This week I spent some more time working on my year-end for my writing business. As someone who finds math very trying, I really wanted to come up with a way to manage the accounting aspect of things efficiently. After seeking advice from an Accounting Firm, starting in 2010, I started a very basic template in Excel that helped me streamline things. It is a template I am constantly improving on. Each year I file my income tax returns with a great software from Intuit called TurboTax. The version I use is for Home and Business. It specifically has templates that allow one to enter certain expenses and the income one earns from a business like mine.
There is the reality of my work life that I have to factor in as part of my year end work. I have a day job. So part of my writing business year end is filing the necessary tax returns for my day job. So the version of TurboTax that I use allows me to enter all of the numbers from the day job’s tax paperwork and the business at the same time.
As I was writing this, I spent several minutes trying to get the best angles on all of the screenshots and photos of my demo spreadsheet. I cannot seem to get the photos the way I like them. So I will write out the best demonstrations I can of each worksheet that forms part of the overall spreadsheet.
I should note that this is not meant to be a substitute for advice from an accountant or legal counsel. This has been an effective tool for me as I keep track of things in my writing business. It is meant to help stay organized. As I reside in Canada, your tax requirements might be different and what you need to keep track of could be different. Make sure you consult the proper professionals in those areas.
Sheet 1 – Invoices and Payments. 5 Columns
On the first worksheet I will list the date of invoicing the client, or if you want, you could make it the date you were paid for the work. The second column would be the description of the work. Be as detailed as you can. (i.e. writing website content – cooking website). In your third column, type in the invoice amount. Fourth column you could write the amount received in your currency. This is particularly important. As you need to keep accurate track of your additional income, make sure you have the number correct. In the fifth column, you would have transfer fees. The transfer fees would reflect something like the fees you would pay PayPal if you accept payment via that method. Depending on where you are, this could be another business expense. Check your laws to see if they could apply.
Sheet 2 – Expenses. 4 Columns
This section of the spreadsheet is where I keep track of each of my expenses. After the first column showing the date incurred expense, the second column should state the place you incurred the expense. Your third should include the reason for the expense. I should add here that each receipt, I immediately write on it in pen the date, and the reason the expense was incurred. This is in case the receipt ink wears off. The final column is of course the amount.
Sheet 3 – Final Totals. 2 Columns
I set this worksheet up in order to keep running totals of business expenses that are allowable as per the applicable laws. For example, As I incur office supplies or expenses, I will add it to the running total under this worksheet. Since I work the writing trade from home, I can claim something that is in relation to my home such as the cost of electricity. So as I pay a power bill, I add it to the running total under the column of “electricity’. The columns are one for the type of expense, and one for the running total.
Sheet 4 – KM Breakdown. 3 columns
In Canada, you can claim the total amount of kilometers you might have to drive in order to conduct business. I only recently added this sheet since I was required to take a few road trips in relation to the business. So the three columns here are pretty straightforward. Date, Reason, Distance.
When I drafted this outline, I fully intended to include pictures to demonstrate each part of this worksheet. It just won’t work properly the way I intended it to. I hope the descriptions make sense. If anyone wants a copy of the demonstration file that I wrote up, I will send a copy if you drop a line to my business email – email@example.com
Staying on top of your business ultimately leaves you with more time to create and more time to work.