MLM Bookkeeping: How to Keep Good Tax Records for Your MLM Business

by Chuck
(MD)

MLM Bookkeeping is one of the most neglected subjects in this industry. I’ve met very few network marketers who (1) have ever owned a business before, and (2) have ever received even one hour of instruction about MLM Bookkeeping.

All businesses require proper bookkeeping. I define MLM bookkeeping as tracking your monthly revenue and expenses. Personally, I file all my expenses and revenue into envelopes each month. At the end of each month, I sort them by category and tally up my totals. Once I do that, I input the information onto my Microsoft Excel Spreadsheet.

On the other hand, I know many network marketers who use programs such as QuickBooks® to keep track of their revenue and expenses. And other networkers simply use a hand-written ledger. The method that you pick is the least important decision. Just pick something you are comfortable with and stick with it.

If you are just getting started, I would keep it simple. Get a shoebox. Every time you get a receipt, put it in the shoebox. On the first of the month, take out your shoebox and sort all your receipts by category, for the previous month. Tally up the totals and input them into QuickBooks®, a spreadsheet, or your ledger. If you do this, you will be on top of things.

Listed below are the typical revenue and expense I have each your month. Your categories might vary a little bit.

Revenue:

• Sales to Customers

• Bonus Checks

• Affiliate Commissions

Expenses:

• Advertising

• Inventory

• Product Samples

• Business Cards

• Website and Internet Expense

The benefits of good MLM bookkeeping are that you can save money on your taxes. If you are treating your MLM business like a legitimate business, you have the same tax advantages that traditional businesses have. That’s a good thing!

If the whole thought of keeping your own books overwhelms you, I suggest you visit a local CPA and hire them. They are very affordable and well worth it.

The bottom line is that you MUST keep good records of your business revenue and expenses. Not only is it a legal requirement, it is also in your best interest because you can save money on your taxes.