How to Properly Account Your Blog's Income Part 1: Recognizing Revenue

The benefits of proper reporting applies to all business entities, business transactions and all business related activities, which includes blogging. With a proper report, a businessman or a blogger can properly identify whether his business/blog is gaining profits. Also, with proper reports, a blogger can compile comparable documents which he can always evaluate and analyze. This can help him in making decisions regarding his blog, setting up budgets in advertising, predicting trends through statistics, and many more.

So you are now earning something (money) from your blog, but could you accurately tell everybody that you are receiving more that you are giving out? Are you sure that the revenues that you have earned exceeds the expenses you have incurred? How could you tell that you have more cash inflows than cash outflows in the first place?

Well, most of you would answer, “It is very simple, just get the difference between your revenues and expenses and presto, you’ll get your profit or loss.” If that’s your mindset, then you’re probably going on the right track of accounting your blog’s income, but to tell you the truth, that’s not enough. In order to compute the true income of your blog, you should also consider another factor in determining it.

Before I continue, I want all of you to be familiar with the basic accounting terms that I will be using throughout this discussion.

Revenue - the total money that you receive for the goods or services that you offered.
Expenses - money that you spend or incur to continue your operation
Income/Loss - the difference between your revenues and expenses.

In order to properly identify your income for a certain period, you will have to consider the factor of time. So what do I mean by this? To consider the time factor, you should make a consistent period wherein you will identify the income of your blog, reporting period in the accounting sense. These periods could be weekly, monthly, quarterly, semi-annually or annually, depending on how appropriate a period is to your needs. In my case, I chose to make my reports monthly, which I think is very practical because almost all revenues and expenses comes in monthly. For discussion purposes, let us use a one-month period as a basis. After identifying your reporting period, you should now identify the revenues that you have earned and the expenses that you have incurred during the period.. In informal reporting, this is plain easy, but to make your reports precise and accurate, let me share with you the formal accounting standpoint of identifying your revenues and expenses that I have derived from the principles of my academic studies.

So, our reporting period starts at the first day of the month until the last day, April 1-30 for instance. To recognize your revenue for the month of April, I want you to consider the following.

Cash receipts is irrelevant in determining your revenues for the period. What is important in recognizing your revenue is the date when a particular service is rendered in regards to achieving that particular revenue. Details are in the succeeding considerations.
If you monetize your blog from paid to blog programs like sponsoredreviews, smorty, payperpost, etc.. ask this question to yourself, “Do I received assignments that I eventually completed during the month (April)? How much?” Compute the total amount from the assignments that you have completed during the month, regardless of when you will receive the payment.
- Notice that in the above statements, when you create an article for your paid to blog network, the foregoing assumption is that it will be eventually be approved. Use this approach if your are very confident that all assignments that you submit gets approved without any problems. If not, you can choose to recognize revenue by considering when these posts gets approved and not when submitted. In this case, posts that you have created during the previous month could be included in the current month’s earnings.
- Remember, whichever approach you opt to apply, be consistent to it. Frequently changing from one approach to another will make your monthly reports incomparable.
If you monetize your blog from pay per click programs like google adsense, bidvertiser and the like, determine the revenues for the month. For those who haven’t received payout because their balance is below the minimum payout, just subtract the current balance from the previous month’s balance and you’ll eventually get your current month’s earnings.
If you monetize your blog from affiliate programs, just the same, get your current month’s earnings. This information is given by your affiliate, but just in case it isn’t, use the formula that I have given in the previous number.
If you receive income from direct advertisers, the same again, just get the income which represents the current month’s earnings. If the contract started in the middle of the month, just allocate the revenue, a part will be recognized in the current month, and a part will be recognized in the succeeding month.

The concept of revenue recognition is very simple, recognize what you have earned during the period, whether or not you received cash.

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Looking for more info regarding personal finance? The Internet can be an excellent source of information about bonds, mutual fund stats and real time stock quotes. With the proper financial planning you’ll be financially secure through your career and on into your retirement.

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