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A Bank and PayPal Account for New Freelance Writers

So you want to become a freelance writer? Before you get too excited and start marketing your services it is essential that you setup both a bank and PayPal account. This may not be something you think about early on because you have yet to make any money. But you expect to do so soon enough, right? By setting up these accounts before doing anything else you will be off to a good start.

Why do I need a separate bank account? Many new freelance writers ask me time after time if they can use their personal checking account for their business. While this is possible in theory it is not something you want to do. Instead, it would be in your best interest to open a business checking account with the same bank. This will only take a few minutes, and in the long run it offers many benefits.

The main reason to open a business account is to keep your personal and business money separate. You should use your business account for depositing checks and PayPal money, as well as when paying expenses. Of course, you should feel free to “pay yourself” from this account when necessary.

You will also realize early on that a dedicated business account makes it much easier to stay organized. There is nothing worse than being disorganized as a freelance writer and this definitely holds true when it comes to your income. With separate accounts you will find it easy to track your income, pay taxes and expenses, etc.

As I have said many times in the past, PayPal is one of the best ways for freelance writers to collect from clients. While you will be hit with fees with most payments this is not something you should worry about. Instead, chalk this up as part of doing business. A PayPal account allows you to get paid quickly and efficiently without having to worry about collecting checks. To go along with this, you can link your PayPal account to your business checking account for easy transfers. At the end of every month I withdrawal all of my PayPal funds to my business account; it only takes a few days to complete a transfer.

Beginning freelance writers should definitely setup a dedicated bank account, as well as a PayPal account. This may not be as fun as finding new clients and taking on projects, but it is something you must do if you want your career to grow in the right direction. All in all, it is better to get these accounts setup sooner rather than later. 

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1 Comment »Freelance WritingDecember 12th, 2008

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