There is a common misconception that a business website is nothing more than a marketing expense. True, the majority of expenses related to building and maintaining a website have to be treated as an expense under US GAAP or Generally Accepted Accounting Principles.

These include web hosting, development, content creation, and the cost of any software or services purchased for it. (There’s an exception with domain name fees, which are typically treated as an asset and capitalized. This makes sense if you purchased a very popular domain with a lot of organic traffic for a high price, such as $50,000.)

Just because most of a website’s related costs show up as an expense on the Income (P&L) statement now, doesn’t rule out the possibility for building a business’s Balance Sheet in the future. The reason is simple: a good business website adds value over time and depending on how you use it can be considered either a separately valued intangible asset, or at the very least be reasonably included in Goodwill for a business valuation.

That’s right. There’s a reason you put that little copyright symbol on all of the pages of a website. It’s a copyright protected work, which when combined with some royalty free stock photos, should ideally build value for your company in one of four ways:

1. Lead Generation (helping sales occur)
2. Brand Recognition (helping get your name known)
3. Direct Sales (selling products online, ecommerce)
4. Content Monetization (either through ad placement, or charging visitors for access to your  website’s experience)

There are methods to measure each of these four categories. Lead generation can easily be indicated by the number of visitors who complete web forms with their contact information. Brand recognition can be measured by inbound links, and mentions in social media networks. Direct sales are shown by the amount of product that gets purchased. Content monetization will also show you a dollar figure at the end of the day.

If your website isn’t currently doing at least one of these you are literally wasting the money your business’s marketing budget. Too often, we are sold on the idea that a website is nothing more than a five page brochure on the web, static, never updated, just as a quick reference for your hours of operation and contact information. So a site like that could be successful, but there’s no way to be sure unless you ask every individual caller and person who walks through the door if they’ve seen it.

Why is it good to show as much value as possible for your intangible assets? One reason is that in some instances, this can help you negotiate better terms during the sale of a business or when obtaining financing from a lender. Another reason is financial stewardship. As managers, we are responsible for creating the most value (legally and ethically) that we can with the investment capital entrusted to us. A good Web strategy, properly executed is one of the ways to do just that. Accounting standards will differ on exact dollar amounts we can value the end result with, but when done right, the results should speak for themselves, not through an accountant.  How has your website added value to your business?