Maintaining Financial Records: As an author

Maintaining a detailed and accurate record of expenditures and revenue is essential for any author whether they published traditionally or self-published. Financial records are good for measuring growth, protecting one’s money, and filing taxes.

Keeping records can be simple using programs such as Excel, QuickBooks, and Quicken. Excel is the simplest program to use. If the author prefers pen and paper, purchase a notebook or legal pad dedicated to your author records solely. Keep receipts from sales, to gas, and other expenses. A big benefit to authors is a receipt book for direct sales/face to face sales. One can easily purchase one at stores such as Office Depot, Staples, or an online store, Amazon namely. Receipt books are dated compared to mobile card readers for credit card purchases.

However, a receipt book is a valuable tool to keep record of cash sells. Do not assume all book sales are made with a credit or debit card. During book signings and other high traffic events one card readers will slow the line down. Having a receipt book allows for two lines and smoother payment processing. When the process is easier for customers, they are more likely to fill out all their information and not rush. When customers rush, they are more likely to not fill out all provided boxes. The most important box often avoided while rushing is the email address box. For authors an email is too valuable to miss out on.

If an author has a customer’s email address they can add the person to their email list, their newsletters, and keep the customer updated on any new books, cultivating a list of repeat customers.
As an author keep track of book sells. Detail what type of sale took place and for which book. If an author has more than one book keep a spreadsheet for each book. An author who is traditionally published should get this information from their publisher.

Self-Published authors should break down each book sale by format, transaction, amount, date, location, and customer name as shown in Table 1.

Table 1.

Breaking down sales this way will help the author to know which book format is selling better, if customers prefer cash over credit/debit more, and which location the author might want to revisit or skip next time. This type of information has the potential to increase an author’s revenue by avoiding low to zero sale locations, develop relationships with lucrative locations and repeat customers.

An author with the above information is able to measure their growth as an author and get better with each book release. Things you measure as an author to see if you are growing: Revenue, Increase Sales, Increased Profits, Customers. Self-Published or traditionally published an author must measure their growth individually and measure the growth of their books. Do not depend on the publisher to dictate your growth. Take ownership of your business. Being an author is a business.

At the end of the year or quarterly do a profit and loss statement. This goes for traditionally and self-published authors. This is more important for those who self-published but also useful for those who are traditionally published. If you are traditionally published doing a profit and loss statement for your books only will help you to know if the relationship with your publisher is beneficial to you and your career, if the partnership might end and they stop printing copies of your book. You will also be able to gage if you should write another book in the same genre, if you should write a sequel, etc. If there is a great loss you might save your money by not writing a sequel. Having information helps an author to make better decisions for themselves.

Self-published authors must consider the same things with their profit and loss statement concerning their books. Should they continue the world they created, or should they spend their time and money in another genre?

If there are high numbers of sales but little profits, an authors must examine why. Are they not getting paid fully? Are they spending money beyond their revenue that they can start cutting back on? Is the publisher intentionally or unintentionally not paying the author their full royalties? Is there an error with the distributor (KDP, IngramSpark) they are using?

Authors protect your money!

All of the information the author collects year-round will make filing taxes a whole lot simpler. While filing taxes the author must know their revenue and expenses whether the author starts their own publishing company or publishes using KDP, revenue and expenses is always needed. Depending on the expenses, an author may get a deduction.

See a video on author revenue and expenses below