Bookkeeping Tips for Freelance Writers

How to Keep Track of Your Income and Expenses

In case you haven't already heard, freelance writers are self-employed individuals who must keep track of their own income and expenses. Bookkeeping comes naturally to some people, while others -- such as myself -- must work at it. Unless you are an extremely profitable freelance writer, you don't have your own accounting department that handles all of your bookkeeping for you, so you must learn how to do it yourself.

You don't need a fancy accounting degree or expensive financial software in order to keep track of your income and expenses. All you really need to know is the first simple rule of bookkeeping: Write everything down! Keep records both in hard copy and on your computer and you virtually can do no wrong because there will always be a way to double-check your figures and to produce financial information when need be.

Bookkeeping Tip #1: Keep Business & Personal Receipts Separated

For tax purposes, you'll need to keep track of your business receipts in order to itemize your deductions. Business receipts are the receipts for anything you purchase that pertains solely to your business. Writing supplies, electronic equipment and other business purchases should be kept separate from any personal things you need to acquire.

For example, let's say you're making a trip to the office supply store. For your business, you need copy paper, pens, pencils and manila folders, but you also need to purchase a calendar for your own personal use. When you check out of the store, ring the business purchases separately from the personal purchase so that you can keep your receipts separated. This will help enormously when cataloging your deductions and will also be beneficial if you should come under scrutiny by the IRS.

TIP:If you forget to purchase business and personal items separately (as I sometimes do), highlight the items which were purchased for your business and keep it with your business receipts. That way you won't have to make guesses later.

Bookkeeping Tip #2: Write the Client or Publication Name on Project-Specific Receipts