Becoming a Freelance Copywriter – Part 7 – The Financial Aspects

There are many good things about being self-employed but, unfortunately, along with the benefits comes the burden of having to keep financial records. Let’s be honest; it’s not a task that many of us enjoy but there are ways in which you can make it easier for yourself.

Record Keeping
I have never found the need to invest in costly, time-consuming accounting software. I find it much easier to keep two spreadsheets; one recording my income and the other recording my outgoings. For income you should include your invoice number, date, amount and description, and also add columns for the amount and date of payment as well as columns showing total income, total paid and total outstanding.  The spreadsheet for expenditure is similar but you would divide the columns into different types of expenditure to make it easier when you fill in your tax return at the end of the year.

Excel logo

I use an invoice numbering system beginning with the letter S (for sales) for all my client work and the letters BS for all my book sales. For client work I issue an invoice as soon as the work is complete and enter it onto my spreadsheet. This enables me to keep a record of all the invoices I have issued, and with my current spreadsheet I have a separate column for book sales so that I can see how well my books are selling. You will find it easy to get hold of an invoice template on the Internet, which you can adapt for your own use. Every time I update my spreadsheets e.g. by adding invoices, expenditure or payments received, I back the spreadsheet up so that I don’t lose valuable information.

Don’t forget that there are a number of items for which you can claim through your business such as the use of a home office, pension contributions etc. You can find information regarding items you can claim for on the HMRC website at:

Your Trading Status
From my point of view, as a freelancer there is little to be gained from operating as a limited company, even if you occasionally enlist outside help. In fact, there are a lot of drawbacks financially. You have to open a separate business banking account often entailing increased bank charges, you need insurance and there is a lot of form-filling as well as various rules and regulations. I therefore find it much easier to operate as a sole trader, and you can still have a separate name and brand for your company if you want to.

Credit Control
I worked in credit control for about 14 years prior to becoming a writer so I’m aware of the problems that this can sometimes present. Here are some tips that might help you when it comes to credit control:

1) Agree terms with the client at the outset. I send a simple quotation document with a few terms at the bottom. These set out when payment is required and the number of revisions that are included in the price. Ask the client to agree to your quotation before work goes ahead as this will avoid problems in the long run.

2) Always bear in mind that it is you who sets the terms, not the client. Many clients insist that they take 30 days credit but it is up to you whether you choose to allow this. This is often because they have monthly payment runs but it is always possible for companies to issue separate payments if they want to. I usually ask for payment within 7 days as I think that this is a reasonable period to enable the client to process payments.

If you want to be paid more quickly than the company’s usual timescales explain to the customer that you do not offer extended credit because you are a sole trader and rely on income from clients for your living expenses. Some clients may still insist on lengthier payment terms and it will be up to you whether you think that it is worthwhile waiting e.g. because the client gives you a lot of work and you are confident that he will keep to his word.

3) When you start working for a new client check him out to see whether he is in a good financial position. The website gives you a certain amount of free financial information about limited companies, but there are also paid services you can use. You will find the Companies House website useful at:

Companies House main_logo

4) If a client’s invoices become overdue, it is important to maintain contact. Don’t be frightened of asking for payment; it is your money after all. It is usually best to make contact by telephone as this enables you to get a feel for the situation. Also, make sure you are speaking to the right person. You could start by contacting the member of staff responsible for processing payments then move onto the finance manager if you have no success.

If you have given the client sufficient opportunity to make payments and he still hasn’t paid, it may be time to threaten further action. Before doing so, though, think about whether this could jeopardise any chances of future work. It is also standard practice to send a 7 day letter (or a Letter before Action) before taking a client to court. You can find further information on the Citizen’s Advice website at:

This is the seventh blog in my series about becoming a freelance writer. To view any of the earlier blogs in the series please visit the blog archive. If you have found this blog useful, or any others in this series, you are welcome to leave any feedback in the comments box below. You can also use the comments box if you have any questions and I will respond via the blog.

3 thoughts on “Becoming a Freelance Copywriter – Part 7 – The Financial Aspects

  1. This is all very interesting stuff Diane. I’m currently liaising with HMRC to see whether I should complete a tax return for 2012/2013 with regard to book sales etc. If the answer is yes (bearing in mind I haven’t broken even yet) I will refer back to this blog. They are making decisions about it for me at the mo.

    You really are a mine of info! 🙂

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