Clear Systems & Processes: Seamless Financial Management

When asked what advice I would give other freelance editors, I answer with this every time: Take the time to get clear systems and processes in place.

This is the best thing you can do for your business. And the good news is, you do not have to reinvent the wheel.

You can borrow from others’ systems and processes, then customize to make your own.

This blog’s system and process topic: financial management

Financial Management System

First, invest in financial management software or create your own. This is your system.

Many financial management programs exist out there with different features and price points.

You want to find a system that will do all or most of these tasks:

  • Record your income and expenses and categorize them
  • Track monthly gross, net, and expenses
  • Track quarterly gross, net, and expenses
  • Track yearly gross, net, and expenses
  • Track total-to-date gross, net, and expenses
  • Generate report(s) for tax time
  • Configure how much you owe in taxes
  • Remind you to pay your taxes
  • See what percentage of gross went toward expenses and taxes
  • See the amount spent in a given category

I couldn’t find a system that would configure how much I owed in taxes and most of the systems I explored had too many unnecessary features, as they were more for big businesses, so I built my own system in Excel that does all these tasks, and I sell it to other editors.

You can also just set up your own Excel spreadsheet if you want to go bare minimum and just track income and expenses.

I explored a variety of financial management systems and have listed their price and pros and cons for each one:

  • Dubsado
  • 17Hats
  • Bonsai
  • FreshBooks
  • Wave
  • Quickbooks
  • Beacon Point’s Business Finance Tracker (the one I built)

Financial Management Processes

Once you have your system, you need clear processes for ensuring you stay up on your bookkeeping.

This is a process you only need to do once, then modify as needed.

Set up your financial management system with your reoccurring bills (invoice fees, license, website domain) etc. Some systems allow you to create these one time, select when you pay them, and then they will automatically show up in your expenses on the due date.

Set up your system with your income and expense categories.

If you have different avenues of income, and you want to track how much money you get from each revenue stream, then set up income categories.

Example Income Categories:

  • Course
  • Editing
  • Presentations

You may not have income categories, but you should definitely set up your expense categories because you will have to enter your expenses by category come tax time—plus it is helpful information to know how much money you’re spending on what.
Example Expense Categories:

  • Advertising
  • Business Learning
  • Office Expenses
  • PayPal Fees
  • Website

Some systems already have built-in categories. I found this annoying, as I had to go through and delete all the ones that weren’t applicable to me, and some didn’t even allow you to delete them, which made for a long list you had to scroll through to get to the ones you want.

But all systems allow you to create your own categories, and this is great!

The basics of managing your books are pretty simple. You need a record of money in and money out.

Every time you earn money, record that income. And every time you spend money on your business, record that expense and make sure to select the correct category.

If you already set up your categories, you just select them from a drop-down menu.

This screenshot shows some of my data entries in my system.

If you have a good system, by keeping up on your data entry, you will automatically know your monthly, quarterly, and yearly gross and net.

Gross = total income received

Net = your profit after all expenses

Then, you also want to record your tax payments. While you may pay them quarterly, if you only record them when you officially pay them, you won’t have an accurate picture of your monthly net, as your net for the months you pay taxes will be much lower than the others.

If this matters to you like it does me, you will want to record a monthly tax payment even if you pay taxes quarterly (see more about taxes in my upcoming blog Taxes for US Editors).

For example, even though I don’t pay my taxes in February, I record how much I set aside so I have an accurate net for that month. My system automatically tells me how much to set aside in taxes when I select “Federal Taxes” and “State Taxes” for the type.

At the end of every month, I follow the steps below to ensure my data entry was accurate and that I have all the documents I need come tax time.

Step 1: Generate a monthly report

For this, go into your invoicing software (for me that is PayPal) and generate a PDF report. Save this report as [Month] [Invoice System] Report. So my June report would be called “June PayPal Report.”

I save this in my business finance folder à Tax and PayPal Reports à Year.

So all my PayPal statements for 2024 are in the 2024 folder. This will be very helpful if I ever get audited. This is proof that my income was reported accurately.

If you have income from other sources (direct bank transfer, cash, check, etc.), you will want record of those as well.

Step 2:  Check accuracy of income reported

Using the monthly report you generated in step one, check that all income and invoice fees were reported accurately in your data entry system.

Typos happen. So make sure you didn’t put in $1,450 when it should have been $1,350.

Correct any inaccurate income and invoicing fee entries.

Step 3: Check accuracy for expenses reported

You can do this in a number of ways, but I’ll just explain how I do it.

I have a budget system that I use (Rocket Money). Because it is connected to my bank account, it shows all transactions. And about three times I week, I go in and make sure transactions were labeled accurately. All business expenses are labeled as “business.”

So I go to the “business” section of my budget and make sure that every transaction listed has been entered into my system. I sometimes forget to add in an expense right after making it, so this helps me make sure I entered them all in.

I also check for typos on the amounts.

I then make sure I have a copy of every receipt for every business expense that month. These are saved in my Business Finance Folder –> Receipts à Year

Again having these is important in case I ever get audited. So as part of closing out my month, I make sure I have a receipt for every expense that month (minus the invoicing fees, which are on my PDF statement generated in step one).

If I am missing one, I hunt it down and add it to the folder.

Step 4: Configure monthly taxes

Now that I know all my data entries for the month are accurate, I can determine how much to set aside in taxes.

The program I built does this automatically for me. I haven’t found any other financial software that does this, but in my blog “Taxes for US Editors,” I explain how to configure this.

Since it is automatic for me, I just put in the date and select “Federal Taxes,” and it tells me the amount to set aside. Then I do the same for state.

Once my system has the amount to set aside, I immediately transfer that money out of checking and into my holding account.

Step 5: Configure my real hourly rate

On my Project Data Tracker, I have a Month and Year sheet that I use to track my net hourly rate (what I really pocketed per hour).

Each month, I enter in my monthly gross and net, then my time spent on billable and nonbillables. This then displays what I grossed per hour and what I netted after expenses per hour for that month. It also shows the year to date totals.

In order to get an accurate picture of what you’re really making per hour, you have to run a timer when you’re doing anything business-related, whether it is billable or not.

See this example of March (I changed a few entries here and there so my real data wasn’t on display)

So my per-hour rate might be *$50, for example, but this shows that I really pocketed $25 an hour after time spent on nonbillables and money spent on expenses.

(*I quote a per-word rate based on what I want to make hourly.)

Once a year, I generate a tax report so I have all the information I need to file my taxes—all in one report.

With some systems you may need to generate multiple reports to get the needed information.

You need to have

  • your gross for the year
  • the amount you spent in each expense category
  • how much you paid in estimated taxes and when you paid them
  • information on other deductibles like mileage, office space, etc.

I like to print out this report and put it in my tax folder for the year along with the other tax documents I receive, both in the mail and electronically.

Within your system, you can print out other reports that will help you do a review of your finances and make goals from there.

You can get reports that will show you:

  • Your monthly gross and net
  • Average monthly gross and net
  • Your yearly gross and net
  • How much you spent in each expense category
  • How much you earned in each income category (if you have categories)
  • Your quarterly gross and net income
  • The percentage of income that went toward expenses and taxes
  • Your total-to-date (this is the total amount over the life of your business) gross, net, expenses, and taxes

My system, Beacon Point’s Business Financial Tracker, shows me this information without the need to generate a report. I generate a tax report to get just what I need for taxes, but all this data is just displayed on the spreadsheets themselves.

So I use this data to reflect and analyze on my finances for the year and make goals for next year.

Some reflection questions:

  • Did you net less, the same, or more than last year and why?
  • What percentage of your net did you spend on expenses (excluding taxes)?
  • Do you regret any of your business expenses?
  • What expense categories did you spend more than you felt was worth it?
  • What was your per-hour rate (the real hourly rate you pocketed) after you factor in expenses and time spent on nonbillable tasks?
  • Was this net hourly rate more, the same, or less than your goal?
  • What would you like your pocketed (net) hourly rate to be next year? Can you meet that with your current rates or do you need to raise your rates?

I have a lot more than these ones on my reflection sheet, but this gives you an idea.


Get a system that works for you (either one you pay for or one you create), and set up processes that you repeat at certain intervals to ensure you keep your system up to date.

You certainly don’t have to do the processes I do. Use my processes as a starting point to figure out what works for you.

But whatever you do, don’t just stuff your receipts and invoices into a drawer or digital file and wait to organize them come tax time.

Stay on top of bookkeeping processes and financial management will seem seamless.


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About Me

With a passion for words, collecting quotes, and reading books, I love all things writing related. I will admit to having a love-hate relationship with writing as I am constantly critical, but I feel a grand sense of accomplishment spending hours editing my own writing.

Lest you think I don’t have much of a life, I should add I also enjoy dancing, singing, acting, eating out, and spending quality time with my husband and adorable kids.

I’m pretty cool. And you may want to be my friend. But in order for that to happen, you will need to know more about me than this tiny box allows.