When most of us get into blogging for the first time – we are virgin website owners/administrators. Unlike the offline world where we have routines and habits and lots of assumptions about the best way to do something, the online world is very different. The primary objective is to keep our heads above the water and record keeping is often neglected.
The Importance of Record Keeping
- I’m not just talking about keeping the ‘tax man‘ happy if he comes knocking.
- You need to pay your bills on time or your domain name registration will lapse and your hosting provider will take you off the air
- Those logins you need – to make sure you are getting paid all of the affiliate income you are owed – will mysteriously vanish and the money you need to cover your domain and hosting costs will not arrive in the bank.
Make a plan now, get into it and stick to it.
Check you have recorded – either written down and/or electronically recorded if that is your thing (just make sure you are 100% confident you will not lose your records/files) – somewhere safe, reliable and retrievable, the following:
Domain name (URL) registrations
Especially important if you have more than one. You need to record at least the following:
- Name registered, including whether it was a .com, .com.au etc.
- Who you registered the domain with and what their contact details are. At least their website address.
- Your account details e.g. username, password, email used, name used, your phone and address details you provided.
- How much you paid, where the receipt is for tax time and when it is due again.
Web Hosting Accounts
- Same again: who, when, with what details and the renewal dates.
- Do not let a web hosting account lapse without good reason. If you do not have a full backup for your site and they cleanse the server – you have lost everything.
Going overseas? Into hospital? Mad? Make sure your domain registrar and hosting provider have a valid and healthy credit card on file to automatically deduct renewal fees. If your credit card expires or is reissued for any reason, do not forget to change the number and expiry date with these organisations. Add your domain registrar and hosting provider to your list (make a list then if you don’t have one) of ‘must contact’ orgs for future reference.
- Keep your contact details (mainly your email address) up to date so you receive the reminders.
Expenses & Revenues
If you are just running a blog as a hobby or as a personal vent, you may not think that you need to bother with the financials. But what happens if you suddenly decided to ‘monetize’ your site or the little bit of money you make every now and again, becomes regular and significant? Suddenly, you are in business whether you like it or not. You may be able to reap rewards (eligible tax deductions) or alternatively have to justify why you shouldn’t pay tax on every cent.
There’s no harm in keeping a basic diary of running costs. Wouldn’t you like to know if you are actually in the black? Is your site paying for itself? Or are you constantly putting your hand in your pocket to pay for ongoing site costs?
If you are making money, and it seems like you will continue to grow and be prosperous, you should be assessing which revenue streams are the most worthy to dedicate your time and resources to. If you start recording revenue and expenses early, this is a very easy thing to do. Put it off for too long and you are talking days, even weeks, to catch up. That $1 here and $10 there may make all the difference in helping you make the right, or wrong, decision.
Whether you have one site or many, there are multiple reasons why you should keep a log of events and activities concerning each and every site you are responsible for. If you have to demonstrate a regular activity – like that of other businesses in your industry – you need to have a diary of activities that reflects such effort.
- If you just scrawl things down and then throw away the bits of paper – what supporting evidence do you have to demonstrate you are in business and entitled to those deductions?
If you make a decision and change your site, but then decide to rewind the clock, do you have what you need to undo what you did? What were those colours you used last time? What sites did you visit to get those free images and article content? When did you sign up for that program? And, how long have you been waiting for that cheque to arrive in the mail?
If you have a brainstorm about what to do to your site(s), make sure you record your moments of brilliance. Then, when you have the time to go back and action some of those magnificent ideas, you have your notes and drawings to help you.
Do not lose details of new site registrations, memberships and passwords amongst your work in progress (WIP) notes. Take it from me – you may never find them again. If you join up for something, even a free program, make sure you record the details in a password A-Z index book or something similar and don’t lose it! If you need to lock it away from the kids or flatmates, do it.
Business & Operating Responsibilities
If you are operating under a company structure, make sure you are aware of your company reporting dates and report and pay on time. If a sole trader or partner in a partnership, remember the connection with your personal income tax return. If one part of your tax is audited, logic dictates the others will be as well.
Prepare for tax time ahead of time and make it as easy as possible for whoever is helping you with your tax paperwork, to follow what you did so that income and expenses are categorised properly. Online business is still fairly new for many accounting professionals and they will often be guided by your notes and comments as to the correct treatment of transactions.
Make sure your email address is up to date for business name registrations, company records, utilities and the Tax Office – just to name a few.
Try and find a specialist who won’t charge you an arm and a leg for a simple website enterprise. There is nothing particular hard about online business accounting – it is just a relatively new and rapidly growing area. Unfortunately, there are ‘professionals’ out there very happy to charge an unnecessary premium for their accounting, bookkeeping and tax skills. Your best friend is the Tax Office website at www.ato.gov.au or in the UK, the HMRC.
Email Accounts & Social Media
Unlike your postal address, people online often have multiple email addresses (because you can), multiple profiles and aliases and multiple usernames and passwords, attached to different email accounts. Before you lose your mind, start recording what email accounts you have, with their usernames and passwords and the alternate email/contact details you used.
If you are logged in to different accounts, or use different email addresses, to register for programs – do you know what account you used for what program? Use your activity log to keep track and record a date alongside new registrations.
- Record keeping is essential.
- Maintain an up to date record of domain name registrations and hosting accounts.
- Maintain records of expenses and revenues as a measure of success and for tax evidential purposes.
- Your activity log is your best friend – it remembers what you forget.
- Understand your business and operating responsibilities and keep a diary of important dates.
- Don’t let your email accounts control you – control your email accounts.