As a freelance court reporter, your freelance work is essentially a small business. You go out and find your own work, and you are responsible for managing your own finances. In the beginning of your freelance career, you may be able to track all expenses and incoming revenue with simple spreadsheets. However, there may be a time when you should hire a bookkeeper and/or an accountant.
Two reasons you may want to hire a professional bookkeeper or accountant:
1. You’re Drowning in Details
There is a time in every freelancer court reporter’s work life when you find you are so busy with transcripts that you have time for little else. The flow of court reporting workload often ebbs and flows. There are times you easily can complete transcripts and times when you’re so busy you have to really get organized to get everything done on time. You often have to shift tasks around so that you are able to complete transcripts when clients need them. One of the first tasks that often falls by the wayside is the task of entering your incoming revenue and outgoing expenses into your spreadsheet or software program. When this happens, it’s easy to fall behind. Ultimately, the end of the year comes and you are nowhere near ready to prepare your taxes because your bookkeeping has not been kept up to date. Then begins the scramble to catch up in time. This is a perfect time to consider hiring a bookkeeper and accountant.
If it looks like you will continue to be busy for several weeks, then it would be wise to meet with an accountant to discuss bookkeeping services. If you hire a bookkeeper, you will not be tied down to the task each month of updating your records. When work is busy, this extra time to spend working on transcripts is golden. You likely will make enough with the extra work you can take on to pay for the bookkeeping services.
2. You Are Not a Numbers Person
Court reporters are very comfortable with words. That is what we deal with all day long. Some court reporters are also very good with numbers and tracking finances. Other court reporters will admit they are not numbers people. If accounting is not a skill you’ve acquired along the way to becoming a court reporter, you may find it a struggle to understand and correctly handle all of the tasks needed to keep your finances in order. This is a good time to hire a bookkeeper and an accountant.
Even if you’re pretty good at the bookkeeping piece, are you equipped to prepare your own taxes? As a freelancer, you’ll need to file tax forms that are more complicated than the ones appropriate for traditional employees. The rules you don’t know about could cost you more dollars in taxes each year. Hiring an accountant and paying for their expertise will likely pay for itself in saved tax dollars because they will know which expenses you are allowed to deduct and exactly how to handle them.
Advantages of Hiring a Good Bookkeeper and/or Accountant
Even if you aren’t pressed for time or have no trouble doing your own taxes, you may consider hiring an accountant anyway. As a business owner, it is best to spend your time on the tasks that only you can do, taking and transcribing legal proceedings. Outsourcing your accounting tasks will free you up to pursue more avenues of income.
Here are a few advantages of hiring a bookkeeper and/or an accountant:
- Your bookkeeping may be set up properly (for tax purposes), if it isn’t already.
- Your time can be spent on more important tasks you should be performing.
- Tax time will be much easier than when you handle all tasks yourself.
- Your tax bill may be lower because a professional will help you take advantage of all deductions and credits available to you as a self-employed court reporter.
- An accountant can give you good advice if you ever have a tax-related question or problem.
- Professionals may anticipate potential problems and alert you to a corrective action.
A freelance court reporting business is a very simple business model, and you might be able to take care of your bookkeeping and taxes yourself. However, you have options. Hiring a professional does not necessarily cost a lot of money. Bookkeepers and accountants will likely save you money in the long run, and make your life much easier in the process.
If you enjoyed this article, you might also like “Organizing Court Reporting Expense Receipts for Tax Time.”