Monday, December 21, 2009

Year-End Accounting Analysis

The end of the year is a good time to see how our translation business is doing.

Corinne McKay, in Thoughts on Translation, already published a good list of things to do.

My list has a narrower focus: a good look at the data from the past year to see what went well, what didn’t go so well, and what to change.

Depending on how you track your projects, and on the features of you accounting software, you should do some or all of the following tasks:

  • Create a list of all the invoices you issued during the year.
  • Add all the invoices up, to get your total turnover for the year.
  • Sort your list in decreasing order (i.e., you should have a list that starts with your best customer, and shows the total invoiced amount for this customer, then your second best customer, with the total invoiced amount, and so on).
  • Work out what was the share of your total invoiced for each customer. Add that information to your list. At this point your list should look something like this:

    ACME Translation $ 25,000 25.00%
    BETA languages $ 18,500 18.50%
    Zeta Trans $ 250 0.25%
    TOTAL INVOICED $100,000 100.00%
  • Calculate the increase or decrease of the invoiced amount for each customer over the previous year. For this you need a similar list for your previous year. If you don't have it, this is a good time to create it from the previous year final data.
  • Calculate the percent increase or decrease for each customer over the previous year.
  • Note which customers are new, which stopped sending you work, which have increased turnover, and which have decreased it.
  • If you have done things like increasing or decreasing your rates for some of your customers but not for all of them:
    • Check how the income from those customers has gone up or down (bear in mind, though, that correlation is not causation).
  • Analyze your projects in whatever other ways you think most useful to give you a good picture of your business.
    For example, while two customers may both have assigned you $ 2,000 worth of work, they may be different if one has sent you ten $ 200 projects throughout the year and the other customer a single $ 2000 project. Try to decide which has the most upward potential (e.g., asking the "small projects only" customer if they can give you larger projects, or the "one big project" customer whether they have more frequent jobs).
  • Analyze your projects by sorting them by language pair, subject matter and so on.
  • If you find you would like to know something about your past performance that the data you have cannot tell you, think how to change your accounting and record keeping so as to gather the new data in the future (but also think whether the necessary changes in your workflow would be worth the trouble).

You should then run a similar analysis on your professional expenses:

  • List all equipment, software licenses and other things you bought for your translation business during the year.
  • List all subscriptions to professional publications, memberships, etc. you pay for your business.
  • List all domain maintenance fees, hosting fees etc. for you net presence.
  • List all services you pay for your business, such as utilities, telephone, Internet, online backup services (but remember that if you use these services also for your personal use, you should only count the portion you actually use for business).
  • List all the marketing expenses for your business (brochures you brought to professional conferences or that you sent to prospects, e-marketing expenses, etc.).

Once you have listed all your professional expenses, you should analyze them to see what was well spent, things or services that you may not need any more (a good candidate for trimming could be your fax service, if you are finding that it is no longer used or necessary, for example), and things or services where the investment of more money spent would be helpful.

Some of the operations above are only possible if you already had similar data from the previous year. If you don't have the data, collect it starting for this year, so that next year you'll be able to run a more detailed analysis.

Tuesday, December 08, 2009

How to become rich working in translation...

...probably not by accepting such offers as

Dear translator,

A new translation job is available for you:

ProjectID: 253753
Word Count: 7
Your Earning: 0.56 $

Time allowance / deadline: 01:00 (hh:mm) - Time starts the moment you accept this job.

Source Language: Portuguese
Target Language: English

Commit responsibly! You must be able to deliver an on-time, high quality translation. Be sure you are qualified, interested and available to do the job.

To get this job assigned to you, please log in to XXX Professional Translation Services and go to the "My Translation".

If you accept this job, you are obligated to meet the deadline. Your time limit begins the moment you accept the job.

To take on this job assignment, log in to your translator account at XXX Human Translation.

If you have any questions, please send us an email.

With best regards.
The XXX Team

Article on translation and interpreting on the Wall Street Journal

The Wall Street Journal today has an article by Diana Middleton on translation and interpreting jobs.

While some of the information is of doubtful value ("Interpreters can earn between $15 and $30 per hour": interpreters - especially conference interpreters - can earn much more than that, apart from those who work in phone interpreting and certain "community" interpreting services), the article on the whole will provide some useful insight to those that don't know much about our profession (kudos to Ms. Middleton for getting right the distinction between translation and interpreting, so often confused in the press).

Ms. Middleton had the good sense to rely on people who are knowledgeable about our industry - for example, prominent among the people quoted is fellow translation blogger Judy Jenner of Translation Times (congratulations, Judy!).