We all tend to think of New Year’s resolutions for how we’ll make the next year better than the last: we’ll exercise more, eat better, spend more time with loved ones, and finally write that book.
But how often do you look back on the previous year and make sure that you’ve wrapped everything up neatly so that you can start the new year fresh and clean?
When you’re a freelancer, it’s particularly important to close out the previous year right, paying attention to details and making sure you’ve set yourself up for success moving forward.
To help you start the new year in great shape, let’s take a look at the 4 key things you need to do to evaluate and settle the past year.
1. Organize All Your Paperwork
Being a freelancer is amazing because it gives you the freedom to pursue what you love on your own terms.
But it also means you have to do the scut work, too—you and only you are responsible for all the paperwork and record-keeping required to run your business.
The end of the year is a great time to make sure you’ve got everything in order—many businesses take a holiday hiatus, so you may have a little downtime in between client requests or projects to handle the stacks of paperwork that you’ve been ignoring throughout the year.
It’s not nearly as intimidating as you might think—take an hour or two each day for a week doing these simple organizing tasks and you’ll be in good shape to start the year clean!
Step 1: Set Up a Filing System
Do you have a filing system for your business documents? If I asked you right now if you have any unpaid invoices outstanding, could you answer? What if I asked you how much you’d spent on business supplies in October?
If you’re relying on a combination of memory, papers jammed into shoeboxes, and stacks of notes on your desk, now is the time to sort yourself out.
Set up a folder on your desktop to organize all your business documents into and consider using a cloud sync service like Box, Dropbox, or Mega to ensure that you have secure copies stored in offsite as well, just in case anything happens to your main computer or hard drive.
What you do with that folder is up to you—some folks like to sort everything into subfolders by month, while others prefer having a folder for invoices, a folder for receipts, and so on.
Whatever works for you is the right system—what matters is that you use it.
Sort through all your paperwork from this past year—invoices, receipts, tax filings, payment notifications, contracts, the works—and drop the files into the appropriate folders in your shiny new system.
It might take some time to get everything sorted, especially if you haven’t had a system in the past, but it’ll be well worth the effort when you can simply zip the folder and send it to your accountant when tax time rolls around.
Step 2: Digitize Your Receipts
While you’re sorting your paperwork, take the time to digitize all your receipts for the year using a handy service like Shoeboxed or Wave Apps so that they’re ready to send off to your accountant or log in your DIY software come tax time. You can also store them in Google Drive, Evernote, or another cloud service for easy access.
If you don’t have a scanner, don’t worry! You can use a free smartphone scanning app like Adobe Scan or Microsoft Office Lens to save your receipts to your phone or send to the cloud for safe storage.
Step 3: Commit to Keeping Up
The greatest filing system in the world can’t help you if you don’t use it.
Commit to keeping up the great work you’ve started by scheduling time into your week to do your paperwork. Figure on it taking about an hour a week to make sure all your ducks are in a row, then put that on your calendar and keep the appointment with yourself.
Personally, I spend every Friday morning making sure that I’ve filed all my receipts from the week, followed up on any invoices or client requests, reconciled my bank account, and generally have the business part of the week ready to wrap.
It usually takes no more than an hour—and often as little as 20 minutes—and it saves me a whole lot of hassle later on. If I make it a regular part of my week and settle down to do the paperwork with a nice latte in hand, it actually becomes a nice break from the bustle of managing a busy publishing company’s editorial department.
2. Review Your Financials
With your paperwork in order, you can get a better idea of how your year went financially—a critical exercise for any freelancer!
Look for Patterns
Personal finance expert and freelancer J.R. Duren of HighYa suggests doing a systematic overview of your finances for the year. “If you haven’t already done it, create a spreadsheet and write down how much you made pre-tax each month, how much you paid in estimated taxes, and how much you earned after taxes. If there’s any doubt, you can log into your IRS account and see your payment history.”
This will help make sure that you’ve kept up on your quarterly tax payments and won’t have any surprises waiting for you in April. Plus, you can start planning ahead for next year’s tax payments and review whether you’ve had any particularly high or low months.
With that kind of systematic understanding of your business, you can plan ahead to look for more work in traditionally slow months for your business, or look for ways to manage rush months better.
Prep Your Reports
Maddy Osman, an SEO expert and freelance writer, likes to make sure that she’s reviewing her transactions (both payments from clients and expenses) at the end of the year. She’s incorporated her freelance business, so she says, “This way, I can generate the reports I need to send 1099 forms for my contractors and file my company’s annual report on time.”
For Maddy, the end-of-year period is perfect for this kind of work. “Assuming that you’re taking time off from client work, the holidays can be a great time to work on admin stuff without the burden of also fielding client emails and satisfying other due dates.”
Update Your Rates
Digital marketing consultant Mazdak Mohammadi of Blueberry Cloud likes to review his financials with a little extra care at the end of the year, because tax payments and holiday shopping often add to financial pressure as a freelancer. But he says that it’s always a helpful exercise regardless.
“I look at my cost of doing business, and how much I am charging for my services. I decide whether increasing prices for services and products is appropriate, and communicate any changes to my clients with a fair amount of heads up—usually 1-3 months.”
Set Financial Goals
Carrie Pobre, the vice president of Sandler Training in Los Angeles, suggests going one step further and using your review of the past year to establish financial goals for yourself for next year. “In order to achieve your income goals, it takes using the right behaviors, attitudes, and techniques to get you there.”
Carrie suggests figuring out how much you’d like to bring in for the year and breaking it down by how many projects or clients you’d need each month to make that happen. Ask yourself how many new clients you need to gain to make it happen.
She says, “Prospecting behaviors such as networking, cold calling, and asking for referrals are three strong ways to find them. Review your weaknesses and decide where improvement is needed. Without doing this reflection and then very proactive behavioral work, nothing is going to change from last year.”
Which brings us to the next key action you should take to get ready for a fresh year…
3. Strengthen Your Client Relationships
Having great client relationships is the foundation of any successful business. Take the time to check in on your relationships at the end of the year and you’ll be able to start the new year right.
Make a List and Check It Twice
Independent anesthesiologist and business owner Alex Roher of San Diego Botox says “As a freelancer, you’ll almost always be handling more than one client at a time. I always tell my freelancers to make a list of all their clients and the nature of their business. I also ask them to organize them by date, name, business type, work type, and status.
“This will help them determine if they still have some deliverables left before they end the year.”
Close Out Your Emails
With that client list in hand, you can do what digital marketing director Michael Russell of Ratchet Straps USA recommends: closing out your emails for the year.
“One thing that has really helped me over the past few years is cold emailing all my clients at the end of the year, asking if they want to continue with us. One of the best ways I do it is by emailing: ‘Hey, I saw that you haven’t had a chance to respond or the email has become lost. My accountant wants to wrap up finances for the year and wanted to see if it was a quick nay or yay to continue.’ It works like a charm and you can go in to next year fresh with last year staying in the past.”
Send a Friendly Greeting
Even if you’re not looking to close out invoices with your clients, make sure to reach out to them at the close of the year.
New Year’s is a great time to do this—sending a heartfelt wish for a great year to come has none of the potential baggage of sending a holiday greeting and has the added benefit of suggesting that you’d like to continue the relationship for the long haul.
Mazdak, the marketing consultant, recommends sending either a paper greeting or a digital card thanking your clients for their continued business and wishing them all the best in the new year.
4. Review Your Progress and Priorities
The absolute most important thing you can do at the end of the year has nothing to do with paperwork and emails, though—and everything to do with looking at your own processes, motivations, and needs.
A thorough year-end review can help you determine your goals for next year and create a strategic action plan to reach them.
- What work did I enjoy most this year? Why?
- How can I do more of that next year?
Mazdak Mohammadi says, “I create goals based on the answers to these questions that determine next year’s area of focus, and begin to work backwards from these goals to help formulate a logical plan.”
Once you’ve determined what you’d like to do more of, areas for potential growth, and other targets, you can use agile methods to help you plan and achieve your goals for the year in a manageable, stress-free way.
Freelance work can be incredibly rewarding, especially if you take a systematic approach to getting your admin work done so you can focus more on what drew you to the work in the first place.
Set aside a few hours to close out your year and plan ahead for next and see just how great the new year can be for you and your business!
For more business tips for freelancers, read on:
- 6 Financial Tips for Freelance Writers and Independent Contractors
- Business Plans for Writers: Planning Your Way to a Profitable Writing Career
- Author Tax Prep Checklist: Free Printable Tax Organizer for Writers
Kate Sullivan is an editor with experience in every aspect of the publishing industry, from editorial to marketing to cover and interior design.
In her career, Kate has edited millions of words and helped dozens of bestselling, award-winning authors grow their careers and do what they love!