Freelance Accounting: What to Know Before Making the Jump

Freelance accounting offers flexibility and independence, but it’s not without its challenges. This blog explores the pros and cons of freelancing in the finance sector and provides tips for making the transition successfully. Get access to all the latest positions through PrideStaff Financial.

Flexibility but uncertainty:

One of the biggest advantages of becoming a freelance accountant is the flexibility that comes with it. Freelancers can choose their own hours and work from anywhere, making it easier to balance work and personal life. However, along with this comes uncertainty. Freelance work is often unpredictable, with no guarantee of consistent work or income. This can make it difficult to plan. You have to be ok with continuously “pounding the pavement” to build a client roster.

Earnings can be substantial but there is a downside:

Freelance accountants often charge higher rates than traditional employees, which means that they have the potential to earn more money. This is especially true for those with specialized skills or expertise. Along with this though comes self-employment tax, which at the moment is extremely high at more than 15%. And, freelance accountants are responsible for paying their own taxes, which can be complicated and time-consuming.

A variety of work, but no health benefits:

Freelance accountants work with a variety of clients across different industries, which can be both challenging and rewarding. This allows them to develop a diverse set of skills and gain experience working in different business settings. Any freelancer, no matter the industry, will have to contend with not receiving the same benefits as traditional employees, such as health insurance and retirement benefits. You will have to weigh this against the cost of obtaining your own health insurance. The good news is that many carriers these days offer HMO plans that carry little to no monthly costs but come with higher deductibles and co-pays. On the up-side, you don’t have to negotiate paid time off—you control your vacation and work flexibility which gives you a lot of autonomy.

The best way to find success as a freelance accountant is to build a strong network. Networking is essential for freelance accountants to find new clients and build relationships with existing ones. Attend industry events, connect with other professionals on LinkedIn, and ask for referrals from satisfied clients.

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