Blogging Systems – My Method of Tracking Finances

If you have a business, you know you need to track your business finances. There are many applications and cloud based products which are available to use, at a cost of course. Many bloggers do use them – Freshbooks, Quickbooks, Quicken, and more.

My blog is pretty low key and the finances for it are pretty simple. For others though, it is a different story. I have only a need to track income and expenses, cash flow and do bookkeeping and record keeping for tax purposes. Others may have payrolls to meet, invoices to generate, tracking of the money spent on marketing vs the income it generates, funding to seek and  the interest requirements on that to meet, investing of excess profits, use of and tracking of credit – and more.

For me, a spreadsheet type workbook is enough, for others, my solution would be too manual and cumbersome.

Background.

My blog is owned by my single member limited liability corporation. I have an accountant to advise me and to prepare the taxes, which are currently done on schedule C. I track by the cash accounting method and try to use the same accounting category my accountant includes on the yearly taxes – to make the communication between us less costly and difficult.

I hire independent contractors as opposed to employees, to avoid some of the more complex legal and accounting issues. Currently, my only sources of income are a) staff writing which I do b) direct advertising and c) affiliate income. My expenses generally run to an occasional staff writer or person to comment for me; hosting and domain fees, the accountant and commissions to an ad manager.

My process.

Name: Financial record keeping

Category: Administration

Purpose: To provide a solid foundation of financial activity and record keeping to grow the business, ensure compliance with tax laws, ensure payment of bills and track the financial pulse of the business.

Importance: Critical

Timing: One time setup, at each accounting event and at tax time (quarterly and at year end).

Time spent: The one time setup up took approximately 3 hours to complete. For each accounting event, I spend about 5 – 10 minutes.At tax time quarterly I spend about ½ hour and at year end, I spend about 5 hours.

Interaction with other systems: This system interacts with my system for money movement (paying and receiving money).

What do I do?:

One time:

Create an open office spreadsheet collection each year with the following sheets:

• Income tracking
• Direct Ads
• Staff writing
• Affiliate
• Product sales
• Expense tracking
• Professional and Legal fees
• Hosting fees
• Domain name fees
• Phone, internet fees
• Software
• Hardware
• Educational expenses
• Contractor payments
• Misc expenses

Set up each sheet with a corresponding pivot table sheet to summarize it, as well as a summary on the first sheet to include major expense and income categories and show net income and net income average by month.

For each accounting event (payment to me for staff writing, income from ads, hosting fees, etc):

1. Perform the event (whether it is using Paypal to generate and invoice or to pay my hosting fees or writing a check from my business checking account for some miscellaneous expense).  This is the interaction with my money movement system.
2. Print the receipt and file it in either the ‘income’ or the ‘expense’ paper folder for the current year.
3. Update the appropriate row and column in the spreadsheet with the item.
4. Refresh the pivot summary table to reflect the update to the sheet for that item.
5. Save the spreadsheet.
6. Review the summary on the first sheet to evaluate financial progress to date.

For taxes – quarterly

1. Review the net income to date to decide if I need to include more on my estimated taxes due to the business.

For taxes – April

1. Ensure all paper receipts were printed.
2. Go through all paper receipts and organize by type and date.
3. Ensure all transactions were entered in the accounting system by comparing paper receipts, bank statements, Paypal transactions and checkbook register to the entries.
4. Update the record keeping spreadsheets with missed information, if any.
5. Review accounting categories and make sure everything is in a category.
6. Print all parts of the spreadsheet and file in the business file.
7. Print the summary sheet and any sheets with questionable categorization to send to the accountant.
8. Submit paperwork to accountant along with personal tax paperwork (he asks us to fill out a form pulling all information together).
9. Answer any questions the accountant may have.
10. Receive and review the Schedule C and worksheets prepared by the accountant for filing.
11. Resolve any questions or issues with the accountant.
12. Write a check for any taxes owed due to the business to myself (so we can write one check for any taxes due but still keep the business finances separate from our personal finances).
13. File taxes with the IRS (we usually have the accountant do this electronically).
14. File taxes with the state.
15. Put the submitted IRS and state tax returns in our personal tax file along with all of the information used to generate the Schedule C (in case of audit we need to be able to figure out how we got to all the numbers).

Examples of my sheets and pivot tables.

Summary sheet:

Income Source	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Total
Staff Post	$210.00	$480.00	$75.00	$0.00	$200.00	$225.00	$240.00	$250.00	$2,605.00
Ads	$400.00	$684.08	$925.00	$375.00	$65.00	$0.00	$100.00	$0.00	$4,044.08
Affiliates	$0.00	$0.00	$24.63	$0.00	$0.00	$0.00	$0.00	$0.00	$42.57
	$610.00	$1,164.08	$1,024.63	$375.00	$265.00	$225.00	$340.00	$250.00	$6,691.65
Income all	$6,691.65
Expense all	$3,578.81
Net before taxes	$3,112.84
Avg net per month	$259.40

I had to leave out 4th quarter as it wouldn’t fit on the screen!  You can see though, that I don’t make much yet from my blog.  These figures are pretty close to what I did in 2012.

My sheet for income from affiliates:

Income Source	Month	Day	Year	Amount	Description	Site	Solicited by	Sub cat
Affiliates	1	1	2012	$0.00		All	NA	Amazon
Affiliates	2	1	2012	$0.00		All	NA	Amazon
Affiliates	3	2	2012	$24.63	Beginning to date payout	All	NA	Amazon
Affiliates	4	1	2012	$0.00		All	NA	Amazon
Affiliates	5	1	2012	$0.00		All	NA	Amazon
Affiliates	6	1	2012	$0.00		All	NA	Amazon
Affiliates	7	1	2012	$0.00		All	NA	Amazon
Affiliates	8	1	2012	$0.00		All	NA	Amazon
Affiliates	9	1	2012	$0.00		All	NA	Amazon
Affiliates	10	1	2012	$0.00		All	NA	Amazon
Affiliates	11	1	2012	$0.00		All	NA	Amazon
Affiliates	12	21	2012	$17.94		All	NA	Amazon

The corresponding data pilot sheet:

Sum – Amount	Month
Income Source	1	2	3	4	5	6	7	8	9	10	11	12	Total Result
Affiliates	$0.00	$0.00	$24.63	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$17.94	$42.57
Total Result	$0.00	$0.00	$24.63	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$17.94	$42.57

Note that I had to have an entry for each month – even if the figure was zero – so that month would show up in the data pilot sheet.

My sheet for miscellaneous expense – which shows some of the accounting categories I use on the far right:

Expense Source	Month	Day	Year	Amount	Description	Site	Subcategory	Tax Category
Misc	1	26	2012	$149.00	FINcon12 Registration fee	FMV	Education	Legal and Professional fees
Misc	2	28	2012	$0.00	None	All	Contracted Services	Contract Labor
Misc	3	19	2012	$27.15	HP Laptop Diagnostic – system board crashed – cost more to fix than for a new one	All	Equipment	Repair & Maint
Misc	3	22	2012	$431.89	New Dell Laptop – motherboard died on HP laptop	All	Equipment	Property & Equip
Misc	3	26	2012	$86.37	External hard drive for backups – Blue My Passport	All	Equipment	Property & Equip

Here is the corresponding data pilot sheet for the miscellaneous expense sheet:

Month	Expense Source
1	2	3	4	5	6	7	8	9	10	11	12	Total Result
Misc	Misc	Misc	Misc	Misc	Misc	Misc	Misc	Misc	Misc	Misc	Misc
$149.00	$0.00	$550.41	$225.00	$220.00	$371.57	$5.00	-$149.00	$718.35	$10.00	$0.00	$0.00	$2,100.33

That it folks. It may seem cumbersome to some, but it works (so far) for me.
What is your system for tracking finances for your blog or small business?