As a writer, you undoubtedly keep every one of your writings. You’ve got journals full of story ideas, descriptions and story outlines, you’ve got great lines and character names scribbled on scraps of paper, you’ve got file folders with printouts of stories in various stages of revision.
Once you self-publish, you’ll need to bring all the meticulousness of that word hoarding to bear on your business records. That means never tossing a receipt and tracking them on income statements and balance sheets.
I know, I know, that sounds all terribly boring. But there are several reasons why you must keep business records:
• Monitor your business – Records allow you to see if you’re making a profit or loss, to identify which products or services are selling, and to decide via data about how to make your business more profitable.
• Provide financial statements – You’ll need income (specifically profit and loss) statements and balance sheets when you pay taxes or should you decide to seek a business loan.
• Identify source of receipts – This information is needed to separate business from nonbusiness receipts and taxable from nontaxable income.
• Keep track of deductible expenses – You then will be able to ensure you save some money at tax time.
• Support items reported on tax returns – The IRS will require you to submit some of these records and at any time can request to inspect them to prove the validity of your returns.
Usually just a few minutes a day are needed to maintain your business records. Remember that recording the expenses as they occur will be much easier than trying to remember them or locate receipts when doing taxes. And before you offer the excuse, “But that cuts into my writing time!” know that not doing so likely means you’ll spend days of having to forgo writing at tax time.
My name is Rob Bignell. I’m an affordable, professional editor who runs Inventing Reality Editing Service, which meets the manuscript needs of writers both new and published. I also offer a variety of self-publishing services. During the past decade, I’ve helped more than 300 novelists and nonfiction authors obtain their publishing dreams at reasonable prices. I’m also the author of the 7 Minutes a Day… writing guidebooks, four nonfiction hiking guidebook series, and the literary novel Windmill. Several of my short stories in the literary and science fiction genres also have been published.