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Category Archives: New skills

Tammy Ditmore

Welcome to Saturday Business chat.Today’s Freelancer is Tammy Ditmore from eDitmore Editorial Services, who I know through a network of editorial professionals we both belong to. Tammy’s one of our newer businesses, having been going for around 18 months (this time round), and is one of our freelancers based in the US – but as you can see, we all have similar issues and learning curves, wherever in the world we might be!

Tammy has some interesting things to say about the difference between being a freelancer and running a business, and also about the resources that are out there for both business people in general and editors in particular.

What’s your business called?

eDitmore Editorial Services.

When did you set it up?

January 2011.

What made you decide to set up your own business?

I had been working as the managing editor of an academic journal for more than five years, but the situation had become very stagnant and I wanted something different. I wanted to edit more and manage less. I applied for several editing and/or writing jobs in my area and got nowhere—I couldn’t even get an interview. I finally decided it was time to return to freelance editing, which I had done before I started at the journal. But when I freelanced before, I never thought of it as a business; I just took whatever work happened to come my way. This time I wanted to be more official. So I established a name, created a website, and set myself up legally as a “sole proprietorship”.

What made you decide to go into this particular business area?

I have been involved in editing in one way or another for about 30 years. I graduated from college with a journalism degree and spent more than 10 years in various editor roles at several daily newspapers. I left newspapers when my oldest son was a baby and wound up working from home as a freelance editor, proofreader and writer while my kids were young. Then I took the academic journal position, and learned more about running a business. By the time I started my business, I had editing or writing experience in a number of styles and publications.

Had you run your own business before?

Although I had worked as a freelance editor for a number of years, I had not thought of myself during those years as running a business. I did not have a business name; I did not market or advertise; and I never thought of myself as a businesswoman. When I decided to leave my position with the academic journal, I knew I needed to do things differently. I wanted to see my work—and I wanted other people to see this—as my business, not just something I was doing until I could get a real job.

How did you do it? Did you launch full-time, start off with a part-time or full-time job to keep you going … ?

While I was still at the journal, I made my business plans and did the preliminary work, like getting a logo and a website. By the time I left that job, I had one contract that I knew would keep me very busy for a few weeks and would provide some steady work throughout the year. I was lucky; I could take some risks because my husband’s job was very safe and I didn’t have to worry about insurance benefits since our family was insured through him. That made it less risky for me to step away from the steady paycheck.

What do you wish someone had told you before you started?

I wish I had known how many resources were available to help get me started, such as editing classes and training, list-serves and discussion groups, online invoicing, etc. I did not need to reinvent so many things—it was all out there but I didn’t know where to look for it.

What would you go back and tell your newly entrepreneurial self?

“You don’t have to go it alone,” and, “You know more than you think you do”.

What do you wish you’d done differently?

I wish I had taken more time off between finishing my journal job and really plunging into work on my own. I think it would have been good to take some editing classes and just spend some time thinking about what I wanted to do and how. I expected to have slow spells in my first few months where I could focus on such things, but I never really did.

What are you glad you did?

I’m glad that I paid to have a logo designed around my business name and that I was able to get a professional to design my website. Both turned out better than I had envisioned and are definitely memorable.

What’s your top business tip?

It’s not a very original one—I would say you should network. Join professional organizations in your field; volunteer for specific roles; and tell everyone you know about your business. Some of my best and most unexpected business has come from very unlikely places.

How has it gone since you started? Have you grown, diversified or stayed the same?

Much better than I had expected. I almost doubled the income goal I had set for myself for the first year, and I have turned away work on several occasions. Even more important to me, I have been able to work on a wide variety of publications and manuscripts for a variety of publishers, authors, and students. In a little more than a year, I have worked on books and articles about Puritan theology, international counter-terrorism tactics, Christian ethics, Facebook advertising, the original Saint Nicholas, and successful car dealers, and I have just started editing my first novel. Also, I am truly enjoying learning more about today’s rapidly changing publishing world and how to market and run my business. I have started to think more like a businesswoman in addition to thinking like an editor.

Where do you see yourself and your business in a year’s time?

I am considering some steps now to raise my business profile and visibility, so I hope that by this time next year more people will know about eDitmore Editorial Services.

I know what Tammy means about expecting a slow spell between finishing the day job and launching the business – I thought that about Jan/Feb 2012, but went straight into full-time busy-ness. Still, it’s good to be busy! And I wish Tammy all success through this next important year for her business. Read her 2013 update here.

Tammy’s website is at www.editmore.com and you can of course contact her by email. She’s based in Califormia.

If you’ve enjoyed this interview, please see more freelancer chat, the index to all the interviewees, and information on how you can have your business featured.

 
 

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How do I count the words in my Word document?

Looking at the search engine searches people have done before coming to this website, I’ve realised I need to publish some notes on how to count the words in your Word document. This information covers Word 2003, Word 2007 and Word 2010, although most of the screenshots are from Word 2007.

How do I count the number of words in my Word 2007 document?

Word 2007 and 2010 handily display your word count at the bottom of the screen. Well, it should be there. Let’s see …

 But what if it’s not there? If you want to display your word count at the bottom of your document, right click with your mouse on the lower menu bar – that’s the blue bit at the bottom of the window, indicated with an arrow on this screen shot:

Do take a moment to marvel at all the different things you can do on this menu bar – we will come back to them another time! Now, when you’ve clicked on Word Count, you should see your word count at the bottom of the window:

OK, so that’s one way, but what if you want more information, such as the number of characters (maybe you’re writing some text that has to keep to a certain character limit)? Never fear, there are often two ways to do things in Word, and this is no exception.

We’re going to stop looking at the bottom of the screen and move up to those tabs at the top. Click on the Review tab and you will see the Word Count option to the left:

 Click on Word Count and you will get a little dialogue box telling you all sorts of information …

Now, what if you want to count just the words in a particular section of your document (you might be trying to keep to a word limit per chapter or be writing lots of short articles you want to check)? Simply highlight the section of text you want to count, then either look at the bottom of the screen, where it will tell you that you have highlighted x out of a total of y words, or click on Word Count on the Review tab and your dialogue box will tell you just about the words you’ve highlighted:

How do I count the number of words in a Word 2010 document?

Word 2010 works in exactly the same as Word 2007 as far as the lower menu bar goes, so just follow the instructions above to show the word count at the bottom of your document.

When it comes to the Review tab and Word Count option, it’s all pretty much in the same place, but looks a little bit different:

How do I check the number of words in a Word 2003 document?

In Word 2003, you can access Word Count from the Tools drop down menu.

Please note, these hints work with versions of Microsoft Word currently in use – Word 2003, Word 2007 and Word 2010, all for PC. Mac compatible versions of Word should have similar options. Always save a copy of your document before manipulating it. I bear no responsibility for any pickles you might get yourself into! This is part of my series on how to avoid time-consuming “short cuts” and use Word in the right way to maximise your time and improve the look of your documents. Find all the short cuts here

 
 

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My short cuts – Using AutoCorrect in Word (1) What it is and where to find it

Have you come across AutoCorrect yet? Open up a Word document and type “teh”. Did it magically change to “the” in front of your eyes? That’s AutoCorrect.

So, it’s great for correcting common typing mistakes that lots of people make. But did you know that you can harness its power to help you write and type more efficiently and faster? In this article, I’ll tell you more about AutoCorrect and explain where to find it in different versions of Word, so you can tinker with it to tailor it to your requirements. In the next post, I explain just how to do that.

How to access AutoCorrect in Word 2003

Let’s look at Word 2003 first. You can find AutoCorrect under the Tools screen (I have to admit that it was so much better when it was so accessible, right here off a main menu. Nowadays, they like to hide it!). Click on Tools and then near the bottom, you’ll find AutoCorrect Options.

Once you’ve clicked on AutoCorrect Options, you’ll find yourself at a screen that will start to look familiar as you work your way through this article. This is where you can see what is already set up, and delete / change / add AutoCorrect entries as you wish. More about that in the next article!

How to access AutoCorrect in Word 2007

Here is how to access AutoCorrect in Word 2007. When I first moved over to Word 2007, I found it a bit hard to track down AutoCorrect – the key is to click on that Office button in the top left corner of the screen. When you do that, a menu will come up below the button, with a list of the files you’ve recently accessed (that’s what I’ve blanked out, for confidentiality purposes!), with a list of things you can do and, right at the bottom, a Word Options button. Click that button.

Once you have clicked on the Word Options button, you’re confronted with another menu (oh, for the simplicity of Word 2003!). You’ll find lots of intriguing options here, some of which we’ll be exploring in further articles, but for now, what you want is Proofing, about half way down on the left hand side. Click on Proofing and you will get a menu including the heading AutoCorrect Options. Click on the AutoCorrect Options button …

… and you come to a rather familiar screen, offering you a place to delete, change and add AutoCorrect entries as you wish. More about that in the next article! Note that you can also set up a shortcut button on your Quick Access Toolbar if you use this a lot.

How to access AutoCorrect in Word 2010

Now, in Word 2010 I feel like they’ve buried AutoCorrect just that one level deeper. But we’ll find it! To access AutoCorrect in Word 2010, you need to first click on that File tab, one to the left of Home, to which Word defaults. This has replaced the Office button from Word 2007. Anyway, Click on the File tab and you will be given a menu which, handily enough, doesn’t have a “Word Options” entry, but just Options. Click on Options.

Once you have clicked on Options, you will be given a new menu. This is quite similar to the one in Word 2007. Choose Proofing and then AutoCorrect Options.

… and here is your menu where you can see what is already set up, and delete / change / add AutoCorrect entries as you wish. More about that in the next article! Note that you can also set up a shortcut button on your Quick Access Toolbar if you use this a lot.

In the second half of this article, we look at how to tailor the automatic corrections to suit your purpose, whether you have a word you just can’t spell or type correctly, or you need to type a lot of words fast and want to auto-type particular common phrases.

Many thanks to Katharine O’Moore Klopf for the Word 2003 screen shots!

Please note, these hints work with versions of Microsoft Word currently in use – Word 2003, Word 2007 and Word 2010, all for PC. Mac compatible versions of Word should have similar options. Always save a copy of your document before manipulating it. I bear no responsibility for any pickles you might get yourself into!

This is part of my series on how to avoid time-consuming “short cuts” and use Word in the right way to maximise your time and improve the look of your documents. Find all the short cuts here

 
 

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Is it actually worth the stress?

I was chatting to a business associate the other day. He’s enjoying his high-powered, high-stress and, let’s be honest, high-earning position, managing all sorts of change, rushing around here, there and everywhere … or he thinks he is.

Actually, he’s plagued by all sorts of niggling illnesses, that have become worse. Nothing that’s putting him in hospital, but things that are affecting his quality of life, outside work more than inside, and can’t be ignored.

So, is it worth the stress?

Downsizing your life, downsizing your stress levels

I can claim to be a bit of an expert on this, from personal experience. Having been doing a management-level, fairly demanding job in London, when we moved to the Midlands I was determined to have “a job”. In fact, we both agreed we would indulge ourselves for a year, M going back to post-graduate study and me looking for a basic level library job.

I had a bit of trouble, as a qualified librarian, getting a basic entry level job, but I did in the end. Lots of people said I would get bored; my managers tried to encourage me to apply for promotions I didn’t really want. I’d been up the corporate ladder, and I knew that it suited me at the time to have “a job” rather than “a career”, something that would pay the bills but allow me the resources and energy to enjoy my new life in a new city.

So that’s what I did, and I was perfectly content for a good few years. In fact, having that lower-stress, lower-responsibility job allowed me to start up Libro and develop my own business.

Different career paths for different life stages

Now, I could have quite easily chosen to progress through the corporate ranks again, gone for those management jobs, gone for the higher salary, which is always a consideration, isn’t it. But I decided to go this alternative route, and set up the business.

But I did that in as stress-free and risk-free a way as I could (see my article on not taking risks for more information). I’d decided it wasn’t worth the fear of going full-time at the beginning, the stress of having to scrape around for money to live on, etc. Instead, I lived very frugally, scraped together money to live on in advance, and launched Libro full time in January 2012.

Now I have a satisfying job, where I’m responsible to myself and my clients, no bosses, no employees. I earn more than I’ve earned in any of my corporate jobs, and, having identified during my career that I like to work in this way, that I don’t like office politics, being a manager, etc., I can honestly say that, even running my own business where every sick day means income and jobs lost, where I do sometimes put in an 11 hour day, but where I can claim what I know makes me happy:

  • responsibility for myself and my clients
  • no employees
  • no office politics
  • flexibility to juggle my day to fit in friends and exercise

I am as stress-free as I can be. And I have no stress dermatitis, no IBS, I’m fit and healthy and enjoying life.

I’m not boasting about this: it’s taken time to know myself and know what I want, and it’s taken hard work to get here, which hasn’t always been the most fun I’ve ever had. But I’m in my own space now, not trying to jam myself into an inappropriate role, and I’m very much happier as a result.

Know yourself and make the change

The photo at the top of this post? That’s butterflies emerging from their chrysalises. Whether what’s confining you is stress or something else, such as lack of the confidence to break free, surely it’s worth trying to achieve your potential and seeing what you can do … if you just break out of the chrysalis.

My advice to you, if you think you’re stressed, or you don’t think you’re stressed but your body does …

  • Think about what you REALLY want. Is the money worth it? Yes, we all need money to live on, yes, economic times are perilous, but if you can save anything ahead of changing your lifestyle, do it.
  • Think about what you enjoy, what you need, and work towards claiming it.
  • Talk to close friends or colleagues. How do they see your stress levels? What solutions can they offer?
  • Talk to a reputable life coach or careers counsellor. What ideas do they have?
  • Mind-map, brainstorm, go walking for a week, whatever it takes to give you space to think this through.
  • Seek mentors and role models. People have told me my blog posts have helped them on their path to self-employment (hooray!) – look around for people doing what you might fancy doing, and drill down into how they did it.
  • Think laterally. Do you really want to be an architect, or do you want to work for a housing association? Do you really want to be a social worker, or do you want to train as a counsellor? Could you work part time while you pursue your aims?

My “career path”, from corporate ladder-climber to “just a library assistant” to successful small business owner shows that you can step down, sideways, whatever. I’m not a risk-taker, I’m not particularly well-off, and it hasn’t always been easy. But it can be done.

Good luck!

 
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Posted by on May 16, 2012 in Business, New skills, Organisation

 

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My short cuts – how to change your text from upper case to lower case

This is part of my series on how to avoid time-consuming “short cuts” and use Word in the right way to maximise your time and improve the look of your documents.

Sometimes you really want to change a sentence from, maybe, all lower case to All Title Case, or ALL CAPITALS to all lower case, or some other variant.

And you know how to do it, right: delete the sentence and retype it, or delete the first letter of each word and retype it, or turn on overtype then forget to turn it back to insert when you’ve finished … well, there is a way to just do it with a couple of keystrokes!

How do I change all small letters to all capitals or all capitals to all lower case letters?

This is such a simple one. Highlight your sentence (1). With the sentence still highlighted, press shift and F3 at the same time. Magic! With each press of shift-F3 it will cycle through Title Case (2), UPPER CASE (3) and then back to lower case (4).

This is so useful if you’re grappling with a bibliography you’ve written or you’re editing (especially when the capitalisation in article or book titles is not consistent), or if you accidentally type something all in capitals.

Please note, these hints work with versions of Microsoft Word currently in use – Word 2003, Word 2007 and Word 2010, all for PC. Mac compatible versions of Word should have similar options. Always save a copy of your document before manipulating it. I bear no responsibility for any pickles you might get yourself into!

Find all the short cuts here

 

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Tone Hitchcock

Welcome to Saturday Business chat. In a first for the series, we’ve got a brother-sister combination! Last week I featured Annabelle Beckwith, and now it’s the turn of her equally talented brother, Tone Hitchcock, of Anthony Hitchcock Art & Design. I met Tone at about the time I met Anna, so he would have been 16 or so at the time. I heard about his work through Anna over the years, went to an opening night of some wonderful paintings he had exhibited, and met up with him a few months ago when he came to “visit” the fibreglass gorilla he’d made that was on display in Digbeth Coach Station. Models he’s made appear on the TV and in films, and it’s great to watch the inventive and marvellous things he produces. Let’s find out how he got started …

What’s your business called? When did you set it up?

Anthony Hitchcock Art & Design. I know, it’s not the snappiest of titles, but it does what it says on the tin. I’ve been doing this since 1997, sometimes part-time, now mostly full time. Unofficially, it’s “Purveyor of Props, Paintings and Peculiarities”.

What made you decide to set up your own business?

I decided to set up for myself as I’d spent most of my time at Uni doing artwork and playing in various bands anyway, rather than concentrating on my English degree. Pretty much the only person I could find willing to employ me when I graduated was me, so it seemed like a good idea.

What made you decide to go into this particular business area?

Art has always been my first love; I’ve been selling paintings since I was 14. I started commercially by doing illustrations and caricatures; it snowballed from there.

Had you run your own business before?

A friend of mine and I at school had run a t-shirt printing business from our study, if that counts … [Liz: yes, of course it does!]

How did you do it? Did you launch full-time, start off with a part-time or full-time job to keep you going … ?

I’ve had a couple of full-time stints at this, and, as I said, I am now pretty much full-time again, but for a long time, I had various part-time jobs as well to keep me ticking over. I’ve worked in a few different shops, done kitchen and bathroom design, worked in a warehouse, done stock control for the Roman Baths shops; whatever it took, really!

What do you wish someone had told you before you started?

I wish someone had told me to concentrate on prop and modelmaking 15 years ago!

What would you go back and tell your newly entrepreneurial self?

I would like to go back and tell myself not to lose faith; it’s never easy trying to make a living artistically, but when it does start to come together, it makes the hard times fade away, and it all becomes worthwhile.

What do you wish you’d done differently?

I took a sculpting course in late ’97, whereas before I’d mainly concentrated on 2D artwork. It felt really natural to me, but I was already committed to trying to make a go of it with paintings. I remember wondering if I should make the switch to 3D work instead, but I decided against it. I don’t generally dwell on “what if?” contemplation, but still … in this case, it might have got me further along sooner.

What are you glad you did?

To be honest, even all the rubbishy part-time roles I’ve had have given me something useful, even if it was just experience. Heck, even my wasted youth making Lightsabers out of old bits of Hoover tube has come in useful, as it gave me the perfect skillbase for making the collapsible armature for my latest commission!

What’s your top business tip?

DON’T GIVE UP! And also, tailor what you do to the market. As an artist, it is quite tempting to throw a bit of a hissy fit, and go “But this is my muse! People must appreciate it and buy my work!”

Well, I love melancholy landscapes and bleak atmospheres, but apparently the general art-buying public isn’t keen enough on them to pay for my living. Talent doesn’t guarantee you a career – the old adage about success coming from 10% inspiration and 90% perspiration is true.

How has it gone since you started? Have you grown, diversified or stayed the same?

Following on nicely from the last question, my success rate increased exponentially as soon as I started being less precious about what I do, and started listening more to what other people advised (particularly my wife, but don’t tell her that or she’ll become insufferable).

I’ve always made models as a bit of a sideline, hence the lightsabers, but I’d never really taken it seriously. Three years ago, I made a Wookiee mask for a friend’s birthday, and everyone that saw it asked why I wasn’t doing prop and modelwork all the time. As the only answer I could come up with was a rather sheepish “errr…”, I started scouting around for that kind of work, which lead me on to freelancing at Codsteaks Prop and Model Workshop in Bristol. It’s gone on from there.

Where do you see yourself and your business in a year’s time?

This time next year, Rodders, we’ll be miwionaires … or at least, doing model and prop work more consistently so that Bryony, my wife, can lessen the amount of hours she works.

What a talented pair of siblings Anna and Tone are. And what a lot of different areas of inspiration they offer to other freelancers and entrepreneurs. Never give up, learn from your mistakes, do what you have to in order to sustain your business idea … things we can all learn, whether we train people or make eels for a living! Oh, look – I’ve interviewed their cousin, Sam, too!

Tone’s 2013 update is here!

This is one website that you MUST go and look at, for all sorts of weird and wonderful creatures and beautiful paintings: find Anthony Hitchcock Art & Design at www.tonyhitchcock.co.uk. You can, of course, email Tone or call him on 07929 272 513, especially if you’d like to commission a painting or sculpture. Or an eel.

If you’ve enjoyed this interview, please see more freelancer chat, the index to all the interviewees, and information on how you can have your business featured.

 
 

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New ways to navigate the resources on the Libro blog

I’ve built up loads of information on all sorts of topics on this blog over the past few years, so I thought it was time to put together a resource to help you find what’s most useful for you. I ran a poll, people said yes, so I did it!

I put this new guide together about a week ago, and it’s proved popular so I thought I’d let you know about it quickly.

I’ve put together one simple resource guide with three main sections:

  • Resources for business – these include posts on how to set up a small business, things to do to grow your business, hints on networking, motivation, etc.; then some information about tax and finally an additional link to my small business interviews (note that business formation and tax posts are relevant to the UK although the rest of it will translate anywhere)
  • Resources for students – how to write an essay or dissertation, plagiarism and quoting sources, and lots more to come
  • Resources for Word users – all sorts of tips and hints to make your documents more consistent and easy to write, change and navigate, including tabs, margins, headings, contents pages and more obscure matters like how to put text in alphabetical order. Also includes a few notes on PowerPoint and other applications,

The whole resource guide offers a good way to find out what you need to know – do have a look and a play around, and let me know if you’ve found anything particularly useful!  I’ll be adding both resources and entries to the resource guide as I go along, of course. Watch this space …

And of course, we still have the index to the Troublesome Pairs and index to all the Saturday Small Business Chat posts.

I hope you enjoy the resource guide and indexes, and the resources they guide you to!

 

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How to count the words in a PowerPoint 2007 presentation

I recently needed to know the word count in a PowerPoint presentation. In my case, this was because I charge my clients by the word, in the main, and needed to know how much to charge someone for editing her PowerPoint text. But I’m sure it will be useful in other cases, too, for example if you’re a student with a word count target.

And it’s NOT obvious. Plus it’s different in Word 2007 and Word 2010, of course.

So, this is what you do …

How do I count the words in a PowerPoint 2007 presentation?

Open your document and click on the big Office button in the top left (1)

Click on Prepare (2) (like that’s obvious!) then Properties (3). This will give you some of the document properties in a bar along the top (these vary according to how you set up your document in the first place):

And because nothing ever shows you what you want immediately, you then need to click on Document Properties then choose Advanced Properties from the drop down. Then, finally, you get …

A lovely dialogue box with all the properties you could ever want, including the word count.

Please note, these hints work with versions of Microsoft Powerpoint 2007, for PC. Mac compatible versions should have similar options. Always save a copy of your document before manipulating it. I bear no responsibility for any pickles you might get yourself into!

Related posts:

How do I count the number of words in a PowerPoint 2010 presentation?

How do I count the number of words in a PowerPoint 2013 presentation?

Find all the short cuts here

 

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How to put text in alphabetical order in Word

I was inspired to write this post after having to put yet another student’s bibliography into alphabetical order. I know the quick and easy way to do this – but I don’t think a lot of people know that you can do this!

So, you’ve got your bibliography, and you’ve been very good and followed the rules for setting it out (I’ve used Harvard method here) but it’s not in alphabetical order by author surname, and, except in certain cases,* it really should be.

*A very few referencing systems ask for the bibliography to be in the order in which the references appear in the text. I’ve hardly ever had to deal with them. But I like completeness!

So, a lovely list of books but not in order by the authors’ surnames. How can we resolve this without swapping all the lines around?

First, highlight all the text you want to alphabetise. Then, make sure you’ve got the Home tab at the front. See that little button you’ve never even seen before, next to the paragraph mark?

Press the A-Z button and up pops a dialogue box.

There are all sorts of ways in which you can order the text, which are very similar to the ways you can order text and numbers in Excel. You can even specify whether what you’re sorting has a header row (I’m not sure why you’d want to do that, as you can just exclude the header row when you’re doing the highlighting, but I suppose it would be useful if you realise you’ve accidentally highlighted the headers too). I’ve sorted by Paragraph, Text, and in Ascending Order here, and to be honest, that’s what I always do. Click on OK, and look what you get:

Here’s our bibliography in order by author surname with just a highlight of the text and a few clicks – much quicker and with far less risk of human error than doing it manually.

Note: if your results come out a bit odd and have split your entries up into two halves, reverse your alphabetising by either hitting Control-Z or the Undo button, and check there aren’t any pesky hard returns hiding out in the middle of paragraphs (the best way to do this is to click the Paragraph button, to the right of the A-Z button and look out for bent arrows signifying carriage returns). Get rid of those and alphabetise again to your heart’s content!

This is part of my series on how to avoid time-consuming “short cuts” and use Word in the right way to maximise your time and improve the look of your documents.

If you have enjoyed this post and found it useful, please click on the “share” buttons below or tell your friends and colleagues about it! Thank you!

Please note, these hints work with versions of Microsoft Word currently in use – Word 2003, Word 2007 and Word 2010, all for PC. Mac compatible versions of Word should have similar options. Always save a copy of your document before manipulating it. I bear no responsibility for any pickles you might get yourself into!

Find all the short cuts here

 
 

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Income tax payment on account

Special guest Emily Coltman

Business is booming for me and Libro – and my friends and family are probably expecting me to start splashing around some of that hard-earned cash now I’m full time and earning well, after those lean start-up years. But wait! No – just when you’d think I’ll be booking that round-the-world cruise (we can only dream), in fact I’ll be giving the tax man over half of my income from Libro over the coming year. Edited to add: this is what actually happened when I submitted this year’s tax return.

It’s something called “Payment on Account”. I’m lucky: I already knew about it and so I have been saving up so I have enough money to live on. But if your business is doing well (and you only have to have a tax bill of £1000 to get into this situation, so not even THAT well), you need to be aware of this issue and make sure you have the money to hand.

I thought I’d better get someone official to explain all this, and the lovely Emily Coltman has obliged. Emily is Chief Accountant to award-winning software provider FreeAgent.com. Read on to find out all about tax payment on account.

Payments on account

Did you know that if you’re a sole trader, or in partnership, you sometimes have to pay one and a half year’s worth of income tax and class 4 National Insurance all at once?

This is because if your tax and NI bill is more than £1,000, and less than 80% of your income is taxed at source (like employment income, where tax is taken off before the money is paid to you), you have to make “payments on account” to HM Revenue & Customs (HMRC).

Calculating payments on account

Maria is a self-employed beauty therapist.  Her tax and NI bill for the year to 5th April 2012 (the tax year 2011/12) is £1,200.  This was her first year in business.

That £1,200 will be payable to HMRC by 31st January 2013.

But that’s not the end of the story.  Because Maria’s tax and NI bill is over £1,000 and none of her income was taxed at source, she must make payments on account for the tax year 2012/13.  These each amount to half of her bill for 2011/12, and will be payable by 31st January 2013 and 31st July 2013.

So by 31st January 2013, Maria must pay £1,200 for her 2011/12 tax bill, and £600 on account for 2012/13.  That means she has a whopping £1,800 to pay in total – one and a half times her tax bill for 2011/12.

Maria must also pay another £600 by 31st July 2013.

When the actual tax and NI due is known

What happens when Maria works out her actual tax bill for 2012/13?

If she’s overpaid, HMRC will give her a refund, but if she’s not paid enough yet, she must make a balancing payment.

Let’s look at that.

Refund

If Maria’s tax and NI bill for 2012/13 was actually £1,100, she’s already paid £1,200 on account towards that, £600 in January 2013 and £600 in July 2013.  That means she’s overpaid £100 which HMRC will refund her.

She must then make her payments on account for 2013/14, which will be £550 each (half of £1,100) and will be due by 31st January 2014 and 31st July 2014.

Balancing payment

But if Maria’s tax and NI bill for 2012/13 turned out to be £1,500, she’s already paid £1,200 towards that but still has another £300 to pay.  This is called the balancing payment and is due by 31st January 2014.

That means that on 31st January 2014 she must pay £1,050 (£300 balancing payment, plus her first payment on account for 2013/14, which is £1,500 / 2 = £750).

Can payments on account be reduced?

If you’re reasonably certain that your tax and NI bill for the following year will be less than the payments on account you’d make, you can apply to HMRC to reduce your payments on account.

Be warned, though, that if you reduce them too far, HMRC can charge you interest for late payment of tax.

HMRC should send you a statement of account explaining what you have to pay and when, but if you’re not sure whether this is correct, always check with them or with your accountant.

Emily Coltman, Chief Accountant to award-winning online accounting software provider FreeAgent, is a very unusual Chartered Accountant – she is fluent in plain English! Emily has been working with small business owners for twelve years and is passionate about helping them to escape their fear of “the numbers”.  She believes that equipped with the right tools anyone can learn to look after the finances of a small business. She is also a keen advocate of tax simplification, especially in the case of VAT.
Emily is author of two e-books, Finance for Small Business and Micro Multinationals. Web: www.freeagent.com
Twitter: @dialm4accounts
Mobile: 07857 162104
Office: 0131 447 0011
 
 

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