Why freelancers should write annual reports

This year, for the first time, I wrote an annual report for my freelance business.

But wait, isn’t that a bit of a paradox – a freelancer writing an annual report? Surely annual reports are designed to be shared with government, shareholders and the media (entities unlikely to have much interest in the average freelance business)? Surely they are abstruse, tedious things written only because they are compulsory?

They don’t have to be.

Freelancers may not be obliged to write annual reports, but I believe that doing so – thoughtfully and in proportion to your business activities – is hugely valuable. It can unlock new thinking and help you to understand what you’ve been doing, whether you’ve been doing it well and what you want to do in the future.

Freshbooks gives a list of reasons why companies write annual reports. Three of them particularly stand out to me as just as relevant to freelancers:

  • provides an opportunity to highlight a company’s key achievements, expectations for the coming year and overall goals and objectives
  • gives information on the company’s financial position
  • useful as a decision-making tool.

This post outlines why I believe freelancers should write annual reports, how to go about it and how to make it work for you.

Why I wrote an annual report

I should probably start by confessing that I love tinkering in Excel. Professionally speaking, few things make me happier than an intuitively designed spreadsheet or chart that tells a story.

However, my reasons for writing an annual report as a freelancer went beyond a preoccupation with prettily coloured shapes. My goals were to:

  1. celebrate my achievements
  2. understand whether my subjective day-to-day impression of my business’s progress is accurate
  3. understand whether the choices I’m making (about which projects to accept, which clients to prioritise, etc.) are meeting my goals
  4. make better use of the data I collect on my day-to-day business activities (work logs, enquiry tracking, etc.)
  5. reflect on things that didn’t work out how I planned
  6. ensure I have a clear focus on what I want to achieve in the future.  

What you need to write an annual report

You need a certain amount of data, but don’t worry if you don’t have much of it already. Your first annual report could be about assessing what data you have now and deciding what else you want to collect in the future.

Excel and Google Sheets are fantastic places to start, and there is reams of software aimed at freelancers and small businesses (such as 17hats and Toggl) that you can use to collect information from day to day. I’ve also heard good things about Maya Berger’s The Editor’s Affairs. (I have no affiliation with any of these companies.)

The key thing is to keep your report in proportion to your business. To give you an idea, my report for FY20/21 is eight pages (1,300 words) long and contains 13 charts, each accompanied by a bit of commentary that summarises past trends and looks to the future. I included lots of charts because this way of visualising information works best for me; plain words are fine too if that’s your marmalade.

You can share your report with trusted others (perhaps a partner or mentor) to get feedback if you wish, or just reflect on it yourself. I shared mine with my editorial-assistant-cum-sounding-board and found it really useful to get a second perspective.

Ideas about what to report on

The great thing about writing an annual report as a freelancer is that there are no stipulations or limitations. It’s for you, so you can report on whatever you like and do it however you like. The most important thing is to make it a practical, usable document that you will naturally return to in the future and build upon.

The topics you can report on are limitless, but some might be:

  • Overall income and expenses
  • Hourly rate
  • Working hours and work–life balance
  • Proportions of time spent on paid (client) vs. non-paid (non-client) work
  • Proportions of time spent on different types of paid and non-paid work
  • Volume of work, income and hourly rate by sector (I divide mine up into six categories: academic, business and tech, charity and public sector, creative, education, and encyclopedias and reference)
  • Volume of work, income and hourly rate by type of project (e.g. books, reports, website copy, journal articles)
  • Number of clients and percentages of income by client
  • Enjoyment of working with each client (I wrote more about this here in a post on using bubble charts to assess the value of clients to your business)
  • Sources of new business
  • Income redundancy (value of work you had to turn down that you would have accepted if you’d had time for it)
  • Website visits and how visitors use your website
  • Marketing activities and success rates
  • Social media engagements
  • Enquiry quality (i.e. how many of the enquiries you receive are ones you’d have liked to say ‘yes’ to if the fee, schedule, etc. had been suitable)
  • Enquiry outcomes (i.e. how many enquiries turn into paid work)
  • Feedback from clients
  • How long clients take to pay invoices
  • Training completed and planned – and why and what you got out of it
  • Details of any work with subcontractors or other colleagues
  • Business stability (e.g. how consistent your bookings are or how far ahead you are booked)

What I got out of writing an annual report

In past years I’ve limited my annual analysis to numbers and facts. Making myself write down my reflections on those numbers and facts – as if for someone else to read – was a hugely valuable experience. It forced me to think critically and objectively about what the data meant, and it threw up several surprises to reflect on.

It also confirmed that, overall, my subjective impression of my business (goal 2 above) is accurate. This reinforced my feeling of being in control of my business and boosted my confidence about setting realistic, rewarding goals for the future.

I’ll be referring to my report periodically throughout FY21/22, and I’m looking forward to updating it next year and seeing how my business is evolving.

It’s all about you

Writing an annual report as a freelancer should be about telling your story as a business and planning where you want it to go in the future. Crucially, although it should be a practical process based on objectivity (i.e. what the cold, hard data tells you), there should be plenty of space for subjectivity too. After all, you likely went freelance at least partially because you wanted a working life you find fulfilling.

So, if you conduct your analyses and discover your favourite area of work is earning you the least money and is unlikely to ever pay substantially more, that’s fine: you don’t have to give it up. But the knowledge will give you a clearer head and may influence decisions you make in other areas of your business.

Freelancers should write annual reports that are unique to them. Use yours as a pathway to shed the aspects of your business that pull you down and achieve more of what you want.

About Hazel Bird

Hazel is an editorial project manager, copyeditor and proofreader who works with businesses, charities, publishers, academics and students to make their projects happen. She was once described as ’superhuman’ and is still wondering whether this is a good thing.

1 Comment

  1. Violetta on May 24, 2021 at 9:41 am

    This a so helpful. I’ve been having monthly reports assessing my performance as a freelance editor. However, at the end of this year, I will consider coming up with an annual report.

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