As an online content creator, you already know the potential of Youtube. Youtube is the second most visited site globally – an amazing potential audience for your business to grow. As your Youtube business grows, you will need to start treating your channel as the business it is, including managing your finances. One of the first steps in managing your finances is ensuring that your accounting is handled properly, which is why we’re sharing our top accounting tips for YouTubers.
Accurate accounting for your channel can prevent unexpected expenses from appearing and ensure you’re taking care of your taxes. For example, depending on your income, you may need to start paying quarterly taxes or you may be skipping over potential tax write-offs.
Let’s take a look at how you can better manage your accounting and keep your business finances accurate and up-to-date:
To put it simply, accounting is the action or process of keeping financial accounts or records. Accounting involves recording all “credits and debits” into and out of your business. From the smallest transaction to large purchases or even paying a sub-contractor for video editing or transcription services, all should be recorded in your accounting system like QuickBooks.
Accounting allows you to easily access important financial information such as the cost of running your channel, your earnings, and your overall profits. Why is accounting so important for Youtubers? Well, to understand if you’re making money from your channel, you need to keep up with your accounting.
When you have accurate accounting, you can weigh your income and expenses to ensure that you’re not overspending or missing out on potential opportunities to outsource. Other benefits include tracking business expenses to write off at tax time and understanding where all your money goes across days, weeks, months, and even years.
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Let’s get to the good stuff, our top accounting tips for YouTubers. We’re sharing our top tips to ensure you’re able to start your business accounting without making the common mistakes we see every day.
Here are seven accounting tips for YouTubers:
Accounting software is a great way to speed up your accounting and even have transactions tracked automatically. We recommend using Quickbooks.
Although operating out of your personal bank account may be tempting, open your business account using a free EIN (no LLC required). Separating your funds will help track and classify your transactions.
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As a YouTuber, you’re likely generating income from multiple sources. Rather than tracking all of your income as income from a singular source, track where your income is originating from. Sponsorships, Ad revenue, product sales, affiliate marketing, etc.
Since you’re considered an independent contractor or self-employed as a YouTuber (unless you’re an LLC or S-Corp), you will need to set aside a portion of your income to pay taxes. You should set aside around 15.3% of your income for taxes.
Another task that can be easily accomplished while using accounting software, you should always keep a record of your expenses. This includes travel, technology, programs, and pretty much anything you’re spending on your business.
Not everything you spend on your business can be used as a deduction – or can it? Deductions for YouTubers and other content creators/influencers can be a bit tricky as you have different business expenses in comparison to traditional businesses. You may be surprised by what can be considered a deductible expense.
The initial setup of your accounting system is one of the most important aspects of accounting for YouTubers. If you do something wrong in the beginning, it can spell disaster later on – particularly since the chance of virality and a quick increase in income can happen nearly overnight.
When you’re ready to treat your channel like the business it is and keep track of your finances as a YouTuber, use our Business-Savvy Influencer Course to learn everything you need to know to DIY your accounting this year!