This is part of a continuing series on how I, as a sole proprietor, manage my accounting. It is intended as a guide, and should not replace the advice you get from your accountant.

In this post I’ll be talking about Bank Accounts

I maintain three bank accounts, business checking, personal checking, and savings. This makes book keeping a lot easier, because business and personal are separated into different ledgers. It creates a clear, and well documented, picture of how money comes in and goes out. This is very important if you happen to get audited.

All cash receipts, the money my business earns, is deposited into the business checking account. From the business account, I transfer money to the other accounts, and pay any business expenses.

To the personal account I transfer the equivalent of a monthly paycheck. This money is used exclusively for personal expenses. Any money I receive that is not taxable, such as a refund on after tax money, gets deposited directly into the personal account.

Into savings I transfer a predetermined percentage of each deposit made to the business checking account. This percentage is based on my projected tax bracket. Your accountant can assist you in determining what that percentage should be. This is a high interest baring account that I transfer money into. Then I transfer out of it, to the personal checking account, for paying quarterly and annual taxes. In other words I keep the money in a high interest baring account until I need it for taxes. At the end of the year there may be some money left over. This is after tax money, so it can be use just like a tax return. The only difference is I collected the interest on it, not Uncle Sam.

In my next post I’ll discuss bank deposits.

adultchamber.com has put together what looks to be a comprehensive resource on 2275. It includes documents, resources, tools, forums, and articles relevant to 2257. This is basically a links page that pulls it all together in one location.

http://www.adultchamber.com/members/2257.htm

I know of a webmaster with a Lesbian TGP that was sending blind clicks to a twink pay site. He sent seven thousand unique hits a day and no sales. Go figure. And yes, you guest it, the webmaster determined the twink pay site did not convert well. The owner of the twink pay site said the only thing this webmaster accomplished was to hurt his twink pay site’s overall average conversion ratio. He was happy to see the webmaster move on.

This is an excellent example of a straight webmaster that has absolutely no understanding of the Gay market place, and he is not in the minority. Straight webmasters that do understand the Gay marketplace make a killing. But many don’t know how to effectively tap into it.

I guess I should explain that Lesbian is a straight market niche that attracts the straight consumer. Technically Lesbian is Gay content, but that does not translate into a strong crossover with Gay male content. In this situation, trying to up sell a Gay market site with blind clicks is a total waste of good traffic. Better is to promote the Gay site with banner or text links.

I made a discovery the other day that I just have to share with everyone. 409 Orange Power Wipes do a fantastic (pun) job cleaning computer and other electronic components. I’m talking keyboard, mouse, monitor, printer, speakers, phone, calculator, and any other office item that gets dirty over time.

In the past I used spray cleaners, paper towels and Q-tips to clean these items. Most tedious, and time consuming was the keyboard. Too much liquid could cause permanent damage, so I had to go slow and use care not to get any liquid down inside.

The other day I decided to try these 409 Wipes. I wasn’t expecting much, but figured what the hell, it’s worth a try. I started on my keyboard and quickly discovered these wipes are the best thing since sliced bread!

The wipes are moist, not dripping wet, so you don’t have to worry about any liquid running down into a component. And the dirt comes right off, usually in the first pass. Needless to say, I went wild with these things, cleaning everything in sight. Nothing was safe! My cat ran and hid under the bed thinking she might be next.

I know this is sounding like a Tide commercial, but I’m really jazzed about these little wipes. Right now they top my list of new discoveries in 2005.

Atlanta based RevShare Hosting announces the launch of GayRevShare Hosting. “This program is very appealing to webmasters promoting gay sponsors because we offer all the advantages of a traditional hosting plan, except without a bandwidth bill or server charges like you would see from a paid host”, claimed General Manger Rob Bryan. “Unlike most free hosts the webmaster controls all the advertising, “ Bryan continued. “Webmasters can promote the best and highest converting Gay Sponsors through this program”

GayRevShare Hosting offers webmasters unlimited bandwidth, storage, and email. The company also makes domain names available to webmasters that might not ordinarily be able to afford them. Customer support is available 24/7 via ticket system, ICQ, email, or telephone, and includes free support for FTP, CGI, PHP, PERL, and MYSQL.

GayRevShare Hosting makes their money through revenue sharing with its participating webmasters. For each sale a hosted webmaster makes, the company takes a small commission. Affiliates earn at, or near, the same income as they would with paid hosting, because they do not have any bandwidth or server overhead.

www.gayrevsharehosting.com

In mainstream marketing, the cost of acquiring a new customer is estimated at five times that of retaining an existing customer. And it’s much easier to sell something to an existing customer than it is with a new one.

Therefore, it would be a smart business strategy to invest in customer retention. That means putting time and money into improving the member experience, including that all important customer service. Its money well spent, because you get two for the price of one – better retention, and improved up sell potential.

It goes without saying, but holding onto the customer has the added advantage of holding onto the affiliate. The better you retain, the more money your affiliates make. And the more money they make, the more new customers they will bring to you.

Use that same thinking in the cost of acquisition with affiliates. It costs a lot less to hold onto what you got. Granted, you still have to make them money, but good customer service goes a long way with affiliates. I’ve dropped a lot of affiliate programs because they failed to be responsive to my needs. Competition for affiliates if fierce, so that’s one ball you don’t want to drop.

I thought I’d share with you how I, as a sole proprietor, manage my accounting. The system I use is based on advice from my accountant that has worked well for me over the eight years I’ve been in this business. My goal here is to give you an idea of how it is done, and not to replace the advice you get from your accountant. I should also mention that if your business is structured as a partnership or corporation, my system might not be appropriate.

You will need a good accountant. Your accountant will calculate your quarterly tax obligation, prepare your annual tax return, and advise you on how to structure and maintain your books.

Keeping the books means ultimately ending up with two reports (ledgers) at the end of the tax year – how much money you made (Cash Receipts) and how much money you spent (Expenses). Now this is overly simplified, but your accountant basically subtracts your expenses from your earnings to determine your taxable income, the amount you must pay taxes on.

You and your accountant should determine what constitutes a legitimate expense (deduction). How far you push the envelope is driven by how aggressive/conservative you and your accountant are. In other words, you and your accountant need to find a comfort level as it relates to defending your deductions if audited. You should also keep in mind that a more aggressive approach could actually trigger an audit. The IRS does not publish what triggers an audit, but a good accountant knows what some of the red flags are.

There are a lot of software packages available for maintaining the books. Quick Books is probably the most popular. My business does not involve keeping a product inventory, or paying employees, so a simple spreadsheet is more than adequate for maintaining Cash Receipts and Expense ledgers.

Cash Receipts Ledger

This ledger records the company name, check number, check date, deposit date, and check amount. I post this information by each deposit, with a sub total for each deposit. Later it can be sorted by company name, with a subtotal for each company, if that’s how your accountant wants to see it.

Expense ledger

This ledger records the company name, amount paid, method of payment (cash, check, credit card), category of expense, and brief description of expense. Your accountant should determine expense categories, such as office supplies, software, computer hardware, and postage. As I understand it, categories are needed because some items get a partial deduction while others get a total write off. Software, for example, is amortized over several years, while computers get a 100 percent deduction.

As I said, your ultimate goal is to end up with these two reports. But they need to be backed up with supporting documentation. The quality of that documentation plays an important role in how well you perform in an audit. Basically you need to maintain a clear paper trail that supports those two reports. In future posts I’ll talk about the details involved in maintaining that paper trail.

I just finished the painful process of moving into a new home. Before I’d even unpacked I started the process of changing my contact information, an arduous task in and of itself. It would have been less daunting had I not been faced with dozens of affiliate programs, all needing updates.

Fortunately I have all the affiliate programs documented in a spreadsheet, so I could just work my way down the list. About two thirds of the programs I work with use CCbill, making it easy to change all of them in one place. Or at least I thought it was going to be easy.

I login to my CCbill account and the first thing I see (lower right of screen) is a link to Account Change Forms. I was familiar with these forms from the days when I had several pay sites at CCbill. I had no reason to think their system worked any different for affiliates, so I downloaded their address change form, filled it out, and faxed it to CCbill.

Within the hour I got a canned Email from CCbill advising me I did not need to use their change form. It instructed me to select the “Tools” option and then select edit profile. All right, at this point I’m annoyed, because I have 26 different affiliate programs that apparently need to be edited. As usual, with CCbill, the only way to find out exactly what you are supposed to do is pick up the phone and ask.

First I explain to the CCbill support person that it’s confusing to offer a link to their Account Change Forms. He explains that some of the forms are applicable to affiliates and they do send out a canned Email when Affiliates mistakenly use the address change form. I try to explain to him that if they find a need for a canned Email, then perhaps it’s an indication something needs to be changed in their system. I get silence for a reaction.

So I move on to my question…do I need to edit all 26 profiles or just the primary account? He happily explains I only need to edit the primary account profile. I tried to revisit the other issue, but he had no intention of going there.

Their system’s customer interface is the biggest cluster fuck I’ve had the displeasure of dealing with. But hey…if you’re the only game in town, what difference does it make…right?

It’s not lost on me that CCbill’s large support staff is necessary to compensate for their awful system interface. They could probably get rid of half their support staff if they took the time to fix their system. Employees represent the largest source of overhead for any company. Guess who ends up paying that cost?