Accounting for affiliate income

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I've just started using QuickBooks SimpleStart. It offers me two ways to enter money received: either by issuing an invoice and then receiving payment or as a sales receipt where I receive payment at the time of sale.

Which is the better way of recording income from the affiliate networks? It would seem easiest just to record it as a sale when the money arrives in my bank account but I have a feeling there's a tax issue with regards to when work is done versus when you are actually paid for it.

[ian-d]

Give user 'hrbs' a shout on this forum. He'll be able to answer these type of questions.

[hrbs]

I've just started using QuickBooks SimpleStart. It offers me two ways to enter money received: either by issuing an invoice and then receiving payment or as a sales receipt where I receive payment at the time of sale.

Which is the better way of recording income from the affiliate networks? It would seem easiest just to record it as a sale when the money arrives in my bank account but I have a feeling there's a tax issue with regards to when work is done versus when you are actually paid for it.

Hi

As you are not VAT registered and not a ltd Co. , to make book-keeping as straight forward as possible, account for the sale on the receipts basis. However, at the end of the year when preparing your accounts you will have to make an accounting adjustment (journal) for commissions earned but not received. The easiest way to calculate this is to take a print of each network balance at your year end. Each month you might want to monitor the %age of commissions that are reversed and then reduce the year end provision accordingly.

As you are relatively new to business you may wish to read this recent posting (there are quite a few others) http://www.affiliates4u.com/forums/g...g-efforts.html

and read articles at tips.hrbs.biz .

Regards

Keith
High Royd Business Services Limited
Small business and affiliate marketing specialists

[mainlime]

Thanks for your help Keith. I'll read those links too. Might be back in April to get clarification on the accounting adjustment!