So you’re a super-talented writer able to weave concepts into compelling narratives, interviews into stories of interest, and ideas into novels. But how are your bookkeeping skills?
We spoke with three freelance writers at various stages in their careers, all of whom have totally different approaches to bookkeeping. Below, check out their tips and glean some insights from their spreadsheet wisdom.
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Use an organizational system that works for you.
When you’re thinking about your approach to bookkeeping, it’s good to look deep inside yourself and figure out how you stay organized in other areas of your life. For example, do you store all of your music and books on physical shelves? Is everything digital? Do you routinely alphabetize and rearrange, or are you more likely to have a major spring-cleaning session once a month or once a year?
Whatever you do in your ordinary life is likely to impact your professional approach, so keep that in mind when you’re developing a bookkeeping system and routine.
Freelance writer Carie Sherman speaks fondly of her “piles” system. “I’m not a naturally organized person, but I just kind of have to go with the way I work, and the way I work is that I put things in piles,” she says. That means she keeps her receipts, contracts, and tax information in different physical piles so she knows where to access them later. On the other hand, freelancer Davina van Buren keeps a folder for just about everything. “I have folders of receipts, folders for any equipment I buy or newsletters for my profession,” she says. She adds that she does this, in part, to make things easier on her certified public accountant (CPA). But the process also saves her time and money: “I want to maximize my time in there with him… so they don’t end up charging me for organizing my things!”
My approach to bookkeeping, like my approach to life, is sort of all-or-nothing. I’ll passively dump all of my stuff throughout the week into its general spot, whether on my computer’s desktop or directly into my Google Drive, then I’ll inevitably get a burst of motivation that carries me through the remainder of the organization process and delivers a clean series of numerically ordered electronic folders. I don’t keep much paper anymore because I’m somewhat of a minimalist (my physical office fits in a backpack).
So think about it. Are you more of a “files” person or a “piles” person? You may even be a little of both, like me. Either way, you’ll be the most successful if you do what feels natural to you.
Track items in these three basic categories.
Whether you’re a newbie freelancer or you’ve been grappling with this stuff for years, it’s better to keep things as simple as possible. Here are the basic things you’ll need to keep track of:
• Assignments
• Payments
• Tax stuff
Seem simple? It is. Of course, there are plenty of subcategories to each of these, and depending on the type and quantity of work you do, there are plenty of other things you may need to integrate into your system. But if you’re just getting started as a writer, these are the three most important things. Let’s dive into each.
Assignments: First, you need some method for tracking the status of your assignments. This includes the pitch letters, queries and job applications you’ve sent out, in addition to important dates like assignment deadlines, project timelines and scheduled interviews.
I like using my Google Calendar to track all of my deadlines and interviews. I also use a spreadsheet to track my submissions, pitch letters, job applications and other “outreach” types of actions. I keep it very basic: just a description of the item, the date I submitted something and the current status of it. I recently added a “Follow up by” column to remind me to check back with editors or other professionals after a week has passed. Whether you track these things with an old-fashioned wall calendar or have a complex database in your computer, follow the golden rule of freelance bookkeeping—do what works for you!
Payments: Next, you have to have a solid system for tracking payments. This includes a place to keep all of your invoices, and a list or spreadsheet detailing the status of each invoice. Don’t even know how to create an invoice? Try downloading a template from MS Word, or using one of the many invoicing sites like Invoiced, Zoho or Freshbooks to generate them for you.
Sherman emphasizes the importance of sending an invoice as soon as the work is complete. “If I say I’m going to do it later, I won’t! I really will forget about it. Nobody can pay you if you’re not doing your invoicing,” she says. When Sherman was starting out, she forgot to send an invoice to a client and she didn’t have a solid bookkeeping process in place. “I didn’t enter [the invoice information] into my online system, and they said that they paid me—but in my heart of hearts, I believe I wasn’t paid, but I don’t have any way of proving it.”
Adds Betsy Farber, editor of an online trade mag who’s planning to return to freelancing soon: if you’re waiting for a payment, “it’s so easy to take it personally… [but] you just have to follow up with these people.” Although there are times when processes get delayed by the editor or by accounting, she suggests you do everything you can as a writer to keep things moving. “When a pub or editor sends you the paperwork, I would just get that back to them as soon as possible, so when it does come time to be paid you’re accounted for… they’re not waiting around for you to send your W9 or a contract,” she advises.
It may seem silly when you’re getting started and you have just one client or maybe all of your work is unpaid, but believe me, developing a system now will save you from serious migraines later.
Taxes: The third major requirement for solid bookkeeping is tax stuff. Just the word “tax” still gives me the heebie-jeebies, but if you’re a full-time freelancer, you’re far better off paying taxes quarterly or monthly than getting slammed with a massive bill at the end of the year. Van Buren doesn’t take any chances when it comes to Uncle Sam. She’s been working with a CPA for two years, and though she may venture out and begin doing them on her own, she says, “for now, I feel more comfortable having a professional do it so I don’t leave anything out, and so I can maximize my final deductions.”
However, if you prefer to handle it yourself, there are a variety of ways to do so. I use QuickBooks: I like how I can link my accounts to the app and categorize my income and expenses as business, personal, or both. Based on my entries, the platform automatically calculates about how much I’ll owe in taxes to date—and gives me the option to pay them now if I want.
However, you don’t have to use a computer program. Farber has her own system that works for her: “I have a folder for each publication on my desktop, and I’m really diligent about invoicing and naming them, and when I get paid, I always keep the paystubs so that come the end of the year, I’ll have all that in order,” she says. You don’t need anything fancy to track your freelance income and expenses. Many writers still use the old shoebox method, in which you toss all of your paystubs and business receipts into a box and sort them out at the end of the year.
Run a better business with better bookkeeping.
The bottom line is that the more reliable and functional your bookkeeping system is (files or piles), the easier it will be to run your business overall. It’s especially helpful to know where everything is in case you run into a client problem.
Sherman shares her recent story about handling a client who won’t pay: “I’m far more organized now, I have the estimate, I have the approval of work, all of those things; it’s just a matter of a client not paying.” She may wind up taking this situation to small claims court, and if she does, she has all of the supporting paperwork to prove she signed a contract and performed the work.
Strong bookkeeping skills will also make your day-to-day life easier. I’ve had countless instances where clients need me to conjure up an old draft, an invoice, something someone said in an email, or the exact date something occurred. It’s much easier on the brain and the nerves when everything’s in its place—and as you know, functioning brains and nerves are essential to survival as a freelance writer.
