As your blog grows, you may start to take on opportunities where you receive compensation – either product or monetary. By the same token, you may also start to pay for things related to your blog: hosting, photo props, or conference tickets.
In the last couple months, I started paying a monthly fee for Quickbooks (Self-Employed) and it has helped me TREMENDOUSLY! It’s so easy to set it up so all your transactions from your bank and Paypal are recorded there. You can easily move them to the correct categories (Personal or Business) and then categorize them even further (things like office supplies, travel, any time you pay a virtual assistant, etc.). I really wish I would have started using it a long time ago but I love that next year I can start paying quarterly taxes and it will tell me exactly what I should pay. Give it a try and get 50% off your first 6 months!
In order for your blog to be profitable, you must track your income and expenses and start keeping track of your blogging finances to ensure you are staying in the green. Read on to find out how to keep track of your blogging finances, so you aren’t losing money, and to keep yourself from going crazy during tax season!
5 Tips for Keeping Track of Your Blogging Finances
1. Create two spreadsheets
To closely monitor your blog’s finances, create an income and expense spreadsheet. Since you will be dealing with lots of dollar amounts, separating the two means nothing gets mixed up. You can use Microsoft Excel or Google Docs – the latter will let you access your information, no matter where you are.
For each spreadsheet, add 14 sheets. The first one is for payments you are awaiting (income) or payments needed to be made (expenses). The next 12 are your monthly sheets, where the dollar amounts are broken down by category.
For example, the income sheet may have “advertising, sponsored post, affiliate marketing, and other” columns, while the expenses sheet may include “courses/ebooks, hosting, blog design, travel, and other” categories.
The remaining tab in each spreadsheet will be a total summary of the amount earned or spent. If you are savvy, you can create formulas in the spreadsheet to automatically add and insert the information on this page. If not, grab a calculator and input the information on the total tab at the end of each month.
2. Write down every payment or purchase, when it happens
Do not put off recording your income and expenses, or else you are bound to forget some of them! Keep the spreadsheet open on your computer, if needed, so you don’t forget to put in the check that came in the mail or the cost of the food you bought for a recipe.
3. Keep every receipt
Holding on to your receipts will help you at tax time. Should you be audited, you need receipts as evidence of the expenses you reported. It can also help you ensure you have all income and expenses accounted for at the end of the year. Keep paper receipts in an envelope. For online purchases, print the receipt or have a separate folder in your inbox for the confirmations or receipts.
4. Use PayPal when possible
PayPal is a very popular payment processor, and many bloggers use it to make purchases or accept payments. Since it works like a bank, you can see details on every transaction that goes through the website. Should you get behind on tracking your blogging finances, PayPal will help you get up to date.
5. Open a separate bank account for your blog
If you have a lot of income and expenses due to your blog, you may want to consider opening a checking account dedicated to your venture. You can get an EIN number from the IRS so you can open the account as a business. This will help you keep better track of things since your personal bills and purchases will not be included.
On a side note, if you already have a blog or are thinking about starting one, check out SiteGround for all your hosting needs. It’s who I use & who I recommend. I switched over to them from a company that was awful and the difference was amazing! If you have any questions about their services, leave me a comment & I’ll answer it for you!
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