Bookkeeping is the process of tracking your income and expenses, so you always know what your money is doing. Bookkeeping for the self-employed is almost the same as bookkeeping for a small business, with a few minor differences. No matter if you are a small business owner or a self-employed person, bookkeeping is important to understanding your finances and allows you to make knowledgeable financial decisions.
The main differences between the bookkeeping process for a self-employed person versus a small business owner are what is tracked. If you are a small business owner, you most likely have employees or independent contractors you hire, so you must track payroll expenses. A self-employed individual doesn’t have employees, so they will not need to worry about payroll. A self-employed individual may need to track mileage though, which may be less common for small business owners to have to do. If you are a driver, such as an Uber driver or an Instacart Shopper, tracking your milage is very important.
Overall, the bookkeeping process is the same whether you are a self-employed individual or a small business owner. Keep in mind, small business owners are technically self-employed as well! As long as you are on top of your books, you are on the right track to remaining successful in your endeavor.