Bookkeeping for affiliate marketers and digital Marketing
This one is for the ‘digital marketing besties’ out there: the affiliate marketers and the ‘faceless’ digital marketers. Affiliate and Digital Marketing are not new industries, but the way they are done today are different to what they’ve been historically. The industry has adapted to technological advancements, changing consumer behaviours and of course, evolving regulations in the digital world. It’s no secret that in 2024, the internet is plagued with the gratification of being an Affiliate or Digital Marketer online and the ease of success, but nobody really talks about the behind the scenes. One of which, is importance of bookkeeping when it comes to having a sustainable Affiliate and Digital Marketing venture and attaining long-term success.
IMPORTANCE OF BOOKKEEPING (IN GENERAL)
Understanding Cash Flow. Bookkeeping provides you with a clear picture of your income and expenses.
Better financial decision making and business analysis. You’re able to set budgets, plan for future expenditures and see how you are tracking to those targets which will facilitate better financial decisions both in the short and long terms. On a similar note, bookkeeping allows you to use financial data to analyse your business performance and identify opportunities for growth/improvement.
Tax Compliance and audit preparation. The more organised you are, the easier it is to meet tax obligations and address audit enquiries.
Before we step through the main elements of bookkeeping, it is up to you/your business to decide if you want to outsource bookkeeping or manage it on your own. This post will assume you are managing it on your own, as we’re sure we’ve got other blog posts tailored for those looking to outsource bookkeeping.
P.S. this post is NOT a step-by-step guide. This is an outline of main tasks to be carried out, to give you an idea of what’s involved.
SETTING UP YOUR BOOKS
Figure out what system you’ll be using. As we’re in a digital era, we’re going to assume you are not considering traditional pen and paper (actual books?!) for bookkeeping. Some questions to ask yourself:
How much is your budget?
Do I need multi-user access?
How comfortable are you with complexity of system/software?
Do you need integration capabilities (e.g. banking, e-commerce platforms, CRM systems)?
Accessibility - cloud vs desktop vs mobile
Security features
Ensuring compliance to local regulations - always check that it supports relevant accounting and bookkeeping standards in Australia (or your region, if you’re reading this from the other side of the world!)
Popular bookkeeping software options include QuickBooks, Xero, MYOB, and Wave. Ultimately, the best choice will depend on your requirements and preferences.
You may also just be starting out and not earning enough to justify paying for accounting software, in which case you may opt for spreadsheet-based bookkeeping. There are plenty of free and paid templates out there for you to use. Again, always make sure the template you are using will facilitate compliance in your country/region.
Establish your chart of accounts. A chart of accounts is basically the backbone of the system - it’s basically a list of all the individual accounts used by a business to record its financial transactions. A chart of accounts categorises accounts into different classifications: expenses, income, assets, liability and equity; and can be categorised further within each classification for better granularity and reporting.
RECORDING INCOME, INVOICING & PAYMENT TRACKING
Identify income sources. Identify and categorise the different income streams - e.g. affiliate commissions, sales revenue, interest, etc.
Create invoice/sales receipts. For all sales or services provided, generate invoices or sales receipts. Include details such as product/service sold, quantity, price and terms of payment. Assign unique invoice numbers for easy reference and tracking, which will keep your books easy to organise and easy to retrieve when needed. Always specify the payment methods that the customer can use to pay.
Recording income. If not already automated by the software or tool you’re using, enter income transactions into the software/tool/ledger. Ensure accuracy by cross-referencing data with bank statements or other supporting documents.
RECORDING EXPENSES
Identify Expense Categories. Define the different categories for expenses - e.g. rent, utilities, office supplies, marketing expenses, etc.
Collect receipts and invoices. Keep your receipts! If you believe that an expense or purchase could potentially be tax-deductible, then keep the receipts until end of financial year. Your accountant can give you better guidance on whether it can be included in your returns or not.
Recording income. If not already automated by the software or tool you’re using, enter expenses into the software/tool/ledger. Ensure accuracy by cross-referencing data with bank statements or other supporting documents.
BANK RECONCILIATION
Regularly reconcile your recorded income and expenses with bank statements to identify discrepancies and ensure all transactions are accounted for.
BUDGETING AND FORECASTING
Budgeting. Budgeting involves planning and allocating financial resources to achieve specific business objectives. It sets spending limits for various activities, helping businesses control costs, prioritise expenses, and work towards financial goals.
Forecasting. Forecasting is the process of predicting future financial outcomes based on historical data and analysis. It enables businesses to anticipate trends, revenue, and expenses, aiding in strategic decision-making and adapting to changing market conditions.
REINVESTING PROFITS
Reinvesting profits involves allocating a portion of earned income back into the business, which supports business growth by funding initiatives: such as developing products or services, upgrading technology, marketing efforts, etc. Reinvesting profits can enhance long-term sustainability and competitiveness.
FINANCIAL REVIEWS
Lastly, don’t forget to perform your own financial reviews! No point doing all this work, keeping your books clean and tidy if you won’t use it! Have a look at the numbers and see which elements can be improved for better business growth and success.
YOU’VE GOT THIS
To wrap up, bookkeeping is a massive piece of business/financial success that most Affiliate or Digital Marketers may not be aware of, and needs to be prioritised just as much as preparing content or networking with brands, etc. Don’t let the above list scare you, if you are genuinely not comfortable with numbers or managing your own books, we are more than happy to help. We offer a free and zero commitment consultation to see how we can help.