Tracking Income as a Freelancer

I’ve talked about how feast and famine cycles can make the freelancer’s life challenging. Yet you can use those cycles to your advantage. An important thing you can do as you’re monitoring your freelance environment is determine when the busy and quiet times are likely to occur to help you plan your budget and work/home life accordingly.

Tracking progress

Personally, I track my hours and income on a Microsoft Excel spreadsheet using a format I created. I could pay for dedicated software–and I probably will at some point–but this approach allowed me to arrange the data in a format that made sense to me and allowed me to track the information I found most useful: hours, hourly rates, and month-end totals.

From these monthly spreadsheets, I created a separate sheet within that year’s workbook that tracks the monthly totals in graphical (bar graph) form month to month, so I can observe trends in my customers’ needs.

While it shouldn’t have surprised me too much, my proposal-based work tends to peak in spring and autumn. So, too, does my instructional design work. In a way, they both follow the school year, with slack periods in summer and during the winter holidays. The  one variable line of work for me happens to be the space industry, which is in constant development mode but has uneven technical writing needs. Yet when space customers are submitting proposals to the U.S. Government, they too follow the March-May and September-November peaks.

Why does all this matter?

In addition to helping you plan for family vacations, etc., knowing when your customers are busy can, also helps you plan when to hold onto more of your cash, knowing that quiet months that are likely to follow.

If you are new to an industry or customer, it would benefit you to ask when their busiest times are–their times of greatest writing need. This also helps you to balance your workload(s) among customers and to manage expectations should you have more than one customer requiring your services at a given time.

Lastly, tracking your hours over the course of a year can help you set expectations for yourself, should you be someone who worries about being too busy or not busy enough. This is not to say that surprise assignments won’t come up during non-peak months. However, having a notion about cycles and trends in your customers’ lines of business can help ensure that you are available to meet their needs when you’re needed.

About Bart Leahy

Freelance Technical Writer, Science Cheerleader Event & Membership Director, and an all-around nice guy. Here to help.
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