The end of the year is right around the corner. If you are a freelance worker, whether you take photographs, write articles or conduct some other type of business on a contract by contract, it is imperative that you know where your money is going at the end of the month and from where it came.
I’ve spoken with a lot of freelance workers since opening my marketing company and they’ve told me tales about how they had no idea what they were putting out each month on necessities such as cell phone (to use as business phone), Internet (to use for research), supplies (paper, printer, printer cartridges), equipment (camera, computer, printer) and other items needed to make their business run.
Sadly, some freelancers do not look at their jobs as an actual business, but they should. If you are working from home doing a job for clients and you need to purchase items in order to do the job, then you are running a company. And if you are running a company, you should know just where your money is going and where it is coming from.
Now, don’t get me wrong: I’m horrible with finances. Luckily for me, I married a businessman. He understands the numbers game much more than I ever will (or even will ever want to, though I won’t tell him this!) I am gifted with words, he is gifted with numbers, so I guess we even each other out.
When I began my business, he told me how important it was to keep track of my money. Not only does it make a difference when operating a company, but it matters at the end of the year when we have to pay tribute to the tax man. If you don’t know how much you are making, you may be surprised at the amount you owe when the time comes around to fill out your tax forms.
If you have not already set up some type of financial statement that shows the goings and comings of your money on a monthly basis, it is time to do so.
If you are not computer/spreadsheet savvy, I suggest purchasing software that does this for you. I recently acquired one type of software from a purchase I made for my business. You can pick up numerous types of software at any office supply store.
If you are an excel or spreadsheet wizard you can set up a simple in and out spreadsheet in which you input your monthly expenses and your monthly income. As a freelancer, it is highly likely (and I will say almost probable) that your monthly income will change from month to month, so it is very important that you also include the company that paid you that amount. For instance, I know that I have a steady paycheck coming from several of my jobs, and that I have a paycheck coming from some other steady jobs that will vary depending upon the amount of words I write each month. And then there are those copywriting and web design jobs that I pick up here and there, and those are always changing my financial statements at the end of the month. When I record what I make, I write the person who paid me (or the company), the type of job (copywriting, article writing, web design, graphics, etc), the date I was paid and the amount.
So, my advice to you is this: If you have not already set up some type of financial statement plan that shows where your money is coming from and to where it is going each month, do so now. Freelance work and independent contractor types of jobs are businesses, and it is important that you treat them as such!