Finance for Freelancers

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Love it or hate it, business is financial so we all need to know the basics in order to build a successful freelancing business. Mark MacLeod of Freshbooks leads you through all the fundamentals in terms of invoicing, getting paid, collecting and remitting sales taxes, accounting 101, dealing with service providers, funding and taxes in this jam-packed session on finance for freelancers.

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  • Employment trendsMarketplacesOutsourcingOnline presence
  • Costs: benefits, severance, utlization
  • Invoice as soon as work is done. On the go…
  • No GL, Chart of Accounts, Trial Balance, Accruals
  • No GL, Chart of Accounts, Trial Balance, Accruals
  • Lower taxes
  • Services-based business should not need outside funding!
  • No GL, Chart of Accounts, Trial Balance, Accruals
  • Finance for Freelancers

    1. 1. Finance for Freelancers 1 Mark MacLeod FreshBooks
    2. 2. Intro “Today if we look at just North America alone, no one excep QuickBooks Online has more online paying subscribers than FreshBooks, making FreshBooks the #1 cloud accounting specialist for small business owners.” 2
    3. 3. Agenda 3 Setting the Stage Making Money Spending Money Accounting 101 Funding your business Your long term goals
    4. 4. Setting the Stage 4
    5. 5. Change… 5 2011 2020 16 MM 70 MM # of full-time professionals # of independent professionals Source: oDesk & eLance 2012 annual reports
    6. 6. Making Money… 6
    7. 7. Mo’ Money… 7 Unique Clear Referrals! Leverage Have a system Sell Value
    8. 8. Pricing… 8 Not about cost Get what you pay for… Experiment Value not time
    9. 9. Value-Based Billing 9 http://www.freshbooks.com/blog/2013/06/12/breakingthetimebarrier/
    10. 10. Getting paid 10 Retainers Online (credit card, ACH) Know HOW before you start Remote clients prepay It’s your money!
    11. 11. Spending Money… 11
    12. 12. Hiring 12 STAFF CONTRACTORS Pros: Pros:  Control experience  On demand  Build team, culture  Low cost Cons: Cons:  Cost  Unpredictable
    13. 13. Hiring 13 Confidentiality Non-solicit Non-compete No prior conflicts Benefits?
    14. 14. Contracting 14 Work for hire Confidentiality Non-solicit Non-compete
    15. 15. Performing Work 15 Magic ratio Work in Progress Measure twice, cut once
    16. 16. Accounting 101… 16
    17. 17. Reality 17
    18. 18. What we believe… 18 Accounting software is built for accountants Do what you love Business is financial…
    19. 19. ABCs… 19 Assets – what you own Liabilities – what you owe Equity – what’s left Balance Sheet – statement of what you own & owe
    20. 20. More ABCs… 20 Revenue – what you bill your customers Expenses – what you pay to generate revenue Profit – what’s left Income Statement – statement of the results of your business
    21. 21. What you care about… 21 Invoicing Getting paid Expense control Compliance
    22. 22. Invoicing… 22 Excel is not an invoicing tool Online: o Bill more. o Save time. o Get paid faster. o Look more professional
    23. 23. Avoid 23 Data entry (just connect bank account/ credit card) Fancy accounting terms
    24. 24. Sales Taxes 24 Must collect if more than $30K in sales Better to collect even before so you can recover what you pay File quarterly
    25. 25. Cash Management 25 Church & State: Separate bank accounts Rack up points Expenses: need to keep receipts
    26. 26. Entity 26 Corporation: o More $ to setup and maintain o Enables more income splitting o More professional o Limited liability Sole Prop: o Easy. Less costs
    27. 27. Funding Your Business 27
    28. 28. Sources 28 Debt o Not available Equity o Complicated. Expensive Sales!!! o The best
    29. 29. Equity 29 Selling a part of your business o Your goals? o Alignment? o Exit strategy? o Do you want a partner? o Not easy to divorce
    30. 30. Final Thoughts 30
    31. 31. Build what you want… 31 Business: Love every day Life: Have a financial plan o Clear goals o RRSPs??? o Retirement o Succession
    32. 32. Thank you… 32 Mark @startupcfo FreshBooks.com

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