Hey Guys! A super informative post for you all today outlining the accounting tips for a profitable blog. When you first realise your humble blog can be a bit of a gold mine, providing you with either a useful second income or even replacing your main income, it’s very exciting. But hold on. You want that excitement to last and your blog to flourish in the long term. While blogging is great fun and very rewarding, there’s a lot going on behind the scenes that you need to get familiar with. Accounting is one of those things.
How Accounting Helps Your Business
Basic accounting consists of gathering up all the financial information in one place, so you know what your money situation is from one day to the next. But there is so much more information buried within those numbers. They can help with:
- Profit and loss forecasts.
- Future planning.
- More success with loan applications.
- Easier tax returns.
- Lower accountants’ fees.
With a successful blog you’re going to be dealing with advertising, sponsorship, agencies, marketing and promotion, as well as a host of other activities that form the structure of your business. You’ll have expenses, such as maintaining your domain and paying hosting fees, updating software and computer equipment, and if you go full time you’ll be thinking about insurance, taxes, and expense allowances.
Understanding Your Needs
You don’t need an extensive accounting system to keep accurate records for a small business. You can either set up your own system in a spreadsheet or opt for an online account such as Freshbooks or Freeagent. There are quite a few online accounting providers, and they make it very quick and easy to input your details as often as needed. Some will sync with your bank account to automatically capture transactions and add them into your records. Then all you need do is go in and provide explanations for what each one is for.
Using online systems for your daily accounting doesn’t mean you can’t get expert help from professional accountants. Very often they are happy to take care of accounting for sole traders or freelancers who use such accounts.
Do You Need an Accountant or a Bookkeeper?
In the world of accounting, these roles are often confused by people outside the industry. The jobs do overlap but have generally different functions.
- A bookkeeper will help you with keeping up to date records. They can help you set up a system that works for your individual needs, and if you want them to many will take care of sending and paying invoices on your behalf.
- An accountant takes a deeper dive, working from the books or records that daily bookkeeping creates. They’ll compile your tax return, make sure you’re not paying more tax than you need, and that you’re properly claiming all your expenses. If possible, they may even offer business advice if your records show areas where your business could be more productive or profitable.
Some accountants may offer bookkeeping services, but don’t take this for granted. It’s always best to ask.
Separate Personal and Business Finances
If you’ve been used to running a hobby blog in your spare time, you’ve probably been paying its expenses from your personal bank balance. Once you enter the realms of becoming a professional blogger, it’s better to keep a dedicated business account. They’re easy to open and set up, especially if you don’t want to borrow money or run an overdraft, and you’ll often be granted a free banking period as a welcome.
Keeping business records is a lot easier with a separate bank account. For one thing, everything that appears on your statement is business related and needs to appear as an entry in your accounting records. You don’t have to filter through reams of household and personal spending to find the relevant transactions.
Accounting tips for a profitable blog is important therefore opening that new account could be the perfect step to get the ball rolling.
Automate Whenever Possible
Blogs take up a lot of time. Even if you were just engaged in writing your posts, it would take several hours each week. When you factor in the other, behind the scenes activities mentioned earlier, time management becomes more important.
At least make sure you’ve got online banking and accounting, with a sync between the two:
- Set up bank feeds so you don’t have to manually enter each transaction every day.
- Use debit or credit cards for expenses but pay off the credit balance each month.
- Manage your invoices online, both those you pay and the ones you send to your clients. Digital records are acceptable in many instances to HMRC so electronic records save you lots of time.
If you’re just starting out on your blogging journey, or even if you’ve been at it a while but want to streamline your process, you’ve hopefully got a few ideas to try. There’s always more than one way of doing things, and with accounting the important thing is to get stuck in and make a start with keeping proper records.
I hope you have found these accounting tips for a profitable blog both, informative and useful. Maybe it’s something you haven’t really considered before – but why not give it a go. You have nothing to lose if you already have an established blog.
P.S Have you seen the recent post all about learning new skills?