How to Use Quickbooks Self-Employed as a Freelancer or Solopreneur

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Wouldn’t it be nice if we could rewrite history? It would be great if I could sit tall in my chair and tell you how I’ve masterfully managed my finances during the entire 12 year journey I’ve been on as a small business owner. But alas, I cannot. Things started out bumpy and I’ve dealt with just about everything along the way including undercharging, chasing clients for payment and bounced checks.

Mostly, there was a lot of fear. I avoided organizing my finances, not because it was actually hard (hello, I’m an organizer!), but because I was afraid to know how little I was actually making. I was afraid to think of how much debt I had. And so I told myself what a lot of people do – if I ignore the problem, it isn’t really a problem.

That is entirely untrue.

Ignoring your problems – especially financial ones – is only going to make things worse. What I needed was an easy way to focus on exactly what mattered to me. What I needed was straightforward insight into my financials. And that’s what QuickBooks Self-Employed was able to deliver.

In this post, I’m going to walk you through how you can use  QuickBooks Self-Employed to manage your finances as a freelancer or solopreneur.

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How to Use Quickbooks Self-Employed

Who is QuickBooks Self-Employed for?

QBSE is for a very specific segment of us business folks out there. If you’re a “side hustler,” freelancer, or solopreneur, sole proprietor or one person LLC, this might be the perfect tool for you. This means if you’re a writer, designer, consultant, strategist, marketer, coach, speaker, virtual assistant, or almost any other kind of solo service provider, you can use QBSE.

If you have employees, have a brick and mortar business, a product based ecommerce business (where you need to keep track or raw materials and other fun stuff), then you  may be better off with another product. Something in the QuickBooks Online family would be ideal for you.

Now that we’re clear on that, let’s talk about how to use it.

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Manage Expenses:

QuickBooks Self-Employed is easy to set up. Once you sign up for an account, answer a few questions about your business, connect your bank and credit card accounts and watch the magic happen. Connecting your accounts is key. Doing this allows QBSE to track and categorize your expenses. They’ll map nicely to your Schedule C form come tax time (more on that later). You can set up rules so that you can minimize the time you spend categorizing your income and expenses. For example, I do sell some products and I do it through Shopify. I have a rule set up that any credits from Shopify are automatically categorized as business income. And I have a rule that any debits from Staples are supplies expenses.)

All year long you can have an at-a-glace view at your income, expenses and see which categories are getting the most of your dough (I paid way more money to freelancers and sub-contractors in 2017 than I would have guessed off the top of my head). Knowing what you’re making and what you’re spending is powerful. It’s a simple thing, but it tells you a lot.

And, if you’re not tracking your expenses, you’re likely missing out on tons of tax saving deductions.

Track Spending:

If you ever pay cash for things, you can use the QuickBooks Self-Employed app to take a photo of your receipt and add the transaction to your account. I never stress myself out about doing it in the moment. But once a week, I empty out my wallet and snap pictures of any of those random cash receipts I have (usually for parking).

Ideally, you have separate accounts for your business and personal transactions. But, chances are if you’re not commingling funds now, you have at some point. QBSE makes it really easy to exclude your personal transactions from your reporting. Because of that, I went ahead and connected my personal credit card. I don’t have a business credit card and every once in a while, usually while traveling, I’ll be in a situation where I can’t use a debit card. So, I’ll whip out my credit card and know that transaction is still being captured and categorized.

Track Miles:

If you’re using your car for business, you should be tracking your miles. While you have the option to take the standard deduction on your taxes, the only way to know if that’s your best option is to actually know how many business miles you’ve traveled and what else you’ve spent on car related expenses. I used to use a separate app for tracking my miles. It wasn’t the end of the world, but knowing that QBSE‘s app has mileage tracking built in was a huge selling point for me. Like my income and expenses, I can see what my mileage is like at any given point. And again, come tax time, that info is all in one system without exporting the data from somewhere else or calculating things in a notebook. If you turn off the auto tracking function and forget to log a ride, you can always add it in manually.

Get Paid:

Have a business? Well, you’ve gotta get paid. When I signed up for QBSE, they didn’t have invoicing and so when they added it, I was thrilled. Even though I use another tool for invoicing now, if you’re looking to minimize the number of systems you have and you like having your invoicing tied in seamlessly with your other financial info, you’ll love this feature.

Pay Your Taxes:

Oh, taxes. I used to dread them. And back in those fearful days, occasionally I fell behind in filing and paying them. I can’t say I love the idea of cutting a check to the IRS and the state at any given time, but over the years, my attitude on taxes has completely changed. If I have taxes to pay, that means my business made money. I had plenty of years when I deleted over a refund check – but those years were also stressful because I wasn’t making the kind of money I could – and should – have been making.

There are 3 tax related perks of using QBSE:

• Inside your account, you’ll always have a reminder of when quarterly taxes are due and what your estimated taxes are. Again, think positively – you’re making money, honey!
• If you have an accountant, they can login and access your info, which will make their job easier (and it may be cheaper for you – or at least they won’t resent you for being a hot mess).
• If you upgrade your plan (like me), you can get QBSE + Turbo Tax and then come tax time, your info gets pushed right on over to Turbo Tax. This has saved me hours.

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So, those are some of the important ways you can use QuickBooks Self-Employed to manage your finances as a freelancer or solopreneur. It’s easy to set up, easy to use, it costs practically nothing (yet its worth a ton!) and the support is great. Why wait? Make chaos and uncertainty things of the past.

Click here for 50% off the next 12 months and get Quickbooks Self-Employed for only $5 a month.

Disclaimer: I’m a systems whiz, but I am by no means a financial expert. Questions about your specific financial issues should be directed to a finance pro. But if you need help organizing your finances or setting up systems to help you get more control over your finances, contact me.