Quickbooks Self-Employed: 8 Ways to Optimize Your Business

Are you a side hustler, freelancer, or run a small business? Then I hope you’re using some sort of accounting software, like Quickbooks Self-Employed, to help you out.

Want to hear a crazy stat? Right now, self-employed workers make up 37% of the Canadian workforce. What’s even crazier is that by 2020 that number will jump to 45%! That means that almost half of Canadian workers will be self-employed in some way (either full-time or to supplement their income).

This may seem like a big number at first, but it actually makes a lot of sense. Since the recession in 2008, wage growth has been either stagnant or slow to rise. Even though that was a decade ago, for many workers, especially those who live in expensive parts of the country, one job still isn’t enough to live off of. That’s a big reason why I decided to work two jobs after university, then eventually tacked on a third job (my freelance writing side hustle).

How I Got Started Freelancing

When I graduated in June 2009 there were hardly any jobs. I so badly wanted to move out of my parents’ place and get an apartment of my own in Vancouver. Unfortunately, I had to endure a long and hard year of job hunting while taking any random gig I could get to make some sort of money.

After about 6 months, I got an on-call job as a teleprompter operator for the news. I only worked one or two shifts per week, but it was something and I was grateful. When I eventually landed a full-time job at a newspaper 6 months later, I took a look at the salary and crunched the numbers. The job would earn me $30,000/year. That salary was low even for recession standards, but I knew I needed to take it. Still, it would be hard to live off that salary alone, so I decided to keep both jobs…for 3 years.

When I started my personal finance blog at the end of 2011, I realized that I could also earn some extra cash by freelance writing for other websites. So, on top of working 9am-5pm during the day and 8pm-12am two days per week, I also started freelance writing on weekends so I could earn enough to pay my bills, fully fund my emergency fund, start investing and even have a little fun.

Why Right Now Is the Best Time to Start Your Own Business

The reason I wanted to share that story with you is because going through that was a huge turning point for me. It made me realize that we are in a different time right now. Some people like to call it the gig economy, but for me, it’s more about making your own opportunity in this time of million-dollar bungalows, skyrocketing rents, and stagnant salaries.

Instead of getting mad about your situation, get even. With the Internet and social media, it’s easier than ever to start your own side hustle or small business to either supplement your income or replace your full-time job completely (which I was able to do a year and a half ago).

That being said, one thing there’s still not enough emphasis on is the administrative side of things. It’s super exciting and empowering to start making your own money, but what most people don’t think about is how to organize that money, track spending and prepare for tax time.

That’s why I’m going to dive into what it means to do your own accounting as a freelancer, and why you may want to get Quickbooks Self-Employed for iOs or Android, one of the most affordable accounting apps made specifically for side hustlers and self-employed individuals.

Track & Review Your Business Expenses Regularly

Accounting doesn’t have to be something you dread. All it means is taking a look at your earnings, your expenses, and the sales tax you’ve collected. Seriously, it’s that simple. Sure, you can create graphs, projections and get really deep into it if you want, but if you’re just a freelancer or solopreneur, you don’t have to do much more than that.

Still, it can feel overwhelming if you don’t keep on top of everything. Especially if you have a lot of little business expenses from different vendors as I do. What I recommend is making a point of gathering all your business expense information weekly or monthly. Pick a recurring date in your calendar, then dedicate an hour or two to collecting all of your paper and online receipts. Then, and this is when using accounting software comes in, plug it into your accounting software so you have all of that data in one place.

Automatically Import Your Expenses

Now, this is something you can do manually, however, if you use Quickbooks Self-Employed, you can actually just link your bank to the app and it will automatically import your purchases into the app. What I do to minimize the number of personal expenses getting imported is I use a credit card that is with a separate bank from my personal bank. That way when I import all my data, I know it’s just importing my business spending.

Then again, if you do import business and personal expenses into the app, with just a swipe you can label Business, Personal, or Split. When you choose Split, the app allows you to split the expense into Business and Personal, or even another category of your choice.

Take Photos to Import Paper Receipts

The Split feature comes in really handy when you have paper receipts. For instance, if you go buy some items at an office supply store, and 2 items you bought were for business and 1 was for personal use, you can split that up using the app. All you have to do is take a photo of the paper receipt using the app, it will import the receipt’s data, then you can choose to split up the business expenses from the personal expenses.

Automatically Track Your Mileage

I don’t drive so I wouldn’t use this feature, but I know my husband would! He drives a lot for his job as a freelance audio engineer, having to drive to different studios and venues constantly. Currently, he just saves all his gas receipts, puts them in a shoebox, then has a headache to deal with during tax time.

Well, I’m going to suggest he use Quickbooks Self-Employed moving forward because it has a really cool mileage feature. Basically, in the app there’s a toggle you need to swipe to enable auto-tracking, then it uses your phone’s GPS to automatically log your trips and find mileage deductions for you! It’s of course still important to keep your paper receipts for gas for tax purposes, but this feature will make it a lot easier to assign those receipts to specific trips.

Send, Track & Collect Payments

Depending on what your business is, you may only need to send out invoices to clients to get paid. Doing it the manual way (typing it out, saving it as a PDF, email it to the client, hoping they get it) is painful. Believe me. I did it manually for years and hated every minute of it.

Send Invoices in Seconds

Instead, Quickbooks Self-Employed has a very simple and straightforward invoicing feature that enables you to send out an invoice in seconds from your phone. Not only that, it tracks if your client has viewed your invoice to help you determine whether you need to follow up with them.

Take Credit Card Payments

When sending out your invoices, you can also add a Pay Now button that allows clients to pay via credit card. This is a great way to ensure speedy payments from your clients.

Track Sales Tax

I don’t know why, but sales tax always seems to confuse people. Once your business earns more than $30,000/year, you need to start collecting sales tax from your clients or customers to pay the government. If your business operates and you serve customers in Ontario, that means you have to collect 13% HST.

This may seem hard to track, but Quickbooks Self-Employed does all the heavy lifting for you. In the Sales Tax section of the app, you choose what province you collect and pay sales tax in, and it automatically applies it to your invoices.

Now, if your business is a little bit more complicated and you serve customers outside of your province, depending on what your business supplies, you may have to collect the sales tax from the consumer’s province (ie. you live in Ontario, they live in B.C.). This is somewhat complex, but this article on the CRA’s website is pretty helpful.

In a case like that, it makes the most sense to just include the tax in the final price for the client and make a note that the tax is included.

Final Thoughts

It’s important to keep your costs low when running a business, no matter how big or small your business is, but cheaping out and not using accounting software is something I would strongly warn against.

Why? Because you’re running a business! The most important thing you can do to ensure your business thrives is to manage your money right. If you’re not keeping all of your business income, expenses, and sales tax organized, you can find yourself in a real mess real quick.

If it helps, accounting software for your business is a business expense. Not only that, Quickbooks Self-Employed is really affordable when matched up with its competitors. Normally it’s $9.99/month, but right now it’s only $4.99/month. That’s less than $60 per year.

If you want to make sure it’s a good fit for you, make sure to do a free 30-day trial.

Watch my Full Quickbooks Self-Employed Review & Tutorial

Got a business or accounting question? Or have you used Quickbooks Self-Employed before? Share in the comments!