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.
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.