Yesterday I thought it would be a good idea if I started noting down my expenses - my outgoings and incomings in terms of revenue. By the way if you are running an online business or website then I would definitely recommend doing this as a means of organising yourself.
Now as a young entrepreneur online, I thought it would be wise to go on Microsoft Excel and start entering my transactions on the net. After reading another “Income Spreadsheet”, I split the page into 2 columns: Expenses and Revenue. Then underneath I made a “Net Profit” section which I hoped would be in the positives!
In the expenses I would recommend you include Domain Names that you have bought along with Hosting. Also any scripts bought, services paid for, advertising online and so on and so forth. In the revenues show your Adsense or Affiliate figures, maybe your income created by eBay sales and even text links sold on your site. For me, this section even included being hired by a blogger to write an article for him!
I ended up getting most of my figures from my Paypal History tab in my account, and that proved to be a great help, as I could see where I was getting money from, and who I was sending the cash to. At the end I totted up the totals for each column, and subtracted the expenses from the revenue. Fortunately I ended up being in the “+” which was a great feeling seeing how I had already paid off 3 domains and 2 hosting accounts for 12 months, and how I have only been blogging here on Blogtrepreneur.com for a little more than 1 month. I can only now go into profit, so Im feeling on top of the world.
I would recommend you get started on your spreadsheet rightaway so you can know where you are losing and gaining money, and whether you know to cut back on expenditure or try and find another way to get some more income.
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9 responses so far ↓
1 Arthur Chaparyan // Jul 29, 2006 at 6:59 am
I would also recommend using Quicken. I’ve been using it for about 5 years and I couldn’t live without it. A spreadsheet is a good start, but soon you are going to want to see more details and see some nice charts that show spending patterns and a (hopefully rising) net worth graph.
While I am not a big fan of Intuit, there really isn’t a good alternative to Quicken. Microsoft Money is still somewhat primitive. A web-based solution would be ideal, which I am currently developing, but until that happens Quicken is the way to go.
Just my $0.02 + tax
2 adnan // Jul 29, 2006 at 3:56 pm
Thanks for the recommendation Arthur, I’ll be sure to take a look at Quicken. Good luck with your web-based solution and please notify me when you do finish, because I would love to try it out!
Thanks again for the comment!
3 Leroy Brown // Jul 30, 2006 at 4:44 am
This is definately one of those things everyone should do… if you’re spending money, you need to be sure you’re spending wisely. No sense throwing it away, eh?
4 Matt (mithrill) // Jul 30, 2006 at 5:06 am
Keeping track of expenses and revenue is a must for any true entrepreneur.
Congrats on making your way into profit Adnan. I recently earned enough to pay off my site.
However, I have to disagree with Arthur (sorry). Excel can do anything you need. There are charts that you can set-up to show you all kinds of trends. I think the only thing that makes Quicken appear to be better is that it is set-up to track stuff automatically, while Excel (or any blank spreadsheet) requires a bit more work.
Good luck with your web based solution. That would be a great product!
Since I’ve got a lot of experience with Excel, I’ve been debating releasing some tuturials and example spreadsheets on my site to help fellow entrepreneurs. Today, I created a Loan Analysis tool in Google SpreadSheets that tracks the cost of interest over the life of a loan along with showing how much you save by paying extra on the principle.
5 Arthur Chaparyan // Jul 30, 2006 at 7:15 am
While it is true that Excel is very powerful, it isn’t a panacea. Tracking expenses, especially by category, is better suited for relational databases, which gives you the ability to query specific date ranges and categories, and then aggregate that data.
This is possible in Excel, but far from reasonable (considering the alternative). With over 300 categories, it would be rather hectic to deal with all the cross references necessary to deal with my data, even with good old VBA.
Again, Excel works, but after a certain point, it is much more convenient and enjoyable to let a database application handle the details, especially for those who are not too technically advanced in Excel. After all, if it isn’t fun to use, you are more likely to lose interest and stop tracking transactions.
Your mileage may vary.
6 adnan // Jul 30, 2006 at 11:26 am
Leroy I agree. You have to keep a tab on your outgoings especially, so you know that you’re not wasting money. Its also nice to keep track of your progress!
Matt thanks, and congrats to you to on reaching the “+”! I havn’t started using Quicken, so Im not sure how well it works. For me, having quite small projects, Excel is ideal - and it already comes with my computer! I think this is what you’re saying as well Arthur - that different people may need different solutions depending on their businesses and the scale of these projects. Whatever works for you!
I would have to test out Quicken though to see how it fares. And well done with your Loan Analysis Matt!
7 Matt (mithrill) // Jul 30, 2006 at 1:15 pm
Arthur those are good points about Quicken. I guess I didn’t realize Quicken was set-up as a relational database (I must admit I’ve barely used Quicken because I didn’t get a good first impression).
You’re right you can drill down into categories with filters in Excel, but cross references would be a pain.
It sounds like you have much more data than the average individual. In cases like yours Quicken may be a better solution. Thanks for the enlightment.
Two quick question, have you used Intuit’s more powerful Quick Books? Also, what do you know about ACL? My company uses it some, for what I know it is Excel on steroids. It allows relationships and can handle insane amounts of data.
8 Arthur Chaparyan // Jul 30, 2006 at 6:37 pm
Hey Matt,
Quickbooks is basically a Quicken for business. It gives you business-related reports such as balance sheets, profit and loss statements, etc. It also generates invoices, purchase orders, sales receipts, customer statements, the whole 9 yards. It works great for my business, but I would definitely not recommend it for personal use, since that’s not what it was designed for.
I have never used ACL, but I have heard of it. Again it is more geared towards businesses who need to do very in-depth analysis and audits of their financial data.
By the way, how much would any of you (hypothetically) pay per month for a web-based Quicken? $0? $10? $50?
9 Matt (mithrill) // Jul 30, 2006 at 8:01 pm
Hey Arthur,
That’s what I thought about Quickbooks, but wasn’t sure. I wasn’t suggesting it or ACL for personal use. Just wondering what you thought about them since you seem to have a good deal of technical knowledge. I’ve got to check out your website.
I’m cheap and don’t really like to pay for anything web based or not. Especially when I own Excel and it meets my needs. However, if I was in a situation where I needed an online Quicken I think $10 a month would be fair. You can always do staggered plans where more features cost more $$$. 37 signals has a good pricing set-up. Hope this helps.
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