Bookkeeping for the self employed/Freelance Grooms
Administration and bookkeeping might not be something that springs to mind as the most exciting aspect of being self-employed and setting up a Freelance Grooming business, but perhaps it should be as it is the devil in this detail that measures your success or otherwise. It’s the very foundation of your business, the barometer of whether you can take that holiday, buy that new saddle, go out for a slightly posher meal etc.
Having the details of your finances under control will inform your decisions both personal and professional and can make the difference between a calm and relatively stress-free existence and a roller coaster ride including sleepless nights, stress-filled days and worry that can just be avoided by being on top of your finances and planning your business activities in accordance with the financial health of your accounts.
The very basics are that you will need to keep a diary for logging past and future bookings, a system for invoicing, you will need to maintain bookkeeping, and you will need to submit tax returns and knowing WHAT and HOW specifically to maintain your bookkeeping is paramount to enabling you to make sound business decisions that ensure your business’s ongoing success and your financial health.
Your bookkeeping is recording your businesses financial transactions, both outgoing and incoming. This is then used to work out how much tax you need to pay. You only pay tax on the profits you make as a Freelance Groom, so it’s important to keep on top of your Freelance Groom business transactions and file your receipts and invoices so you not only declare all of your income, but also offset your expenses against your income.
Making and receiving payments
Firstly, when setting up your Freelance Groom business, you need to research and decide if it’s better to register as a Sole Trader or a Limited Company. Both have their pros and cons, so you need to decide what works best for you. Find out more about the differences between Sole Traders and Limited Companies here.
Once your business is registered, you will require a business bank account to make and receive business payments. This is important for keeping transactions in order for your tax reporting. You can find out more about using a business bank account versus your personal bank account here.
Allowable expenses
What you can legally offset against your income is referred to as “allowable expenses.” These include everything you need for your freelance Groom business to function, including;
All basic necessities for work, e.g. jodhpurs, coats and jackets, hats, gloves, boots, chaps, riding hats etc.
Any equipment you buy specifically for work, e.g. clipping maintenance and equipment, plaiting kits and show turnout equipment, any yard equipment that you might have for work, cleaning and hygiene liquids, wipes and other equipment.
The cost of branded clothing, i.e. having your name, business name and, if you have one, logo emblazoned on work clothing such as coats, jackets, sweatshirts, tee shirts, caps etc. You can find out more about allowable clothing expenses on the UK government website here.
Monthly payments for your insurance cover.
Stationary you need for your business, including your diary, paper for invoicing, folders and filing, envelopes, postage, bookkeeping provisions such as a cashbook etc.
Hardware like a printer for printing invoices, printer ink etc. In some cases, you might be able to claim for a mobile phone. You can find out more about allowable office expenses on the UK government website here.
Travel expenses. Most Freelance Grooms will have a car or van for travelling between clients because, by the nature of the industry, equestrian facilities tend to be rural or remote. There are certain expenses you can claim as a Freelance Groom. The most common way of covering these expenses is to use a flat rate, which simplifies charges towards fuel, wear and tear, vehicle maintenance, and vehicle insurance. You can find out more about allowable travel expenses on the UK government website here.
Training expenses. Training courses you go on to expand your skill set and maximise your earning potential are allowable expenses, but the courses need to be specific to your Freelance Grooming service. You can find out more about allowable training expenses on the UK government website here.
Filing your paperwork
It’s imperative to keep receipts and invoices to track your income and expenses. It’s a good idea to have two folders; one for income and one for expenses. Divide each folder into twelve sections, one per month of the year, and store your client invoices by month and year, and keep all of your receipts and records of expenses by month and year. Keep unpaid invoices separate until they are paid in full, so you don’t lose track of outstanding payments. You can find out more about recording income and expenditure on the UK government website here.
Accountancy for Freelance Grooms
Accountancy for Freelance GroomsThere are a variety of methods for financial record-keeping for your business, including on paper via a cashbook, using an Excel spreadsheet. There are other paid options in the form of website and Tablet/Phone app programs that allow you to create invoices, record transactions and upload photographs of receipts. Although these programs come at a monthly fee, the fee is an allowable expense, and can assist you in preparing everything for your tax returns without your Accountant having to do that for you. They will also help you to keep track of your unpaid and part-paid invoices. FreeAgent, Quickbooks, and Xero are three examples of such programs which can help you keep your bookkeeping on track.
Be disciplined!
You need to be disciplined in maintaining your bookkeeping and administration regularly. It might be difficult to find time among your client bookings, and it will feel like unpaid work, but it is a crucial part of working at a Freelance Groom and you can land in hot water if you allow this task to get out of your control. Make time and make sure you are on top of everything each month. This, along with marketing your Freelance Groom services, are fundamental elements of your business that you need to factor into your pricing structure in order to keep your business profitable and viable.
