Author Financials—6 Top Tips for New Indie Authors
“You must gain control over your money, or the lack of it will forever control you.” —Dave Ramsey
Being a talented writer doesn’t automatically mean you’re confident with numbers, and that’s okay. Many new indie authors and creative professionals start their publishing journey with big dreams and zero financial training. But understanding author financials is more than spreadsheets or taxes. It’s about gaining the clarity and confidence to run your author business like a pro.
In this writer’s guide, we’ll walk you through the accounting basics every new indie author should know, from setting up simple tracking systems to understanding cash flow and preparing for tax season.
(Note: This is for educational and informational purposes. It’s not intended as a substitute for a legal or financial professional advisor. Always seek the advice of a licensed professional.)
Whether you’re just starting out or finally ready to get your author finances in order, this writer’s guide will help you shift from guessing to growing.
Why Indie Authors Need Financial Clarity
When you understand your numbers, you make better decisions, period. Without financial clarity, it’s easy to overspend on ads that don’t convert, underprice your services, or panic at tax time. Worse, you might start questioning whether this whole “author business” thing is sustainable at all.
Financial clarity gives you:
- Peace of mind about your income and expenses
- Insight into what’s working and what’s not
- The ability to plan and invest in your growth
You don’t need a finance degree. You need a simple system that grows with your author business.
Income Streams for Indie Authors and Creative Professionals
Before diving into accounting tools or tax categories, it’s important to identify all your income streams. Most indie authors don’t rely on book royalties alone. Knowing where your money comes from helps you track trends, project revenue, and build a more resilient business.
Here are some common sources of income:
- Book sales (ebooks, print, audiobooks)
- Freelance writing or editing
- Speaking engagements or workshops
- Author services (formatting, coaching, cover design)
- Merchandise or online courses
3 Core Numbers to Track
No matter how simple or complex your setup, every indie author business should track three key financial categories:
1. Income: All money that comes in, whether from Amazon royalties or a freelance gig. Track the source, amount, and date received.
2. Expenses: Anything you pay to run your business, such as:
- Software (Scrivener, Atticus, Vellum, Canva)
- Professional services (editors, cover designers)
- Marketing and ads
- ISBNs, website hosting, email tools
- Travel, office supplies, education
3. Cash Flow: This is the difference between what you earn and what you spend month to month. Positive cash flow means you’re bringing in more than you’re spending. Negative cash flow is a red flag that you need to adjust something.
Choosing a Simple Accounting System
You don’t need expensive software to get started. Choose a system that matches your comfort level and business size. Whatever you choose, the key is consistency. Set aside time weekly or monthly to record income and expenses.
Beginner-friendly Options:
- Google Sheets or Excel – Create your own simple tracker of the three core numbers
- Wave Accounting – Free and easy for solo authors
- QuickBooks Self-Employed – Popular for creatives and freelancers
Set Up a Separate Business Bank Account
Even if you’re not an LLC yet, keeping your author finances separate from your personal ones is a smart move. It makes tracking easier, gives you better visibility, and simplifies taxes. Look for a no-fee business checking account at your current bank or explore online business accounts like Novo or Relay.
Understand Basic Tax Concepts
Taxes can feel overwhelming, but a little preparation goes a long way. Here’s what every new indie author should know:
- You may need to pay quarterly estimated taxes to the IRS.
- Many writing-related expenses are tax-deductible (see our upcoming writer’s guide on this).
- Keep digital or paper receipts organized by category.
- A CPA or tax professional with small business experience can save you time, stress, and money.
Pro tip: Don’t wait until tax season to organize your records. Start now and stay consistent each month.
When to Involve a Bookkeeper or Accountant
If your business is growing, your taxes are complex, or numbers make your head spin, it might be time to bring in help. Even a quarterly check-in with a professional bookkeeper or accountant can be worth the investment. They can provide the following:
- Set up your system correctly from the start
- Catch errors and save you time
- Help you understand financial reports and make smarter decisions
Wrap-Up: Clarity Is Power with Author Financials
Understanding your financials is more than compliance. It’s about building confidence. Knowing your numbers gives you power. When you know your numbers, you can make bold, informed choices for your future. When you understand how your income flows in, where your money goes, and how to interpret your reports, you make better decisions with less stress. You’ll stop avoiding your bank account and start leading your author business with clarity and intention.
Whether you’re tracking your first $100 or preparing for a multi-book launch, solid financial systems are the foundation of a healthy author business.
Start where you are. Keep it simple. And remember, you don’t have to do it all alone.
Don’t wait. Start managing your finances today! The sooner you start, the sooner you’ll gain the clarity and confidence to run your author business like a pro.
We hope you’ve found the writer’s guide strategies useful and motivating. We hope they’ll equip you with the insights and tools needed to help you succeed as a new indie author.
For more guidance, see other writer’s guides in this series available at our website. You might also enjoy, AI Empowers New Indie Authors: 5 Best Hacks.
Writing is a journey of continuous learning and improvement. You don’t have to go it alone. We’re excited to continue the journey with you, providing guidance and encouragement every step of the way. Our goal is to provide essential insights and practical advice to help you navigate the writing world with increased confidence.
If you have a draft you want to publish and are wondering how AI can help, read Is Your Book Ready to Self-Publish? Lastly, for help writing a non-fiction book, read Write Your First Non-Fiction eBook: a 30-Day Workbook for Getting It Done.
Don’t wait. Start today!
How can we help? To let us know, please fill out our Contact form. Happy writing!
Action Steps
- List your current and potential income streams.
- Choose a simple accounting system (spreadsheet or software).
- Set up a separate business bank account.
- Start tracking income and expenses weekly.
- Block time for a monthly “Money Review.”
- Save receipts and organize by tax categories.
- Schedule a consultation with a CPA or bookkeeper if needed.
Author Financial Checklist
Use this checklist to start organizing and understanding your indie author business finances.
☐ Separate Personal and Business Finances
- Open a dedicated business checking account.
- Apply for a business credit card (optional, but helpful).
- Get an EIN (Employer Identification Number) if needed.
☐ Track All Income and Expenses
- Choose a bookkeeping method (spreadsheet, accounting software, or hire a pro).
- Record every sale, royalty, and expense related to your author business.
- Set a regular schedule to update your records (weekly or monthly).
☐ Understand Your Tax Obligations
- Research your tax requirements as a sole proprietor or LLC.
- Track deductible expenses (writing tools, advertising, professional services, etc.).
- Set aside 20–30% of income for estimated taxes.
☐ Choose a Bookkeeping System
- Use a simple spreadsheet or tools like QuickBooks, Wave, or FreshBooks.
- Include categories for income (e.g., royalties, services) and expenses (e.g., cover design, editing).
- Reconcile with your bank statements regularly.
☐ Review Your Financials Monthly
- Check your profit and loss.
- Look for trends in income and expenses.
- Make informed decisions about pricing, spending, and scaling.
☐ Plan for Growth
- Set financial goals (e.g., monthly revenue target, savings buffer).
- Budget for upcoming releases, promotions, or tools.
- Evaluate ROI on marketing and publishing expenses.
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