Freelancer setup


I need some help setting up Manager for my situation, even after reading for hours through the forum.

I am an occasional freelancer, using my personal bank account (note: I appreciate the common sense of setting a separate account for business, but with less than a dozen business transaction per year, expenses included, it simply wans’t needed). This year I discovered that I can get a significantly better basic deduction for taxes, as long as I use double-entry bookkeeping. I expect even less business transactions for this year than usual and the year has already began, so I am thinking of just continuing with the personal account.
Income - invoices from foreign countries
Expenses - computer, software

What would be the best way to approach my accounting in Manager? Should I add my personal bank account as an equity which will move up and down with income and expenses, and then input all my transactions, personal and business? If yes, how to separate them? Is there a simpler way, where I can account only for the business transactions? Is there a way to not have my personal account in its entirety in the software? Etc.

This is not a question of amount of work, but of proper setup. Any help would be greatly appreciated.

Maybe a strange question but with only so few business transactions why use any accounting package? Even within Manager I would setup 2 “Businesses”. One for your “Personal accounting” and one for your “Business accounting”. In both, you would create the same Bank Account. You would be able to import the reformatted bank statements but for your Personal account you would delete any business transaction and for the Business account, you would have deleted all Personal account transactions. To get going I would advise reading the guides, but you could easily do double-entry accounting for the 12 transactions in a spreadsheet.

You have to separate business (tax deductible) and personal expenses some how. Your options are:

  • Manually enter all business receipts and payments, keeping Manager business purely for business expenses. You forgo bank import and bank reconciliation.

  • Get a physical business bank account (a basic bank account is cheap for a sole trader in my country). Use this account for your business. You can used bank import and bank reconciliation.

  • Create a chart of accounts which includes separate sections for business and personal expenses. You will then have a record of business and personal transaction (and will need to take the time to process both). Bank import and reconciliation will be available.

All are possible. Most people find the second option easiest to manage as the separation between business and personal occurs when each transaction actually occurs (ie when you are at a shop buying something).

eko, I initially went with that, but with the foreign currency wire transfers it becomes a bit of a hassle to do in a spreadsheet. Possible of course, but I also am using the opportunity to look at some software, as I might need it in the future.

Patch, in that first scenario, does that mean that I am basically keeping equity at 0 and just inputting business income and expenses?
In the last scenario, I assume there will just be duplicate expense accounts, for personal and for business? And another thing I couldn’t figure out, how do I interact with the bank account in the software, do settled invoices go direct to the equity/personal bank account, and expenses are withdrawn direct from there?

As advised please use They are very easy to follow. As you already are aware it is not good to mix personal and business transactions, hence the advice to split them. You can also decide not to keep your personal account stuff in Manager and just set up the business and import only those bank statement items relevant to the business (as you will need to reformat the statements you can also just use the few lines for your transactions.

Try it by entering the accounting data for your last year

  • Create a test business
  • Add a bank account
  • Add expense and income accounts as appropriate to your chart of account.
  • Enter your business transactions by hand
  • See if you like the result.

Note when entering transaction you need to specify a bank account and another account as Manager is a double entry account system.

For a Manager business combining Business and personal activity the chart of accounts and data entry is much more involved.

I’m a newbie here. I would like to know more about it. Thank you so much!

@eko @Patch Thank you both!

Start by reading the guides, downloading the software and creating a test business.

Enter some of your usual transactions and see what happens.

There is a Guide covering this situation: Set up business as a self-employed services provider | Manager.

Note this in the third main topic:

A services business can be run without a business bank account, relying on your personal bank account. But it then needs a cash account. While normally reserved for handling paper bills and coins, a cash account can effectively be imaginary, representing what you would have in your pocket if all your dealings were in cash. But in such a case, you will not have a physical cashbox or till where you can count the money.

You will notice in the second main topic, the list of tabs to enable includes Expense Claims. If you operate with only your imaginary cash account, you might not need this, because you (as an distinct individual from an accounting perspective) will not be making purchases on behalf of the company. Everything will be purchased from your cash account. However, if you will be entering expenses in the form of allowances (such as vehicle distance driven, per diem, and such) you should enable that tab and learn how to use it. You can always add it later.

Not necessarily, you could use the Tracking Code feature. You would only have the one expense account but for the business transaction you add a Tracking code to it. Then you can create a P&L report based just on the business transactions. There is a Guide on Tracking Code usage.

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Interesting approach, I hadn’t considered.

I had assumed the “Profit and Loss Statement” part of the COA would just be structured with a business income group, businesses expenses groups then a total for gross business income.

After which all the personal expense would be listed, with groups and totals to optimise data interpretation. This section could include personal income tax provisioning expense.

I suppose I comes down to what ever each individual finds easiest and most informative.