The speed start-up session at the 2016 conference (on Monday 12th at 1:30) will begin with a segment on finance (followed by Liz Jones on pricing and Louise Harnby on marketing – it’s going to be a busy hour!). Editors and proofreaders are by nature word people, so many of us can find it hard to get to grips with the money end of running our businesses. But you’re not just a proofreader or an editor, you’re a business owner, too, so you do need to understand what your statutory obligations are (keeping records, including the right information on your invoices, making a timely and accurate tax return and paying your tax and national insurance by the deadline). HMRC puts a huge amount of effort into making it easy for you to get your tax return right, and all the things that revolve around it, like understanding what business expenses are allowable (i.e. what expenditure you can offset against your profits to reduce your tax bill) and what aren’t.
Access HMRC’s live and recorded webinars and the business email support system. And watch helpful videos on their YouTube channel.
You also need to know how to budget for the things you need to buy (equipment, reference materials, memberships) and money you need to spend (tax and national insurance, plus perhaps pension contributions), and how much you need to put by to tide you over times of not working, whether for planned holidays, periods of illness, or those times when work just won’t land in your inbox no matter what you do.
Understand the importance of cash flow – more businesses have come unstuck because of a lack of ready cash to cover their commitments than from a lack of overall profitability – and translate that understanding into actions for invoicing promptly and chasing overdue invoices.
I see a lot of comments from people in editors’ groups right across social media saying that invoicing and requiring payment on time makes them cringe – they feel pushy and mercenary. Well, the only thing I can say to that is – don’t! You’re a business owner, not a doormat. Contracts have two halves – what you’ll do and what you’ll be paid for doing it. You did your bit, so now it’s time for your client to fulfil their part of the contract.
Sadly, but unsurprisingly, clients usually have their focus elsewhere than on your finances, so you need to be the one to remind them, and to remind them again, if need be. Keep it polite, keep it businesslike and don’t apologise. But just in case, be aware that you have rights to claim interest and penalties on late payments from clients who are also businesses.
As there’s such a lot to get through, there’ll be a handout bursting with links to plenty more detailed information. There’ll be time for a few questions, too. To get you started, a huge amount of information on running the financial end of a business can be found at www.gov.uk. Start with the two options Business and self-employed and Money and tax.
Plug alert!! All this, and a great deal more, is covered in my upcoming new SfEP guide Going Solo – Creating Your Freelance Editing Business.
Sue Littleford, an Advanced Professional Member of the SfEP, was a career civil servant, before being forcibly outsourced, and spent 14 years as payroll manager for what is now the Ministry of Justice. Then she changed tack altogether and has now been a freelance copy-editor since 2007, working mostly on postgraduate textbooks in the humanities and social sciences, plus the occasional horseracing thriller.
Posted by Tracey Roberts, SfEP blog coordinator.
The views expressed here do not necessarily reflect those of the SfEP