While the coronavirus has made travelling difficult, it has also created an avenue for more people to work online. We expect to see an increase in digital nomads in the coming years as travel restrictions begin to ease. Our goal is to ensure that your lifestyle remains an adventure of the fun kind and not one that involves a CRA audit.
1. Open separate accounts
As a digital nomad, it is easy to fall into the trap of having all your personal and business transactions happen in one account. Operating this way can create a lot of extra work at tax time and lead to challenges if you need to apply for a loan.
Even if you move the funds into your personal account for spending as soon as they hit your business account. Having two separate accounts makes every element of your accounting a lot easier. Make sure you also use this business account for paying your bills.
2. Stay on top of taxes
As tempting as it may be to travel the world avoiding taxes, this can lead to serious consequences. You need to determine where you should be reporting your taxes and stay on top of local tax laws and visa requirements when moving about. If you are a Canadian citizen there is a high chance that you need to continue filing taxes in Canada while travelling especially if you have not relocated your business to a new country.
We recommend talking to a tax advisor prior to leaving the country to ensure you don’t return to a mountain of tax debt and CRA fines.
3. Know your numbers
The biggest mistake you can make in any business is not keeping track of income and expenses. Knowing your numbers is essential for planning effectively and ensuring you don’t get stuck in a tropical coworking space with no money left in your account.
If keeping track of everything sounds like a bore, make sure you find a bookkeeper who can support your remote lifestyle. At Homeroom, we have all the systems in place to support digital nomads and e-commerce businesses. We focus on tech-savvy solutions that allow you to send receipts to us from anywhere in the world. We also store them digitally so that you don’t have to carry around a backpack full of receipts for the next 7 years.
4. Choose the right software
It can be tempting to cheap out on your accounting software. We can assure you that what you save on your subscription you will pay for with your time. We use Quickbooks online with a number of robust integrations to support our client’s needs. If you aren’t quite ready to hire a bookkeeper who includes the software in their cost, we highly recommend using Quickbooks online.
5. Have the time of your life
Last but not least, being a digital nomad is an amazing new journey. You will meet new people, experience new places and learn so much about yourself. Make sure you soak up every experience and network with other roaming professionals. There will be ups and downs but the downs are a small price to pay for an office with a view!!