Financial Account for Online Revenue

Like most people, I hate keeping account. But when I start wondering where the money went, I wished I had kept an account. Ever wonder how many ProNetizen keeps account of their online earnings?

For the purpose at hand, I want to approach accounting from a single person, work at home perspective. Keeping it simple because we all want to spend our time blogging and surfing but doing account.

The basic of accounting is simple: revenue – expenses = profit/loss

Revenue

Sometimes also known as gross revenue, is the amount you received from, for example, AdSense or affiliate programs.

Expenses

It can get a bit complicated with what you want to include as expenses.To begin, let us understand indirect expenses. In order to earn revenue online, we got to have a notebook/computer, power supply, Internet connection. We might also have living expenses like food, housing. All these indirect enables us to create income online.

On the other hand, direct expenses are those that incurred directly from our activities. For example, domain name registration, hosting fee, transaction fee (like PayPal), bank charges (like cashing foreign cheque).

For my purpose and to simplify work, I consider only direct expenses for accounting.

Profit/Loss

Here I will clarify my revenue objective mentioned earlier. The target amount is really the net-profit not the gross revenue. So I will have to first take away all the expenses I had incurred.

So far so simple?

Using a spreadsheet you can create a simple account to track your real online revenue. Here are 2 templates to get you started:

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1 Comment »

  1. You have made some valuable points about financial accounting which are very useful for business people. I wanted to thank you for this great read.

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