Self-Employed Bookkeeping

Self-employed bookkeeping is an essential part of your business. Each year a self-assessment tax return will need completing with HMRC. If you do not complete your accounts regularly, you may need to request a bookkeeper or accountant’s services. If you have confidence, it is possible to complete your return yourself.

Business Accounting Basics has free bookkeeping templates to assist in the process. One template that we have received requests for is a cash book that runs from April for the taxation year. There is a free download of the self-employed cashbook template below.

Separate Bank Account

The best way to keep track of your business finance is to open a separate bank account. Although it is unnecessary, it will reduce the risk of errors and make it easier to keep track of the business income and expenditure.

How to do Accounts for Self-Employed

One of the most critical things in bookkeeping is getting organised. You will need to keep all your financial records either paper-based or electronic.

Some of the best bookkeeping packages now can upload a copy of a receipt to the software, so all the documents are in one place. If you want to use an accounting package but are unsure which one is best to take out a free trial and give it a test.

There are several different ways to complete your self-employed bookkeeping, including:

Self Employed Bookkeeping Software – As software is developing, it is easier for businesses to complete their accounts. Some of the most popular packages include Xero, FreshBooks, QuickBooks and Sage, these all have a monthly cost. A free package is Pandle, which is easy to use. If you are looking at software, take out a free trial and see if the package is suitable for your business.


Excel – Excel spreadsheets or an equivariant free package gives you the flexibility to design your spreadsheets. There are lots of free templates available online. Business Accounting Basics has developed our own templates: including cash book, expenses, creditors, debtors, budgeting and invoice. All our templates are available to download for free and without signing up.

Our cash book for self-employed is available below.

Paper Based

If you are a small business and do not like technology, you can complete your records using a paper-based system. Stationery shops and places like Amazon sell books and paper with columns set to record income and expenditure.

Long term, the government has plans called making tax digital; this will mean that all tax returns will need to be completed using approved software. It is one thing to consider when choosing the basis of completing the business bookkeeping.

Self-Employed Bookkeeping Example

Our self-employed bookkeeping example is for a computer repair specialist using our free cashbook template. He buys computer parts and sells his services to repair computers. He rents small premises and pays for utilities.

All the sales are on a cash basis, and he issues a Word invoice as a receipt. Once the sale appears on his bank statement, record the transaction in the cash book template. Payment of outgoings is either by debit card or Direct Debit and are therefore easy to track. A few business expenses are also claimed using an expense claim form and paid by bank transfer.

If you are not sure what business expenses you can claim, our free guide is available.

Below is a one-month income and expenditure during April.  

Self employed bookkeeping

The totals page of the template shows all the figures for April and the end bank balance. You should always ensure that the bank balance equals the figure in the bank. If there is a difference, you will need to complete bank reconciliation.

Self employed bookkeeping template totals

When the whole year figures are posted, the totals page will look like this:

Self assessment tax return bookkeeping template

Once all the figures are posted for the year, you are ready to submit your figures to HMRC for self-assessment. One adjustment that needs completing is deducting the owner drawings as it is not an expense of the business. In the example, the sales are 40175.34 and expenses 36754.74 – 8400 = 28354.74. The total profit for the business is 40175.34 – 28354.74 = 11820.60. 

The business owner will need to pay taxes on the profit. There are self-employed tax calculators which will calculate the taxation that is due. The best calculator is employed and self-employed.

Self Employed Bookkeeping Template

The self employed bookkeeping template runs from April to March. If your accounting period is 6th April to 5th April, the best advice is to add the end of the year April figures into March. It keeps checking the bank figure much easier.

Full instructions on using the cash book template are available here.

Licence Agreement

To download your free monthly expense template, you must agree to our licence agreement

By clicking on the link, you agree to the licence agreement.

There are several ways in which you can complete bookkeeping for the self-employed. The options include online accounting software, Excel spreadsheets and paper-based bookkeeping.

You can complete your own bookkeeping using any of the methods that you choose. Online bookkeeping software makes it easier to keep track of your transactions. We also offer free bookkeeping templates, which are used by many.

One advantage of using a bookkeeper or accountant is that they will know everything that the business can claim for. If you are unsure about completing the self-assessment tax return then it is better to hire a bookkeeper or an accountant.

It is better to have a separate business bank account if you are self-employed. It enables you to keep your personal and business transactions separate. Most banks will offer a business account.

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