Today on the Creative’s Chronicles we have Mr. Chuks, He is a Software Engineer, an Accounting Professional, He is well read, a knowledge seeker and lifelong learner. He shares with us today on tips for Cash Flow, Profitability, book keeping and Freelancing. An understanding of how systems work will enable you have mastery and help you properly put in place other tools and systems for effectively running a business or a Freelancing Career.
You can’t run a business effectively without been conversant with accounting principles.Profitability
My Take Aways from today’s Episode:
Your profit is your revenue (what comes in) minus the costs, all that went out to bring in the revenue. Components of costs; cost of revenues (direct expenses spent to bring in revenue).
Cost of sale is the money spent to bring in revenue;
Transportation cost is also included as cost of sale; personnel costs, electricity, data, rent etc. are costs associated with revenue coming in.
Your financial records shouldn’t be in your head.
You need to understand what constitute a cost for your business: costs in business depends on the kind of business you are engaged in. e.g. rent on co-working spaces, data, transportation costs
There is need to calculate your daily costs as a Freelancer or an Agency
Understanding your costs influences how you charge and price your services
Your booking keeping is better automated and there are several tools that can do this for you; preferably double entry book keeping (tools wave accounting, real cash etc. this tools give you overview of your financial performance over a period of time).
Most Freelancers are specialists on use of technologies for driving solutions and most times they relegate other aspects and tools needed for running a successful business.
Freelancing is not for everyone. Freelancing has its perks and its shortcomings.
You need to acquire knowledge and understanding of what Freelancing entails.
You also need to acquire money management skills
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