It would be hard to top the buzz (furor?) generated by the guest post on translator pet peeves, so I’m going to stick with a dry topic for today!
Statistics and performance metrics are important keys to tracking the success of your freelance business. Hopefully you at least track your income and expenses, but there are many other tracking possibilities out there. I’m not a great statistics user, but I do find it extremely helpful to keep a running total of my outstanding invoices. I do this using a simple OpenOffice spreadsheet. Whenever I issue an invoice, I put the invoice details into the spreadsheet and set the spreadsheet to total up the column that includes the invoice amounts. Then, if I’m on the fence about whether to take on a project or take some extra time off, I can look at the running total and see how it compares to the amount that I want to earn in a month. If the total is substantially more than my monthly target income, I know that I’m not under any pressure to take on extra work. If it’s less, I know that I have to keep my nose to the grindstone until the total increases.
I also use my accounting software to compare my year-over-year income at various points in time. I find this to be a good sanity check; this year, although I feel as if my business volume has decreased, a quick look at last year’s income data tells me that I’ve actually earned about 20% more money because more of my work is coming from higher-paying direct clients.
Other business statistics that you might want to keep (and feel free to add your own):
- Income by client. Use this to determine who to thank profusely at the end of the year (!) and what types of clients to market to.
- Hourly rate for various translation jobs. Forget about the word count and divide the amount you made by how long the job took. This will tell show you which projects are more or less lucrative than others regardless of the per-word rate.
- Time spent on non-translation tasks. This could help you figure out whether outsourcing some tasks such as OCRing, accounting, putting stamps on postcards, etc. could help improve your bottom line.
- Average translation speed under various circumstances. If you want to know whether you work faster, and thus make more money using translation memory software,using speech recognition software, working on your laptop at a cafe instead of at home, measure it. Calculate how many finished words per hour you produce using these techniques. This might help you decide whether it’s worth investing in new software, hardware or training, whether it might be worth dictating your translations and hiring a transcriptionist to type them out, etc.
Feel free to add your own suggestions for things that other freelancers might like to track!
1) Subject matter (Legal, IT, Medical, etc.)
2) Type of task (Translation, Editing, Proofreading, Interpreting, etc.)
3) Invoice aging (How many days before or after the agreed due date are you receiving payment from the customer?)
4) Unpaid total by customer
1) and 2) are very useful if you want to get E&O insurance
A combination of 3) and 4) is especially important, as we don’t want to be overexposed towards certain customers, and bad numbers in 3) may indicate a customer that needs pruning
This is a very useful reminder, Corinne. Every time I do a statistical workup on my business data I learn very important things, some of which show that I harbored fundamental misconceptions about the distribution of projects or the economic importance of some prominent customers. Fact-based reality checks are always good.
As far as some of the tools for doing this are concerned, I’m at a bit of a crossroads. I own several good commercial solutions (one discontinued and no longer supported) which allow me to manage a lot of the administrative side of our translation business, but I have grown increasingly disgusted with little details in which the “solution” fails to accommodate the international, multi-lingual nature of the business where minor details such as the way numbers are written also differ between countries that appear to share a common language. Or in some cases I am just damned tired of clumsy workflows that force my to twist my administrative practices to fit.
So I’m thinking about “downshifting” and restructuring all my data to use simple spreadsheets, a custom database and mail merge templates in the OO word processor or perhaps MS Word again. A horrible thought, really, but after nearly a decade of waiting for other programmers to get things sorted out I’m just tired of half-solutions and little being done to advance them in a direction that would really save me time.
Corinne,
This is interesting and I’m actually working on tracking my numbers for different types of linguistic services this year (translation x edit/proof x interpretation x voice-over, etc) and am curious to hear what our colleagues are actually using to do that. I’ve figured out that my accounting program (Quicken) actually has some categories that I can use to do that, but would like to see what others are doing.
Sorry, I’m a late replier.
I’ve tried tracking a number of these things, and am not very good at sticking with them, but there is one very simple record-keeping system I’ve used for a long time that I find useful. It’s nothing but a color-coded table in Word.
I keep a table of each job (my invoice/client name/job/number/amount/date submitted and invoiced/and the date the invoice is paid). I started this table at the beginning of 2000, and from that point on, I can go back and check how much I made in any given month of a given year and compare how I’m doing.
Also, if a client name rings a bell, but I can’t quite remember, I can find them, see when I last work for them, how large the job was (and my invoice # which language, as well as the sequence number, my first invoice, in 1993, was 0001, the last was 4447, plus F, S, or T to indicate the language)
I can also see how long it took them to pay me. When I receive payment, in addition to noting the date, I color code the line for that job: blue (under 30 days), green (30-60 days), orange if I have to chase them down. One orange may not be a problem if something really did slip through the cracks and they quickly send it when I call. It can happen to anyone, but if it’s a pattern, or I get the run around, have to remind repeatedly, the client may eventually get marked red (with a little skull and crossbones for effect), which means stay away.
In addition, I keep an extra little table below with mid-year and end-of-year totals also going back to 2000. If I’m on track, I can relax a little. If I’m behind, then it means I need to hustle a little.
Joan