Consultants: Are You Paying Yourself Right?

Dec 20

One of the most common mistakes consultants and service-based business owners make is not paying themselves correctly.

Whether you're a business coach in Bentonville, a freelance strategist in Fayetteville, or a creative consultant based anywhere in Northwest Arkansas, you might be asking:

“Am I paying myself the right way—or just winging it?”

At DBR Bookkeeping, we help consultants get real clarity on their financials—especially when it comes to paying themselves right.

Why Paying Yourself Correctly Matters

When your business finances are messy or unclear, personal compensation becomes… chaotic. We see it all the time:

Mixing business and personal expenses
Random transfers with no documentation
No consistent payment schedule
Over- or under-paying yourself without knowing

Not only does this make your bookkeeping harder, but it also confuses your CPA come tax time—and could trigger red flags with the IRS.

3 Questions Every Consultant Should Ask

1. How is my business structured?

If you're a sole proprietor or single-member LLC, you're typically paid through owner's draws. If you're an S-Corp, you may need to set up reasonable payroll for yourself.

Using QuickBooks Online, we help our clients track these correctly for tax and bookkeeping compliance.

2. Am I paying myself consistently?

Random transfers aren’t a system. Whether it’s weekly, bi-weekly, or monthly, create a pay schedule based on your business revenue and profit.

This gives you peace of mind—and allows for more accurate budgeting and forecasting.

3. Am I saving for taxes with every paycheck?

We recommend setting aside 25–30% of each draw or paycheck into a separate tax account. With clean books, this becomes an easy rule—not a stressful scramble.

What’s the Best Way to Pay Yourself?

There’s no one-size-fits-all answer. But here’s what we recommend for most consultants we work with:

Track all revenue and expenses through a tool like QuickBooks Online
Separate business and personal accounts
Use Owner's Draw for single-member LLCs or Sole Props
Consider S-Corp election and payroll if your income supports it (consult with your CPA or tax advisor)
Pay yourself regularly and set aside taxes automatically

At DBR Bookkeeping, We Help You Do It Right

Our team specializes in helping consultants and service-based professionals across Northwest Arkansas set up simple, effective bookkeeping systems. Whether you’re using QuickBooks Online already or need a full cleanup, we help you track your numbers and pay yourself right.

Because financial confidence starts with a good system.

FAQ: Paying Yourself as a Consultant

What’s the difference between an owner draw and a salary?
An owner draw is a direct withdrawal of profits (used in Sole Proprietorships or LLCs). A salary is set payroll typically used in S-Corps and C-Corps.

Should I pay myself through QuickBooks?
Yes—QuickBooks Online helps you track these payments correctly. For payroll, QuickBooks Payroll can automate the process.

How often should I pay myself?
It depends on your cash flow, but weekly or bi-weekly is ideal for consistency.

Will this affect my taxes?
Yes. Paying yourself correctly—and tracking it well—ensures accurate tax reporting and can help reduce tax surprises.

Ready to Clean Up Your Books & Pay Yourself the Right Way?

📅 Book a free call with Dr. Bryan Raya today and let’s help you build a system that supports your income and your growth.

Let’s start Doing Business Right.

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Bryan Raya