professional advice (this article)
- Strategy #2: Keep your money separate
- Strategy #3: Invoice regularly
- Strategy #4: Pay your bills on time
- Strategy #5: Pay yourself
- Strategy #6: Set aside your tax obligations
- Strategy #7: Use accounting software of some sort
- Strategy #8: Regularly keep track of your position
- Strategy #9: Decide on a billing method
- Strategy #10: Manage any surplus funds