Writers can choose between bookkeeping systems

12/22/2016

Writers can choose between bookkeeping systems

When writers run a small business centered on their books, they need to spend some time handling the accounting. When doing so, they can choose between one of the two bookkeeping systems – single-entry or double-entry.

Both simple and practical, the single-entry system usually is the best option for authors new to the business world. The flow of income and expenses is recorded through two simple documents – a daily summary of cash receipts (income) and a monthly summary of cash receipts and disbursements (expenses). So long as disbursements is a smaller amount that cash receipts, you’ve made a profit.

As your business grows larger to include appearances, paid classes, and merchandise in addition to books, you likely will want to use the double-entry system. This bookkeeping system involves entering transactions in a journal and then posting them to ledger accounts, which show not just income and expenses but also assets (your business property), liabilities (your business debts), and net worth (which are your assets minus your liabilities). It’s called a double-entry system because on old accounting paper debits would be recorded on the left and credits on the right in columns next to one another.

Fortunately, you don’t have do any of the accounting by hand as bookkeeping software is available. Such programs generally are easy to use and usually take the math out of it for you, ensuring that so long as you’ve entered the correct numbers in the correct spots, you’ll have accurate records. You can find this fairly inexpensive software at any number of retail stores or even download it from online vendors.

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