Understand the numbers behind your work.
Clear definitions for Gig Workers, creators, freelancers, solopreneurs, and micro-business owners. Start with a term, follow the related links, and turn unfamiliar accounting language into practical next steps.
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Explore the glossary.
Vendor
A vendor is a person or business that supplies goods or services to your business.
Gig Worker and vehicle costsVehicle Expense
Vehicle expense is the business-use portion of costs related to operating and maintaining a vehicle.
Banking workflowUnreconciled Transaction
An unreconciled transaction is a recorded item not yet matched to a completed statement reconciliation.
Banking workflowUndeposited Funds
Undeposited funds is a holding account for customer payments received before they appear in the bank.
Core bookkeepingTrial Balance
A trial balance lists account balances to check that total debits equal total credits.
Gig Worker and vehicle costsTips
Tips are voluntary customer payments in addition to base prices or worker earnings.
Expenses and taxesTaxable Income
Taxable income is income used in calculating tax after applicable adjustments, deductions, and rules.
Expenses and taxesTax Reserve
A tax reserve is money intentionally set aside from business cash for expected tax obligations.
Assets and taxesTax Basis
Tax basis is the tax value assigned to an asset or ownership interest for calculating certain tax results.
Expenses and taxesStartup Cost
A startup cost is an expense paid before or while beginning a new business activity.
Gig Worker and vehicle costsStandard Mileage Rate
The standard mileage rate is an IRS-permitted method that may calculate eligible business vehicle deductions using recorded miles.
Ownership and entity typesSole Proprietor
A sole proprietor is an individual who owns and operates an unincorporated business.
Expenses and taxesSelf-Employment Tax
Self-employment tax is generally the Social Security and Medicare tax associated with net self-employment earnings.
Expenses and taxesSchedule C
Schedule C is the IRS form many sole proprietors use to report business income and expenses.
Ownership and entity typesS Corporation (S-corp)
An S corporation is a tax-election status available to qualifying corporations and LLCs.
Income and customersRevenue
Revenue is income earned from a business’s normal work, products, or services before expenses.
Banking workflowReconciliation
Reconciliation is the process of comparing two related records and resolving differences.
Financial reportsProfit and Loss Statement (P&L)
A profit and loss statement, also called an income statement, summarizes revenue and expenses over a period.
Gig Worker and vehicle costsPlatform Fee
A platform fee is an amount a marketplace or platform charges in connection with a transaction or service.
Gig Worker and vehicle costsPlatform Earnings
Platform earnings are amounts a Gig Worker receives from a rideshare, delivery, shopping, or service platform.
Core bookkeepingPersonal Expense
A personal expense is a cost primarily for an owner’s personal use rather than business operations.
Contractors and payrollPayroll
Payroll is the process of calculating, recording, paying, and reporting employee compensation and related taxes.
Gig Worker and vehicle costsPayout Fee
A payout fee is an optional charge to move available platform earnings to a bank or debit account sooner.
Ownership and entity typesOwner Draw
An owner draw is money or property an owner takes from a business for personal use.
Ownership and entity typesOwner Contribution
An owner contribution is money or property the owner puts into the business.
Expenses and taxesOperating Expense
An operating expense is a recurring cost of running the business that is not directly tied to producing one item sold.
Gig Worker and vehicle costsOnline Time
Online time is the period a Gig Worker is available in an app, including active work and waiting time.
Financial reportsNet Profit (or Loss)
Net profit or loss is the amount remaining after all recorded revenue and expenses for a period.
Gig Worker and vehicle costsNet Earnings per Hour
Net earnings per hour compares shift earnings after selected costs with the time required to do the work.
Expenses and taxesMerchant Processing Fee
A merchant processing fee is a charge for accepting card, digital-wallet, or payment-platform transactions.
Ownership and entity typesLimited Liability Company (LLC)
An LLC is a state-law business structure that can provide legal separation between an owner and business.
Core bookkeepingLiability
A liability is a debt or obligation a business owes to another party.
Core bookkeepingJournal Entry
A journal entry is an accounting record that captures the debit and credit sides of a transaction or adjustment.
Income and customersInvoice
An invoice is a request for payment that identifies completed work, amounts due, and payment terms.
Contractors and payrollIndependent Contractor
An independent contractor is generally a self-employed person providing services without employee status.
Financial reportsGross Profit
Gross profit is revenue minus the direct cost of producing or delivering what was sold.
Gig Worker and vehicle costsGross Earnings
Gross earnings are earnings before subtracting the worker’s own operating costs, taxes, or other selected deductions.
Core bookkeepingGeneral Ledger
The general ledger is the detailed account record that supports business financial reports.
Contractors and payrollForm W-9
Form W-9 requests a payee’s taxpayer identification information for information-reporting purposes.
Contractors and payrollForm 1099-NEC
Form 1099-NEC is an IRS information return generally used to report qualifying nonemployee compensation.
Income and customersForm 1099-K
Form 1099-K is an information return that may report qualifying payment-card or third-party network transactions.
Expenses and taxesExpense
An expense is a cost recognized in a period while operating or earning business income.
Expenses and taxesEstimated Tax Payments
Estimated tax payments are periodic payments individuals may make toward expected annual tax obligations.
Core bookkeepingEquity
Equity is the owner’s residual interest in business assets after liabilities are considered.
Core bookkeepingDouble-Entry Bookkeeping
Double-entry bookkeeping records each transaction with at least equal debit and credit effects.
Assets and taxesDepreciation
Depreciation spreads the recorded cost of a long-lived business asset over its useful life.
Expenses and taxesDeductible Expense
A deductible expense is a business cost that may reduce taxable income when tax rules and records support it.
Core bookkeepingDebit
A debit is one side of a double-entry accounting record; its effect depends on the account type.
Income and customersCustomer
A customer is the person or organization that buys a business’s product or service.
Core bookkeepingCredit
A credit is one side of a double-entry accounting record; its effect depends on the account type.
Income and customersCreator Income
Creator income is revenue earned from creative work, such as sponsorships, advertising, subscriptions, affiliate activity, or digital products.
Financial reportsCost of Goods Sold (COGS)
Cost of goods sold is the direct cost of inventory or inputs used to produce sold goods.
Core bookkeepingChart of Accounts
A chart of accounts is the organized list of categories used to record business financial activity.
Financial reportsCash Flow
Cash flow is the movement of money into and out of a business over time.
Accounting methodsCash Basis
Cash-basis accounting records income when received and expenses when paid.
Gig Worker and vehicle costsBusiness Mileage
Business mileage is distance driven for qualified business activity and supported by a contemporaneous record.
Expenses and taxesBusiness Expense
A business expense is a cost incurred to operate, support, or earn income in a business.
Core bookkeepingBookkeeping
Bookkeeping is the ongoing process of recording, organizing, and reviewing business financial activity.
Banking workflowBank Reconciliation
Bank reconciliation compares bookkeeping records with a bank or card statement and explains differences.
Financial reportsBalance Sheet
A balance sheet shows what a business owns, owes, and retains at a point in time.
Core bookkeepingAsset
An asset is something a business owns or controls that is expected to provide future value.
Gig Worker and vehicle costsActive Time
Active time is time spent on accepted or assigned Gig Worker tasks, rather than all time available in an app.
Accounting methodsAccrual Basis
Accrual-basis accounting records income when earned and expenses when incurred, even if cash moves later.
Core bookkeepingAccounts Receivable (A/R)
Accounts receivable is money customers owe your business for completed work or issued invoices.
Core bookkeepingAccounts Payable (A/P)
Accounts payable is money your business owes vendors for goods or services already received.