Cash vs. Accrual Accounting for Affiliate Marketing & SEO

[Cash Builder]

What is the correct way to track earnings for affiliate sites? Is there a correct way, or is it just preference? A lot of affiliate networks, including Amazon, pay out the earnings after 2 months. Do you add revenue to your profit/loss statement when you earn it, or when it comes into your bank account?

Here is my current setup:

I have a P/L sheet for all individual sites. I put the revenue that I actually earned that month into it, the earnings that I can pull from the affiliate network reports for that month.

I also have a P/L sheet for my business as a whole. In this, I put the earnings as money that came into my bank account that month. This could be Amazon earnings from 2 months ago, and Ezoic earnings from 1 month ago.

I don't really see any other way I can track this. The first way allows me to calculate my KPIs for the month, while the second way allows me to see what cashflow I have for the month. Is there a better way to do this? It's confusing the hell out of me each month as the numbers obviously don't add up between the statements.

 

[mikey3times]

What is the correct way to track earnings for affiliate sites? Is there a correct way, or is it just preference? A lot of affiliate networks, including Amazon, pay out the earnings after 2 months. Do you add revenue to your profit/loss statement when you earn it, or when it comes into your bank account?

I’m not an accountant, but I believe it is a preference. Although, you cannot switch back and forth whenever you want.

Check this out:
https://quickbooks.intuit.com/r/bookkeeping/cash-vs-accrual-accounting-whats-best-small-business/

You can also do a google search for “Cash vs Accrual Accounting” to get 1000 other opinions.

 

[Cash Builder]

I’m not an accountant, but I believe it is a preference. Although, you cannot switch back and forth whenever you want.

Check this out:
https://quickbooks.intuit.com/r/bookkeeping/cash-vs-accrual-accounting-whats-best-small-business/

You can also do a google search for “Cash vs Accrual Accounting” to get 1000 other opinions.

Thanks, that’s what I was looking for. Think I’ll just keep doing what I’m doing for now, I use the cash flow system for my main business accounts. Don’t think I’ll be making $25 million for a while, unless I have a really good Black Friday.

 

[Ryuzaki]

I do cash basis in my overall business and life. Money gets noted when it comes in or leaves. This is so I have 100% accurate numbers down to the penny about my net worth and cash on hand, etc.

But on each individual project I do accrual accounting. I want to be able to compare revenue and expenses month to month in numbers and charts.

And I definitely don't want to have to reconcile my accounts receivables versus my accrual numbers on every little project, which is why I run the overall finances on a cash basis.