Your (Simple and Straightforward) Guide to Using AI for Your Solo Business Finances

Utter the terms “AI in finance” or “fintech” to a group of freelancers and solopreneurs, and most people’s eyes are going to glaze over. It all feels complex, intimidating, and maybe even inaccessible to most of the self-employed crowd.

But, in reality, AI-driven tools are no longer reserved for big businesses or the most cutting-edge and tech-savvy among us. They’re gaining traction everywhere—including how you manage your solo business finances.

From automated bookkeeping to chatbots that essentially act like your always-on accountant, this technology can offer a big boost for small business owners like you.

Still feeling intimidated by using AI for something as important and complex as your finances? Take a deep breath—this guide has the straightforward information you need to know.

What Are the Benefits of Using AI for Your Small Business Finances?

Most solopreneurs aren’t complete strangers to using AI. In one recent survey, 75% of freelancers said they use generative AI in their work and, according to the World Economic Forum, freelancers are using AI more than traditionally-employed professionals.

But using AI in finance when you’re self-employed? That feels like a completely different ballgame than using it to write an email or generate a few headlines.

The intimidation factor is real, but leveraging this technology to keep track of your finances offers plenty of compelling benefits, including:

• Saving time: From recording client payments to categorizing your expenses, AI can take a lot of tedious and time-consuming tasks entirely off your plate.

• Reducing errors: AI certainly isn’t perfect, but neither are you. Reliable rules and workflows reduce the risk that you’ll make a mistake. That means more accurate records and better tax compliance.

• Providing personalized insights: How often are you stepping back to look at your business finances and identify areas for improvement? Yeah, we thought so. AI tools can do that work for you by analyzing your spending patterns and income trends and providing targeted recommendations.

• Getting real-time updates: It’s easy to let your bookkeeping slip when you’re self-employed. But, when AI is doing all of the tracking and updating for you, you can rest assured that you’re always looking at the most accurate and up-to-date picture of your small business finances. Plus, many AI finance tools can provide nudges and reminders about important due dates (like tax deadlines)—or even make the payments for you.

• Lowering your stress: Keeping track of your finances and taxes is one of the most dreaded parts of self-employment, with 60% of small business owners saying they’d rather do a variety of dreadful tasks (like getting a root canal or removing a nest of angry bees) than do their taxes. Fortunately, AI can do a lot of the dirty work for you. That not only saves you time, but also stress.

AI In Finance: 5 Ways to Use It for Your Solo Business

Alright, so now for the big question: How do you use AI to manage your small business finances?

Rest assured that you don’t need a computer science degree to make the most of this technology. Today’s tools (like Lettuce) make it easy to reap the benefits of AI without tearing your hair out.

Here’s a look at just a few of the ways you can use AI for the money side of your solo business.

1. Automatic Expense Categorization

When you’re self-employed, all of your legitimate business expenses are write offs. That means you can deduct them and lower your taxable income—which translates to paying less in taxes.

But if you’re going to write off these expenses, you need to keep track of them. And that’s where things get sticky for a lot of solopreneurs. They forget to document an expense here or neglect to keep a receipt there. And, when tax time rolls around, they know they’re missing a good chunk of their deductible expenses.

Lettuce will automatically set you up with a business bank account that you can use for all of your business transactions. Every time you receive a payment or make a purchase, Lettuce categorizes it for you. You’ll always have clear, correct, and current financial records—without lifting a finger.

2. Smart Income Planning

Working for yourself means you need to be proactive about your money. It’s up to you to set aside money for things like your estimated tax payments, expenses, retirement savings, and more.

Put simply, when a client pays you, you don’t get to keep all of that money in your bank account—it needs to get allocated to a bunch of different areas.

Lettuce takes care of all of the math for you. When a payment comes in, Lettuce automatically distributes it across your salary (if you’re set up as an S Corp), expenses, tax withholding, and your profits. You have the peace of mind that every dollar is exactly where it needs to be.

3. Personalized Tax Advice

Is it worth switching your LLC to an S Corp? When are your quarterly estimated tax payments due again? Does your internet bill count as a business expense?

You inevitably have tax and finance-related questions—and you don’t need an accountant to get the answers you need when you need them. AI can be a huge help here too.

From tax-saving tips to details about business entities, LettuceHead AI is a chatbot that has answers to all of your burning questions. And the best part? It’s fast, easy, and free.

4. Payments on Autopilot

This has probably happened to you before: You send an invoice to a client and, before you know it, the payment due date has come and gone. Now you have a late payment on your hands—and you’ll need to sink time and energy into following up.

Lettuce not only sends your invoices for you, but it’ll also automatically send payment reminders so you can get your hard-earned money on time (and skip the nagging).

Those aren’t the only payments Lettuce can automate. Lettuce can also automatically pay your taxes with money the platform proactively sets aside. Less time spent on paperwork and payment nudges means more time spent on billable work.

5. Stress-Free Financial Reports

Maybe you want to see your total expenses for last year. Or perhaps you need to check how much a single client has paid you. Getting that information should be painless.

A platform like Lettuce pulls all of your business transactions into one place so you can quickly and easily access reports that make your financial management feel more straightforward (and less stressful).

Plus, Lettuce can even complete and file both your business and individual tax return for you. You can say goodbye to wading through spreadsheets and random receipts. Lettuce gives you all of the financial information you need right at your fingertips.

The Future Is Here: Experience the Impact of AI (Without the Intimidation)

Think AI in finance is out of reach for you? Think again. This technology can be surprisingly simple to implement in your solo business—and it can make a huge difference in increasing your financial smarts while simultaneously decreasing your stress.

Ready to give it a try? Get started with Lettuce and see how an automated financial system can streamline the back-office of your business-of-one.