What accounting records do I need if I’m newly self-employed?

Getting started: why accounting records matter when you’re newly self-employed

Becoming self-employed is exciting: you get to choose your clients, set your prices, and build something that’s yours. But along with the freedom comes a responsibility that catches many new freelancers, contractors, and sole traders off guard: keeping proper accounting records. Good recordkeeping isn’t just about “doing your taxes” once a year. It’s about understanding whether you’re actually making money, getting paid on time, proving what you earned and spent, and staying organised if anyone ever asks questions about your numbers.

The good news is that you don’t need to become an accountant to stay on top of it. You just need a simple system and the right habit: record your income, record your expenses, keep the evidence, and keep it all tidy. If you do that consistently from day one, your future self will thank you.

One of the easiest ways to keep your income records clean is to invoice properly and consistently. That’s exactly why invoice24 exists: to help you send professional invoices, track what’s been billed, and keep a neat trail of your sales documents from the very beginning. When your income paperwork is consistent, everything else becomes easier—bank reconciliation, tax returns, profitability checks, and chasing overdue payments.

The core accounting records every new self-employed person should keep

When people ask, “What accounting records do I need?”, they often imagine a massive stack of complicated documents. In reality, your records typically fall into a few straightforward categories. Think of them as the evidence that supports your income and expenses, plus a few tracking tools that help you keep control.

1) Sales records (proof of what you earned)

Your sales records are the documents and data that show how you made money. These are crucial because they directly support the income you declare. Even if you’re paid in cash, bank transfer, card, or through an online platform, you need a clear record of what the payment was for and when it happened.

Common sales records include:

Invoices you issue: If you bill clients, your invoices are one of the most important documents in your business. Each invoice should clearly show who you billed, what you provided, the date, the amount, and payment terms. Using invoice24 helps you create a consistent invoice trail that you can search, sort, and reference later—much easier than digging through old email threads or scattered PDFs.

Sales receipts: If you sell directly to the public or take payment at the point of sale, you may provide receipts. Keep copies or records of what was sold and the total collected.

Contracts, statements of work, and purchase orders: These are helpful for explaining the context behind an invoice or payment, especially for larger projects or ongoing retainers.

Payment confirmations: Bank notifications, payment processor confirmations, or transaction receipts can help match an invoice to a payment received.

Credit notes or refunds: If you issue a refund or reduce a bill, keep the related credit note and the reason. This keeps your sales totals accurate and prevents confusion later.

Practical tip: your invoice list is often the backbone of your income recordkeeping. If you invoice all client work through invoice24, you create a clean, chronological set of sales documents that you can use to check what’s outstanding, what’s paid, and what revenue belongs in each period.

2) Expense records (proof of what you spent)

Expenses are the costs of running your business. To claim legitimate business costs, you generally need evidence of the purchase and a clear business purpose. Even if you don’t claim every expense, you should still track them because they show your true profitability. Many self-employed people feel “busy” and “paid,” but don’t realise how much is leaving their account in subscriptions, fees, and small purchases.

Common expense records include:

Supplier invoices and receipts: Keep receipts for materials, equipment, software subscriptions, travel, postage, and anything else you buy for business use.

Bank and card statements: These are not a replacement for receipts, but they’re extremely useful for tracking spending and confirming payment dates.

Online purchase confirmations: If you buy tools or services online, keep the confirmation email or PDF invoice. Save it somewhere organised and searchable.

Expense claims (if you work with others): If you have subcontractors or team members who submit expenses, keep their claims and the evidence they provide.

Practical tip: get into a routine of saving receipts immediately. Create a simple folder structure by month, or by category, and keep digital copies. The faster you file, the less time you waste later trying to remember what “CARD PAYMENT 14.99” was for.

3) Banking records (the reality check)

Banking records are the easiest way to see the real flow of money. If you can, use a separate bank account for business. It’s not always legally required, but it can be a huge help. When business and personal spending are mixed together, your bookkeeping takes longer and mistakes are far more likely.

What to keep and review:

Business bank statements: Download and store them regularly. They help you track income, identify missing invoices, and ensure you’re not forgetting recurring expenses.

Business card statements: Similar to bank statements, these show the spending side clearly.

Payment processor statements: If you use card processors, online checkout tools, marketplaces, or app stores, keep their payout statements and fee reports.

A simple habit that saves stress: once a week (or at least once a month), compare your bank transactions to your invoice list. If you use invoice24 for invoicing, you can quickly scan what’s unpaid and match incoming payments to the correct invoices. This protects your cash flow and reduces awkward “just checking you saw my invoice” emails.

4) Tax-related records (what makes filing easier)

Tax records aren’t a separate category so much as a “filter” across everything you do. Your invoices, receipts, and statements will feed into your tax return. But there are a few additional items you should keep that often matter for self-employed people.

Examples include:

Tax return copies and calculations: Keep the return you filed and any supporting calculations. If you ever need to check something later, you’ll have a reference point.

Tax payment confirmations: If you make payments on account or separate instalments, keep proof and dates.

VAT records (if registered): If you’re registered for VAT or similar sales taxes, you’ll need to keep records showing VAT charged on sales and VAT paid on purchases, plus VAT returns and payment evidence.

Payroll records (if you employ someone): If you hire employees, payroll becomes its own recordkeeping area (payslips, tax withholdings, filings). If you’re a solo operator, you may not need this yet.

Important mindset: tax is not just a once-a-year task. Your recordkeeping is the foundation that makes tax filing straightforward. The more consistent your documentation, the less time you spend trying to reconstruct the year.

5) Assets and equipment records (what you own for the business)

When you buy something significant for your business—like a laptop, camera gear, tools, or machinery—you should keep a clear record of it. Not only does this help you understand your investment, but it can also matter for tax treatment depending on your local rules.

Keep:

Purchase invoices and receipts: Include date, vendor, and what was purchased.

Warranty information and serial numbers: Helpful for insurance, repairs, and resale.

Depreciation or capital allowance schedules (if used): If you or your accountant track depreciation, keep a simple schedule showing what assets you bought and when.

Disposal records: If you sell or scrap an asset, keep proof and the date.

6) Mileage and travel logs (if you travel for work)

If you use a personal vehicle for business, you may be able to claim mileage or a portion of vehicle costs, depending on where you live and which method you use. The key is consistency and evidence. A rough estimate made at tax time is a common mistake that can create problems later.

Keep:

Mileage logs: Date, start and end locations, purpose of trip, and distance.

Travel receipts: Public transport, parking, tolls, flights, accommodation, and other travel costs.

Client meeting evidence: Calendar invites or emails can help support why travel was business-related.

Tip: if you’re doing in-person work, create a simple habit of writing the trip details immediately after you arrive or leave. Consistency matters more than complexity.

7) Home office records (if you work from home)

Many newly self-employed people work from home, at least at the start. If you claim home office costs, keep a record of how you calculated the business portion and the bills that support it.

Keep:

Utility bills and internet bills: Electricity, heating, water, internet—whatever you claim a portion of.

Rent or mortgage interest documentation (where relevant): Depending on rules in your location, you may need specific records for home office deductions.

Workspace calculation notes: For example, the square footage of your workspace compared to the home, or a simplified method used consistently.

Good practice: separate “evidence” (your bills) from “calculation notes” (how you arrived at a number). If you ever need to revisit it, you can quickly see both the inputs and the logic.

8) Records for subcontractors and freelancers you pay

Even if you’re newly self-employed, you might outsource tasks—design, editing, bookkeeping, development, or admin. Whenever you pay someone, keep documentation showing what they did and what you paid.

Keep:

Supplier invoices from subcontractors: These are your expense evidence.

Contracts or agreements: Useful for confirming the scope and terms.

Payment confirmations: Bank transfers, payment processor receipts, and dates.

Tip: make it a rule that you only pay once you have an invoice or clear record. This prevents missing paperwork later.

How invoices fit into your recordkeeping system

Invoices are more than a request for payment—they’re the story of your work. A professional invoice shows what you did, helps clients process payment faster, and creates a reliable record for you.

When you use invoice24 for invoicing, you’re not just producing a document; you’re building an organised sales ledger in real time. Each invoice becomes a searchable item tied to a client, a date, an amount, and a status (paid or unpaid). That means:

Less admin: You’re not manually typing invoices in a word processor or copying old templates.

Fewer mistakes: Consistent formatting reduces missing details that can delay payment.

Better cash flow: It’s easy to see what’s outstanding and follow up quickly.

Cleaner year-end: Your income documentation is already lined up when tax time arrives.

And because invoice24 is built as a free invoice app, it’s a practical starting point when you’re newly self-employed and managing costs carefully. Before you spend money on complex systems, you can keep your invoicing professional and your records tidy with a tool designed for the job.

What details should be on your invoices?

Invoice requirements vary by country, but the principle is universal: your invoice should make it easy to understand the transaction and easy to pay. As a newly self-employed person, clarity builds trust with clients and reduces the risk of payment delays.

In general, strong invoices include:

Your business name and contact details: Plus any required registration details if applicable.

Client name and address: So it’s clearly billed to the correct person or company.

Invoice number: A unique identifier that helps you and the client track it.

Invoice date and due date: So payment expectations are clear.

Description of services or products: Clear line items reduce confusion.

Amounts and totals: Including any tax where relevant.

Payment details: Bank details or payment instructions so clients can pay quickly.

Using invoice24 helps ensure invoices include consistent key fields, reducing the chances of “Can you resend with X included?” emails that slow down payment and create extra admin.

Choosing a simple bookkeeping method: cash basis vs accrual mindset

You may hear terms like “cash basis” and “accrual accounting.” Without getting technical, here’s the simple version: cash basis focuses on when money actually moves in and out of your bank account, while accrual focuses on when you earn or incur amounts (when you invoice or receive bills), even if payment happens later.

As someone newly self-employed, the best approach is often the one you can stick with consistently. If you’re unsure, a straightforward habit is:

Track invoices when you issue them (what you’ve billed), and track payments when they arrive (what you’ve actually received).

invoice24 naturally supports this habit because you can see what’s been invoiced and what’s outstanding, which is essential for managing cash flow while still keeping a structured record of sales activity.

How long should you keep accounting records?

The exact retention period depends on your local rules, but as a general business habit, keep records for multiple years. That includes invoices, receipts, statements, and tax filings. The safest approach is to keep digital copies even longer than the minimum requirement, because storage is cheap and losing paperwork is expensive in time and stress.

Practical storage tip: keep your records both in an organised folder system and within the tools you use daily. When your invoice history lives in invoice24, it gives you a reliable “at a glance” view, and you can still export or download documents for backups and filing.

Organising your records: a straightforward folder structure that works

Organisation is where most people struggle—not because it’s hard, but because they start without a system. Here’s a simple structure that works for many newly self-employed people:

01 Income (invoices issued, sales receipts, platform statements)

02 Expenses (supplier invoices, receipts, subscriptions)

03 Banking (bank statements, card statements, payment processor reports)

04 Tax (returns, calculations, payment confirmations, correspondence)

05 Assets (equipment purchases, warranties, depreciation notes)

06 Clients & Contracts (agreements, proposals, onboarding docs)

Within each folder, create subfolders by year and month. For example: “Expenses > 2026 > 01 January”. When you download a receipt or invoice, save it immediately into the correct month.

Then pair that with a consistent invoicing process: issue every client invoice through invoice24, and treat invoice24 as your primary income record. You’ll always know what you billed, to whom, and when.

Common recordkeeping mistakes new self-employed people make

It’s easy to make small mistakes early on that turn into big headaches later. Here are the most common ones—and how to avoid them.

Mixing personal and business transactions

When your personal spending and business spending are mixed in one account, it becomes hard to tell what’s what. You can still make it work, but it increases the time needed for bookkeeping and raises the likelihood of mistakes. If you can open a separate business account, do it early.

Forgetting to invoice promptly

Delaying invoices delays payment. It also weakens your records because details are fresh right after you complete the work. A simple weekly invoicing routine using invoice24 can dramatically improve cash flow and reduce the risk of missed income.

Losing receipts or relying on bank statements alone

A bank statement shows that money left your account, but it often doesn’t show what you bought or why. Receipts and supplier invoices provide that detail. Make it a habit to save receipts immediately.

Not tracking unpaid invoices

Unpaid invoices can quietly harm your business. You might think you’re doing well because you’ve sent lots of invoices, but cash flow depends on what’s actually paid. With invoice24, keeping an eye on unpaid invoices becomes part of your day-to-day workflow rather than a stressful surprise.

Underestimating subscriptions and small recurring costs