From a former CPA, bookkeeping for influencers doesn’t have to be difficult. Once you know a few basics, it’ll become a part of your influencing business like everything else.
Hi, I’m Sarah, a former and now *inactive/unregistered* Certified Public Accountant (CPA). I left the accounting world behind to become a travel blogger and influencer but still use my skills to understand how bookkeeping for influencers work and apply it to my own blogging/influencing business.
In this post, I’ll share with you:
- the basics of bookkeeping for influencers such as keeping track of your revenue and expenses,
- a few good things to know about doing your taxes
- and the best ways to keep track of your accounting as an influencer!
Disclaimer: I am an inactive/unregistered CPA and anything in this post is meant for entertainment purposes only!
You should reach out to a local CPA or bookkeeper for influencers in your state/country to find out how to best keep track of your revenue and expenses considering all laws within states/countries are different.
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What is bookkeeping for influencers?
As an influencer, you make money and you also spend money to support your business.
For example, you make money by doing sponsored posts or making affiliate income by recommending products to your followers.
On the flip side, you also spend money to be able to create those sponsored and affiliate posts. You might spend money on Instagram planning apps like Planoly or on a tripod that helps you take really good pictures of yourself!
Keeping track of the money that goes in (revenue) and out of your influencer business (expenses) is called bookkeeping.
Even though bookkeeping itself can be tedious, once you get a process going, it actually gets somewhat fun because you’ll see exactly how much money you’re making as an influencer and how much your business has grown over time!
Why is good bookkeeping a must?
“Good” bookkeeping means keeping track of your invoices and expenses in an organized and timely manner.
There are three main reasons why good bookkeeping for influencers is a must:
- For everything tax related
- To analyze how your business is doing and use this information to make more money
- To save yourself headaches
For Everything Tax Related
According to the Internal Revenue Service (IRS), you have to file report how much money you make to the government to potentially pay taxes on your income “if your net earnings from self-employment were $400 or more“.
That doesn’t mean you have to pay full taxes only on the money you make. You only pay taxes on the money you make less the money you spend, which is also known known as tax deductions, tax write-offs or expenses.
If your bookkeeping is up-to-date and accurate, then:
- Your yearly tax reporting will be easier
- Calculating your quarterly tax payments will be easier
- You can save money on taxes by making sure to keep your taxable income as low as possible with tax deductions
Better Analysis of Your Influencer Business
With good bookkeeping, then you can get into the world of accounting.
Bookkeeping is the act of keeping track of your revenue and expenses whereas accounting delves into the analytics of your revenue and expenses.
By seeing where most of your income comes from or perhaps where you are spending too much money, you can clearly see where to put your attention in your influencer business (i.e. sponsorships or affiliate marketing) or perhaps decide to let go of expenses that are costing you too much.
Peace of Mind
When you keep track of your revenue (money coming in) and expenses (money going out) consistently and in a logical manner, you won’t have to shuffle through a year’s worth of receipts to prep for tax time in April. Doing taxes will be much easier.
Also, with your books in order and knowing exactly where you make the most money or see what expenses are necessary, you’ll be able to focus better on the creative part of your business: creating and influencing!
The Basics of Bookkeeping for Influencers
Sweet Reminder/Disclaimer: I am an inactive/unregistered CPA turned travel blogger/influencer. This information is for entertainment purposes only. Reach out to your local CPA to get specific advice on bookkeeping for influencers.
There are three basic numbers in bookkeeping that influencers should be aware of.
It gets more detailed than this but this is a good high-level overview to start you off in the world of bookkeeping.
Revenue refers to the money you make from your influencer business whether it’s monetary (cash) or in kind.
Monetary payments can come in the form of:
- Affiliate marketing
- Digital product sales
- Physical product sales
In kind products and services that have a value and are exchanged for social media promotion must also be included in your revenue.
All of this must be included as part of your revenue.
To keep track of revenue, you have to send invoices to your clients or download invoices from websites that you use to make money. You’ll want to store copies of these records in a safe place such as in an bookkeeping program or in a Cloud if you opt for the Excel sheet method below.
Expenses refers to the money you spend to maintain your influencer business so that it makes money.
Common expenses for influencers include but are not limited to:
- Cameras and related equipment
- Home office
- Travel expenses
- Meals and entertainment
Note that many of these categories above have certain exceptions to how much you can expense and over which period! Reach out to a local CPA to get advice for your influencer business or use this bookkeeping program that gives you access to your own personal bookkeeper to ask questions to.
To keep track of expenses, you have to download invoices or take photos of receipts, and keep a copy of them in a safe place such as in an bookkeeping program or in a Cloud if you opt for the Excel sheet method below.
Revenue, the money you make, less expenses, the money you spend equals your profit.
- Revenue – Expenses = Profit
If you account for your expenses according to what is allowable as tax deductions or not, then your profit is also known as taxable income.
Best Tips for Influencers to Help With Bookkeeping
In the first couple years of being an influencer, I didn’t have a good system down with my bookkeeping. Here are my best tips so you can skip the hassle and take care of this part of your influencer business easily.
Get a Business Credit Card
When you have a lot of business expenses mixed in with personal expenses on one credit card, it can be hard to track your business expenses.
As a result, you might want to do what I did and get a separate credit card for your influencer business if your finances allow you to; reach out to a financial consultant if you need help making a decision with this.
Your credit card for your influencer business doesn’t necessarily have to known as a “business” card like the American Express® Business cards, which have high yearly fees.
It just has to be a separate credit card that you don’t use for personal expenses.
For my travel influencer business, I have two cards:
- The American Express Delta SkyMiles Card
- Since I travel so much, I got this mainly to save money on baggage while flying for both me and a travel companion and get priority boarding with Delta in the US.
- With my referral link, you can get 70,000 Bonus miles you use your card to make $2,000 in purchases within the first 3 months!
- There is no fee for the first year; then it’s $95/year after.
- Chase Sapphire Reserve
- Again, since I travel so much as a travel influencer, I got the Chase Sapphire Reserve because of all its travel benefits.
- The fee is high at $550/year but this gets offset quickly with the $300 travel credit, higher points value, trip protection, complimentary airport lounge access and Global Entry fee credit.
If you don’t have too many expenses, your finances aren’t stable at the moment or you can’t pay off your bill in full each month, then of course don’t get a credit card yet or consider a no-to-low fee one! Talk to a financial consultant if you need help deciding.
Keep Good Track of All Your Receipts
You’ll want to keep good track of all your receipts whether they are inputted right into a bookkeeping program (two are listed below) or you save them in the Cloud (method listed below).
The reason for this is because if you are audited by the IRS, then you may have to pull up old records as proof. It’s best to keep your records for at least three years but you may need to keep them indefinitely (IRS.gov).
Do Your Accounting Weekly
From my own personal experience, you’ll want to set aside 30 minutes each week or at least every other week to do your accounting (if you do it manually with the Excel sheet method).
If you don’t keep up with it in a timely manner, it’s easy to lose track of expenses you paid for, which means you’ll have to pay more in taxes with less deductions.
Plus, it gets really tedious when you have weeks and weeks of bookkeeping piled up to do. It’s best to do a little bit each week so it doesn’t build up and take a large portion of your time all at once.
2 Methods to Keep Track of Your Bookkeeping
Now that you know the basics, here’s how to keep track of your bookkeeping as an influencer. These two methods include:
- a free one, which is what I did in the beginning of my influencer days,
- and very helpful method that includes a dedicated bookkeeper to help you with the specifics of your influencer business. I moved towards this after a few years of influencing because doing my own bookkeeping was so tedious.
Method 1: For New Influencers
This method is probably preferable if you’re a brand new influencer and making less than $2k/month.
Most influencers like myself start out their bookkeeping on a simple Excel sheet because bookkeeping for influencers is actually not too complicated.
You have money coming in and you have money coming out so if you’re on a budget, all you need is an Excel sheet with four tabs:
- tab for Revenue (money you make),
- a tab for Expenses (money you spend),
- and a tab that takes your Revenue and subtracts your Expenses from it so you can see your Profit (how much you make from your influencer business).
The best part about using an Excel sheet is that it’s free.
You can either use the Microsoft Excel or Numbers program that comes with your PC or Macbook, or even better, use Google Sheets in Google.
With Google Sheets, your bookkeeping will always be online in the Cloud and you’ll have access to it from anywhere. You also won’t have to worry about it not saving or getting corrupted on your computer so it’s always safe.
I first used the Excel sheet method when I started out as an influencer and I found it to be quite tedious because of keeping track of invoices and receipts. It is fully done manually without any type of automation.
Once inputting filling out the Excel sheet with your invoice or receipt, I’d have to keep a good system of files separately in the Cloud.
How to Keep Track of Your Records With This Method
I eventually moved to a bookkeeping program that comes with my own dedicated bookkeeper but before then, here’s how I kept track of expenses, which you can follow.
- For every revenue or expense, you’ll want a PDF, photo or screenshot of it.
- Rename the file so it’s formatted as “MMDD Name of Receipt”.
- It’s helpful to numerically order your files like this so that they are in order and you can easily refer back to them by month and date, which corresponds to your spreadsheet.
- Drag and drop it into a Revenue or Expenses folder in Google Drive, Amazon Drive, Dropbox, etc.
- Keep your Revenue and Expenses folder separate so you don’t mix them up.
Again, sweet reminder/disclaimer, just because this worked for me; it might not work for you! Considering I am no longer a CPA, this information is purely for entertainment. Make sure to reach out to a local CPA for influencers or use a good bookkeeping program with a dedicated bookkeeper who you can ask questions to.
Method 2: For Established Influencers
This method is preferable if you’re an established influencer and making more than $2k/month.
After a couple of years of doing the free Excel method above, which got quite tedious with manually filing my records, I finally got a bookkeeping service with a dedicated bookkeeper to ask questions to.
Using this service has been a life changer since I can ask my bookkeeper questions anytime.
The company I use is actually in the Netherlands since I’m an American living abroad but an influencer friend uses and absolutely loves Bench so I checked it out for you to see what the hype is about.
There are so many pros to using Bench as your bookkeeping software for your influencer business. Here are a few of my favorites:
- You get a dedicated bookkeeper.
- Your credit card transactions and bank account are synced automatically with Bench.
- Uploading your records onto Bench is easy with their software.
- You get a clear breakdown of all your expenses to make better decisions in the future.
- Paying quarterly taxes and doing yearly taxes will be much easier.
- You have more time to focus on the revenue-generating activities of your business.
Let’s dive into how the above will make your bookkeeping much easier and more accurate!
Already convinced? Start a free trial here.
You get a dedicated bookkeeper.
With Bench, the best part is that you get a dedicated bookkeeper that you can call or message anytime with bookkeeping questions.
Even better, you’ll have an extra set of eyes on your bookkeeping checking to see if anything looks out of the norm. Your bookkeeper will literally message you if something looks unusual!
Your credit card transactions and bank account are synced automatically with Bench.
You no longer have to manually enter in every invoice or expense manually, and you certainly don’t have to upload your records to the Cloud manually either!
All you have to do with Bench is connect your credit card accounts as well as your bank accounts, and your transactions will get synced in automatically.
Uploading your records onto Bench is easy with their software.
For those transactions that don’t sync automatically or for transactions that need extra documents, your bookkeeper will let you know what they need at which point you simply drag and drop into the documents section to upload them.
You get a clear breakdown of all your expenses to make better decisions in the future.
My favorite part about Bench is how the clearly the revenue and expenses are broken down so you get analyze how your business is doing.
If you wanted a breakdown like this with the Excel sheet method, you’d have to create a Pivot table that groups together similar revenue and expense line items. Bench does this for you.
This breakdown will easily help you answer questions like:
- Which income stream should I focus more on?
- Which expenses can I let go of to save money?
By knowing exactly what part of your business makes the most money or takes up the most resources, you can better figure out how to optimize your business for the future.
Get two months for free if you sign up by March 25, 2022.
Paying quarterly taxes and doing yearly taxes will be much easier.
Influencers have to pay quarterly estimated taxes if they estimate that they will owing $1,000 or more when tax time comes.
With your clear Revenue/Expense breakdown in Bench, you can see how much you make each quarter, which helps estimating your quarterly taxes much easier.
If you work with a CPA for your yearly taxes, they can also get data from Bench easily and help you with your quarterly tax payments and yearly taxes.
You have more time to focus on the revenue-generating activities of your business.
When I switched from manual bookkeeping with Excel to my bookkeeping service, I saved about 8-12 hours/month doing my accounting.
With this time savings, I focused on creating content, pitching to clients and ultimately, focusing on revenue-generating activities of my business.
Think of all the things you can do by saving time with an efficient bookkeeping program!
Alright… you’re going to think that Bench is expensive but read through this whole section and hear me out…
Bench costs $249/month billed annually or $299/month billed monthly. Get two months for free if you sign up by March 25, 2022.
I recommend this method if you’re making more than $2k/month as an influencer, but if you are only making $2k/month then at $249/month, this might seem like a big expense for you.
However, cost is really the only downside here.
On the flip side, you will gain a lot of time saved on your bookkeeping, and as they say, time is money.
Based on my own experience, I estimate you will save a minimum of 8 hours a month doing your bookkeeping, which means 8 extra hours creating content, pitching to clients and focusing on the revenue-generating side of your business.
Generally my mindset when it comes to my influencer business is that if I have to spend money on something necessary to the growth of my business, I will just make more money. That’s the beauty of the influencing business; there is always the opportunity to make more money, especially with pitching.
Plus, with your own dedicated bookkeeper, you won’t have those unanswered questions on whether or not you are keeping track of your revenue and expenses properly. That’s priceless.
I hope this guide helped you understand the basics of bookkeeping for influencers.
If you are have any questions, leave a comment below or reach out to a bookkeeper at Bench.
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Until next time,