Freelancers Need To Learn This Skill To Save Money

The need to keep paperwork organized is key to success.

08/04/2017 16:50 EDT | Updated 08/04/2017 16:56 EDT
Joseph Yarrow

I counted. Last month I collected income from nine different sources. I'm a freelance journalist, so when a media outlet calls for work, I go. I don't have the luxury of saying no or asking if I can do it later.

I'm part of a growing number of people who work in the "Gig Economy," a group where all of our income comes from freelance work. Working freelance is nothing new, but in today's workforce, the pool of part-time, temporary and contract jobs is growing. As well, a number of full-time workers are adding a side hustle to supplement their income.

In the latest data available on temporary job growth, Statistics Canada reports that from 1997 to 2007, temporary employment grew 43.5 per cent. Added to that, in 2016, 2.3 million Canadians considered their jobs to be temporary.

It's not just in journalism, but all types of creative jobs, from designing websites to making music. It's also common in traditional sectors, like banking and medicine. For many of these workers, they declare themselves as self-employed, like I do, and invoice for services rendered.

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The beauty of being freelance and self-employed is much of my day-to-day spending is considered a business expense. Hair and nail care for when I do TV appearances, using my car to go interview an expert for my radio column, even a portion of my utilities and mortgage interest is tax deductible, as I have a home office. It's where I'm writing this article from right now. But being self-employed comes with extra tasks, including a lot of bookkeeping that you don't have to do if you held a permanent, full-time job.

My problem is I'm disorganized when it comes to keeping my receipts and invoices in one place. I lose them all the time.

For many, like me, who are eager to take on more work and save money, the need to keep paperwork organized is key to success. In fact, I would say receipt management, as dry as that sounds, is a skill every single person in the gig economy should learn if you want to save the most money.

This includes keeping an up-to-date list of all the places you need to invoice, and all the receipts that you need to keep safe for tax purposes and expense reimbursements.

The need to keep paperwork organized is key to success.

Up until last year, I used a shoebox to store all my receipts. This was for all my expenses throughout the year, for tax purposes, expense tracking, returns and warranty claims.

Turning that shoebox upside down every year at tax time, just to rifle through receipts, is extremely cumbersome.

But for shoebox collectors like me, there's help. A number of apps are available to help keep receipts organized and track spending, making it easier to see your total expenses year-round. The big bonus is at tax time it's easier to total your expenses and organize them by category.

Apps like Fresh Books and Quick Books are great all-service accounting apps. But for many like me who use a tax professional, my greatest need is to just have receipts tracked and stored.

Many big commercial banks are already on board with helping customers' track receipts.

If you're a customer of Scotiabank, they have a mobile app feature called eReceipts, a receipt management solution that allows customers to digitally store, organize, and retrieve important paper and electronic receipts. TD Bank and PC Financial also offer services to customers through UGO wallet, an app that allows users to store receipts and loyalty cards. Their aim is to help make your wallet slimmer.

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Most Hilarious Receipts

By scanning and keeping all your receipts in your smartphone, you can retrieve information anytime you need it. Rather than digging through a shoebox to find that one receipt for a taxi you took to a gig a few weeks ago, you have the copy on your smartphone all the time.

A few months ago, I misplaced a few parking stubs at a gig where I could claim my travel expenses. It wasn't a huge amount, but it was $20 I could easily put back into my wallet. This happens all the time and has added up to hundreds of dollars I missed out on claiming. Had I known about a mobile receipt management solution back then, I would have been able to easily find it.

Here my top reasons why anyone working in the "Gig Economy" needs to keep their receipts digitally organized.

  1. Losing receipts that you can claim is like throwing money in the garbage.
  2. The Canada Revenue Agency can, for up to 7 years, ask you to prove you purchased an item you claimed as a business expense.
  3. Many companies now offer digital receipts making it easier to store in an app.
  4. Keeping digital records of receipts is good for the environment.
  5. Keeping receipts organized reduces clutter.
  6. Good record keeping of receipts helps avoid overlooking an expense you could have claimed.

Working in this gig economy can be exhilarating as you hunt for more work, or start a lucrative side hustle, but since there is zero administration in these jobs, there is a lot of do-it-yourself accounting and bookkeeping.

As a freelance journalist, being organized is key. You have to keep your receipts in order and stay on top of your invoicing. And since I write about personal finance and how to keep more money in your pocket, I wanted to share this important lesson with my readers.

Ultimately, you need to find a method for managing receipts that work for you. Or better yet, find a tool that does the heavy-lifting for you. That way, you have more time to do what's most important: hustle for work.