Blogging Income in QuickBooks
Here’s a question from a reader about blogging income:
Most bloggers get advertising money from ad networks, who take a commission and payment processing fee. My question is this — is my income the amount that was paid for the ad before or after these commissions and fees were taken?
Essentially… do the commissions and fees make it into my accounting system, or do I only care about the amount that is on the check/EFT that I get in my hands?
Here’s a quick answer:
Your “customer” is the ad network or 3rd party that pays you. What they receive from the actual advertiser is irrelevant to the issue of your income. So your income is only what you actually receive, whatever the method of payment. You may want to track what fees or commissions are deducted for other reasons (like finding the highest paying programs) but it is not necessary for tax purposes.
One option would be to set each advertiser up as a customer (Google adsense as well). When you receive a check simply record a sales receipt using the appropriate items and accounts.
Any other questions about accounting (or using QuickBooks) from bloggers?
Which QuickBooks Version is Best for Bloggers?
This is the first post in a series of “blogger bookkeeping tips.” If you have a question you’d like to see addressed here just leave a comment with your question. If you prefer you can also send an email to me at - rachel@knoxvillebookkeeper.com
First of all, if you’re reading this post you probably already realize the importance of tracking and being able to analyze your income and expenses. Good job!Looking at a program like QuickBooks is a good start too.
If you’ve never operated a business before (and if you’re making money from blogging it is a business) choosing an accounting software package can seem very overwhelming. With QuickBooks you have more than 10 different choices. See all the versions by clicking here.
For even the biggest blogging empires, the Premier or Enterprise Editions would be overkill. That eliminates half the choices, leaving Simple Start, Pro and the online version. For Mac users you only have 1 choice - QuickBooks Pro for Mac. While the Mac version has some fewer features than the Window version, it will do very nicely for bloggers. Windows users have a few other things to look at.
Simple Start - the greatest benefit to Simple Start is that it has a free version. Browsing the QuickBooks site you will see various references to the “Simple Start Plus Pack” which includes a training CD, 250 checks, and online backup service. You can do a quick search on the site for “Free Simple Start” and download the software only. Simple Start has various drawbacks though. Primarily, the inability to import data from banks (including paypal) or other QuickBooks versions. There is also no option to record sales receipts, something that can save you a lot of time if you have many transactions to record. My Recommendation - Get Simple Start if you can’t afford anything else. Invest some of your earnings back in your business as soon as possible.
QuickBooks Pro - This is the software I would use (if I didn’t already own the Accountant’s Edition for my bookkeeping business). QuickBooks Pro allows you to import bank transactions automatically, record sales receipts and track income categories easily with classes, all of which I’ll be covering in upcoming posts. You can click here to save 15% off QuickBooks Pro + get free shipping.
QuickBooks Online - QuickBooks online edition is a good choice for those who want to be able to work on their books from any (windows-based) computer, anywhere they are. It also allows you to easily share your books with partners, virtual assistants and bookkeepers/ accountants. As long as your subscription is up to date, you always have the most current software. *** Note *** This version is only compatible with Internet Explorer. A high-speed internet connection is recommended.
A final option would be Quicken Home & Business. I would only recommend this for those who have very small side businesses and don’t fully separate business & personal expenses. (You can see my views on that here.) Right now you can save on a Quicken / Turbo Tax combo by clicking the link below.
The final word - if you are a serious blogger and want to have meaningful reports when making decisions choose QuickBooks Pro or Online Edition. If you are interested only in tracking money in and out to make taxes easier, Simple Start may be all you need. You can always upgrade later.
Do you use PayPal for your Business?
How do you use Paypal to send or receive money in your business?
First, create a new Bank Account called Paypal. You can use this account just like your checking account, depositing payments for payments received and writing checks (no check number needed) for purchases.
Accounting for Paypal fees? These are “bank charges” or “merchant fees” expenses. For invoices, record the payment for the full invoice amount (if that is what was paid). When depositing to the Paypal bank account, record the fee as a negative amount on the first 
empty line in the deposit window.
Click here for larger screen shot
** Note ** These instructions work for basic transactions in Paypal. If you have shipping, sales tax or more complex transactions this will not be the best solution for you. I am researching a few options (including some of the software mentioned below and in the comments). I will report back with a follow up.
Want to download your transactions directly to QuickBooks? After logging on to your Paypal account, select History > Download History. Choose the time frame to download and select the QuickBooks .iif file type. Download to your desktop or another easy to locate directory. Try including the date in your file name to keep things organized.
In QuickBooks, from the file menu, select Utilities> Import> IIF files. (This may very based on your QuickBooks year and version.) Locate and open your IIF file downloaded from Paypal.
Now to take a look at the transactions you just imported. Bring up the Find window with Crtl+F. Filter by Account> Paypal and Entered/ Modified> Today. This will create a list of all the new transactions in the Paypal account. Double-click on transactions to edit accounts or memos.
For an even more automated system, try SimplePort from Simple Biz Systems. SimplePort recognizes sales and transfers and creates the appropriate sales or banking transaction in QuickBooks. For a full list of benefits click here. There are some limitations with refunds and foreign currency so this may not be a solution for you if you have many of those transactions. Sign up for a 30-day free trial to see for yourself.
