Finance Glossary

Income is the money you earn from your creative work. This can include sponsorships, ad revenue, affiliate commissions, merchandise sales, and more. Any time money lands in your account from your business activities, it’s income. Keep track of all these sources to understand how much you’re truly making.

Expenses are the costs of running your business. This might include new equipment, software subscriptions, internet bills, or travel expenses for a photoshoot. The golden rule? If it’s necessary for your work, it’s likely an expense, and possibly deductible!

Think of revenue as your total income before subtracting any expenses. It’s a big-picture number that shows your business’s gross earnings.

Profit is what’s left after you subtract your expenses from your revenue. Knowing your profit helps you see how much you’re actually making after covering costs. We’ve got a handy income and expenses tracker you can download to help you stay on top of your profit.

Gross income is everything you earned before costs. Net income is what’s left after your business expenses. Gross is the big number you see in your accounts. Net is the number you’re taxed on.

Cash flow is the movement of money in and out of your business. Positive cash flow means you’re earning more than you’re spending. Negative cash flow means the opposite, which might signal it’s time to cut back on spending or find ways to increase your income.

A budget is your financial game plan. Your budget shows how much money you expect to earn and spend over a specific period. For content creators like you, this might include allocating funds for new gear, advertising, or hiring an editor. Stick to your budget, and you’ll avoid financial surprises.

An invoice is a document you send to clients or brands requesting payment for your work. It typically includes details like the service provided, payment amount, due date, and your payment info. Invoicing professionally ensures you get paid and helps you keep your finances organized. You can create your own invoices using Google Docs, your payment processor, or your accounting software.

Receipts are proof of purchase for your expenses. Hold onto them! Whether it’s a coffee meeting with a potential client or a new camera, receipts are crucial for claiming deductions at tax time. Digital tools can make storing and organizing these much easier, but it may be worthwhile to keep the printed copies even if you take snapshots or enter them into a spreadsheet or accounting software.

Bookkeeping is the process of tracking and recording all your financial transactions. Whether you use a notebook, spreadsheet, or fancy software, good bookkeeping ensures you’re prepared come tax season and gives you peace of mind year-round.

This term refers to the money you owe vendors, suppliers, or contractors for services they’ve already performed for your business. Maybe you’ve hired a freelancer to help edit your videos or purchased a service on credit, but still need to pay them by a certain deadline. Keep an eye on your accounts payable to avoid falling behind on payments.

On the flip side, “accounts receivable” refers to the money others owe you. This might include unpaid invoices from a brand collaboration or a sponsorship deal. Monitoring your accounts receivable ensures you get paid for your hard work.

A tax deduction, also called a write-off, reduces your taxable income so you don’t have to pay as much in taxes. Expenses like home office space, internet, and business travel often qualify as deductions, so understanding them can save you serious money. Not sure whether a particular expense is deductible? Use our handy tax deductions cheat sheet to figure it out.

A write-off is the common word for a tax deduction: a business expense you subtract from your income so you’re taxed on less. Think camera gear, video editing software, or part of your internet bill. It has to be a real business expense, and you’ll need your receipts.

When you work for yourself, you pay both halves of Social Security and Medicare. At a regular job, your employer covers half. It’s separate from income tax, and it’s based on your profit, not your revenue, so your business expenses help bring it down.

Depreciation is the loss of value over time for big-ticket items like cameras or computers. For tax purposes, instead of deducting the full cost upfront, you might spread the deduction out over several years. It’s a little technical but can work in your favor, depending on your needs and the type of equipment purchased.

Barter income is payment in something other than cash, like free gear, a trip, or product in exchange for a post. The IRS generally treats the fair market value as income, even though no money changed hands. Always keep a record of what you received and what it was worth.

If you earn money from your content and haven’t set up a business entity, you’re a sole proprietor by default. There’s no paperwork to start, and you report your income on your personal tax return. The tradeoff: you and your business are legally the same, so your personal assets aren’t protected if something goes wrong.

An LLC (limited liability company) is a legal business structure you form with your state. It separates you from your business, which can protect your personal assets, as long as you keep business and personal expenses separate. It’s a legal structure, not a tax status. By default, you’re taxed as a sole proprietor, and you can choose different tax treatment later.

An S Corp isn’t a type of business. It’s a tax election an LLC can make with the IRS. You pay yourself a reasonable salary through payroll, and the rest of your profit comes out as distributions, which aren’t hit with self-employment tax. That can lower your tax bill once your profit is high enough, but it adds payroll and extra filings.

An EIN (Employer Identification Number) is a nine-digit federal tax ID for your business, like a Social Security number for your company. It’s assigned by the IRS. You’ll usually need one to open a business bank account, run payroll, or elect S Corp status. You can also put it on your W-9 instead of your Social Security number.

A W-9 is a one-page IRS form where you give a brand or platform your legal name, address, and tax ID (your Social Security number or EIN). They need it to pay you and report that payment to the IRS. You send it to the payer, not the IRS. Expect to fill one out before your first brand deal payment lands.

A 1099-NEC reports what a company paid you for work as a non-employee, like a brand deal or sponsorship. You’ll usually get one by January 31 if a payer crossed the IRS reporting threshold that year. Didn’t get one? The income still counts, and you still report it.

A 1099-K comes from a payment platform, like PayPal, Stripe, or your own merch store, and reports the payments you received through it. Keep your own records so you can match the two.