An American Editor

October 20, 2014

The Proofreader’s Corner: Rates, Data Tracking, and Digital Efficiencies (Part I)

Rates, Data Tracking, and Digital Efficiencies (Part I)

by Louise Harnby

If you’re a proofreader working for agencies or publishers on typeset page proofs, you may believe that you’re worse off financially than you used to be. This may be because:

  • Your client has increased its rates but not in line with the cost of living, so in real terms you’re still not being rewarded as well as you were in the past. You’re worse off.
  • Your client’s rates have remained the same year on year, so in real terms, again, you’re not being rewarded as well as you were in the past. You’re worse off.
  • Your client has reduced the hourly rate — real terms or not, you’re worse off.
  • Your client offers a fixed fee for the job, based on the number of pages in a set of proofs, and the page rate has been reduced. You’re proofreading the same number of words per page, but for less money. You’re worse off.
  • Your client offers a fixed fee for the job, based on the number of pages in a set of proofs, and the page rate is the same or slightly higher than in previous years, but the font size has decreased and there are, on average, more words on a page. The increased number of words per page offsets the static or increased page rate such that, overall, you’re proofreading more words for less (or the same) money. You’re worse off.

These aren’t the only scenarios but they’re the ones I’ve heard discussed often.

Tracking the Data…

If you’re not tracking your data, you can’t begin to work out whether your business is sustainable let alone whether one particular client remains a valuable asset that you wish to retain. Your data-tracking system doesn’t need to be fancy — an Excel spreadsheet might be all you need — but it should enable you to evaluate the health of your business, perhaps on a client-by-client and year-by-year basis. The reason I like Excel is because it gives me complete control over which data I collect and how I organize the information.

There are other options that are designed specifically for the job of business-performance analysis, though you’ll have to pay for them. One example, favored by Rich Adin, is QuickBooks Pro. Take advantage of free trials before you invest in expensive software, though. There will be things that you can do easily in, for example, Excel that are fiddly in paid-for programs, and vice versa. You might prefer to use different tools depending on what you want to find out.

When you’ve recorded your data over a lengthier time frame, say a year, you’ll be in a position to start assessing what works and what doesn’t, depending on your circumstances. For the specialist proofreader this could provide insight into which areas of work are most profitable (e.g., academic compared with trade publishing) or which client types (e.g. businesses compared with students or publishers). In “The Business of Editing: Recordkeeping II”, Rich Adin discusses how his data analysis taught him which parts of his business were the most valuable, “based on my experience and my data. I am not suggesting that they are true lessons for anyone else. Rather, the point is that the collection of data can help direct your business into the areas that are most lucrative for you” (An American Editor, 2014).

What Should You Keep Note Of?

Says Allena Tapia, “The variables that you track will depend on the things that are most important to you. You’ll likely play with these variables over the years, adding some and letting go of others” (“Bookkeeping for Freelancers — Exactly What Should You Track?”).

Sometimes our clients will be transparent about the changes in the fees being offered for proofreading page proofs, but sometimes changes to, for example, design (and the impact these have on rates) are only discernible if the proofreader keeps track of the data for each project — for example, number of pages, size of page, words per page, hours spent on the job, fee earned for the job. Think about what’s important to you, or what might be important to you in a year’s time, when deciding what to record.

My project data spreadsheet is Excel-based and tracks every project I’ve worked on in a particular financial year. It includes information such as: month in which the job was carried out, author, publisher, invoice number, date of invoice, payment due date, date of actual payment, pages, word count, £/1000 words, £/page, words proofed per hour, pages proofed per hour, total hours spent proofreading the project, agreed total fee, and the (sometimes extrapolated) hourly rate. I can manipulate the cells using filters so that I can see monthly and yearly totals. Or I can sort by client and compare particular variables. Previous years’ spreadsheets are similarly designed so I can cross-compare to see if there have been changes over a longer time frame.

Collecting data for many different variables is essential because I’m not always comparing like with like when looking at various projects. Some clients offer me per-page rates, some offer flat rates, some offer hourly rates, and sometimes I set the fee; page sizes and font sizes differ; and the approximate number of words on a page varies a great deal. By recording different variables, I can, over time, extrapolate information that enables me to build a picture of where the financial value lies in my client base.

I’m always particularly interested in extrapolating what I earn per hour because that’s the time I could be doing something else (e.g., working for a different client or doing my laundry). I’m also interested in what I earn overall per month and per year because those are the figures that I hold up against my monthly and yearly outgoings — this tells me whether my business is sustainable overall.

Don’t forget that by tracking the data more broadly you’ll become a better estimator, too, as Adrienne Montgomerie reminds us in “Track Your Pace to Estimate with Confidence” (Copyediting.com, 2014). For a more thorough discussion of tracking, see Rich Adin’s “Business of Editing: What to Charge (Part III)” (An American Editor, 2013). In it, Adin takes readers through the process of how he tracks the data necessary to determine his “effective hourly rate.”

Adin has addressed issues of what to charge, how to track data, and how to extrapolate an effective hourly rate extensively on his blog, and I’d recommend reading every word. There’s a great deal to absorb but it’s a wise editorial professional who’ll take the time to do so. See also Melanie Thompson’s Pricing a Project (Society for Editors and Proofreaders, 2013).

“But the Rate’s Not Fair…”

Considerations of whether your client is being fair are of little help. Publishing is a fluid industry. It’s operating in a climate where there are ways for authors to publish that bypass mainstream publishers, and in a world where what it means “to publish” is constantly being redefined by both the presses themselves (e.g., online vs. print; journal vs. article; bundle vs. single product; open-access initiatives) and the authors. This recent article, “The State of the University Press,” is a case in point (BookBusiness, 2014<http://www.bookbusinessmag.com/article/the-state-university-press/1&gt;). Furthermore, publishers are businesses facing the same challenges that all businesses face — how to keep costs low and quality high in a way that means they can continue to do what they do both now and in the future.

The impact can be felt directly by the freelance proofreader because keeping editorial production costs as low as possible is one (and only one) way in which some publisher clients and agencies might seek to address the economic challenges of publishing.

More important than fairness is necessity. What I need to earn and what I want to earn are two different things. In my case, because of my particular household’s financial needs, my required effective hourly rate is £17/US$27 — that’s what my business needs to earn, given the working hours I have available, to meet my portion of what it costs my family to live the life we want to live. However, I do sometimes accept projects that fall south of this mark, because, when I evaluate my business earnings over the course of a year and from all my clients, the overall achieved effective hourly rate is well in excess of this — £27/US$44. That allows me to take a hit on the projects that I want to do.

Nevertheless, even if a client’s rates are meeting my requirements, I may still think that the fees are not in line with the value I bring to the table. In other words, the client isn’t offering me what I want to earn.

What can the proofreader do if her earnings are below that which she either needs to earn or wants to earn?

In Part II, I’ll discuss three options for dealing with problematic rates, including my preferred — that of introducing digital efficiencies.

Louise Harnby is a professional proofreader and the curator of The Proofreader’s Parlour. Visit her business website at Louise Harnby | Proofreader, follow her on Twitter at @LouiseHarnby, or find her on LinkedIn. She is the author of Business Planning for Editorial Freelancers and Marketing Your Editing & Proofreading Business.

The Proofreader’s Corner: Rates, Data Tracking, and Digital Efficiencies (Part II)

April 16, 2014

Are Boom Times Coming?

As all self-employed in the United States know, April 15 is not only the date our personal income tax returns for the prior fiscal year are due, but also the time when we need to pay our first quarter estimated taxes for the current fiscal year. For me, it is also a time to spend a few hours looking at data I have accumulated during the first quarter and making an attempt to predict future trends.

In recent articles, I have noted the importance of data collection (see, e.g., The Business of Editing: Recordkeeping I and The Business of Editing: Recordkeeping II). I have also noted the upswing I have experienced in offers of editing work (see, e.g., The Business of Editing: An Embarrassment of Riches). In those articles, I hinted (at best) at the extent of the data I keep and analyze.

Important data that I keep are the number of projects I have been offered, the number that I accepted and the number I declined, and as much detail as I can about the projects I declined, but with particular focus on size, offered fee, subject matter, and schedule. I usually review and analyze this data quarterly, about the same time that I prepare my income information for transmittal to my accountant for the quarterly returns. (I know that many, if not most, of my colleagues do their own quarterly payments; after all, it is a simple form. But I have made it a practice over my years as a freelancer to always use an accountant even though the accountant’s services are not free. For my business it is worth the fee. The accountant also looks at the data I have collected and sometimes offers a very valuable insight into my business that I have overlooked.)

This year has been significantly different than previous years. When publishers started offshoring, I could see a trending decline in the number of projects I was being offered. Interestingly, at the height of the offshoring and of the consolidation of the publishing industry, a key indicator was the low number of projects that I declined. (I should note that I do track the reason why I declined a project. This is important data. It makes a big difference in my analyses if the reason was fee, schedule, project size, or subject matter, or a combination of these four. For example, if I declined a project because it was outside the scope of the areas in which I work [e.g., a historical romance novel], then that particular project plays a very minimal role in my analyses; in fact, other than being counted as a declined project, it has no role in my analyses.) At that time, few projects were declined.

I could then trace a leveling. Every year following the plateauing of the accepted-declined numbers, I could reliably estimate the amount of work I would have each quarter of the following year, from whom the work would come, and the type of work it would be. That information helped guide my marketing: how much marketing I needed to do, to whom it should be directed, and when it should be done.

Beginning in the last half of 2012 I noticed that what had been plateauing was changing. The number of projects and the size of the projects being offered were beginning to increase. Where previously the number of projects being declined had remained low and steady, the trend was starting to show an increase.

The data for 2013 reinforced this trend, with the numbers steadily, but slowly growing. Also the data showed an increase in the effective hourly rate, which indicates an improvement in efficiency as well as an improvement in the types of projects accepted.

For the first quarter of 2014, the data demonstrates a continuation of the trend. But the data shows a significant spike. For example, in the first quarter of 2014 I was offered and declined as many projects as I had declined for the whole year in 2011 and 2012. The data shows that the number of manuscript pages in the declined projects equals 46% of the number of pages that was accepted.

Perhaps more importantly, the data shows that clients increasingly tried to alter schedules in hopes that by doing so I could fit the projects in my schedule. This is an important bit of knowledge because I can look at, for example, 2007 and see that in 2007 clients were willing to alter production schedules for very few projects, but in 2014 it changed to the majority of projects.

The data indicates to me that, at least within my niche, boom times may be coming. The first quarter 2014 data is an eye-opener for me. I note that revenues are up 61%, the size of the projects under contract is up 143%, and the number of projects being offered is up 218%, but I declined 58% of gross number (or 46% in terms of manuscript pages), which is also an increase. Unfortunately, because editing is hands-on work that has limits on what can be automated, the number of projects that I can accept is governed by the same key determinants — number of manuscript pages, project difficulty, and schedule — that existed in 2000, which limited the number of projects I could accept in 2000, still control the number of projects I can accept today.

But data analysis also discloses how efficiently I can edit. The more efficient I am, the higher the number of pages per hour that can be edited. The higher that number is, the more projects I can accept; conversely, the lower that number, the fewer projects that can be accepted.

Although the percentages noted above look great, it needs to be remembered that they represent just the first quarter of 2014. Second quarter data could plummet those numbers when applied year to date. My point is that although analysis of the first quarter is important in the decision-making process for upcoming months, it cannot be the sole determinant. At most it is a guide. Had the numbers been down, however, the importance of the analysis would be much greater; the analysis would be a warning of a negative trend that requires immediate corrective steps.

As I said earlier, my first quarter results indicate a change in the publishing industry for my niche and implies that boom times are coming. But even if boom times are coming, who knows how long they will stay. It could be fleeting or it could be years. The answer lies in the data I continue to collect.

What does your data tell you about upcoming trends for your business? Are you doing better than previously? Do you limit your analyses to comparing gross revenue? If so, what does that comparison tell you about your business and what you need to do?

Richard Adin, An American Editor

March 19, 2014

The Business of Editing: Recordkeeping II

In The Business of Editing: Recordkeeping I, I discussed the importance of keeping records to determine whether it is better for you to charge by, for example, the page or the hour. But that article gave a very limited view of why recordkeeping is important.

Businesses run on data. As freelancers, we are well aware of the reliance of corporate clients on data — the data is used to determine everything from whether a new edition of a book should be undertaken to how much should be budgeted to produce the book. Although we do not have the same issues to think about, those that we do have are as equally weighty for our business.

For most freelancers, the beginning year(s) are devoted to accepting paying work of any type. When I first started, I accepted book editing, book proofreading, journal article editing, advertising, desktop publishing, and whatever other assignments came my way. And I kept detailed data on every one of those assignments.

Every couple of months I would analyze the data, but it wasn’t until I had about a year’s worth of data that I could draw conclusions. The data told me that for me:

  • advertising work didn’t pay
  • proofreading didn’t pay
  • book editing was the most lucrative work — but only if
    • it was on a per-page or project-fee basis
    • the manuscripts were of a sufficiently large size
    • the work was nonfiction
    • the work was not for academic presses
    • the work was not directly with the author
    • the work was copyediting

I also learned other things, such as what types of subject matter were best for me and that I could increase profitability by working with other editors.

Let me emphasize that the above were lessons I learned based on my experience and my data. I am not suggesting that they are true lessons for anyone else. Rather, the point is that the collection of data can help direct your business into the areas that are most lucrative for you.

Data also helps guide marketing efforts. Once I learned what was best for me, I was able to focus my marketing efforts on those services and (potential) clients. I stopped trying to be all things to everyone; instead I focused solely on those things that had the greatest potential to help me reach my goals. Once I realized that editing fiction was less lucrative for me than editing nonfiction, I eliminated my marketing efforts to fiction publishers and refocused my efforts to nonfiction publishers.

All of that is well and good, but the focusing of my efforts was not the biggest boon I got (and continue to receive) from data collection. Rather, the biggest boon is identifying those projects that were financially more successful and those that were less successful.

With that identification (which is something you cannot readily do if you charge by the hour because hourly charging makes all projects equally successful, regardless of whether that is the best or least success you can have), I was able to focus on what made one project more successful than another. I was able to glean the stumbling blocks.

One example: I discovered that projects that had hundreds of references with each chapter were a mixed bag of success. Those that were second or subsequent editions were more likely to have greater success than first editions because authors would often follow the citation formatting of the prior edition, but if it was a first edition, there often was no uniformity to the style the authors followed.

I also discovered that the two primary problems that I encountered with references were wrong journal abbreviations and wrong format of author names. The questions were (1) could these problems be solved or at least mitigated and if so, (2) what are the solutions? The solutions took some time to formulate, but having identified the problems, I could focus. The ultimate result was the creation of my Journals macro and the Wildcard Find & Replace macro. My journals database now approaches 20,000 entries (see Business of Editing: The Logistics of Large Projects for more information), which makes checking and correcting journal names easy and accurate. The Wildcard macro makes it possible to fix many of the incorrectly formatted author names. Combined, the two macros significantly reduce the time I need to spend on the references.

Of course, other problems also needed addressing, but I would not have been able to identify common problems in the absence of the data; in the absence of the data, I would have been able to identify only the problems in an individual project, which may not have recurred in other projects.

Ultimately, the more information you can parse from the projects you work on and can categorize, the more you will be able to identify common problems among your projects that you can address. The more of these that you address, the more profitable you can make your business.

There is all kinds of data worth collecting, but I have found one of the most valuable to be my churn rate; that is, how many pages an hour I can edit. That number varies by project and project complexity, but I have found it important to track. I know that I need to churn a minimum number of pages per hour (on average across a project) to meet my goals. When I see that a certain type of project consistently falls short of that minimum number, I know that I need to rethink accepting such projects.

As I hope is evident, data is the lifeblood of even a freelancer’s business. The more effort you put into collecting and analyzing data regarding your work, the more likely it is that your goals will be met. This endeavor is well worth the time and effort required.

What data, if any, do you collect and analyze? How often do you review the information? Has it helped guide your business?

Richard Adin, An American Editor

March 12, 2014

The Business of Editing: Recordkeeping I

Have you ever wondered why some businesses are successful and others are not? One key ingredient to being successful is knowledge — knowledge about one’s business.

Think about all the ways companies like Google and Facebook collect data on those who use their services — all the ways they “invade your privacy.” Why do they and other companies mine their users for information? Because data is important and these companies either want to sell others data about you or want the data to determine how best to reach you.

It’s true that editors don’t need the same information or even the same detail information, but we still need information about how our business is running. We need to know, for example, what our minimum effective hourly rate needs to be in order to ensure that we charge clients enough to meet our bills. (For a discussion on the effective hourly rate and what to charge, see the 5-part series Business of Editing: What to Charge. Part V includes links to the prior parts. The series should be read in order.)

Note: The following discussion centers on editing and editors. Modifications need to be made for writers and other freelancers, but the basic concepts hold true.

To determine what to charge, how to charge, and whether we are doing the best we can, we need to have data. Consequently, we need to keep records of what we do and know how to analyze those records.

Rule number 1 is to always track your work time. All analysis begins with knowing the amount of time spent on a project, how much time was spent working during a week, how many weeks of work we have over the course of a year. And we need to distinguish between billable work and nonbillable work. Every business has both, but it is the billable work that has to pay for both itself and for the nonbillable work. Nonbillable work includes the time we spend marketing and participating in online discussions and anything else that is work-related but for which we have no client to whom we can bill the time.

Rule number 2 for editing is to always convert a project to pages. It doesn’t matter what formula you use as long as whatever constitutes a page remains constant. By constant I mean that you use it for all your calculations, including how you would charge a client if you were/are charging using a per-page method.

Rule number 3 is that you collect the data for each project as a standalone as well as for projects cumulatively. That is, Project Alpha may provide data of 32 hours, 210 manuscript pages, and a fee of $800, and we need to know that information for Project Alpha. Project Beta’s data may be 21 hours, 250 manuscript pages, and a fee of $525. Project Gamma’s data may be 41 hours, 207 manuscript pages, and a fee of $1025. Cumulatively, Alpha, Beta, and Gamma’s data equals 94 hours, 667 manuscript pages, and $2350 in fees. As additional projects are completed, the cumulative numbers will grow.

Hours should be kept in quarter hours, rounded up; that is, if a project takes 5 hours and 3 minutes according to our timer, it should be calculated as 5.25 hours. There is always some unaccounted for project time and the rounding up to the nearest quarter hour accounts for at least some of it. My experience has been that over the course of time, the rounding up actually undercounts the actual time spent on work, but not by enough to matter for our purposes.

What do we do with this information?

The data used for Projects Alpha, Beta, and Gamma above assumed the billing method was $25 per hour. But we need to analyze the data to determine if this was the best billing method for us.

The very first bit of information we need to determine is what our effective hourly rate (EHR) needs to be. Is $25 an hour sufficient? It may be all that we can charge our clients for competitive reasons, but that does not mean $25 meets our required EHR. (Again, see the discussion of EHR referred to above.)

If what we can charge our clients and our required EHR do not at least match, or, better yet, exceed our EHR, then charging by the hour is not in our best interests. Even if the hourly rate we are charging meets or exceeds our EHR, charging by the hour may not be in our best interests.

Next we need to analyze each project on its own merits. Always remember that when we charge by the hour, the hourly rate we are charging is the most we can earn. Alpha was 210 pages, took 32 hours, and earned us $800. If we had charged $3.50 per page, we would have earned $735, or $22.97 an hour. In this instance, it appears that the hourly rate was advantageous.

Beta was 250 pages, took 21 hours, and earned $525. At $3.50 per page, the fee would have been $875 or $41.67 an hour. Here we took a beating charging by the hour. Gamma was 207 pages, took 41 hours, and earned $1025. At $3.50 per page, we would have earned $724.50 or $17.67 an hour. Again, on an individual basis, the hourly rate was best.

But what about cumulatively? Together the three projects were 667 pages and 94 hours for a total fee of $2350. At $3.50 per page, the fee would have been $2334.50, or $24.84 per hour — in other words, either choice was about the same. And if our required EHR is $25, the data, so far, shows that either hourly or per-page is an OK choice.

Where we have trouble is if our required EHR is higher than the $25 that competition will let us charge. We also have trouble if clients balk at paying for 41 hours for a 207-page project. Also, as we add more projects to the databank, we may find that Project Gamma was an anomaly and Project Beta was more typical, in which case we are losing significant sums by charging by the hour.

But the point is the importance of recordkeeping. Because we have the data, we can verify our choice of how to bill. In the absence of the data, we do not know if we are making the smart choice or not.

The data also gives us insight into projects. For example, I would want to know why the shortest project took the longest amount of time to complete and the largest project took the least amount of time. What was the difference? Did I do something differently? Is there something different that I could have done?

Although the data indicates that financially we chose wisely for these three projects, it also points out that there is something we are doing incorrectly. Our goal should be to do more in less, that is more pages of editing in less time editing.

The other purpose of recordkeeping is to take a long view of our work. I discovered early in my career, that as the data included more projects, I was losing significant amounts of money adhering to the hourly based system. Year after year the data demonstrated that while on some projects I lost money charging by the page, overall I did much better, which is why I have charged by the page for 28 years — the yearly and multiyear data keep reinforcing that per-page is best for me, in addition to being the only effective way to meet and exceed my required EHR.

I review my decision regularly. Should the data change, I would change. But I would not base a decision on just a few projects nor on anecdotal evidence. Consequently, I maintain records on every project. Recordkeeping is vital to business success because that is how the data needed to make business decisions is obtained.

(For the next part, see The Business of Editing: Recordkeeping II.)

Richard Adin, An American Editor

January 21, 2013

The Business of Editing: New Year, New Books

It’s a new year and one of the first tasks I undertook as the calendar changed from 2012 to 2013 was to create the “books” I will use during 2013 to track how my business is doing. It doesn’t take me long to create the new books, less than an hour, but it is — aside from obtaining business to keep track of — the most important task I will undertake in the new year.

I know that there are many ways of keeping track of how well one’s business is doing. Over my 30 years as a freelancer, I have modified not only what information I keep, but how I keep it. About 10 years ago, I settled on my current system, which has been holding up well for me.

But before deciding how to keep the records, the decision as to what records to keep must be made. Once I decided on the information I needed, I then decided on how I was going to keep and use the information.

Basically, in addition to the usual chores of tracking income and expenses, there is certain information I want to know about each project I work on. Item #1 in the must-know column is how much time I am spending working on a project. Even the editors who subcontract to me are required to include on their invoices the number of hours worked.

Don’t misunderstand: I do not care if a subcontractor takes 10 hours or 30 hours to complete a project; I care that the effective hourly rate I am receiving from a client is sufficient to warrant continuing to do work for the client and I care that the subcontractor is making a reasonable effective hourly rate. (I discuss effective hourly rates in Thinking About Money: What Freelancers Need to Understand.) As part of the effective hourly rate discussion, I also keep in mind my Rule of Three, which is a critical determinant of whether I keep or fire a client. (Note, however, that this rule does not apply to one-shot projects such as are often encountered when working directly with authors.)

Keeping track of hours and my effective hourly rate also serves as a clue as to whether I am working as efficiently as I can. The data give me information so that I can determine that over the course of time my effective hourly rate for a project should be at least $x; that is, the average of all my projects over that period. If that number is $75 an hour and I find that my most recent projects came in at $35 to $50 an hour, I know I need to do some investigating. So, accurate hours are important — even though I charge a per-page or project rate rather than an hourly rate, my thinking is geared toward the effective hourly rate (EHR) statistic.

Another bit of information that I want to know is how projects break down by individual publishers and within individual publishers, by inhouse editor. Am I getting a balanced workload from a publisher/editor or are the projects skewed in one direction? If skewed, are they skewed toward a low EHR or a high EHR?

Along with that information, I also want to know how problematic a project was. For example, was the project loaded with incomplete references that were almost uniformly in the wrong style and thus requiring an excessive amount of time to edit? Consequently, I also rate a completed project on a scale of 1 to 10 (1 being easy, 5 being average or “balanced,” 10 being excessively difficult). If I find that a particular inhouse editor sends me only projects that rate 8 or 9, I think about whether I want to continue to accept projects from the editor.

There are a lot of factors that go into my rating a project, including how much information I did not receive about a project that I needed and how extensive the client’s style exceptions are (e.g., it raises the difficulty number if the client tells me to adhere to AMA 10th ed. style, but then sends me a list of 100 exceptions). This is the most subjective of the data I keep, but it is important because the last thing I want is to find that nearly all my projects are in the 8 to 10 range, but is without compensation that matches the difficulty level.

Of course, I also track page count, but do so for more than calculating the EHR: I want to track ratings along with manuscript length. This ratio is one reason I prefer very large projects (i.e., thousands of manuscript pages) — such projects allow me to get a rhythm going and make more effective use of editing tools such as EditTools. Page count also tells me how busy I am and whether or not I should consider doing more books in a particular series.

There are other little bits of information I track, but the above are the keys. I use both QuickBooks Pro and Microsoft Excel to maintain my records. QuickBooks Pro makes it easy to compare performance over time; for example, I can easily compare income and expense information for the first month of 2013 against the first month of 2012, 2011, and as far back as my first use of QuickBooks Pro. QuickBook Pros also allows me to check on sources of revenue in detail. And tracking accounts receivable is a breeze. (It also makes it easy to generate the reports I need for my accountant for tax filings.)

Excel lets me easily keep duplicate information about billing (I like to know that should one program fail for some reason, I have an alternative handy) and it allows me to track the bits of information I am interested in collecting and to manipulate them for analysis. QuickBooks Pro doesn’t require a resetting of the forms each year — it is a continuous history; Excel, however, does require me to reset the forms each year. I’m sure that a more advanced user of Excel wouldn’t have to reset the forms, but using Excel is not my job, editing is, and it is pretty easy to reset the forms for each new year. (I do retain, however, the prior years’ forms for a comparative history. I have Excel information going back to my first days as a freelancer.)

Now that we are at the beginning of a new year, you should think about what data you want to keep and how to keep it. The key is to make sure that you have enough data to make business-related decisions on facts and not on supposition. Keeping track of data is not time-consuming; it is necessary to maintaining a healthy and prosperous business.

Blog at WordPress.com.

%d bloggers like this: