Monday, January 26, 2009

Enterprise Nation - Taking care of the finances

This week, Emma Jones from Enterprise Nation looks at the topical subject of money (I've noticed on Twitter that a lot of shedworkers are in the midst of doing their tax return this week...).
I often speak about the golden triangle in business. This is the simple triangle that helps to keep your head and your business in order. It goes like this; try to spend equal amounts of your time on three things - business development, customer care and admin - if you spend roughly a third of your time on each, the business will balance.

There will though be a corner of the triangle you don’t enjoy. If you’re like me, it’s ‘admin’ – the canny corner that involves distributing invoices, monitoring cashflow and generally keeping the books in order. The good news is, there’s help at hand for each corner of the triangle, including support with your admin and accounts.

A number of online services have come to market, particularly aimed at the freelance community. They include Free Agent Central which, in a review of online invoice applications by our freelance technology editor, San Sharma, was described as “more than an invoicing app - it's the closest thing to a virtual accountant that I've ever seen and, far from those services on my original list, it's British! That means it’s easy to report Sales Tax, VAT, business and personal taxes.” Other options for online invoicing include Freshbooks, Simply Invoices and Cashboard with more comprehensive accountancy products such as Intuit’s Quickbooks also available.

To receive an even deeper level of support as a freelancer, you can register with an umbrella company. This essentially outsources all of your admin with tasks like invoicing, collecting payment and paying taxes taken care of by the umbrella business. You have your own clients and continue to enjoy the benefits of being self-employed, whilst your status changes to an employee, with someone else taking care of the support required. Companies such as Kingston UK and Brookson are leaders in this field.

Central to the services offered by all of these support businesses is that they take care of the money, so you can spend more time generating it. Which has got to be good news!
Emma Jones is Founder of Enterprise Nation and author of ‘Spare Room Start Up – how to start a business from home’

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  1. It would appear that you would need to spend a fourth third on actually doing the work/making products/providing a service.

    Spending a 1/3 of time on admin seems like a terrible waste so I agree with your suggestions for outsourcing or automating that part.

  2. Another invoicing option is Time59 ( It’s targeted at solo professionals and is a great solution if you don’t need (or want to pay for) the multi-user capability of Freshbooks (great product by the way). Bottom line: If you are solo and bill by the hour it is definitely worth a look. The first 30 days are free.