5 Bookkeeping Tips for Entrepreneurial Authors
It doesn’t matter whether you’re a freelancing writer, a blogger, a traditionally or independently published author – you need to look at your writing and the income you get from it as a small business, and that business will always need good bookkeeping. However, most writers have zero to none bookkeeping experience, and that makes it really easy to get lost in your own finances. It’s not exactly an easy task to do your own bookkeeping, but you can use the tips below to make it less difficult for yourself.
1. Think ahead
You might think you don’t need to do your bookkeeping at the moment, especially if you’re not making a lot of money. But, that might change sooner than you think. And you will find yourself lost in your own finances before you know it. Do your bookkeeping every week, or at least biweekly to ensure that you’re on top of what’s happening in your bank account.
2. Separate business and personal
Depending on the nature of your work, you might have different expenses, like paper, or office supplies. If you currently don’t have separate accounts for your writing and your day job (or other means of income) then you should make them separate. Don’t mix buying office supplies or other things you need for your writing with your personal needs – that will only ensure you mix up your expenses and you will not be able to tell how much money you’ve made at the end of the month.
3. Keep taxes in mind
Subject to where you are geographically in the world, you will need to pay different taxes. For example, in a lot of countries, freelance writers are considered to be self-employed, and unlike the more common belief – they do have to pay taxes just like any other employed person. The best way to avoid getting in trouble with the law is to research income tax for freelance writers, and for authors. This will also help you figure out which of your expenses are tax deductible – especially since they can save you money when it comes to do your taxes.
4. Keep records of everything
Keep invoices (or simple records) of every time you get paid for a project, a book, or any other kind of payment related to your writing. Additionally, keep a record of all the expenses you’ve had when it comes to writing – this will help you keep track of your income every month, and thus make it easier for you to know how much money you earn and how much you spend when doing your writing. This is especially important for independent authors as well – in particular if you’ve hired someone and paid them a certain amount to edit your manuscript, create a cover design, etc. You need these records to be sure the price you have set your book at, is bringing you enough income to supplement for those costs.
5. Consider getting help
Getting help for your bookkeeping is always a good idea – especially if you don’t believe you can handle it on your own. If you don’t have the financial capacity to hire someone, then you should at least consider asking friends or relatives who are experienced in the matter for help. There are also programs and apps which can be of assistance, which are available online. You can also use spreadsheet programs, like Microsoft Excel or its equivalent. A spreadsheet can be a lot of help – especially in tracking income and expenses, and you can use the spreadsheet to keep track of how many projects you’ve done in a month, how much you got paid for each project, as well as how much money you’ve spent during that month for your expenses.
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