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Whimsical Writing
02-10-2015, 07:29 AM
Hi guys!

So now that I have my second book out, and sales are picking up, I am left with an important issue: bookkeeping. Confession: I haven't been downloading my sales spreadsheets. :cry: I really need thoughts, ideas, or suggestions as to how to go about having a system. I just figured that I'll hopefully sell books, and receive a 1099 for taxes, and file them when they're due. Is this bad? One thing you should know, is that I have another full-time job. So, my books don't exclusively pay my bills. Does that change your suggestions for an internal bookkeeping system?

So that I'm clear, I don't only mean a computer program or accountant when I say bookkeeping. I just mean how you go about tracking your sales on a continuous basis, using whatever means is preferable to you.

Thanks. I'd really appreciate some advice. :)

Old Hack
02-10-2015, 11:36 AM
I keep a record of all my income from writing and editing, including dates, amounts, project, and source.

I keep a record of all my expenses including amount, dates, type of expense (entertainment, travel, stationery, etc) and project, which is linked to the appropriate receipts.

I send all that information to my accountant every few months.

Done.

Whimsical Writing
02-10-2015, 02:18 PM
Thanks, Old Hack! That doesn't sound complicated! :) I love MS Excel, so I should just breakdown and do a spreadsheet. Money in/money out.

Polenth
02-10-2015, 02:37 PM
I have an accounts book with money in/out. I save receipts/payment notices over the year. Most of mine are digital in the form of emails, spreadsheets and PayPal transactions. I print these out as evidence of payments to put in my records. So each year I have a list of transactions in the accounts book, a printout of my tax return, and a printout of any evidence. I don't record individual sales in my main accounts as that's not how I'm paid.

I keep the sales spreadsheets provided by the vendors, in case anyone wants to see where the figures in the main book come from. For my own interest, I tally up sales per month. I don't need this information to fill out my tax return or main accounts, but I think it's useful to have.

I'm sure I've made some mistakes over the years (especially when I was trying to do accrual accounting, as that's ridiculously complicated for a small business... I'm now doing cash basis, which is so much simpler). But avoiding accounting really isn't an option. The tax people might ask to see accounts from several years, and you don't want to be trying to generate five years of accounts in a panic.

Parametric
02-10-2015, 02:38 PM
I use a spreadsheet to log my income, including royalties, each month. It tells me how much money to pay into a tax account each month so I'm ready for my half-year and end-of-year tax bills.

Old Hack
02-10-2015, 03:15 PM
Don't forget to keep all the paperwork associated with each item: royalty statements, contracts, receipts, invoices, etc., and to reference them appropriately so your accountant can find things easily--it really keeps down their fees. And make sure you keep all your communications and forms from your tax authority too.

Parametric
02-10-2015, 03:19 PM
I do my own accounts, and fortunately I don't charge myself by the hour. :tongue

Whimsical Writing
02-10-2015, 04:47 PM
This is all very helpful information. Thank you. I see my accountant this week, and I'm compiling a list of questions for him. Fortunately, I'm not too much at the mercy of my own lack of accounting, since I had only just self-published my first book back in September. That's only a few months' time, so I didn't muck things up.

This really is a small business. It's pretty cool when you think about it.

M. H. Lee
02-10-2015, 11:29 PM
I'm pretty much like everyone else above.

For budgeting I have an Excel file. One tab in that file is for my self-publishing income.

On the top of that worksheet I list money I'm due with columns for Month, Income, Source, Currency, Paid. So, for Amazon I might list January, $100, Amazon US, USD, and then leave that last column blank until I get paid.

Further down on the spreadsheet I have another section where I list Payments Received with columns for Date Received, Source, Amount, Tax Liability, For. So I might say January 28, 2015, Amazon US, $100, $35, Amazon November 2014 Sales.

This lets me track outstanding payments. (I had an Amazon Italy payment not show up for four months last year.) And also lets me track expected tax liability for my quarterly tax payments. And annual income so I can keep on top of what I'm earning and adjust my tax withholding percent if needed.

For expenses I do three things: I have an e-mail folder labeled Taxes 2015 where I put any e-mailed receipts I receive. I have a folder on my computer where I save PDFs of receipts for online purchases (or tax payments) that don't result in e-mails. And I have a physical folder on my desk where I put paper receipts.

At year-end I add all those expenses together in a giant spreadsheet and print everything out for my tax records.

(Keep in mind I do my own taxes. A few years back I was using an accountant for overseas tax returns and in that case I used Microsoft Accounting and did all the journal entries and all that fun stuff to create balance sheets and general ledgers that I was then able to provide to the accountant so they could do my taxes for me. Given the scope of my current business, I don't see the need to do that. I am also on cash-basis accounting. Accrual-basis is a whole different ball of wax that is no fun to deal with but may be required if you hold inventory of your books.)