Tips on What Do We ‘Treat’ As an Asset in a Small Home Business Or Blogging Business?
Take into consideration everything you use to make the business run smoothly. Whether you are involved in affiliate marketing, blogging your own products.
Entrepreneurs are frequently not experts in any one thing, capable of being the chief, chef and bottle washer all in one. Normally bloggers are creative, so being grounded by the nitty-gritty of spreadsheets seems boring job!
1. Preparing a simple spreadsheet saving you time and money in the near future.
2. Ask your Tax Man about deductions you can claim or, money will be thrown away.
List of possible Tangible Assets purchased and/or used by an Entrepreneur:-
• Motor Vehicle
• Computer
• Lightening Protection Plugs + UPS (Uninterrupted Power Supply)
• Phone (Landline and/or Mobile)
• Printers – Fax – Scanner
• Video camera
• Office Furniture – Desk, Chairs, Visitors Lounge for Business
Inquire at your local tax office what period of time you are given to write an asset off. Remember this is in preparation for when you need an Accountant. Keep all the receipts and proof of payments.
Hardware is given a three year “life span”, whereas Software (Intangible Asset) can be written off the books within one year, in my home country.
A few years ago you could write-off a computer over a five year period, so this can change year-on-year. If you get stuck speak to an Accountant or Tax Official.
This part of the accounting can become a bit more complicated than is planned in an Article. So I am only going to make mention of it to enable you to prepare an asset register.
Once your business grows, this is another aspect that must be taken into account and could save you money in the long run.
An accountant in any country would agree that the assets of the business are being financed by the capital (money) of the business owner, possibly with a loan from a bank.
The Financial equation is Assets= Liabilities + Capital or Assets – Liabilities=Capital
1. Asset = Property owned by a person or company (example: your motor vehicle – if used for business purposes) and the list below – each asset will have a “life span” indicated by your tax office.
2. Liability = Financial obligation, money owed (example: You buy a course to teach yourself how to blog, you have agreed to pay an amount over a period of four months – this is a liability)
3. Capital = Money, this can be money you have set aside to start up your business, or money borrowed from a bank (not normally the case when you are starting out as an online entrepreneur), a loan from family or friends.
OK, some of us may be screaming, this is not what I wanted to do, I want to blog and sell products. Unfortunately somewhere along the line you will meet up with the Tax Man, whether it is in your personal capacity for paying tax, or as a business. The more records you have on hand to substantiate your expenses, the easier your life will be.
Personal Tax – refer to your Tax Office and find out from what level of earnings you must start paying tax. Each country will vary make sure you comply with the law within your country.
Business Tax – Consult with an Accountant in your country of residence to register. Remember to prepare your Asset Register and Cash Book/Cash Flow Chart, before consulting with an Accountant, Lawyer, Banker, and Tax Consultant.
When you start to reap the benefits of all your hard work, you don’t want to be paying out huge amounts of money to get an Accountant to do the preparatory work for you. Keep simple spreadsheets of your business’ progress this saves in time and money.
Wherever possible, try to separate your business bank account from your personal bank account. Most of us venture into online marketing without a registered business and do not take enough care of where we are spending our money.
Sooner, rather than later, prepare for the big day when the business lifts off and you are able to start recouping the money spent over the past year or years.
