Pros and Cons of Freelance Accounting

Freelance accounting has many advantages over traditional employment. You can:

• Set your own hours

• Work anywhere there’s an internet connection

• Take breaks to eat or exercise anytime you want

• Choose and drop whichever clients you want

• Take vacations any day of the year

• Make as much money as you’re able to work

• Design your work space however you please

• Invest and spend money as you earn it

In addition, freelance accounting lets you develop relationships with as wide a range of businesses as you like, and you can always quit and join a brick-and-mortar business, if you desire. Some businesses even let their accountants do freelance work on the side.

Also, freelancing as an accountant has low starting costs and overhead, since you only need a computer and phone. If you want state-of-the-art software, you can buy it immediately instead of using a company’s standard fare, which may be outdated and clunky.

Freelance accounting is also just good practice, if you ever intend to join a company, and it teaches you how to balance your own books, too.

Not every aspect of freelancing accounting may be ideal, though. For example:

• Many clients expect to pay freelancers less than traditional accountants

• You don’t get the employee benefits that most brick-and-mortar accountants do

• You have to build a client base, which takes time

• Earnings and available work are both up-and-down

• You can’t enjoy camaraderie with coworkers

• You have to motivate yourself and exercise greater self-discipline to avoid distractions

Moreover, the work you receive as a freelancer at the outset is likely to be duller and more routine than you might prefer, since you may have to build a reputation before clients trust you with big, decisive projects. If you want to build a reputation quickly, you can always offer free or cut-rate services for such projects to prove that you can do them.

Although the income tax rates Canadian freelancers face aren’t higher than for ordinary workers, they may have to sort out installment payments and Canada Pension Plan contributions to stay in line with Canadian tax law.

Also, freelance accountants have to advertise their services, vet their clients, pay their overhead costs, acquire extra certifications, and send invoices primarily on their own. The freelancing side of the equation can take almost as much effort as the accounting part.