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Top 7 Steps to Managing Your Finances When Youíre a Freelance WriterBy Bobbi Linkemer
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When you become a freelance writer -- even part time -- you are automatically a business owner. That may be a new concept for you, as well as something you feel ill prepared to tackle. Start with the basics: the seven things you must do immediately to get off to a good start.
- Hire an accountant
Preferably one who specializes in small businesses and will answer the questions you donít know enough to ask. A good accountant will provide a road map for what to do and how to do it and be accessible when you call.
- Keep orderly records
Keep track of everything, especially your expenses. Ask for, record, and file receipts. Know what is deductible and what is not. A good accountant will find legitimate deductions you never dreamed of. Immediately record mileage, parking charges, tips, reimbursable and billable expenses. If you donít do it on the spot, you will not remember. Believe me, it will go up in a puff of smoke.
- Save for taxes
That means putting away the correct percentage of every fee in a separate account. If youíve never paid quarterly estimated taxes before, the first time they are due and you are caught unprepared will be the rudest of awakenings. Itís a mistake you are not likely to make twice.
- Open a separate checking account for your business
This will eliminate the confusion of trying to sort out what is a business expense and what is not. It also will clearly spell out what is coming in and what is going out -- the point being that supposedly you canít spend money you donít have.
- Use one credit card for business purposes,
and donít use it for anything else. If you get one that sends you an end-of-the-year itemized report of charges, that will simplify your record keeping enormously.
- Invest in a time-and-billing software program
Such software does amazing things and often interacts with check-writing programs so that everything becomes part of a seamless process. It will keep perfect track of your time with a simple on/off switch and multiply that by your hourly rate. It will maintain a record of every clientís or publicationís information, agreements, projects, invoices, and payments.
- Send out invoices, and follow up on late payments
A time-and-billing program will set up a template for your bills and allow you to customize any aspect, from marking up expenses, to listing every activity and expense, to including personalized messages. These are just the basic things such software can do for you. Read the manual, or take a course to learn the finer points.
Bobbi Linkemer is a ghostwriter, writing coach, and editor. She is also the author of 14 books. Bobbi has been a professional writer for 40 years, a magazine editor and journalist, and a book-writing teacher. Her clients range from Fortune 100 companies to entrepreneurs who want to enhance their credibility and build their businesses. Visit her Website at: http://www.WriteANonfictionBook.com
Article Submitted On: November 14, 2008