Small Business

8 Types Of Records Freelancers Should Keep For Clients & For Taxes

Freelancing is an previous follow. The time period “freelance” originated within the early 1800s and referred to medieval warriors who had been providing their companies for hire — particularly their abilities in fight. Lances had been a preferred weapon of alternative throughout this time, so when your lance was free from a contract and also you had been obtainable to tackle a brand new shopper, you had been thought-about a free lance.

The idea of freelancing endured the take a look at of time and is now a preferred and acknowledged type of entrepreneurship. And it’s now not restricted to knights and mercenaries. Freelance writers, editors, software builders, designers, accountants, and lots of different professionals provide their companies on a contract foundation in an ever-expanding gig economic system.

In the fashionable world, freelancers must preserve observe of much more paperwork than their medieval counterparts. From quotes and contracts to invoices and receipts, listed here are crucial data it’s worthwhile to handle to make sure your small business runs easily.

Freelance Recordkeeping

Freelance data will be divided into two principal classes: client-based and monetary. Client-based data are paperwork that define your relationship, communications, or work with a shopper, whereas monetary data consist of paperwork you employ to finish your taxes and observe your earnings, like receipts and invoices.

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Client-Based Freelance Records to Keep

Client-based freelance data are made up of supplies that outline your working relationship with a shopper. They aren’t essentially important for tax functions however they’re helpful to have readily available in case it’s worthwhile to refer again to them within the occasion of a dispute or miscommunication. Important client-based freelance data embody:

1. Quotes and Proposals

Quotes and proposals are what you ship to a shopper earlier than you determine whether or not to signal a contract collectively. Basically, it’s like placing a price ticket on the companies a possible shopper has requested. It ought to embody:

  • An define of the companies a shopper has requested for
  • The whole price, together with whether or not it’s based mostly on a one-time price or hourly rate
  • How lengthy the quote is legitimate

Keeping quotes and proposals is important as a result of they aid you to handle and preserve shopper relationships. For instance, if the shopper decides to maneuver ahead with a contract however later ask for companies which can be outdoors of your preliminary proposal, referring to the unique quote is an efficient strategy to preserve the project in scope or negotiate for an elevated rate.

2. Contracts

Contracts are an essential half of any freelancer’s data. They’re used to put out the authorized and monetary tasks of each the unbiased contractor and the shopper, in addition to the phrases of their business relationship. Most freelance contracts embody:

  • Service particulars
  • Rate of pay
  • Client and contractor data
  • Who is accountable for paying taxes
  • How business bills shall be dealt with

You ought to preserve a report of any contract you signal with a shopper as a way to aid you each make clear and outline your expectations and obligations earlier than you tackle any work collectively. Contracts can be utilized down the highway to settle disputes, renegotiate phrases, and finish or renew working relationships.

3. Copies of Your Freelance Work

Even although a project could also be full when you ship it off to a shopper, it’s nonetheless helpful to maintain your completed work. Whether it’s for a present or previous shopper, some of your work can be utilized:

  • In your portfolio or in your web site
  • On your skilled social media accounts, like LinkedIn
  • For future updates, enhancements, or remakes
  • When making use of for an industry-related award or recognition
  • As proof that you just accomplished and submitted work to a shopper

Keeping a report of present and previous work ensures that, if you happen to ever must make modifications to it, you received’t have to start out from scratch. And it additionally offers you an opportunity to bolster your work expertise by serving for instance you may present to future shoppers and employers. Just make it possible for there’s nothing within the copyright part of your contract or nondisclosure clauses barring you from utilizing or sharing your work sooner or later.

4. Client Communications

Emails, texts, and snail-mail from shoppers are all helpful data to maintain. They doc modifications in project scopes, charges, and expectations, creating a transparent and constant paper path. These data make sure you and a shopper keep on the identical web page and may again you up within the occasion of nonpayment or a disagreement.

Even in case your shopper prefers to overview project particulars over the cellphone, take notes and e mail or textual content a recap after you hold up. Having a report of shopper communications retains tasks on observe and smooths out any potential points early on so that you don’t must navigate a miscommunication after you’ve already carried out the work.

Plus, if you happen to ever end up within the center of a authorized dispute, having a complete paper path will provide you with documentation to fall again on.

Freelance Financial Records to Keep

Financial data come into play when tax season rolls round, however they’re additionally helpful when assessing points like your pricing, workload, and the viability of your freelance business. Here are some of crucial monetary data you must preserve as a contract small-business proprietor.

5. Time and Work Tracking Sheets

Whether your shoppers request it or not, time monitoring lets you decide how a lot work you’re placing right into a project versus how a lot you’re getting paid. As a freelancer, this data lets you handle your charges and shopper expectations, bettering the accuracy of the quotes and invoices you present.

Depending on the way you invoice your shoppers, you might observe your time all the way down to the minute, or you might merely cost a specific amount per deliverable. But figuring out how a lot time you spent on a process in comparison with how a lot you had been paid for it’s a good way to remain on high of your profitability and make sure that you aren’t undercutting your self.

It may inform any pricing sheets you make down the highway. For instance, the primary time you tackle a process, you might not understand how lengthy it’s going to take to finish or how a lot to cite. But after you’ve carried out it just a few instances, you’ll have a greater concept of what your worth level is. You can create a easy pricing sheet based mostly on the most typical companies you present and their hourly or per-project worth.

The subsequent time a shopper asks you for the identical service, you may discuss with your pricing sheet to find out a base price and customise it to the shopper.

6. Client Invoices

Invoices are one of crucial freelance paperwork you employ. They element accomplished work, inform shoppers how a lot to pay, and — when added collectively — provide you with your wage. They’re helpful when calculating self-employment taxes and submitting your tax return with the IRS as effectively as a result of lots of the data you’ll must full your taxes will be discovered in your invoices.

Generally, invoices ought to embody:

  • An itemized checklist of companies
  • The whole quantity due
  • How to make a fee
  • A fee due date

Recording all of the invoices you ship to shoppers is one of crucial small-business accounting duties that it’s worthwhile to keep on high of. Invoices are important for documenting earnings inside a tax year they usually aid you to trace shoppers who miss fee deadlines or who don’t pay in any respect. When you employ invoicing software from a company like Freshbooks, every little thing is digital making the whole course of far more easy.

Keeping invoices additionally demonstrates your progress month-over-month and year-over-year, which reveals how effectively your business is doing general. This data is beneficial on the subject of deciding whether or not to tackle new shoppers, enhance your charges, or when to show your aspect hustle right into a full-time job.

7. Payment Receipts

Every time a shopper pays you, it’s worthwhile to doc how and when the fee was made in addition to the greenback quantity. Payment receipts will let you observe who has paid you and who’s behind, displaying you when to ship a fee reminder or when to pursue authorized motion.

As a freelancer, it’s worthwhile to keep on high of funds to just be sure you have sufficient coming in to pay your payments and preserve your self afloat. If you don’t, you can find yourself by chance doing work for free.

Knowing how a lot taxable earnings you made in a year can also be needed when finishing your taxes. Invoicing will solely let you know how a lot you must have made based mostly on the companies you offered, not how a lot your shoppers truly paid you.

8. Expense Receipts

Freelancers must preserve observe of their business bills in order that they will account for them on their earnings tax returns. Many qualify as tax deductions, which makes them much more essential to report and observe. For instance, if you happen to’re self-employed, preserve receipts for:

  • Work-related journey and mileage
  • Professional growth bills
  • Bookkeeping and accounting software
  • Work-related software, applications, and platforms
  • Hardware, like a laptop computer or cellphone
  • Health insurance coverage
  • Business insurance coverage
  • Advertising
  • Website internet hosting and your e mail shopper
  • Office furnishings
  • Credit card and financial institution statements
  • Office hire

If you don’t have already got one, think about opening a checking account for your business. One of our favorites is from Bluevine. That method you may observe your earnings and bills in a single place with out having to separate them from personal purchases or family earnings.

Freelancers who earn a living from home may save payments for companies that aid you to keep up and run your business from residence, similar to your utilities, Internet, and cellphone service.

How to Keep Track of Freelance Records

Some freelancers select to maintain observe of all of these business data on their very own through the use of a combination of totally different strategies, whereas others use software to do the heavy lifting for them. Either method, it’s strongly really useful that you just preserve digital data versus paper data each time attainable, and think about using a backup like a cloud service or exterior exhausting drive.

Keeping Track of Freelance Records Yourself

If you determine to handle your personal freelance data, you’ll nonetheless want to make use of some instruments to do it. For instance, relying on what you provide and what you observe, you need to use:

You can use these instruments to create contracts and invoices, manually observe time and bills, and doc shopper communications. Both Microsoft and Google provide free templates that you need to use to create quotes and invoices in addition to another supporting paperwork.

Software for Freelance Record Keeping

If you don’t have the time or need to handle your personal data, there are a selection of software platforms for you to select from. Here are some fashionable recordkeeping methods you may look into.

Wave Financial

Wave affords accounting, invoicing, funds, and receipt monitoring for freelancers and small-business homeowners. Basic accounting, invoices, and receipts can be found to make use of for free whereas further companies are billed on a per-use or month-to-month foundation.


Quickbooks affords a contract subscription that gives expense and earnings monitoring, invoicing, funds, and extra. It’s a preferred possibility that integrates with a spread of different platforms that will help you seamlessly handle your freelance business. Pricing begins at $15 per thirty days.


Freshbooks offers freelancers an intuitive platform to handle invoices, estimates, time monitoring, and bills, and features a selection of different options to assist with recordkeeping. Freshbooks supplies an all-in-one strategy permitting freelancers to simply accept credit score card funds and observe mileage in addition to handle shoppers and full fundamental accounting. Pricing begins at $4.50 per thirty days for the lite plan.


Bonsai is a good possibility for anybody who wants a product suite to handle every little thing from contracts and invoices to accounting and funds. It additionally affords time monitoring, process monitoring, tax fee estimation, and a spread of templates you need to use for contracts, quotes, and proposals. Pricing begins at $19 per thirty days.

Final Word

It takes lots of work to succeed as a freelancer, however many consider the artistic freedom, work-life steadiness, and autonomy make it price pursuing. I’s essential that you just preserve good data, arrange your shopper paperwork, and keep on high of your paperwork. After all, half of doing business as a freelancer means taking over administrative duties and duties that may in any other case go unfinished.

Keep your data up-to-date and in good order by yourself or utilizing software to ensure your freelance business runs easily.

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