March 3, 2014

Monday Memoirs /// Bookkeeping + COUPON

Last week, I talked about the "fun" I had filing my business taxes and what I learned. I thought I'd share my new method of bookkeeping which should be more tax friendly for next year.


When it comes to record keeping, I follow a month-by-month basis. To keep track of my income and expenses, I use the Work At Home Kit from Clean Mama Printables. I would highly recommend it, because it's easy to use (and really cute).


MONTHLY

Having your income and expenses on one piece of paper will help you to get a good idea of what you are making each month. I like to refer to my monthly income/expense sheet as my Master Breakdown.

What do you need on your monthly Master Breakdown?
  • Income
  • Expenses
  • Total monthly profit/loss
  • Estimated taxes to set back
I have also started to make a special breakdown of my expenses on the side of my monthly Master Breakdown.

For example, instead of leaving the sum of $300 in my total expenses box, I wrote on the side that $50 of that was for office supplies and $250 of it was for printing and shipping costs. This will help me to quickly add up expenses to put in the correct box on my Schedule C next year. 

After I add up and record my profit/loss for the month, I look back at what I did the previous month. I don't just reflect on the numbers, but evaluate how I feel like I am doing. What seems to be working/selling? What isn't working/selling? Did I try something new this month? Do I need to try something new next month?

By thinking critically about the past, I feel like I'm better prepared to make educated plans for the future of my business. On that note, I make sure to list my profit goal for the next month. 

WEEKLY

At the end of every week, I fill out my income and expenses being sure to have all receipts accounted for. 


I staple my receipts to their respective orders and stick them in my trusty pink folder. At the end of the month, I pull out all of my order forms from that month and put them in my file folder with my Master Breakdown.

Another thing I do weekly? Mileage Tracker! (The one picture is also included in the Work at Home Kit.)



I learned this lesson the hard way at tax time - track your mileage all year long even if it's just a quick trip to craft store. Mileage adds up fast and if you don't keep up with it, you'll be calculating a convoluted mass of numbers like I did.

To avoid this for next year, I've added this to my weekly to-do list. 

Without a doubt, bookkeeping is not the most glamorous part of owning your own Etsy shop, but it is so important. Not only will it prepare you for tax time (and maybe an audit), but it'll help you grow your shop. Knowledge is power! Is it just me or am I sensing a theme here?

Becky from Clean Mama Printables was kind enough to partner up with me for a coupon. At checkout, simply enter 20PAPERLARK to receive 20% off your order! (Expires 3/31/14)

What is your bookkeeping method?

Miranda








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