Thursday, June 11, 2009
Bookkeeping Basics For Freelance Writers
Networking is wonderful. Through it you meet so many other talented men and women, who will help you grow your writing business. Most freelance writers don't realize that in order to make a successful career from their writing, they need to treat it as a business. And what could be more important in any business than bookkeeping!
My guest today is Brigitte Thompson. Apart from being the President of Datamaster Accounting Services LLC; Brigitte has also written a book especially for freelance writers. We spoke a couple of days ago about the wonderful work she's produced.
Usha: Hello and welcome. Why don't we start by you telling us a bit about yourself.
Brigitte: I live in Vermont with my husband, three children, three cats and two dogs. I operate an accounting business, Datamaster Accounting Services, LLC, am an author of 8 books, and freelance writer. I’ve been self- employed for 17 years and am very thankful to have found a way to balance everything. I enjoy what I do and don’t consider it work.
Usha: When did you begin to think of writing a book specifically on bookkeeping for freelance writers?
Brigitte: The idea for this book was born in 2006 when I was answering questions from writers that were part of online forums I belonged to. Many of the same questions came up so I began to keep the answers in a file on my computer. As this file grew, the concept of writing a book about the financial side of a writer’s life became a reality.
Usha: Have you found that freelance writers require a very different set of bookkeeping rules by which to play?
Brigitte: Many bookkeeping rules are universal such as the requirement to record income, but there are some areas of the tax law that are more common to freelance writers. This includes dealing with royalty payments, bartering, personal property and agent fees. My book addresses the universal tax rules as well as the infrequently discussed rules that apply specifically to freelance writers.
Some writers may not see themselves as business owners which can be detrimental to their career. Learning what is reportable income and what deductions are allowed will give them the best chance at overall business success.
Usha: Does your book offer advice on issues such as difficulty in fee/payment collection? I know this is a topic that every freelancer must address at some point in his or her career.
Brigitte: I recommend writers work with contracts which are legally binding. There are copies of these written agreements in the book for writers to use. Unfortunately, even written contracts can be broken and eventually we will encounter a client who is not willing to pay us for the work we have completed.
I strongly encourage writers to utilize Small Claims Court and report the problem to the local Better Business Bureau. For more detailed information, I recommend Michelle Dunn’s series of books on collection. She shares a wealth of information on this topic.
Usha: Would writers living outside of the States benefit from picking up a copy of your book?
Brigitte: Yes, the organizational information and tips included in this book benefit writers both in and out of the United States. However, the book is based on the Federal Tax laws of the United States, so the tax portions of the book would not necessarily apply to business owners outside of the United States.
Usha: You’ve interviewed a number of freelance writers while doing research for this book. What are some of the challenges they’ve faced with regards to bookkeeping?
Brigitte: The interviewing was one of the best parts of writing this book! It was so nice to connect with other writers and to learn about their experiences.
I found the most common challenge writers face is an understanding of what they need to do to organize legally as a business. If their first job is writing the school newsletter, is the money received really income? Do they need to do something with the Internal Revenue Service before they can be considered a business? How do they handle self- employment tax?
The second most common concern for the freelance writers I interviewed was related to proper documentation. What receipts did they need to save? How should they be kept? What information needs to be recorded to prove the expense?
These are all great questions and they are addressed in the book.
Usha: You've also incorporated different sections such as Writer’s Block and Tips for Success into your book. Could you tell us a bit more about these?
Brigitte: Yes, these two sections in the book were fun to put together. Tips were shared as part of the interview process and offered insight into the lives of a variety of writers. For example, one tip from noted author, Brette Sember states, “I think that it is very important for a writer to find a niche. You’ve got to find an area in which you have expertise or experience that makes you stand out from others. It’s also important to build a platform to create that expertise. Start with a blog, articles on Web site, maybe a Listmania list on Amazon, and build up to articles in national magazines. Eventually you will have created credentials for yourself in the area you’ve chosen and can possibly make the jump to selling a book on the subject.”
The Writer’s Block section was created to include questions from writers I interviewed and the answers offer additional insight. An example from the book is listed below.
Question – “As a non-fiction writer, my articles appear nationally in a variety of magazines. I am paid by check from each publication, but they don’t all send me Form 1099- MISC. Do I still have to report the income when the company paying me doesn’t bother to send me the tax form?” — Celia in MD
Answer – “Yes, even if the payer does not send you the 1099-MISC tax form, you are still required to report the earnings on your tax return as income.”
Usha: Thanks Brigitte. Is there anything else you’d like to add?
Brigitte: That the most important thing you can do as a writer is to become organized. There are many books available on how to organize your writing, but this is the best book available, written by an accountant who is also a writer, that will help you organize the financial side of your writing business.
Usha recommends you buy this book:
© 2009 Usha Krishnan Sliva
Freelance writer Usha Krishnan Sliva has years of article and copywriting experience. To get more free tips and writing ideas, subscribe to her ezine-Getting It Write!, today.