Home Office Organization – Get Your Finances Straight
Spreadsheets and Accounting Programs for Copywriters
Well, this copywriter and WAHM has managed to finish organizing the entire office. You can see pictures of the finished product at the Flickr group, Clean Up ’09 Campaign. Vicki will also cover the project at SmartWomanGuides.com, so go check it out.
I can tell you it feels fantastic to take out some of the clutter, add a little inspiration, and a lot of convenience. I also spent a large amount of time transferring all of my finances into Simply Accounting (for Canadians). In fact, I spent four, long, stressful days. Now, I’m going to help you prevent the same disaster.
Keep Track Of Finances From The Beginning
I can’t stress this enough. I have just finished attempting to fix this mistake, and I am still finding the odd expense I’ve missed. I thought I had done a great job keeping track of everything until it came right down to it.
Make An Itemized List Of Your Writing Projects
Each time you sell an article, receive advertising revenue, or complete a project, make sure to write down the name of the piece, the order and completion date, the price of the piece, and the cost in your home currency.
Keep track of them as you go, and enter them into your chosen program in daily batches to save yourself confusion later. Trust me. I did keep track of everything I’ve sold from the day I started, but I made the mistake of not transferring from USD to CAD. I’ve been dealing with exchange rates for days.
You will also want to keep them separated by method of income. The money made from selling written work should be separate from advertising revenue, and so on. Your accountant will love you for it.
Choose A Method Of Tracking Your Finances
If you only write for money on occasion, do yourself a favor and set up a group of spreadsheets. It is far more affordable, and far easier to use (Google Docs offers free spreadsheets.) If you plan on freelance writing part-time or more, consider purchasing Quicken or Quickbooks.
After talking with my accountant, I spent a whopping $499 on Simply Accounting. It has many options for serious business people including payroll. Unfortunately, you need an amateur accounting degree to figure it out. Finding help isn’t easy either unless you don’t mind paying for it.
I did manage to figure it out, I think. We’ll see how my accountant’s hair fairs in a month’s time. If you don’t need to, save yourself time and money. I felt it was important for me and for my financial expert to have a set of streamlined programs. It costs both of us less in the end.
Itemize Your Expenses
Every time you spend a penny, keep track of it. Write each fee, supply, and travel expense down complete with the receipt. I’ve also assigned each expense receipt with an item number and recorded that as well as the tracking number from the store/service to make it easier to track.
Be sure to separate your expenses by type. Maintenance costs for your home office should all be on one sheet. PayPal Fees should all be on another (Don’t faint when you add up a year’s worth of fees from these guys. I recommend a glass of wine for this one.) Your bank fees, business licensing fees, software, hardware, etc should all have their own sheet as well.
Find Write-Offs
Being your own boss does have some financial benefits you may not have thought of. In Canada, I can claim a portion of my taxes, insurance, building upkeep, utilities, Internet service, and other common expenses. I have to pay provincial sales tax on items I purchased outside the province, but I make a small enough amount that I receive all of the government sales tax back. It works out to my benefit in the end.
Anytime I travel to the city to purchase supplies, my gas and meals are write offs as well. Expenses such as computers, computer repairs, and other costs are deductible as well. This should translate into some decent savings.
Have A Budget Done Up And Analyze Pricing
The previous year is the perfect opportunity to track how much you are really making from each method. You can balance the income with the expenses to pinpoint what your goals for the upcoming year should be. If you make more money selling articles than advertising revenue, for example, you might want to spend more time pushing that than building article pools.
Storing Your Receipts And Statements
I have a separate file for each set of papers I might get throughout the year including my provincial sales tax correspondence, travel receipts, and bank statements. Each year, my personal and professional copywriting finances are set up this way. In Canada, the tax man can come after you for up to 7 years of previous claims. If he should knock at the door, I’m covered.
I may not need to have my taxes ready for another month, but I’m glad I did it now. If you follow these simple tips, you can avoid making the same mistakes. You’ll be organized and ready to go right from the start.
(image taken by Life in LDN under the Creative Commons License)
January 3, 2009 at 8:23 pm | For the Writer | 2 comments
Angie, this is excellent advice! It’s the nature of the biz that freelancers have to wear many hats, and accountant is one of them. You make some very good points and great suggestions. I’m terrible at this kind of organization, so the nudge and the good info will be put to use right away. Thanks!
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@netta – Thanks for the visit Netta! Thankfully, spreadsheets are extremely easy to use. In fact, mine have no formulas on them except for the auto sum function (which I have managed to goof up on occasion!) Even as a full-time+ freelancer, you can get away with these. It will cost you more in accounting fees, if you don’t have them split up according to their paperwork. For some, this is money well spent.
I’m still reeling from the Pay Pal Fees haha