Getting started as a content creator may seem easy at first, but if you do not have a good grasp on your finances, you may lose money in the long term, undervalue your services, or pay too much in taxes. To avoid unnecessary stress, fees, and headaches, follow these five essential accounting tips for content creators.
1. Set Your Rates Wisely
Many content creators undervalue their services. As a business, it is important to consider not only the time you spend creating and posting content, but also the time you spend interacting with followers, and business-related overhead costs like physical supplies you need for your content, rent, internet costs, office supplies, software purchases, and more. Once you have all of your expenses tallied, calculate the amount you charge for a post or a series of posts on each platform accordingly.
2. Choose Quality Accounting Software
Content creators often have numerous clients and multiple streams of income on a variety of platforms. This can make tracking your finances very challenging. Even if you plan on working with a small business CPA to help you manage your business, which is highly recommended, it is still a good idea to buy some high-quality accounting software for content creators, such as QuickBooks, Xero, or FreshBooks, and take the time to learn how to use it properly. This will make it easier for you, and your CPA, to manage your finances, prepare your taxes, and generate financial reports as needed.
3. Track All Your Transactions
Record each transaction soon after it happens, whether it is paying an invoice, purchasing supplies, receiving a payment for ad revenue, or receiving an affiliate marketing payment. While many of these transactions will be digital, be sure to keep receipts for anything that is not, such as buying supplies from a local store.
4. Determine Which Expenses are Deductible
In order to maximize your earnings and keep your tax obligations as low as possible, it is important to learn which expenses are deductible from your income for tax purposes. Items or services that are used solely for your business are usually tax deductible, as is rent for a dedicated office space. If you have a home office, a portion of the bills may be tax deductible. Some examples of tax-deductible items include:
- Legal fees
- Marketing costs
- Office rent, maintenance, and utility fees
- Office equipment like phones, computers, and printers
- Business-related trips and travel
- Software used for your business, like accounting or video editing software
- Website hosting and maintenance costs
- The costs for hiring other professionals, consultants, or contractors
5. Form a Separate Company
Keep your personal accounts separate from your business accounts, and if your content creation business really starts to thrive, it is best to form a limited liability company. Although it is much more complex and more work than operating as a sole proprietorship, creating a separate company for your business can protect your personal assets, like your home, if you are sued or your business has to file for bankruptcy.
Accounting for Content Creators: Choosing a CPA
To make accounting for content creators as easy as possible, it is best to work with a qualified small business CPA. At Gurian CPA, we have worked with all types of content creators and influencers, so we understand the unique challenges that these positions bring, from tracking affiliate income and managing multiple revenue streams to calculating the taxable value of gifts for sponsored posts. Our company offers all the services you need to keep your business running smoothly, including tax preparation, accounting services, business entity formation, payroll services, and more.Make your content creation business easy to manage with accounting services for content creators from Gurian CPA. Call (469) 306-9866 today to get started in the Dallas or Houston area.
