The accounting dilemma
I had a double shock last week. An agency client of mine contacted me to ask whether I’d sent an invoice last July because they had no record of one. Neither had I. But when I looked in the records of the documents I had translated and my archived e-mails I found they were quite right. I HAD done a job for them in July and I HADN’T invoiced it.
The first shock, obviously, was that a client should take the trouble to point out that I hadn’t asked for payment for work done. It’s not the first time it’s happened to me, but it’s certainly the first time it’s happened after so long. Had they not mentioned it I would have had no idea that I’d done the job six months ago without being paid. I thanked them sincerely and started working to put right the mess – not easy to resolve having just closed my accounts for the financial year.
The second shock was the terrible fallibility of my accounting system. How many other times, I began to wonder, had this happened? How much money had I simply failed to collect because I never asked for it? I should explain a few things. First of all, I hate accounting and admin but I’ve realised, ever since I began as a freelance fifteen years ago now, that I have to do it. That’s why I’ve developed a system over the years which I believe, in its way, is as good as any other I know. It’s also why, as soon as I felt I could afford it, I hired an accountant to keep my official records and fill in all my tax forms. I know there are people who would say this is unnecessary. Maybe it is, but I’m one of those who can add up a column of figures three times and get three different answers, even with Excel (some might say, particularly with Excel, which is hardly the most user-friendly of Microsoft’s contributions to the computing world). When I filled in my own tax forms I spent hours almost certainly getting it wrong. Now I win back those hours paying people who (hopefully) get it right, and on top of that I can set the fee against tax. That has to be a big gain for me.
Spreadsheets
But back to my system, because, unfortunately, my accountants can’t do everything for me. It works like this: when I finish a job I enter it on a draft invoice. Then, at the end of the month, I take all those drafts, one for each client, turn them into finished invoices and send them out. I’ve also created a book of spreadsheets for the year where I enter the amounts for each invoice every month against the clients’ names. That way I can keep track of payment. Easy, isn’t it? The problem is, of course, the human factor; in other words: me. If I forget to enter a job or send an invoice, as I did this time, the whole thing falls down and I don’t get paid. I also make mistakes on invoices – lots of them. To keep the clients’ details the same, I often copy and modify old invoices. But sometimes I forget to change the date or the number and, if any of the tax rates changes, as one did unexpectedly this year, I might forget to change that as well. So despite my accountants, who patiently point it out to me every time I get it wrong, I can still mess things up fairly spectacularly.
Some might say it’s a primitive system, but if I was to replace it with a piece of software, the program would have to save me time and/or stop me making mistakes. I know there are some quite sophisticated accounting and invoicing tools on the market and I’ve looked at some of them, but so far I haven’t found one that convinces me it could do that.
So where does that leave me? Simply with a New Year’s resolution to try to make fewer accounting mistakes. I don’t think that’s good enough, but I don’t really know what else to do. So if you have any ideas or recommendations, please leave your comment here. I’ll be delighted to hear from you.
“We started working with Simon for the translations of a magazine that was published in 2007 and we have carried on doing things together ever since. He now does all the translations of programmes and publications for our live music venues in Barcelona. We work to tight deadlines and I have to say that working with Simon is very fluid because he makes everything easy. He’s flexible, quick and very professional. Whenever I send him a job he gives a delivery date and he’s never been late, quite the contrary.”
Hi Simon
I don’t know if you’ve seen Claire Cox’s latest post, but some of that may be relevant to you: https://clairecoxtranslations.wordpress.com/2016/01/14/keeping-client-statistics-how-organised-are-you-2.
One thing I do to avoid missing a job is to have a macro that looks for the next project on my spreadsheet with a blank invoice number against it. That way, when I’m going through doing my invoices, I just use it to move to the next one with a blank until I get to the end or to jobs that I haven’t delivered yet. It seems to work for me.
HTH.
Best wishes
Oliver
Thanks for your comment, Oliver. I did see Claire’s piece, although her statistical system would be too complex and time-consuming for me to operate. People have suggested various things to me, but they all seem to be vulnerable to the same kind of human error that’s caught me out this time. Your system does sound interesting, though. I don’t have a spreadsheet with every project entered on it. Mine is really just for keeping an eye on my income and monitoring invoice payment. But if I logged every project, it would be much easier not to forget them. I’ll work on something.
My methods are not that modern either, but here’s what I do. I have two Excel spreadsheets. In the first I list all the jobs for the month in the order of delivery, noting price for the job, client details, etc. In theory, I add the job to this list as soon as it comes in. In practice, I often forget, which is why I go through my sent emails at the end of the month to make sure I haven’t missed anything. This is time-consuming but worth it if I have forgotten to add a job. The list also acts as my calendar so I can keep an eye on what needs to be completed when and to assess my availability to take on anything else. I then copy the info in this list to the end-of-month invoice for the client (most of mine prefer to be invoiced once a month only, which is usually fine by me).
In the second I list all the invoices for the financial year, grouped into months. When I log onto my bank account, I check to see if anyone has paid me, mark it as paid in the spreadsheet and see if anyone hasn’t failed to pay me on time.
Thanks for sharing your methods, Nikki. The job list is obviously what I’m missing. I think I’ll keep it as simple as possible, though, because I really can’t afford much more time to spend on admin.
I invoice most of my clients when I send them the translation so forgetting is not normally an issue, but I also colour code my folders: one colour for work to be done; another for quotes I’m waiting to hear back on; another when information is pending and another for work that needs to be invoiced if I haven’t done it straightaway. I also use Excel files to keep track of all of the above, but the colour system is the most effective as it’s very visual.
Thanks Catherine. It’s realy interesting to see the different systems people have developed.
Hi Simon,
How about using your email folders for this? In my case, I use Mozilla Thunderbird for all my email addresses, which I love because email can be easily moved, even to folders under another address.
I have one folder for "current jobs" and another for "ready for invoicing", then folders for each of my clients (invoiced jobs only). Each current job has its own subfolder with all the relevant email. The subfolder name starts with the due date (yyyy-mm-dd-hh:mm) plus client_ref etc., so everything sorts by deadline. Very convenient!
As soon as the job is done, the respective subfolder gets moved to the "ready for invoicing" folder and then as soon as it’s invoiced (or added to the monthly invoice), then I move it to the client’s folder.
If for some reason a job requires multiple invoices, it’s also useful to rename the folder by appending "_mult inv" or some other useful note to self.
Maybe something along these lines could help?
Thanks, Helen. It’s certainly an idea. I use the Gmail tasks function, which normally works reasonably well. I convert e-mails with jobs into tasks and then try not to mark them as "done" until I’ve included them on an invoice. The problem comes, as the post points out, with the human factor…