Cornered Office
with Mir Kamin
I'm a freelance writer and mother of two working from home, which theoretically means I can set my own schedule so as to best accommodate my family. In reality, "flexible hours" often equals "working too much." Yes, I'm my own boss; no, that doesn't mean life is easy. It's hard to leave the office when you live there. But I love what I do and feel very lucky. And not just because I get paid to work in my pajamas.
To learn more about Mir, check out her profile on Work It, Mom! or visit her blog at http://www.wouldashoulda.com/
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Oh, the things I am learning.
Sometimes I look back and laugh at my prior naïveté. Hahaha! I thought all I needed to do was find some work and then write stuff! I thought that was going to be the hard part! Heehee. Oh, don’t you just want to go back in time and smack me? I sure do.
Whether or not you call it “running your own business,” I have news for the newbies out there: Freelancing is running your own business. And while I suppose that if you can’t accomplish the job for which you were hired, things like revenue tracking are greatly simplified (e.g., you have no revenue), as time goes on your skill set needs to expand into things that start to sound a lot like “office management,” whether you’re working from an office or not.
You may recall that I already steeled myself for a rude awakening when it came to figuring out my taxes, and I’ve since gotten some excellent advice, an estimate of what I owe, and several paper bags that I like to breathe into for extended periods of time. For 2008 and beyond I have a much better handle on how to go about handling my taxes as a sole proprietor, so I will not be caught out again in the future.
(That’s assuming that I don’t simply keel over from the grief when making my lump sum payment for 2007, of course. Details.)
You’d think that after going through that and meeting with an accountant and such, I would’ve gotten myself completely organized, and that all of my business matters are neatly squared away, now. But you would only think that if you’ve never met me. Dude, I’m a writer. I cannot be expected to be logical.
While meeting with the accountant I was asked to bring estimates of my earnings for the year, and I’d put that together as asked, but in doing so I realized that some of my estimates were more… errrr… estimate-y than others. And that’s because I’ve never updated my invoicing system.
Allow me to translate. “My invoicing system” = two and a half years ago when I got my first client, I made them an invoice in Microsoft Word. And sent it to them. And then when I got my second client, I also made them an invoice in Word. And then I decided that in order to “keep track” of everything, I would list my invoices in a Microsoft Excel spreadsheet, and I very cleverly gave myself a column in which to mark off if payment had been received.
Isn’t that a great system I have? It really worked flawlessly when I just had those two clients, after all. But now I have over a dozen clients, as well as advertising revenue from several different sources, and direct deposits and monthly checks and one-off checks and most of these things happen without me sending an invoice. My Excel spreadsheet tells me next to nothing. A colleague asked me if I’d received payment from an employer we have in common and I wasn’t sure, because I hadn’t logged it anywhere and it might’ve been part of a recent deposit I’d made, but I couldn’t remember.
That’s sort of horrifying.
So! I am hip-deep in selecting a small business software that meets my three stringent requirements:
1) It should work on a Mac
2) It should not cost an arm and a leg
and
3) It should be easy to use.
I’m still investigating, primarily because QuickBooks (which, look! when I came to this page today, there was a QuickBooks ad right over there on the side, like a sign or something!) no longer makes a “cheap” version that works on Macs. Given the price of QuickBooks Pro, I’m also looking at iBiz 3 and Invoice 2 and some other things, trying to figure out if I can buy something cheaper or if I just need to shut up and buy QuickBooks already.
On the other hand, maybe all I need is a magical elf who lives under my desk and periodically writes down the information from my checks as they come in, pausing only to hide some of them so that when it’s time to pay my taxes it turns out that I have all the money I needed and I didn’t even know!
Do you think that’d cost more than QuickBooks…?
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I use Blinksale for invoicing, and it works flawlessly. You can email all your invoices, post payment details when received, send reminders, etc. I think is is $12 or $15/month. It’s not a comprehensive accounting system, but is the best and easiest way to invoice.
Gidget | December 13th, 2007 at 9:10 am
Mir,
My husband has quickbooks. He is a software engineer with his own business as an S-corp. One word of warning quickbooks is not as simple as it looks. He finally sat down with his CPA, she set it up for him. Now he loves it but it is not the most user-friendly software. He still thinks it is the best software for the job though.
Jen | December 13th, 2007 at 9:12 am
Hi pretty Mir! At my print shop we use MYOB. It’s very user friendly and I’m not sure what your price range is, but for $299 they have great customer service. Here’s a link: http://www.myob-us.com/accountedge/
peanut | December 13th, 2007 at 9:54 am
I don’t think that there is anything wrong with setting up a simple spreadsheet system in Excel. The fact is no matter what system you use your accountant or tax preparer is still going to have to spend time looking at what you’ve spent & what you’ve earned - and no prebuilt software is going to make it so easy their fees are cut substantially.
cursingmama | December 13th, 2007 at 10:37 am
Okay, this is probably more detailed than you want to know, but since my freelance work *is* dealing with the financial and administrative side of things, I’ve got strong opinions!
Quickbooks for Mac has always been really frustrating for me (I’ve only used an older version, so maybe they’ve addressed some of the issues, but in their 2005 releases, they really weren’t designed for easy Mac use.) I called it my fisher price quickbooks because of the lack of functionality, and only bought my current mac because I can also run windows on it, and run the ‘real’ QB. I’m only this negative because I’ve run into the wall of ‘oh, the mac version doesn’t do that’ too many times. If the mac version were cheaper, that’d be fine, but it’s not. And I agree with Jen - there’ll be a learning curve to make sure that you’re getting everything in the right spot, but it’s not too hard once that’s done.
MYOB: I’ve used it, and it’s pretty functional for small businesses, often much bigger than yours. It’s definitely designed for Macs, but it’s not necc. something that is very widely known, so you would likely have to use MYOB’s in-house support - with QB, it’s more likely that your accountant would be able to work with you on setting it up, although the mac version (at least in the past) differed significantly from the PC one.
I haven’t ever used Quicken for macs, but the mac version *is* quite cheap, and I know that their PC version is definitely sufficient for very small businesses. They’re made by the same folks who do Quickbooks, so upgrading from Quicken to QB would be a bit easier than going from another system to QB if you expand at a later date.
In the end, I’d recommend test-driving your top contenders first with a few dummy transactions. You could probably get any of the programs (even the Excel spreadsheet!) to store everything you needed, it’s essentially a question of which program will make you tear out the *least* amount of hair.
Alice | December 13th, 2007 at 11:31 am
Not to be all “phew” at your expense but I’m glad I’m not the only one!! It’s taken me several years to get it all in order. I use an excel spreadsheet for invoicing clients but that doesn’t help me keep track automatically if they paid or whatnot. It requires searching through computer folders for the right client and blah, blah, blah. I’d love to find something that would work for my business. I’m good at keeping track of the paperwork, though, so that helps. I did discover that one of my yoga students is a CPA and she’s gladly going to help me out in exchange for some yoga classes. I love to barter!
Mandy | December 13th, 2007 at 1:05 pm
Um, you mean sending invoices, and tallying payments in Excel isn’t sufficient? Gulp.
Sheryl | December 13th, 2007 at 1:58 pm
Heehee—Sheryl, I suppose if I were more organized it would be. So many of my payments are automatic, now, though (not invoiced), and a large percentage of those vary from month to month, too. So I’d just like to get a little more automated.
Mir | December 13th, 2007 at 2:02 pm
I’ve just submitted an article to WIM about a related topic - not yet posted as I’m writing this comment - since, like Alice, this is the kind of work I do too.
Alice’s advice on various software is good. I use Quicken for Mac all the time for our personal finances (after years on the PC version), and it’s adaptable for small businesses.
CursingMama’s right that you CAN make it all work with just Excel spreadsheets, but it does require more hands-on effort.
In accounting jargon, clients who pay automatically should still be “invoiced,” and then the payment is applied against that invoice - it makes tracking much easier.
Florinda | December 13th, 2007 at 2:37 pm
Oh, bleh. I just sent my 2nd freelance invoice of this year - created in Word, woohoo!
Lots to think about here. Thanks for posting this, Mir, and for all the great comments from everyone. I’m a very newbie freelancer!
Lee | December 13th, 2007 at 3:17 pm
I use iBiz (version 2, still, because who has time to upgrade softwear when you are a freelancer, I ask you?) and I’m fairly happy with it. I have a bunch of different types of billings to track - monthly, hourly work (that I need to time), per-item, one-time charges, etc. It also lets me keep track of estimates so that I can see how estimatey my estimates are.
I’m pretty happy with it overall. I don’t use it to generate invoices automatically - that’s one of the features I’d like to use in v3 - because I am a control freak and thought their invoices were ugly, but I create my invoices in Excel (so as to add numbers automagically, unlike Word) and just save the file with the invoice number that iBiz gives me.
So far, so good.
Liss | December 13th, 2007 at 5:28 pm
Hi ladies
I’m a professional bookkeeper in Australia and I use both Quickbooks and MYOB.
Having specifically designed bookkeeping software is going to make your life so much easier. You can set up recurring transactions including invoices and regular payments you make to suppliers.
Yes your accountant is going to want to check everything over but if you give them your data and reports from a software package, isn’t that going to save you money? Otherwise they are going to have to spend twice as long to figure stuff out!
Good luck with selecting your software and I agree that you should download some trial versions and have a play until you are satisfied with your selection.
Kylie Short | December 13th, 2007 at 11:53 pm
Pretty Mir:
Ask your CPA if they are a QuickBooks ProAdvisor. If so, they get a 20% discount off of the list price and may be willing to pass that savings on to you. That makes QB Pro $159. (I know how you appreciate a bargain!) If they can’t do it, I’d be happy to pass my ProAdvisor discount on to you. Let me know if you’re interested.
Like some other commenters have mentioned, the Mac version is a little clunkier than the windows versions but it’s better than an excel spreadsheet that isn’t really working for you at all.
Melinda | December 14th, 2007 at 1:41 am
Too bad they can’t all pay you with Paypal (”free” shopping money!), then you’d just have to pull up your Paypal acount history.
Brigitte | December 14th, 2007 at 6:23 am
Lovely Mir, I am sure that your wonderful tax advisor mentioned this, but whatever software you bought can (and should) be put on your 2007 business tax return as an expense of running your business (as well as a portion of your internet access, website hosting, mortgage, etc). This will reduce your income and make your tax burden that much smaller. If you have questions, please feel free to email me, I was an H&R Block Tax Preparer, run my own (very) small business and do our taxes.
Erin | December 15th, 2007 at 4:43 pm
QuickBooks has a free version (QuickBooks Simple Start Free Starter Edition) - at least for PCs; I’m not sure about a Mac version. It won’t work for you if you have more than a few clients, but it might give you an idea whether or not you like it.
I have it installed, but I still use the shoebox method of accounting, if that tells you anything.
Carolyn | December 17th, 2007 at 3:26 am
Taking notes…
MaryP | December 17th, 2007 at 8:49 pm
My DH (or his employees) scan all of the checks he receives before he deposits them, so there is a copy of the check saved in his computer should any questions about a deposit come about. He also scans all receipts, packing slips, letters, etc. so all of his business info is saved on the computer, and he has no paper cluttering his office (theoretically). He can also double check what the billing staff do if he has copies of everything saved on the computer.
colleen | December 17th, 2007 at 11:39 pm
Oh that is BRILLIANT! Why am I not scanning everything? I think I’ll start that for 2008.
Mir | December 18th, 2007 at 7:33 am
Save it in files on the computer like you would in a filing cabinet (folder for Deposits, subfolder for months if you wish, and then the individual deposits are saved as yearmonthday-deposit-amount. ex. 20071218-deposit-$ — that way the files are in order by date deposited and easier to find a specific day’s deposit if there are questions. Same for receipts - if saved by date easier to match up to credit cards statements.
colleen | December 18th, 2007 at 10:31 am
Also, kids work as cheap labor for scanning when it is a novelty (for the household things here at least)
colleen | December 18th, 2007 at 10:32 am
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