Freelancing and self-employment can be a process and life of solitude, especially in the beginning months. You can feel as though you are all at once experiencing a total readjustment of your life: you no longer have a boss telling you what to do, you no longer have teams with whom you need to consult to get a final decision, no one will notice if you leave after lunch and don't finish the day of work... or that extra few hours of sleep you snuck in. This shift represents a lot of positive changes and a lot of adjustments. Thankfully, in the last 10 years, technology and innovators have come through and made some sweeping changes that have automated the harder, more lonely parts of self-employment and freelancing: finances, paperwork, and taxes! Here are five ways Kontist can help you (and your tax advisor) keep on top of all things admin in your business...
Before we delve right in, we have spoken a lot on this very blog about whether or not you need a tax advisor. Interestingly, perhaps, is that the bigger the business gets or the more you grow it, the more you will see the answer - the more demanding the business, the more of a need there is for a tax advisor. However, as this is Germany and so many expats pour in with little to no language skills and little to no understanding of the complicated German financial system - it is easy to understand why opting for one from the get-go is a good idea. Therefore, this article will focus on how YOU stay organized, but it is also going to help your tax advisor and ensure they are not spending hours rifling through a shoebox of receipts. And when that happens it means you are saving money! Of course, this is all included in the overview about Kontist, but delving a little deeper is warranted just so you can see how much less isolated you will feel - you may even feel like you have a new employee helping, with all hands on deck.
The all-important automatic tax overview
In the first two years of your business in Germany, be it freelancer or self-employed, if you are registered for VAT it is already going to become immediately apparent that the monthly routine of reporting and paying taxes is a) unavoidable and b) hard to keep track of. First of all, you are likely focused on securing work rapidly and of course, delivering the best work you possibly can for those said clients. You may send out many invoices (here is hoping!) and they could all be incurring VAT. Whatever the difference is in the VAT you bring in and the expenses you have paid out is - will be payable to the residual.
One of the first to recognize this issue was Kontist, and of course, they were inevitably the first to solve it as well. When you receive the payment of an invoice to your account it will automatically separate the amount that was the VAT - storing it aside for when tax time arrives. There could be every chance you paid out more, and are not liable on the incomings, but it is better safe than sorry and is certainly a nice way to start having a reserve - regardless.