This months Author Business tip is to open a bank account for your writing and speaking.
This bank account can be another personal account, however you may want to talk to your bank to see what they have to offer. They may have a low fee account or another product that you can use.
You can also look at the online banks as, for the most part, you will need access to online banking so you can pay bills and track EFT income, a Visa/Mastercard debit card so you can pay for things, and a link to your PayPal account.
The advantages of having a separate bank account include:
- Keep your income and expenses separate from your everyday transactions
- Less temptation to just spend the money you receive!
- Easier to keep track of income to apply it against any invoices sent
- Easier to track transactions to enter into your accounts software or spreadsheet (or whatever you use to keep track of your income/expenses)
- Helps your accountant/bookkeeper at tax time
If you are outsourcing your bookkeeping, having your writing and speaking income and expenses in a separate account, then you can provide your bookkeeper with your bank statement that only has this information on it and not all your personal income and expenses.
When I started getting income, I opened a separate account as I needed to keep money aside to pay for different aspects of book publishing such as editing and layout. I also wanted to make sure there was money ongoing to use for sending out books, purchasing envelopes, and any marketing opportunities that may come along. By keeping my book money separate from my personal account, I know there is money to use for my books. It also helps me with budgeting for future opportunities such as attending conferences.