Time Registration: Benefits For Yourself As A Self-Employed Person

In my opinion, registering your hours is not only something you do for the tax authorities. It is certainly also useful if you want to gain more insight into your company. If you offer your services by the hour, you have to keep track of your hours for the client anyway . You can quickly see how much your turnover is for the assignment. But with self-employed people it often also happens that they charge a fixed price for a certain service or product. If you keep track of your hours, you can quickly calculate what your work actually costs and yields. And that in turn ensures that you can better estimate new assignments and make better quotations.

An example. Suppose you are a furniture maker and you make and sell a chair for 500 euros. You bought 200 euros worth of materials to make the chair. Then your turnover is 300 euros. If you spend 10 hours buying the materials, manufacturing the chair and selling the chair, then you have a turnover of 30 euros per hour. Maybe you want to earn more per hour? Then you can do a number of things for the next assignment: increase the selling price, work with cheaper materials or work faster (if that is possible at all, of course).

Moreover, you can compare your direct (billable) hours against your indirect hours on an annual basis and check whether you have earned enough in the direct hours throughout the year. You can immediately see whether the percentage of indirect hours is not too high. Overview makes adjustments possible!

The entrepreneur’s allowance is a deduction on the profit and consists of self-employed person’s allowance, starter’s allowance, starter’s allowance in the event of incapacity for work, deduction for research and development work, co-workers’ allowance and discontinuation allowance. The components of the entrepreneur’s allowance that most self-employed persons have to deal with are the self-employed person’s allowance and the starter’s allowance. That is why I will go into these ingredients a little further.

Which hours should you keep in your time registration?
You may add up all the hours you work for your company for the hours criterion. So the billable hours and the non-billable hours. So also the hours you need to update your email, keep the administration up, maintain your website, do marketing and acquisitions (write quotes), travel to your customers, make schedules , take training courses and buy supplies. All these hours fall under your time administration.

My tip: make a division into direct and indirect hours (per assignment) and also make a subdivision into indirect hours (general, administration, acquisition, travel time, training / course, marketing, stock purchasing). It is useful if you divide your hours per assignment, so that you can see afterwards which assignments yield the most and which less.

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Time Registration As A Self-Employed Person, How Do You Handle It Conveniently?

You can know for yourself how you keep track of and register your hours. There are roughly 3 ways to register your hours:

  • You keep track of it yourself (in Excel or on paper)
  • With separate software for time registration
  • Via an accounting program with built-in time registration software
  1. You keep track of it yourself (in Excel or on paper)

As a starting self-employed person you may want to incur as little costs as possible; starting your own business already entails a lot of costs (start-up costs). In the beginning, your hours may also be quite easy to keep track of. Then you can choose to keep track of your hours yourself. For example in Excel or even on paper (or in your paper diary). That is the cheapest solution. But I have to say that this is not always the most convenient solution. It is labor intensive and you have to remember to regularly write down your hours or put them in your Excel document. But of course it is possible.

  1. With separate software for time registration

There is a wide choice in purchasing time registration software, also known as time tracking software. Look online for the possibilities. For a small amount per month you purchase a subscription and you have handy options to keep track of your hours. Using time registration software has a number of advantages:

The software helps you to divide the hours into categories

You use certain programs (also) as an app on your mobile, so that you can enter your hours in the system daily and directly (for example when you are on the train home)

The software often has options to make reports per week, month, quarter or year in order to gain direct insight into your registered (direct and indirect) hours

There is software available that allows you to activate a timer when you start a task. You turn off the timer when you’re done. This way you know exactly how much time a particular task takes

With some software programs you can set that you receive a signal (for example on your mobile) that you have to enter your hours. That way you never forget.

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