Before your readership takes off, it’s important to get your blog-related finances in order. Taking the time to set a good foundation now will help you as you grow into new readership and bigger opportunities.
Open a Business Bank Account
As you grow your readership, you will likely incur more costs associated with maintaining such an awesome blog – web hosting, graphic design, supplies, etc. Your blog is becoming a business. The first and most important thing you can do is get a separate bank account. Worried about fees? See if your bank will waive the maintenance fees if you keep all your accounts (personal and business) with them. If not, shop around for a local credit union that can meet your needs.
Once the bank account is in place, you should be using a related debit card or business credit card to make all your blog-related purchases. This will make things much easier as you begin tracking the income and expenses associated with running your blog.
Tracking Income and Expenses
It’s important to keep track of the income you earn from your blog as well as the money you spend to maintain it. Good records will ensure you are all set for April 15th.
Accounting software can help you maintain your books and records. There are several to choose from, so ask yourself the following questions:
- Do I want to have the ability to access my data online or would I prefer software that stays on one computer?
- Does the accounting software link easily with the other applications I use for business (e.g., online banking sites, PayPal, Shopify) How seamlessly can I work with my accountant using this software?
- If I send invoices through this software, can I customize them to use my personal branding?
- Does this software provide reports I can present to financial institutions if I need financing? (In particular, Profit and Loss Statements are very useful!)
- Can I delegate responsibilities to assistants or coworkers?
Accounting software will also help you categorize income and expense items so you can easily track where your money is going. You’ll need to know if you spent money on “office supplies” or “meals and entertainment” because they are treated differently at tax time!
The best accounting software is one that you will use regularly, so make sure you take the time to pick one that best fits your needs.
Even after you start using your business account for blog-related purchases, you will need to keep the receipts relating to larger purchases. Try using a twelve-pocket organizer or separate folders to keep monthly purchases in order. This way, if you ever need to refer back to a receipt, you will have an easier time finding it.
Not interested in keeping paper? Try scanning your receipts and saving the images in folders on your computer. Certain accounting software programs even allows you to “attach” an image of a receipt to a specific transaction, so you will always know where to find your documentation.
Any time you spend getting your blog financing in order now will help you in the future as your readership and blog grow.