After a bit of hard work and establishing yourself as an influencer and therefore a business owner, you’ve decided it’s officially time to get serious about your finances. A common misconception for influencers is that accounting and bookkeeping is hard – and that’s simply untrue. With the right guidance, you can easily DIY your accounting as an influencer!
Naturally, you’ll experience a learning curve when you first get started – as with anything else. But, when you’re a small business owner and influencer, you may not have the budget to fully outsource your accounting (although that may be a future goal), and ensuring you’re properly handling your accounting is key to your success – and avoiding future trouble with the IRS.
Accounting is the act or process of recording and keeping financial information/accounts. With accounting, you track your expenses, income, losses, and gains. Essentially you’re tracking when, where, and how your money is earned and spent.
While accounting is a necessity to make tax time easier and more accurate, it’s also key to growth. You can track how you’re earning income such as which platforms or methods and where you’re spending your money.
Although this is natural for your everyday budgeting, it’s a necessity when it comes to running a business – and that’s exactly what being an influencer or content creator is, it’s your small business.
When it comes to DIYing your accounting, it’s not about speed, it’s about accuracy. As time passes, you’ll find it much easier and quicker to keep up with your bookkeeping and accounting. We recommend setting aside one day a week to track and mark your income and expenses.
Now, let’s look at these five simple steps that you can take to start DIYing your accounting:
The first step you need to take is to register yourself as a business. In addition to being an influencer, you’re also a business owner. While many influencers choose to establish an LLC, you can consider alternative entity types.
Rather than using your social security number, opt for an EIN. An EIN is essentially a social security number for your business and can be used to open a business bank account. Business bank accounts will allow you to keep your business funds separate – and typically have other special offers or benefits for using their services.
There are plenty of programs and systems available online to help you DIY your accounting as an influencer. If apps and websites aren’t for you, you can manually track your transactions by using a Google Spreadsheet and downloading invoices.
It’s highly unlikely that you’re starting your accounting journey before you’ve had any expenses or profits as an influencer, which means you’ll need to organize and categorize your past transactions. Depending on how many “ins and outs” and how long your business has been around, this may take a few minutes, hours, or even days!
While you can figure out a good bit of it on your own, it’s always best to spend some time learning the ins and outs of DIYing your accounting as an influencer. You want to learn which entity is best for you, your potential tax deductions, and how to look at your finances to see areas of profit, loss, and potential growth.