Freelance accounting: starter guide

Key takeaways (TL;DR) Open a business account, separate personal/business, digitize receipts. Pick an invoicing tool with online payments and automated reminders. Set aside VAT/taxes and keep 2–3 months of cash runway. Track 5 simple KPIs: revenue, margin, DSO, fixed costs, available cash. Start with a monthly dashboard and a weekly one-page cash in/out review.

Kicking off as a freelancer involves choosing a legal status, setting up invoicing, tracking expenses, and filing taxes/VAT. This guide highlights key points, obligations, and practical tools to get started well.

1) Choose your legal status

• Sole trader/micro: simplicity, revenue thresholds, potential VAT exemption.
• Single-member company (LLC/SASU/EURL equivalents): more protection, tax options (pass-through/corporate), different contributions.

Tip: decide your VAT regime (exempt, simplified, standard) and monitor thresholds from your revenue forecast.

2) Set up invoicing

• Continuous numbering, legal mentions, payment terms, and late-fee policy.
• Ask for 30–50% upfront, invoice on delivery, enable automated reminders.
• Offeronline payments(card, instant transfer) to reduce DSO.

Invoicing tools Stripe Invoicing — invoices, online payments, reminders. Zoho Invoice — quotes, invoices, payments, reminders. FreshBooks / Wave — simple options for independents.

Best practices Include deposit terms, late fees, and collection charges in your T&Cs. Automated reminders on D+3, D+7, D+14 and a blocking procedure for late payers.

3) Expenses, reimbursements, and cash

• Dedicated business account, auto-categorization via accounting tool, digitized receipts.
• Expense claims via app (receipt photo) or Google Sheets, reimburse monthly.
• Monthly dashboard: revenue, costs, margin, tax provisions, available cash.

Pro tip: set cash threshold alerts and maintain a weekly one-page cash in/out report.

4) VAT, taxes, and obligations

• Set aside VAT and income/corporate taxes to a sub-account after each payment.
• Respect social/tax deadlines based on your regime (monthly/quarterly).
• Keep documents for 10 years; maintain a sales ledger and purchases register if required.

5) KPIs and steering

• Key KPIs:revenue,margin,DSO,utilization rate,average order value.
• Monthly review: actual vs budget and action plan.

Recommended tools (highlighted)

Accounting & dashboards QuickBooks / Wave — bank reconciliation, reports. Google Sheets / Power BI — KPIs and visualizations.

Automation Make / Zapier — reminders, accounting syncs, alerts.

30-day starter checklist

1. Open a business account and define expense categories.
2. Select/enable an invoicing tool with online payments and reminders.
3. Create a budget + 6-month forecast (Google Sheets) and a mini KPI dashboard.
4. Set up a taxes/VAT provisions sub-account and cash alerts.
5. Standardize expense claims (app or sheet) and do a weekly cash review.

This content is informational and does not replace professional tax or legal advice.