(Swipe-And-Deploy Template) How To Set Up The Financial Structure/Processes For Your Freelance Business

Aaron Hoos

Financials seem boring but they’re really not. They’re good practices that pay off in better decisions, more money, less stress, and extra time.

What’s not to love about that?!? Master your finances and you’ll master your business.

Problem is, a lot of people procrastinate on their financials because they think it is complicated and overly-detailed. However, it’s only complicated and overly-detailed if you procrastinate. But if you spend 2-3 minutes a week doing it, you’ll gain HOURS AND HOURS of time and save yourself a ton of frustration. That’s a lesson I wish I learned when I started.

For that reason, I want to help you by handing you the template for the financial structure and processes for your business.

This blog post contains the step-by-step instructions and a swipe-and-deploy financial structure/process template for freelancers who want to set up a good financial process for their businesses. It includes the step-by-step info in this blog post, plus a folder in Google Drive that you can download to duplicate for yourself.

THE BACKGROUND

I was recently working with a photographer who was just getting started. She’d reached out for help and we were talking about branding, marketing, list building, etc. Of course we were also talking about the important administrative side of it too, including financials. I had recommended a couple of books to her and sent her some financial resources but, in retrospect, I overwhelmed her with too much information.

I didn’t realize that at first until I followed up a week or so later and asked her how it was going. She admitted that she’d been procrastinating on the financial side to do other things in her business. Realizing that I’d overwhelmed her, I offered to set it all up for her.

After doing that, I replicated it here for you.

WHO IT’S FOR

I run a bunch of businesses but fundamentally I am a freelancer operating a sole proprietorship in Canada. So, these processes will probably work for other types of businesses and corporate structures, for larger sized businesses, and in other countries. However, this financial structure/process template is built for Canadian sole proprietor freelancers. It’s for new businesses that want to start on a strong foot with their financials, and it’s also for existing businesses that need to get a handle on their financials.

DISCLAIMER

This works for me. It may also work for you. However, you will probably need to make adjustments, depending on what you sell, your corporate structure, additional tax or reporting requirements, the country you operate out of, and many other factors. This is a starting point and you can build on it.

CONTENTS

This swipe-and-deploy financial structure template contains two things: (1) a Google Drive with downloadable templates for you, and (2) instructions that you can follow step-by-step.

(1) THE GOOGLE DRIVE FOLDER

There is a folder in Google Drive that you can view (and download). It’s a folder called “Financials” and inside are 3 things (pictured below)…

  • A Records folder
  • An Income and Expenses spreadsheet
  • An Invoice template

You can view and download this folder structure and upload it into your own Google Drive for a fast start to your own financial structure and processes

(2) STEP-BY-STEP INSTRUCTIONS

Whenever you need to invoice someone, do the following (total duration: 2 minutes):

  1. Right-click and duplicate the invoice template, renaming it the name of your invoice number.*
  2. Customize the contents of the invoice with their name, with their information.
  3. Download it as a PDF and email it to the customer.
  4. Keep it in the main folder.
  5. Put the information into your income/expenses spreadsheet (in the Income tab).

(* Keep your invoice numbers simple. I like using the year, month, and day in reverse order, plus the client’s initials, for very simple filing. For example, if my client is John Smith and I created the invoice on July 18, 2018, then the invoice number would be 20180718js. Nothing fancy, and I can tell at a glance when the invoice was made and who it was for.)

When customers pay, do the following (total duration: 30 seconds):

  1. Update your income/expenses spreadsheet (in the Income tab).
  2. Drag their invoice to the Records folder.*

(* Only drag PAID invoices to the Records folder. That way, anyone who hasn’t paid yet is front and center when you open the Financials folder and you can still see their invoices right away. The goal is to keep this clean by following up on receivables often. Don’t let unpaid invoices pile up!)

Every weekend… Yes, EVERY SINGLE WEEKEND… do the following (total duration: 2 minutes):

  1. Pull out the receipts of stuff you’ve bought that week for your biz. (Oh, pro tip: keep your receipts! Haha!)
  2. Enter the receipts into the income/expenses spreadsheet (in the Expenses tab).

Every year, in January-ish: (total duration: 5 minutes):

  1. Duplicate your income/expenses spreadsheet and rename it for the new year.
  2. Delete last year’s content from the new year’s spreadsheet so you are starting the year with a blank sheet.
  3. Drag the previous year’s spreadsheet into the Records folder.
  4. Go into the Records folder and create a folder for the year (so in January 2019 you will create a folder inside Records for 2018).*
  5. Drag all of 2018’s invoices plus the income/expenses spreadsheet into the 2018 folder.

(* After a few years of business you will end up with a bunch of folders year-by-year for every year you’ve been in business. If it gets to be too much, here’s an optional step: just create another folder in your Records folder called Archives and drag all previous year’s folders into your Archives folder. That way, you minimize the number of folders that you see when you open the Records folder.)

Every year, when doing your taxes*, do the following (total duration: 15 minutes):

  1. Go into the relevant year’s folder inside records and open the income/expenses spreadsheet.
  2. Record your total year’s income as “Business Income” in your tax return.
  3. Record your total year’s expenses (by category) as “Business Expenses” in your tax return.

(* Like everything else in this blog post, these points may differ depending on your corporate structure and the country you are operating in. However, the principles will be generally the same from one country to another.)

SUMMARY

That’s it. All built for you. It’s simple, and if you stay on top of it, it’s fast. Just download the Google Drive folders and put them in your own Google Drive, and bookmark this blog post and come back to it each week (and at the end of the year) to follow the steps to manage your financials.