Self-Publishing: Recordkeeping

Chroniech (book 2 of the Galactic Alliance series) is almost ready to be uploaded to Amazon. Reformatting is complete. All that’s needed now is to modify the cover. I'm on vacation for the next week, so I should have time to work on the cover. I need to use my main system to do that since my little netbook does not have the screen real-estate or the power to run the older version of Adobe Photoshop Editor that I use. In the meantime, I will begin working on the reformatting of the other books in the series.

I also made a business decision to unpublish the rest of my books from Smashwords. A few months ago, I unpublished the Galactic Alliance series and registered them in the Amazon KDP Select program. I earned more in royalties from KDP Select than I earned at Smashwords. That made the decision to move the remainder of my books off Smashwords to KDP Select much easier. It’s a shame to, because I was a big fan of Smashwords. But, business is business and this was a business decision.

Smashwords sounds great on paper and it does a fantastic job of getting your books out to all the other markets. But, truth be told, the other markets are a drop in the bucket as far as Amazon is concerned. Enrolling my books in KDP Select allowed me to make more money than what I was making from Smashwords from all of my book sales through them. The cost benefit analysis was a no-brainer. My apologies to Smashwords.

Recordkeeping for Self-Published Authors
I would imagine that all writers (traditionally published or self-published) can benefit from this post. Self-Published authors, however, typically don’t have the benefit of an agent and a team of financial people helping them track sales and other expenses. Additionally, the IRS might want to look into your records someday and declaring yourself a self-published author could cause them to wonder if you’re treating your writing as a business or as a hobby. If the IRS thinks you’re writing as a hobby, you get no tax deductions at all—nothing—nada—zilch. Having a detailed record-keeping system is one way to avoid this problem.

Finances: Mixing your personal and business (i.e. writing) finances is okay, but keeping them separated is much better. I use Quicken to track my business finances. There are other programs out there, but Quicken has a huge user’s base and can track everything a writer needs. I’ve even found a way to track the number of sales as well as mileage; here’s how: To track mileage, create a cash account named Mileage. Every time you make a trip, just enter it into the register. One dollar equates to one mile. Make sure to exclude the account from the reports dealing with pure financials. To track sales, use the same approach. If you want to break things down by title, you can create a category named “Book Sales” and then add a subcategory for each title. If you enter the seller (Amazon and Smashwords in my case), you can run reports showing sales by seller by title or any combination you want.

Having a separate credit card and bank account for your writing business is also highly recommended. The activity of these accounts should be tracked in your financial register using as much detail as possible. Quicken also allows you to relate a tax form to a specific category making your end-of-year tax reconciliation all that much easier. If you spend money that you are later reimbursed for, make sure you have a separate category for this as well. An auditor might mistake the reimbursement for income (which it isn’t) and it also prevents you from accidentally charging it as a business expense (which it isn’t).

Business Log: You should maintain a business log of important events. For instance, my latest entry is about unpublishing the remainder of my books from Smashwords. You can use virtually any word processor for your log; Word, LibreOffice, OneNote, OpenOffice, etc. (you can tell I’m not a Mac person since I didn’t list Mac software). It’s also your choice as to how to arrange this log. I prefer to have the latest entry at the end so if the log is printed it can be read in chronological order. If you want to get fancy, you could even set up a database to store your log entries and then you can print them out in whatever order you desired.

Mileage Log: Once again, the list of applications is a long one. I prefer to use Microsoft Excel. I have columns for the date, which vehicle I used, starting mileage, ending mileage, a calculated column showing the miles driven, the purpose of the trip, and if the miles shown is for a round-trip or one-way. Excel works because I can quickly total everything, generate reports, and use calculated columns. I prefer to keep each year on a separate worksheet allowing me to house years worth of data in a single file.

Receipts: Keep all of your business-related receipts, no matter how trivial. If you want your records to survive a house fire, flood, tornado, volcanic eruption, or other natural event, you should scan your receipts and store them in the cloud. All multi-function printers come with scanning software. Set up a cloud-based storage account (or ensure you're data is backed up somewhere other than on a drive located in your house) and scan all your receipts into it. Labeling them with the year and date in the format of YYYY-MM-DD followed by the name of the company will keep things organized. Another alternative would be to use a commercial product such as NeatReceipts or NeatDesk.

Conclusion: Recordkeeping can be tedious, but it is necessary to prove you’re running a business. It is also a blessing at tax time, especially if you use software that can generate the reports you will need to fill out your taxes. You can combine everything into a single software package (Excel comes to mind) or use an approach similar to mine.

Writing all the above got me to thinking about an all-in-one solution. I'm a computer programmer and I write large, complex Microsoft Access applications. Everything I just talked about can be handled by an Access program. If I get the time, I might explore this alternative. But not everyone has a copy of Microsoft Access and getting one is not cheap. There are, however, alternatives. There are free open-source database programs that could work. There is also a free version of the Access database engine that can be distributed. Hummmmmmm – perhaps I will look into this. If I come up with something, I promise to make it freely available. I’ll let you know.

Another update: Frustrated with not being able to run Adobe Photoshop Elements 8 on my netbook as well as several Word restarts that happened a few days ago, I made a sudden decision yesterday in the middle of writing this post to go out and buy a better computer. I've been eyeing the Microsoft Surface Pro 4 but it does not sit well on a lap -- and I do a lot of writing on my lap. After looking around and doing some comparisons, I went out and bought a Surface Book. I'll be spending most of the day getting it set up.