Accounting for self-employed and freelancers

Why bookkeeping is crucial for the self-employed

With your accounting, you can map the success of your company. However, it not only shows you how much money you earn and spend, but also forms the basis for your taxes, your business decisions and communication with the tax office.

If you neglect accounting as a freelancer or self-employed person, you risk financial disadvantages and legal problems accordingly. It is therefore all the more important to organize everything in such a way that you keep an eye on your costs, calculate your taxes correctly and ensure your liquidity.

When you organize your bookkeeping digitally, it turns from a chore into a real control center for your company. You work more efficiently, identify bottlenecks early on and can tax advisor Collaborate in a targeted manner.

In the following sections, you will learn how to set up your accounting step by step as a self-employed person or freelancer, with the right software, less effort and more control over your finances.

Your or balance sheet? Rules & duties for self-employed people

Most self-employed and freelancers use the income surplus statement for their bookkeeping. Here, all income and expenditure are compared. The difference is profit. This procedure is a practical solution primarily because it does not require a comprehensive overview of assets and liabilities.

Instead, this is an option for small companies or solo self-employed people who want to do their bookkeeping without major effort.

benefits

• Less administrative effort: There is no obligation to individually value assets and liabilities or to document them comprehensively. This saves time and money, particularly for individual entrepreneurs and freelancers.
  
  
• Easier tax return: Income and expenses are transferred directly to tax forms so that annual financial statements and sales tax returns can be prepared quickly.

drawbacks

• Limited overview: In contrast to the balance sheet, the EUR does not show any details of equity, fixed assets or long-term liabilities. Anyone planning financing therefore has fewer proof options.
  
  
• Not always allowed: Traders who generate more than 600,000€ in turnover or 60,000€ profit per year are required to account in accordance with Section 141 AO. Corporations (e.g. GmbH, UG) must always balance sheets. Freelancers, on the other hand, may use the EUER regardless of the amount of their income.

The accounting is significantly more detailed than the EÜR. Assets and liabilities are recorded here. You get a complete overview of your assets, liabilities and equity.

Accounting also allows you to conduct a more differentiated analysis of your financial position, for example by:

• Depreciation
• provisions
• receivables management.

Accordingly, it forms the basis for your business decisions, for example regarding financing and investments. With it, you can also map more complex business processes in your accounting as a freelancer.

Do bookkeeping yourself: 4 typical mistakes (and tips)

Whether your bookkeeping becomes a daily routine or quickly a burden depends primarily on how well you organize your processes. Especially at the start, it is absolutely possible to do the bookkeeping yourself, especially for smaller projects or if you work as a sole trader. It is important to know the most common pitfalls and to avoid them right from the start.

Source of error No. 1: Incorrect and incomplete documents

The classic: invoices disappear, receipts are missing, amounts are not comprehensible.

Each booking requires a receipt. It is best to use a digital document archive that automatically scans, stores and correctly allocates documents. This will keep you GoBD compliant and save yourself trouble at the tax office.

Source of error #2: An incorrect categorization of income and expenditure

If you allocate bookings incorrectly, this can have a direct impact on your profit. And even if you are often confronted with more complex business transactions, such as depreciation or mixed invoices, the risk of mistakes happening increases.

Are you self-employed And would like your Do your own bookkeeping? Work with a clear chart of accounts and check regularly whether categories such as “business expenses” or “travel expenses” are being used correctly. Many accounting tools automatically help with this.

Source of error No. 3: Late VAT returns

Anyone who misses the deadline for submission quickly pays late fees. Monthly charges in particular are time-critical.

Tip: Set automatic reminders or use tools that warn you when deadlines expire. A simple routine — such as entering documents every Monday — also helps.

Source of error No. 4: Old requirements as a basis

Tax laws change regularly — from lump sums to the amount of sales tax.

Tip: Subscribe to newsletters from your tax advisor or tax office and keep your software up to date. This ensures that you book according to the correct guidelines.

With these principles, you significantly reduce the risk of errors and save time and costs in the long term. If you notice that you lack routine or want more security, you can hand over your prepared bookkeeping to a tax advisor at any time.

Work in a hybrid way: record it yourself, check it by your tax advisor

Accounting for self-employed people doesn't have to be a time waster. More and more freelancers and entrepreneurs rely on a hybrid approach: You do the preparatory bookkeeping yourself, your tax advisor takes over control, closing and communication with the tax office.

In everyday life, this means:

• The first step is to enter all receipts and categorize your income and expenses. You then provide this digitally to your tax advisor.
• Regular coordination with your tax advisor helps you to identify errors at an early stage, to clarify open questions and to implement tax improvements.
• There are now various tools that crafts-Accounting for self-employed people and freelancers be able to simplify. By using these solutions, you save time and significantly reduce the risk of errors, such as number twisters.

In this way, you stay close to your figures yourself, but at the same time benefit from professional control and tax security.

Benefits of the hybrid model

• Less effort: Digital document entry and automatic booking suggestions save you a lot of manual work.
  
  
• More control: You can see in real time how your company is doing — income, expenses, liquidity.
  
  
• Professional safety: The tax advisor corrects ambiguities before they become a problem.
  
  
• Scalable: Whether you're a solo self-employed person or a growing company, the collaboration can be adjusted at any time.

Comparing accounting software for the self-employed

Many modern tools or platforms today enable exactly this fluent exchange with your tax advisor. You work digitally, save time and still have full control over your finances.

The right software decides how easy and efficient your bookkeeping really is. In the following sections, you will find a comparison of the most popular solutions for self-employed and freelancers, including their most important features and integration options.

Integral

With Integral is it an all-in-one tax service that is aimed at companies of various sizes, and therefore also at self-employed people and companies. Here, tax advice, bookkeeping and payroll are brought together on one platform. At the same time, you can automate all accounting processes and also get personal support from a tax advisor.

Key features also include:

• Tax dashboard with real-time overview of all financial data
  
  
• integrated deadline management
  
  
• Connect to existing tools and systems
  
  
• digital signature for documents and receipts

Lexware Office

Lexware Office was specifically designed for self-employed people and small businesses. With this solution, you can automate your central accounting processes. The tool also offers you integrated online banking, automatic document entry and the option to write e-invoices.

• Preparation of offers, invoices, EUS, income statement and tax return
  
  
• automated collection of reminders
  
  
• integrated online banking and document entry
  
  
• around 140 interfaces to other systems
  
  
• Can be used web and mobile via app or cloud access

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sevDesk

sevDesk offers a digital solution for managing invoices, other receipts and your finances. By integrating bank accounts, incoming payments can be assigned directly to open items.

• legally secure invoices with an individual design
  
  
• Document entry via photo or upload
  
  
• Preparation of the EUS and direct submission of the advance sales tax return
  
  
• Analyses and evaluations of business processes
  
  
• Cost center management

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paperwork

Paperwork's accounting software is cloud-based and includes functions related to accounting, invoicing, time recording and project management. It was developed specifically for self-employed people and smaller companies and allows you, among other things, to record project times down to the minute and automatically transfer them to invoices.

• Invoices and offers with individual layout
  
  
• EUER, advance sales tax return and business evaluations (BWA)
  
  
• mobile use via Android and iOS
  
  
• Scan function for documents
  
  
• can be used flexibly for various industries

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Do your own bookkeeping: 5 tips for beginners

If you want to do your bookkeeping yourself as a self-employed person or freelancer, it is a good idea to pay attention to efficiency, the automation of routine tasks and seamless integration into your existing system.

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The following tips will help you find a solution that's right for you.

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Tip #1: Make sure integration is easy

Perhaps you are already using a specific software solution for your accounting. If you want to continue working efficiently, you should opt for a solution that is easy to integrate with your existing system. This allows you to ensure, among other things, that connections to CRM systems, project management tools, and e-commerce platforms can be created. This allows your data to be automatically synchronized so that fewer manual entries are required.

Tip #2: Choose software that allows you to automate booking processes

Many accounting software solutions offer you practical features, such as:

• automatic document recognition
• the ability to automatically categorize income and expenses
• to prepare sales tax returns.

Tip #3: Take part in training courses regularly

Since tax requirements are constantly changing, you should regularly attend training courses and webinars to keep your knowledge of taxes up to date. Many offers are aimed specifically at self-employed people. If you managing director of a limited liability company or a basement You are, can (and should) of course also continue your education. In this case, however, some other training content becomes relevant.

Tip #4: Coordinate regularly with your tax advisor

Even though you have your bookkeeping than freelancers or prepare a self-employed person: As soon as you work with a tax advisor, you should coordinate with him. In this way, you can often further optimize collaboration. Arrange regular reconciliation appointments to clarify tax issues and use digital document submission to exchange documents.

Also talk to your tax advisor about possible tax planning options in order to be able to make better use of potential tax benefits.

Tip #5: Use a tool that's right for you

Depending on the industry or business model, various accounting functions can be particularly helpful. For example, if you travel frequently, it can be helpful to be able to rely on cloud-based access options. These allow you to upload your receipts from anywhere.

Therefore, check which functions make sense in your individual case when it comes to optimizing processes.

4 accounting scenarios for the self-employed

Every self-employed person works differently and that is exactly what is also reflected in accounting. Whether you're a freelancer, tradesman or online retailer: Your processes, documents and evaluations differ, but they always follow the same goal — Transparency and control over your finances.

The following examples show what accounting can look like in practice.

Freelancers in the creative sector

A designer creates a website for a customer, writes the invoice and records the receipt of payment as revenue. He sees the costs for his design software as operating expenses. At the end of the month, he prepares the advance sales tax return and uses the comparison of income and expenditure to identify which projects were particularly profitable.

Tip: With software that automatically categorizes documents, he saves time and avoids manual errors.

Craftsman with project-related accounting

A craftsman collects receipts and assigns them to his projects, from purchasing materials to travel expense reports. When customer payments are received, he reconciles them directly. In this way, he can make post-calculations and recognize early on whether an order is within budget.

Tip: Digital tools with mileage recording and project allocation help to keep an eye on effort and costs.

Online retailers with refunds

An online retailer sells products via a platform, collects income, deducts sales fees, and books refunds as expenses. Shipping costs are also included as operating expenses. In order to keep margins and inventory levels up to date, he regularly coordinates accounts and inventory movements.

Tip: Automatic account reconciliation and warehouse integration are particularly valuable here.

Service providers with recurring payments

A counselor offers monthly care packages. His software automatically records recurring payments and sends reminders as needed. As a result, he saves time and keeps track of outstanding receivables.

Tip: Look for tools that support subscription models and generate invoices automatically.

Efficient accounting starts with the right solution

The best accounting solution is the one that fits your daily work routine. It should be seamlessly integrated into your existing systems, automate routine tasks and relieve you of repetitive processes. Depending on the business model, additional features may be useful, such as managing subscriptions, refunds, or project times.

Software that also allows you to work directly with your tax advisor is ideal. You prepare your documents digitally, your tax advisor reviews them and prepares the annual financial statements based on this. In this way, you combine control, efficiency and security in one system and make your accounting a fixed, uncomplicated part of your everyday business life.

Automate your bookkeeping — Test the best software now!

Checklist: Accounting for self-employed people

Especially when you start your Self-employment yours bookkeeping If you do it yourself, the requirements are often manageable. With the following checklist, you will create the basis for efficient processes.

1. Collect receipts and file them according to the specified structure

This includes collecting all invoices, payment receipts and receipts. Upload everything. How you structure your folders is largely up to you. For example, you can categorize either by project or by month.

2. Record income correctly

It is important to enter every invoice in your system and to regularly check and allocate incoming payments. Depending on which tool you have chosen, this happens automatically.

3. Keep an eye on your sales tax

If you are not working as a small business owner, you must pay sales tax and prepare regular advance returns. You can deduct the amounts that you have paid as input tax. Your accounting tool queries or accounts for the corresponding amounts so that you can see exactly how much sales tax you have to pay for the respective period.

4. Reconcile your accounts regularly

To ensure that all data is up to date, you should regularly check your bank accounts, PayPal, etc. with your accounting department and always keep everything up to date. Preparing monthly and quarterly reports helps you keep a regular eye on the success of your company.

5. Write down important deadlines in the calendar

Make sure you don't forget any important appointments. Note deadlines for advance registrations, business tax, etc. in the calendar and set a reminder.