Indie authors need to record business transactions

Indie authors always should keep track of their business transactions via journals and ledgers.

A journal is used to record all business transactions – meaning income and expenses. All of these transactions should be shown in the supporting documents (sales slips, invoices, etc.) that you’re keeping and filing. You may keep several different journals, say one for your book sales and another for your speaking engagements. A ledger contains the totals from all of your journals. Both journals and ledgers, in either paper or software form, are available at office supply stores.

Recordkeeping through journals and ledgers is simply standard business practice. It’s necessary should you wish to take any deductions on your taxes, if only because an audit likely will require that you have journals, ledgers and supporting documents.

Though recordkeeping can be dull and is hardly the reason most of us want to be full-time writers, it is a necessary evil. You can ease its burden by actually doing it everyday, that is record transactions as they occur. Just setting aside five minutes a day to update your journals and ledgers will save you hours of work later in the month or when you have to figure out your taxes.

Another way to ease recordkeeping is to keep your business transactions separate from your personal transactions. While grabbing the carton of milk you need when buying a printer cartridge at Walmart may be convenient, you’re best to actually purchase them separately, even if that means making two transactions in the checkout lane. Separation easily can be done by having a checkbook or a credit card that is solely used for business purposes.

If keeping a business checkbook, always record those transactions in the checkbook register and then ensure it reconciles with your journal and ledgers. The checkbook register is part of the recordkeeping documents that can be reviewed if audited.

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