Don’t hate me, but I have all my writing/business tax data collected, categorized, added up, and ready to take to my accountant.
I discovered years ago if I kept track during the year, the end of the year was a breeze. So, whenever I incur an expense, I immediately jot down the amount, the date, and the vendor on a sheet of accounting paper. Then I shove the printed receipt into a file drawer and forget about it. Making a note of the expense means never having to look at receipts again; I only keep them in case of audit.
I track expenses on sheets of lined green accounting paper, which I used to keep in a folder on my desk. Accounting paper has handy, useful columns. This year (2017), I made a slight change. My accounting sheets are now in a notebook, divided into three main easy-to-find categories.
- Advertising and Promotion (items such as paid ads, book tours, gift cards, special promotions)
- Production –(Editing, cover art, formatting)
- General (Internet, website, phone, postage etc. These are the expenses that aren’t tied to a specific book)
Within each category, I keep a sheet for each subcategory (for instance, Production has a sheet for editing expenses, one for cover art, etc.). At the end of the year, I grab a calculator and add up the subcategories. (And actually, in June I add up the first part of the year, then at the end of the year, I just add up the second half).
Not only does this method keep track of expenses for my taxes, but it allows me to see at a glance how much I spend. Also new this year, I started a category for expenses by book in which I keep a sheet on each book and list all expenses related to that book: promotion and production costs. It means making a double entry, once in the expense category and again in the book category, but it allows me to see how much each book costs me.
I know many business people use QuickBooks, Quicken, or make Excel spreadsheets, but I don’t know how to use those programs. Last year, I bought Excel for Dummies, intending to set all this up on the computer, but I never got around to reading the book. I’ve decided that this manual process works for me. I think it’s just as fast to grab a pen & notebook as is to open up a program and wait for it to load.