Accounting and Bookkeeping

[SnarkFactory]

Sorry guys, I'm sure you veterans have seen this topic (and many others that I've posted about), over and over again but I could really use some direction.
Do you use a simple worksheet for accounting? I'm inclined to keep the records by hand, as my computer is a POS and i'm worried I can't fit a program on here like excel. I'd like to know the categories you keep track of, right now i'm going to be tracking these expenses for my etsy business:
Supplies
Etsy Fees
Orders
Facebook Ads
Profit
I want to cover all the basis and be as thorough as possible.
Last night, I was kind of going over my purchases and expenses for Etsy and if I consider the supplies I've bought, etsy fees, and etsy search ads, the money I've made from actual sales doesn't cover all of it. That was pretty depressing. So I guess my "business" is operating in the red. Should I be discouraged or is this normal? I bought a lot of things that I thought were brilliant ideas and after experimenting, ended up throwing them out. So some of my expenses are from failed ideas. Also, a lot of the supply expenses include either raw materials waiting to be sold as well as finished items waiting to be sold. I'm not sure how to consider that in my final "profit" amount for the month.
Your most objective honesty will be much appreciated!

[TOMgirlApparel]

Most new businesses take at least 2 years to see a profit.

outright.com is free and amazing!

[WithLoveFromLucille]

I use outright.com

You can connect your accounts or add the information manually. You can pay for the perk of tax information which is super helpful for quarterly taxes.

Losing money is "normal" - only because you have to spend money to make money. And you can claim that for taxes and not have to pay [or pay much] for the quarter.

[Former_Member]

Mallory: If you use paypal you're missing PayPal fees.

Amanda: outright looks great! Thanks for sharing :)

[FreshFromtheFlame]

ARTWORKbyMALLORY

Don't forget to add a shipping expense line as well. And, per articles I have read on Etsy you should also pay yourself. So maybe you should have a line designated to the amount of hours you have spent on each piece.

Good luck, would love to know what you end up using for the spreadsheet.

[Former_Member]

I made an Excel spreadsheet that works well for me.

[SilverLilyJewelry]

I keep track of everything by hand . I split it up into money earned and money spent.

[Former_Member]

i write down everything by hand too in a little book. being a student who has no money from any kind of job i do not need to pay taxes below a certain amout that i will never reach so everything i earn is mine and book keeping is not that important.
i don´t know if that will work for you but to save money i try to buy my mats from people that don´t need them any more and sell them a lot cheaper than in a supply store. that of course means that i cannot choose that much but the few things i need i do not get that way i can still buy in a proper supply store. of course i cannot live off my shop but i managed to quadruple the business money i started with and everything that goes beyond that amount is stored so i can fulfill one or the other little wish

[Former_Member]

Outright has been helpful to me, as well. Good luck!

[Former_Member]

Some people will use a very simple ledger and be fine with it.

But you have to account for EVERYTHING. And I mean everything!

Everything you spend goes in the 'expense' category. That includes
supplies,
postage,
fees (paypal & etsy)
packaging,
cost of materials,
advertizing
business card printing
computer paper
ink
your time,
etc....

Everything you earn goes in the income column
selling price
shipping charge (paid by the customer)


Then if you are lucky, when you deduct all the expenses from the income there is some money left.

That is your PROFIT.

I keep everything on an Excel spreadsheet and its amazing how fast some things can add up.
For example saving a few cents on each package for shipping when using online labels may not seem like much on a per package basis but in 6 months in 2013 I've spent over $3,600 on postage on Etsy sales alone. So even if I've saved 1% over what the post office charges, that's still $360 and that's a fair chunk of change.

[StuckOnSilver]

I separate equipment (drills, etc.) from components that will actually go into jewelry (silver, CZs, etc.)