When you’re a self-employed taxi driver, it’s important to stay on top of your finances. And a large part of that is attributed to your bookkeeping. But not everyone has the funds to hire a professional to balance their books. However, you can take charge of your own bookkeeping by at least knowing some of the basics.
Have an Organised System for Keeping Records
The most important aspect of bookkeeping is organisation. Organising all of your receipts, invoices, contracts, and other paperwork will not only make the process easier for you but will also make it easier for an auditor to track down the information they require to do their own audit.
Get in the habit of keeping all of your business documents in one location. Colour code them or use a system where you have a place for each type of document. And make sure that you update it so that you can always find the document you need.
Analyse Your Income and Expenses Each Month
The best way to keep track of all these expenses is to analyse your income and expenses each month. It will give you an idea of where the money went and how you can cut out unnecessary expenses — or can better plan for new investments. You’ll need to know how much your business brought in each month or each year in order to calculate your tax liability.
When calculating your income, keep track of all your expenses as you go, but also make an attempt to forecast future expenses. For example, if you’re planning a big trip, make sure you factor in how much you’ll need to come up with for expenses. Those extra expenses could be things like adding more days to your lease or flying your family out for the trip.
Separate Your Business Finances from Your Personal Finances
Not everyone can do this, but it’s a good idea if you can. Making sure that your business finances and personal finances are not mixed is important for a couple of reasons. First of all, you don’t want to risk your business finances being linked to your personal finances. If your personal financial situation doesn’t work out, you don’t want your business to be affected by it.
The other reason is that if you get audited or need to file for taxes, it will be much easier to separate those records. It is a lot easier to go through the bookkeeping process when you know exactly where each set of records is. It also makes filing taxes easier since you’ll have all the information right there.
Make Use of the Right Tools
You don’t have to get expensive accounting software to get things done. There are a lot of free options out there that can help you. For example, Quickbooks Online is a great option for many businesses. It’s available through Intuit, and you can use it through your web browser. It can also be synced with your mobile device if you want to keep track of it on the go.
On top of that, there are other software programs that can help you in the bookkeeping process. For example, the right program will help keep track of receipts and invoices and allow you to have a better system to separate your personal finances from your tax records.
Bookkeeping is an important part of running any business, but it is especially important if you are self-employed. It’s important to have an organised system and to keep good records. Having a good handle on your finances will help you to cut out unnecessary expenses, make smart investments, and keep track of your taxes.
Stay on top of your finances with the help of Rideshare Tax. We are the best tax software for rideshare drivers in Australia. We’re a team of tax agents and accountants that have designed our complete service around you to suit your needs. Contact us today to get started!