Accounting tips for online influencers
Accounting doesn’t have to be difficult! We show you how to keep it simple so you can get back to creating what you love.
Use accounting software
Accounting software is a simple way to make sure you manage your finances the right way and stay compliant with HMRC.
Whether you’re working with an accountant or doing your accounting yourself, software like Bokio which is designed for sole traders and small businesses can be a great fit.
There’s lots more you can do with accounting software than just recording transactions. We take you through how you can use it to make sure you manage your finances the right way.
Recording your income
As an influencer there are different ways you can receive income. Here’s how you record them:
Recording invoices
For paid posts and brand collaborations, sending an invoice is the simplest way to get paid.
Integrated accounting software like Bokio lets you create and send invoices online. Our invoice generator saves clients and items, so you can make an invoice really quickly. You can also track the invoice to see if it becomes overdue and send a reminder if you need to.
Once you get paid you can record the payment in your accounting with just a few clicks.
Recording affiliate revenue
When you make money through affiliate links you need to record this in your accounting too. As you won’t be sending invoices, you can record this as ‘Money in’ using the ‘Sales of goods’ template in Bokio.
Gifted items
If you’re receiving products in exchange for a review or social media post then you need to be careful. This is classed as a ‘payment in kind’, especially if you’ve been contracted to post about it by accepting the product.
You need to declare the value of items you get as payment in kind on your tax return. It’s also a good idea to keep a copy of the agreement for your records.
Recording your expenses
Along with affiliate revenue you also need to record your expenses, and any other transactions relating to your business.
The simplest way to get these transactions into your accounting is by using bank feeds. When you connect your bank account to Bokio, we regularly import your bank transactions so you never miss anything important. All you have to do is record them.
Bokio makes accounting really easy by using smart templates. All you need to do is search for the type of transaction you want to record, for example ‘train ticket’, and we suggest the right accounting template to use. We also calculate the VAT for you too. When you use bank feeds, we fill in the date and figures on your transaction.
You don’t need to learn the chart of accounts or understand debit and credit when you’re using smart templates!
Upload receipts with an app
Keeping records is an important part of doing your accounting. Bokio’s receipt capture mobile app means you can snap a picture of your receipt and upload it to Bokio on the go.
When you’re doing your accounting, you can attach it to your bank transaction and record everything at once.
Know your allowable expenses
When the time comes to submit your taxes you can claim some expenses back. These are called ‘allowable expenses’. Claiming allowable expenses reduces the amount of income you pay tax on. But, it’s really important to know what you can claim as an allowable expense!
We have a full guide to allowable expenses which you can check out for more details, but here’s a quick run through of some examples:
- Office costs like utility bills, rent or insurance
- Travel costs for work trips
- Items you purchased to review that weren’t gifted
- Legal costs
- Advertising and marketing, like social media ads
- Equipment like phones, cameras and computers (as long as they’re used for your business)
- Website costs and music license fees
The most important thing to know is that you can only claim on items that are used for your business. In some cases, you can claim part of an item if it’s used for both business and personal use, for example home office costs. You need to find a reasonable way of dividing your costs based on how much you use the expense for your business.
Get to know your taxes
If you’re registered as a sole trader with HMRC then you only need to pay income tax and National Insurance contributions. You do this by submitting a Self Assessment tax return each year.
If you started a limited company you’ll have more tax responsibilities. You can read our guide to running a limited company for more information on what you need to do.
Work with an accountant
If you need some extra help with your accounting or specialist tax advice, it’s a good idea to work with an accountant. You can get in touch with an accountant who uses Bokio through our Find an accountant page.
Give Bokio a try!
Our mission is to make it simple for you to run a business. So, we’ve created an intuitive accounting software that helps make managing your finances quick and easy. Our integrated features and time saving automation give you all the tools you need to get your accounting done.
