Some might say that blogging is the ultimate form of self-sustainability in the digital era, one that enables you to be location-independent, to earn a solid income from a multitude of different (yet reputable) sources, and to have a creative outlet for your experiences. What they’ll conveniently forget to tell you is that even such a rewarding digital career comes with its own setbacks and challenges. Enter: your bookkeeping troubles.
Although they might not necessarily be classified as troubles, since you’re not a bookkeeper by education or profession, they can become a source of regular headaches when you start digging into the knowledge it takes to run an online business and keep up with your accounting needs. From ensuring compliance, following tax regulations, covering expenses such as website maintenance, all the way to protecting your cash flow, taking care of your books is a complex network of tasks.
As a blogger, there are certain steps you can take to simplify this intricate process and to make sure you’re on the right earning track with your digital career. Here are a few pointers to make your blogging life easier, and take a few bookkeeping tasks off your mind.
Separate your bank accounts
It may seem like a no-brainer, but skipping this single decision may complicate your accounting efforts as soon as your blogging business takes off. For starters, tracking your business expenses, your everyday expenses, categorizing them all properly (to which we’ll get in a moment), and noting down your tax responsibilities is far simpler when you have a separate business account.
Head to a trusty bank, and see what you can do in terms of opening a business bank account. With a dedicated card linked to your business account, you’ll have a record of any transaction that happens, making it all the easier for you to keep an eye on your books.
Categorize your statements
When you’re just starting out, using a simple spreadsheet tool can be more than enough to help you with your income, profits, tax returns, and expenses. Depending on how your blogging business is organized, and the sources of your income (whether it’s affiliate marketing, selling services, setting up webinars, etc.), you’ll have a wide array of categories you can introduce to make your books neat.
This spreadsheet approach can help you deduct the items that are truly related to your blogging business, which is far easier to prove with transaction records and a regularly maintained spreadsheet for all your booking needs.
Utilize cloud solutions
Although at the beginning that spreadsheet may work great for your blog, as your business grows and you have more collaborations to track, using a digital solution can be of great help. For example, you can implement cloud accounting software with Xero integration to make sure that all transactions are tracked, automate as many processes as possible, and keep all of your data safely stored.
This is a great solution especially for bloggers who do so much of their work on the go. That means that you can track all of your expenses during every trip, via your phone or your laptop, and you can refine your accounting efforts over time, as more clients come your way, and your blog business grows. Plus, with a trusted solution on your hands, you can rest assured that your business is in line with all the tax regulations and laws that apply to your business.
Keep those taxes in mind
While we’re on the subject of taxes, this may be the most dreaded segment of bookkeeping any blogger will face. However, with the right approach and thorough preparation, you needn’t be afraid of filing that tax report and keeping track of your expenses or any deductibles.
Perhaps the simplest way to be proactive and plan for taxes ahead of time is to keep an eye on your income statements at the end of every month. Then, before you invest into your business, or pay yourself a hefty (and well-deserved) salary, set aside around 30% of that monthly income for expected taxes. Since you’re self-employed, and different regulations apply to your profession in different regions, make sure you talk to a lawyer or accountant with experience that pertains to your business. With a little bit of guidance, you’ll be able to cover your taxes almost effortlessly over time.
Plan your blog budget
Running a blog also comes with certain expenses. That said, you need to make sure you don’t overspend your budget, and that you have access to enough funds to run your blog smoothly over the year. Whether you hire a professional photographer, or you’re visiting a networking event that’s scheduled several months in advance, or you need to pay for hosting, website maintenance, and SEO, it all comes down to setting aside a portion of your income for effectively running your blog.
As months go by, you’ll be able to track if you’re in line with your budget, how you can change your spending habits, and if you can make any smarter decisions regarding your tax allocation.
Bookkeeping may seem intimidating right now, but with a little professional advice and a few handy digital tools to automate your processes, you can certainly transform your blogging career and have peace of mind when it comes to your profits. Use these simple tips to create a solid bookkeeping foundation for your blogging business, and pour all of your creative energy into growing your business.