What do you benefit by doing your own blog bookkeeping?
How to organize yourself and do your own blog bookkeeping, we need a spreadsheet on our computer, a free resource available can be found at http://www.openoffice.org/ which is equivalent to an Office Suite.
When the online marketing business grows, you can purchase a small bookkeeping system to meet your requirements; or hire someone to take care of the finances and tax implications for your blog.
A good place to start by keeping proof of expenses together with copies of receipts, open a folder called Blogging Finance on your desktop.
Save Invoices/Receipts as a PDF (Portable Document Format) into one of the following sub-folders. Firstly give the Sub-folders a name, Expenses and the other can be called Money Received.
For your Banking make sub-folders for each bank you work with, place relevant movement PDF copies into these sub-files, this assists when reconciling bank accounts.
When you register the home business, you’ll need proof of expenditure together with the receipts for bank officials and tax purposes.
Please remember this record of expenses in the beginning is to give you an indication of what you’re spending and in no way is this a “set of accounts”.
This is purely maintaining a record to enable you to balance back to your bank statement when it arrives. In so doing you should be more aware of the spending of funds and not end up having unplanned debt.
Depending on which country you live in, you may even be able to request back some of the expenses incurred whilst setting up your new Blog in the form of a Tax rebate. Inquire at your local authorities.
Most of us in the online marketing business do not calculate the cost of working from home. We do not know how, or what we can or cannot do when it comes to the profit and losses we may incur once our work at home business is a sizeable operation.
Some start off just wishing to work from home, do it as a hobby and grow. Others find themselves in a situation where setting up online is a livelihood out of necessity.
• When you start, build a good financial foundation – you will know what your income is and where you are spending money.
• Starting up is going to cost, once you master selling online you will be able to deduct the expenses from the sales, this will enable you to reflect a true profit. For example; Gross Total Sales (no deductions or tax) less Expenses all expenses incurred equals Net Profit. Net Profit is actual profit after all working expenses have been paid.
When working from home be sure to find out whether the office accommodation you are using at home is tax deductible. If your local authority gives you the go ahead, you will have to measure the area allocated and estimate the worth by market related value.
In other words, if you’re paying for a house bond or rent, you will prorate the space you use for example; total floor space is 1000 meters square – you only use 100 meters square; that is 10:1. Rental/Bond is $1 000 per month at 10:1, your estimate will be $100 per month as an “office rental”.
If you employ full time housekeeper, the ratio for keeping the office clean will work exactly in the same way as mentioned above. You pay the housekeeper $100 per week; therefore $10 is for keeping your office neat and tidy. This is an expense you are paying and is subtracted in your accounting spreadsheet.
To add to this you can take a portion of interest paid on a bond as part of your expenses, plus electricity, water, even maintenance such as painting and upkeep. Remember these deductions increase your earnings and lower your taxes, so it is worth the effort.
Something to think about: “Finance, like time, devours its own children. ” – Honore de Balzac