So, how much extra work is actually involved in running a limited company? Before I answer that, here are the usual disclaimers:
- The choice of the accountant (or lack thereof) has a big impact on your routines. I’m using Digitase Oy.
- You don’t have employees
- I haven’t yet gone through the-end-of-fiscal-year-reporting.
- I don’t consider networking and getting new customers as “bureaucracy”
Here is the list of the non-billable chores I need to do:
- Fill in hours to three different time reporting systems. 😐 I update one UX-friendly system daily by mobile phone, and from there I (manually) export them to the other two, weekly or bi-weekly.
- I think this is unavoidable if you’re working as a consultant, regardless of your employment status
- Of course if you’re lucky you only have one or maybe two system to use
- I have a business debit card that I use to make small purchases for the company. I immediately take a photo of the receipt and upload it to a dedicated Dropbox folder that is shared with my accountant.
- I pay company bills in my bank’s online bank. I take a photo of the bills and upload them to the Dropbox folder.
- When needed, I tell my payroll contact person how much I want to pay salary to myself. She calculates the tax + social security payment and sends me the invoice for paying it. And also tells me the amount that I can then transfer to my personal account.
- At the end of each month I:
- Send an invoice to my customer using Zervant’s electronic invoicing
- Send a monthly report to my accountant about all the incoming payments that have arrived to my account during the month. This is just one figure basically.
My accountant has web service read access to the company’s bank account, so they do all the bookkeeping based on the Dropbox receipts and the monthly account statements. If they have questions about the receipts, they’ll ask. So far they haven’t (okay, it’s been only two months).
The amount of extra day-to-day paper work has been a positive surprise for me. After the initial hassle of setting up the company, there isn’t much stuff you need to do, at least if you’re working for one client only. Maybe one or two hours per month.