Tuesday, January 8, 2008

Bookkeeping. yah.

Thank goodness for my Mother-in-Law! I kept financial records this past year, but didn't really know what I was doing. :) I have all the right info--but wasn't sure how it was supposed to be compiled. I emailed her the other day, and she gave me the info I need to start out right this year! YAH!

First of all , let me state that I do not use excel. I would have to take the time to figure it out and learn about it, and that's not been important to me. I use basic ledger sheets in a notebook. Easy, doesn't get erased accidentally, and I don't have to figure out anything. I do have to use the calculator to add everything, and that does take time. When my MIL visits next, she's setting up an excel program for me to use and giving me basic instructions. Until then, this is how I'll set things up--per MIL's instructions.

INCOME:
Columns: Sale of item, taxes collected, shipping collected

EXPENSES:
Columns: materials, shipping materials, shipping costs, fees (website, internet, ebay, etsy, craft fair booths, etc), fuel, mileage, whatever other expenses. Childcare can be listed as an expense as well, though my MIL states that if you use a babysitter, you must use their SSN on your tax form--and they will have to pay taxes on the money they receive. Sales tax would be an expense--though with a tax id # (gotten through http://www.irs.gov/, also called an EIN), small businesses shouldn't have to pay sales tax on their business purchases. (Still need to figure out how to apply that to each store I purchase from!)

MIL also states that this should be added up monthly, and compiled quarterly and yearly. Now that I have everything compiled for last year (minus two receipts I need!), I need to file those pesky taxes! Should be fun--especially with start up costs exceeding sales by nearly $1500! UGH! But I have ALLLLL that beautiful fabric sitting in my closet!

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