Money Strategy #7: Use Accounting SoftwareNovember 24, 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 #7: Use accounting software of some sort
Decent accounting software should allow you to produce customised invoices, keep track of payments made, log your time for billing purposes, report aging receivables, etc. Personally, I use MYOB, though it really doesn’t matter what you use.
If you’re eligible for GST (Goods and Services Tax), then make sure your accounting software can deal with the Australian tax system, and specifically the GST.
I used to use Microsoft Money to manage my personal finances, and when I first started my business in 1999, I did my invoices in Word. That got old very quickly, and when the GST was coming in, I purchased MYOB.
I use MYOB’s Accounting Plus as it:
- has time billing facilities (great for hourly rate freelancers)
- generates quotes, invoices, and statements
- looks after the GST
- produces figures for my quarterly BAS (Business Activity Statement)
- has regular updates to load new tax tables from the ATO (Australian Tax office)
- manages my PAYG taxes
- generates various reports such as Profit and Loss, etc.
There are many features I don’t use, but I’m happy to keep paying the approx. $300 annual support fee to get the tax table and software upgrades. It’s also really easy to send my tax details to the accountant when it’s time to do my taxes—I just zip up the MYOB file and email it to them.
- The Rules
- Strategy #1: Get professional advice
- 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 (this article)
- Strategy #8: Regularly keep track of your position
- Strategy #9: Decide on a billing method
- Strategy #10: Manage any surplus funds