So, just like any other business, you need to take due measures to keep a tab on your revenues and expenses. Thus, there is a quintessential need for you to organize the business and personal expenses while keeping them separate from each other. If truth be told, it is not readily achievable. 

To streamline the several tasks, which you have to undertake all by yourself, you can depend on a bunch of tools, which prove to be invaluable for the independent contractors, self-employed professionals, and freelancers time and again.

So, here, in this article, we will discuss with you some tools, which can help you increase your tax deductions, organize your business and personal expenses, and automatically help you keep a tab on the miles when you travel for work. 

Different business and personal bank accounts

If you happen to spend non-business money via the account in which you have deposited your business money, you can be assured of landing yourself in a soup in no time. It would be particularly problematic when you have to file your returns. Having the same account for personal and professional use will make it hard for you to maximize your tax deductions.

Thus, you need to have two separate accounts as it will streamline the entire process for you.  

When you have set up a separate business account, do ensure that you have all the client payments deposited in this account. You can even give yourself a salary. However, at all times, you must save 25% in the business account to pay your taxes. Anaida, a freelancer who works as an assignment help provider with different organizations like TFTH, says that she has an account wherein she gets all her professional fee deposited, and a personal account where she transfers some money from the professional account for her day-to-day activities. It is indeed an excellent way to escape overspending and save yourself from financial troubles.  

Have separate business credit cards

At times, you would want to delay making the payments for business costs. It is where the credit comes in the picture. Natasha, a freelance educator who works with TAE, says that she had to buy a new laptop for her projects, but she did not want to struggle for it, so she used her credit card to make the purchase. Thereafter, she can pay the credit card bill a when the payments from the projects come in. When you pay for business expenses, use your business credit card, and vice versa for personal expenses. It will help you organize your business and personal expenses. 

Accounting software

Further, it would be best if you also had an accounting software which can combine the expense tracking and budgeting software. Additionally, accounting software will also ensure tax compliance, maximize your deductions, and estimate your quarterly taxes.  

Expense tracking software

If you feel that tracking all the credit card spending via statements can be a daunting task, you can use an expense tracking software. You can easily link the software to the business credit card and your banking account. It will ensure that all the individual transactions are dated, logged, and timed for complete verification. 

The software can be used to sort the transaction into different categories. You can even remove the transaction that you do not intend to include in your tax returns. Tony, an executive with FineGrades, says that he uses the Zoho expense tracking software, and it is incredibly useful to keep a tab on his expenses. 

Invoicing services

Of course, you might have an invoice template, which you regularly use to file invoices with your clients, having an invoicing service can dramatically reduce your chance of human error and help you keep a better tab on the clients. So, if you ever see that a particular client is overdue for payment, you can easily flag that invoice and follow up with the client. 

Budgeting software

Regardless of how well you organize your business and personal expenses, and carefully track all the spending and revenues, you will still need to do a little more work to establish a monthly budget. It is crucial to make a budget and even stick to it. For this, you can use budgeting software. It can take into account all the financial information, and then help you use it to design a budget. Rosy, a TrumpLearning executive, says that she uses the Mint Budgeting Software, and it alerts her whenever she is overspending.

Well, such software are excellent as they can help you develop smarter spending habits. You can also find out if you need more clients or establish better pay rates to ensure that your finances are more stable. However, if you are already operating on a predetermined budget, the software will take away all the manual work, and streamline the task for you.