Tuesday, June 1, 2010

Business Plan Part 7 - Tracking Business Expenses

Currently reading - Infinity by Sherrilyn Kenyon

Part of turning writing into a career is treating it like a business. That means tracking expenses and income.

Expenses include supplies and equipment (like notepads and laptops), dues to writing organzations, subscriptions to professional magazines, conventions, conferences, postage, etc. Keep your receipts for everything! Don't forget to keep track of mileage to and from meetings and conferences too.

Do I really have to define income? *grin* At a certain point though, you may want to set up a separate business account to make tracking easier.

There's lots of relatively inexpensive accounting software out there. For expenses and income, I have used Quickbooks or Quicken. But, heck, you can use a shoebox as long as your records are clear and accurate. For mileage, I use an Excel spreadsheet.

One thing you'll want to keep track of is your submissions to agents and editors. My accountant, Ed, called one day about three years ago. He was worried the IRS would audit me, that the Feds would look at my writing as a hobby.

Until I produce my spreadsheet listing every pitch session and query letter, the date, the agent/editor I pitched/queried, and the particular manuscript I pitched/queried.

Now that I have income from my magazine column, Ed doesn't worry quite so much.

One caveat--I'm not necessarily recommending everyone run out and hire a CPA. DH and I have a situation that necessitates some professional guidance. But it doesn't hurt to have a consultation with an accountant to make sure your dotting those 'i's and crossing those 't's.

Any one else have some suggestion?

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