Most of us define financial freedom as being our own boss. If you dream of becoming self-employed, don’t forget that careful planning is required before you set things into motion. With this in mind, it is best to consult your Melbourne accountant or small accounting firm Melbourne.
While being self-employed could offer great financial rewards and enormous personal satisfaction, it also entails huge financial risks. Running your own business calls for the expertise of a Melbourne accountant or small accounting firm Melbourne for careful money management.
There are many self-employed Australians out there who earn a good living. However, keep in mind that while your annual income may be above the average, when you are self-employed, the flow of money is not always regular. Sometimes, it can be weeks or even months before the next cheque arrives.
In view of this, you need to be extra careful in managing your cash flow. You don’t want to be living on credit cards with high interest rates when you run out of cash.
Instead of considering all income you earn as your salary, pay yourself a weekly wage instead. Not all money coming in should be treated as your spending income. In addition, make sure to maintain separate bank accounts for personal and business spending.
Unlike being employed, you don’t enjoy the benefits of getting paid holidays. Decide on how much funds you plan to set aside. You can opt to put small extra cash on a regular basis for your travel fund.
One of the most common pitfalls of businesses who do not work with a reliable Melbourne accountant or small accounting firm Melbourne is failing to set aside money for income tax. Failing to meet your tax obligations could mean paying hefty penalties.