by Rachel Smith
27 August 2014
Hi Rachel/Leo. I’ve just started freelancing after being made redundant and am setting myself up – handily it coincides with the new tax year (sarcasm font). My question is, how do you guys keep track of your earnings and receipts in an efficient way? I don’t fancy having a meltdown next July and trying to organise everything then. Paula
Hi Paula. Bummer about the redundancy but I hope it’s the best ‘bad’ thing that’s happened to you career-wise (Nigel Bowen just wrote about it in the SMH if you fancy seeing how others have made lemonade out of lemons, so to speak). In terms of tracking earnings, I think it’s a smart move putting these systems in place now. Otherwise it will be a blinking nightmare when next July rolls around. In terms of the best way – well, I think everyone has their own system so I’m just going to give you mine which has worked well for over a decade. All you need is a copy of Excel and an empty drawer (or box) to get started.
My Excel spreadsheet is two tabs – Earnings (for that financial year) and Expenses. On the earnings tab, I create a horizontal, colour-coded section for each month and name the columns going across with the following: Date, Invoice Number, Company/Client, Type of work, Amount Inc GST, Outstanding, Minus GST, 10% GST and EPOS (because I do a lot of work for Bauer and you need an EPOS number before you can invoice them).
Every single invoice I send is plugged into this in order of date and I fill in all the columns, except in the ‘Amount Inc GST’ column I put ‘unpaid’ and the amount in the ‘Outstanding’ column. Once paid, the amount moves into the ‘Amount’ column and the Outstanding column says ‘O’. The others are probably pretty self explanatory. The ‘Amount’, ‘Outstanding’ , ‘Minus GST’ and ‘10% GST’ columns all have a SUM formula below them enabling me to easily keep track of that month’s earnings coming in.
In the Expenses tab, I enter in receipts once I have a pile that I can no longer ignore. I used to have a complex expenses system where I entered in heaps more data like dates, shops I had bought things and so on, but my accountant doesn’t require that info (be aware that others might). She just gave me a list of headings and told me to enter in receipts under those headings. This is a series of columns going across the page horizontally, and the headings I use are: Telstra/Mobile, Travel, Web, Stat/Post, Materials, Disbursments, Subscriptions, Office Expenses, Cabs, Mags/Books, Tolls/Parking, Donations, Accountancy, Utilities/House. Each column adds up to a SUM formula at the bottom which all add up to a total formula beneath that, which basically boils down to how much I’ve spent that financial year.
All I do with receipts is enter the amount of whatever the expense was under the appropriate column. The formulas do the rest. I then chuck the receipt straight into a drawer in my desk, and it sits in there until next July when I collect them all in a folder and mark the financial year on it and take it to the accountant. I also print out both tabs of the spreadsheet and give that to her along with any Business Activity Statements (BAS) I’ve paid throughout the year, interest earnings and private insurance etc etc. Ask your accountant for what they require. Mine doesn’t go through the receipts – she just needs the completed spreadsheet to do my tax (and it costs less because I’ve done a lot of the legwork for her).
That’s basically it. I’m happy to email you a template of the spreadsheet if you’d like it to get you started (that goes for any List members, so just drop me a line if you’d like an easy way to keep track of earnings).
How do you keep track of invoices, earnings and expenses? Do you use paid programs or online systems? I’d love to hear your advice in the comments.
I started freelancing this year and after some online research I chose Freshbooks for my accounting. It is beyond sensational. I pay a small monthly fee, but it has paid for itself many times over. It has a time tracking feature, so you can log the hours you’re spending on a particular project, then when it’s done, you can hit ‘generate invoice’ and then hit send. Your home screen tells you how you’re faring for the month income-wise and who owes what. I have no affiliation – I just love it.
Hi Jacyln,
That sounds like a great app. At the moment I’m using Toggl for free to track where my working day goes. However, the print outs and reports are only available when you subscribe….
This is great, thanks for sharing how you do it Rachel. I’m going to send an email re the spreadsheet. Appreciate you stepping it out. Good to see how a professional does it!
Pleasure. Will have that spreadsheet to you today!