One of the biggest factors that draw writers into freelancing is the prospect of being their own boss. There is no denying the appeal of becoming the master of your own destiny and earning a living doing something you love.

As you begin your freelance writing journey, it is easy to become caught up in the euphoria of starting a new venture. While this is understandable and a good sign of your level of commitment to this new endeavour, some writers struggle with the financial realities of freelancing.

Many writers view their writing as a creative process and focus heavily on building and expanding their skills. It is very important to focus on your talent — the better your reputation, the more clients you’ll add to your roster — but you must avoid developing tunnel vision and ignoring the financial aspects of freelancing.

Being a freelance writer requires wearing multiple hats. You’re not just a writer, but also a business owner, a marketing agent, an accountant, a client services agent, a human resources officer, a contract negotiator, and even a legal assistant.

This can prove to be a struggle for some writers, particularly if they’re more geared towards the creative aspect rather than being business-minded. Dealing with money can frighten some new writers, particularly if they have no background in accounting.

Being successful is not just about landing jobs — though that is a big part — it is also about managing your finances to ensure that you’re maximizing your profits.

The good news is that you don’t have to run out and earn a degree in accounting. All you’ll need is a spreadsheet or financial journal — if you prefer a low tech method.

Here are three common financial mistakes made by freelance writers:

Not tracking all your income

A frequent mistake made by new freelancers is not accurately tracking your income. At the start of your venture, extensive tracking might not be necessary because you’ll probably have just a few clients. Regardless, there are four pieces of information you must know at any given time:

Who owes you money? What are the paying you? When are they paying you? Did they actually pay you?

Using a spreadsheet or journal is key to accurately tracking this information. It doesn’t need to be overly complicated. Simply list the client’s name and all the necessary financial information.

You can also expand this list by including due dates, nature of the work required, timelines, etc. Some writers prefer having all their information on one master sheet. That is also a highly effective way of keeping yourself organized.

Regardless of the method that works best for you, you must keep track of every penny that is owed to you. This will not only give you an accurate income forecast, but it will also help to ensure your clients are paying you on time.

Ignoring expenses

You don’t need to spend four years in college to know the equation for calculating profit:

Income-Expenses=Profit!

Just as you must account for every penny, nickel, dime, and dollar owed to you, you have to keep track of all the money going out of your business.

When you’re running a business from home, it’s very easy to incorporate work expenses with living expenses. For example, while out grocery shopping you might throw a package of printing paper into your cart and just think of it as part of your shopping budget rather than a business expense.Try to avoid falling into this habit.

Every penny spent on your business is an expense that you need to account for. This includes equipment like a printer or computer, office supplies (paper, pencils, pens), subscriptions, membership dues, etc. These expenses can also be claimed at tax time. By keeping tabs on your expenses, you’ll have an accurate figure of your net profit.

Failing to pay your taxes

Remember that old adage: “the only two certainties in life are death and taxes.” The truth is, many self-employed people opt not to file taxes. Typically, this has more to do with the complexity of the tax system when you’re working for yourself rather than a desire to evade taxes.

The good news is that if you can’t afford a third-party to complete and file your taxes, there are many free guides available online. Depending on where you live, some governments have special tax forms and educational programs for self-employed workers.

Another reason why a freelancer doesn’t file their taxes is that they didn’t earn much income. Many countries have a minimum tax threshold. If you make less than this threshold, you likely won’t be required to pay income tax.

Failing to file your taxes might mean missing out on money.

In some countries, your tax return is used to calculate your eligibility for social programs or benefits like childcare or sales tax rebates. In some jurisdictions, you can’t apply for a mortgage or buy a house if your taxes aren’t up-to-date.

As stated earlier, being self-employed means many of your expenses can be claimed and may result in deductions from any taxes you could owe or even give you a larger refund.

A word of warning, if you earn a good amount of income but fail to file your taxes, expect to be audited at some point. This could end up costing you. If it’s deemed you owe the government money, interest will be calculated retroactively to the year of the original balance.

Paying your taxes on time every year lessens the risk of an avoidable financial burden.