As a freelancer, just about everything falls in your lap. That’s doubly true of your finances. After all, you can probably get away with some older software and even if you don’t spend hours on marketing you can probably make a little money at some content site — but if you don’t make sure that you get paid, there just isn’t a point to freelancing.
Taking charge of your finances can go far beyond simply keeping up with your invoices though. As a freelance writer, you need to look at the entire financial picture for your business. Numbers can change the amount of time you spend on marketing, just as they can lead you to increase your prices.
In a way, bookkeeping is easier for freelance writers than many other types of small business owners. Our expenses are generally fairly minimal, it’s not often that we have to bill clients for expenses beyond the services we’ve provided and freelancers with employees are extremely rare. But a freelance writer’s bookkeeping doesn’t do itself, and many of us struggle to find time to handle such administrative tasks.
No one denies that keeping our accounts is important, but as our own CFOs, it’s important to find ways to minimize the amount of time we have to spend on bookkeeping. Sometimes technology is the answer: certain applications automate at least part of the invoicing process and can import expenses from bank statements and other information. As a CFO, it’s important to take a look at these options and determine that amount of time you can save — and if you can earn enough in that time to cover the cost of new software or outsourcing.
The Bigger Picture
When you’re recording expenses and sending out invoices, it’s easy to lose track of the bigger picture. You may know how much money you’re earning, but where is that money going? How much do you need to be saving for taxes? How can you best make use of the money you’ve earned? These questions may require someone with a little more financial background, like a CPA or a financial adviser. A professional trained to look at the bigger financial picture may be able to help you grow your freelance business.
Personally, sitting down with a CPA is one of the best business decisions I’ve ever made. Not only did I not need to wade through the stacks of paper that make up my tax return, but he was able to advise me on how to keep more of my money through opportunities like a retirement account.
A good CFO (and freelance writer) should have access to great financial advice. We may not have the financial background of the CFOs who work for big companies, but that doesn’t mean that we can’t get access to good financial information.