I’m feeling quite grown up today – I’ve recently hired an accountant and today we’re getting together to talk company structures, bookkeeping, tax and the like.
One of the stressful parts of starting a blogging business has been getting the administrative side of things up and running. I’m not at all wired in this way (I’m more of a dreamer, networker, marketer, creator) and so things have been quite messy. This has largely been because to a large extent I never planned for blogging to become a way of earning an income at all.
When I first started putting ads on my blogs just over 2 years ago it was with the goal of paying my ISP and perhaps even some hosting costs. A cheque (check for you North Americans) would come every few months (if that) and there was very little to account for.
I’ve been very fortunate and instead of a bimonthly $100 cheque the way things are going 2007 could well be a 7 figure year now that Chitika’s tripled (and some) daily income.
To say things have become more complicated is an understatement.
As I look over all of the receipts, cheque stubs, invoices etc that I’ve collected for the accountant today I’ve realized that I now have ten or so regular income streams (in a variety of overseas currencies) – some of which arrive in the form of cheques, others via PayPal and others via direct deposits. Some arrive monthly, others quarterly, some require me to send invoices and others come automatically. Things will continue to grow more complicated in the months ahead with some of the deals I’m working on which could involve stock options, royalties and a variety of other income streams.
While there are not many overheads to a business like this – there are an increasing number of expenses which are tax deductible and provide their own bookkeeping challenges.
Speaking of tax – readers often ask me about it – more specifically they ask whether I pay it or have some way to dodge the system. I’m quite up front about the fact that I do declare my income and pay the taxes I am legally required to pay. In fact until now I’ve probably been a bit stupid and have paid more than I should have due to my poor accounting skills and a lack of understanding of Aussie GST law. I will continue to declare my income – although will be a bit smarter about it with the system my accountant is setting up.
To keep a long and complicated story short – what we’re doing is transitioning from a hobby business with me as a sole trader we’re moving to a company structure.
I guess all that I’m reflecting upon is that things have changed for my business and up until this month the financial and record keeping side of my business has not changed with it. I’m a big believer in the idea that a business is only as strong as it’s weakest link – and I suspect that many ProBloggers out there will be like me in this and need to get their administrative side of business up to scratch also.