3 ways to maintain accounts in Excel as a freelancer

7

Min Read

Ardith Stephanson

As a freelancer, you have many balls to juggle, including a number of administrative tasks such as your invoice templates, scope of work templates, or quote templates.

You have to write proposal templates and contract templates, connect those contracts to your freelance invoicing, track your time, and manage multiple projects. You also have to document expenses and manage taxes. You have to monitor payments, including recurring payments.

And you have to get all that information to an accountant at tax time.

While accounting is not the most pleasant job for many freelancers, doing it regularly – and properly – is important to your success.

To accomplish all of this, Excel is one example of an easy-to-access tool. But if you’re not an expert at using its spreadsheets and formulas, that can seem daunting.

So let’s explore how to maintain your accounts in Excel.

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Starting with Excel

Excel is a program in the Microsoft Office suite that is perfect for tracking, particularly when it comes to calculating numbers.

You can create tables and charts, and insert formulas that will add, subtract or multiply. You can also convert it to a PDF file to protect the contents, and then email it as necessary.

The work you do in Excel can be as easy or complex as you like. Besides bookkeeping, it can also be a great way to track your clients and freelance contracts.

So let’s look at 3 of the main administrative tasks you have to look after, and how you can use Excel to accomplish them.

1. Track client and contract information

In its simplest form, Excel has blank worksheets with rows and columns that make it easy to use for record keeping.

You can use an Excel accounting spreadsheet to track your clients, including contact information, any follow-up dates, or even contract milestones. You can even track the invoicing of your clients and receipt of payments.

An Excel spreadsheet is easy to navigate and has built-in tables, making it easy to use as a record-keeping program.

Simply open Excel, create the categories you need to track, and populate the worksheet. For a simple record like this, it isn’t necessary to figure out any formulas.

Here’s a simple example of a client tracking worksheet:

Tracking clients in Excel

The cells in the spreadsheet in this example are perfect to input whatever client information you want to record.

Now, here’s a simple example of contract tracking:

How to track contracts in Excel

In this example, you are tracking each contract, including start and finish date. Once the contract is complete, you track when you sent an invoice, and when you received payment.

This way, you’ll be able to tell at a glance where you’re at with each client and contract.

2. Track expenses

It’s important to track all your freelance expenses, for several reasons. We offer an online 1099 excel template you could use to do so.

First, it helps you understand where your freelance business is in terms of revenue and costs.

Second, it’s important at tax time. When it comes to knowing what information you will need at tax time, including expenses, reach out to an accountant to be sure you’re keeping all the relevant records. That includes things like tax collection and remittance, as well as expense tracking.

You can use Excel to track your expenses, and create a simple formula to do the appropriate math for you.

Here’s a sample of an expense tracking Excel spreadsheet:

how to track expenses

To know the total of all expenses, create a formula and place it in the bottom column of all the amounts.

In our example, in cell F7, you would place the formula: =SUM (F3:F6)

You can also do a shortcut by simply highlighting all the numbers in the column you want to add, and click AutoSum on the Home tab in Excel.

This is an easy way to keep track of your expenses in Excel. It’s a good idea to dedicate time each week to filling out the spreadsheet, so that you don’t get too far behind.

Besides, if you’re dedicated with your account keeping, there’s a good chance you’ll save money when it comes time to pay your accountant. After all, if you don’t do the legwork, the accountant will, and likely charge you by the hour.

In our example, we’ve tracked an advertising expenditure, office expenses and a business license. Depending on advice from your accountant, you may also be able to claim rent for office space, or a portion of home expenses dedicated to a home office.

You can also document expenditures on office equipment, any conferences or professional memberships, insurance premiums, and business lunches. A clear record of expenses helps you calculate your overall profit, and helps your accountant when it comes to any tax payments or refunds.

You can also consider automating your expense tracking. For instance, Bonsai offers a free trial for its services, which include an expense-tracking tool. You can centralize, track and bill expenses online with the click of a button.

how-to-maintain-accounts-in-excel-tax

3. Keeping tax accounts

It’s important to know exactly what you need to document in terms of any tax you collect as well as tax you pay.

Tax preparation doesn’t happen just once a year. It’s a good idea to have an accountant who will partner with you to ensure you’re maximizing any tax benefits throughout the year, as well as keeping track of all the relevant information. There are important deduction items you need to account for when it comes time for your annual tax return.

Once again, you can use an Excel spreadsheet to document any taxes that you may collect from clients, if applicable. You can maintain accounts in Excel for your taxes in a similar fashion as other expenses. In some instances, it’s valuable to document tax collection separate from other expenses.

As well, when it comes to preparing for tax time, you can also research software options for accounting and taxes.

Then there are options for also automating this work. For instance, Bonsai is integrated with Zapier so that you can use Bonsai with more than 1,000 other tools and software.

Here’s an example.

By creating "Zaps," you establish an integration point so that an invoice paid through Bonsai is automatically sent to a Quickbooks account, for instance.

how-to-maintain-accounts-in-excel-expenses

Other options for maintaining accounts

Now you know the basics of how to maintain accounts in Excel.

But maybe this sounds like too much effort. Or perhaps you don’t have the time to dedicate to building formulas and updating contract status.

Not everyone is savvy with Excel, with spreadsheets and building formulas, or has the time to learn.

With all you have to manage in running your freelance business, maybe it would be better for you to spend your time on other tasks. Things like finding clients, preparing proposals, and doing the actual freelance work, whatever that may be.

You might decide it’s better to do the work you love and get paid for, and find support for your account keeping.

Want to know the best part?

There are a multitude of tools in Bonsai to help your business run smoothly and make your life simpler.

With Bonsai, you can go from proposals to payments and then to tax season. The products are integrated and automated, which means you save time and get paid fast.

The tools that are specific to account keeping include:

  • Contract tools with live notifications and auto-invoicing, integrated with your proposals and your timesheets.
  • A freelance time tracking tool which allows you to automate invoicing directly from your timesheets.
  • An expense-tracking tool that centralizes the tracking and billing of expenses. You can create expenses and assign them to projects, connect to your bank account to import your expenses into the Bonsai dashboard, and get a unified view of your expenses across all projects. You can also attach expenses to invoices or bill directly.

Keeping accurate accounts takes time and effort, but it’s vital to a successful freelance business. Now that you understand how to maintain accounts in Excel, consider the option of the integrated tools available to you as part of Bonsai’s freelance suite by signing up for a free trial now.

Ardith Stephanson
Ardith S. is a freelance writer and communications professional who has some fun with her personal blog theardizan.com

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