Accounting and break even:(???

[BaloolahB]

Following husbands advice (nagging and whining!) I put all my receipts in an exel spreadsheet, goods bought, postage paid etc
Then I put each months receipts in a separate envelope ( as read on a forum on here, hubby impressed with that idea!)

Have I really spent THAT MUCH!!!
I have to say it was a little eye opening, now I need to sit and do the figures, when will I break even?? ( will I ever???!!!)

Does any one else struggle with keeping track of ins and outs, what's the best way of sorting it? Any ideas??

[Former_Member]

I highly recommend Outright.com, which does all of the accounting for you. It even sends you a weekly e-mail letting you know what your profits/losses are. It's synced with Etsy, so you don't have to do manual entry, and if you buy supplies on Ebay or do sales there as well, you can sync it with Ebay too.

[Former_Member]

How many years have you been running your business?

I wouldn't worry yourself, during my first year I didn't break even, the next year I did and the year after then I had a very healthy profit. It takes time to build up a business. During my first year I had quite a few large expenses, such as a printer, spinning wheel, internet access etc etc Everything does mount up : )

ETA I also put everything in an excel spread sheet and work out my monthly ins and outs from that.

[Former_Member]

i put in certain amount of cash in an envelop just for the supplies.. and whenever it's gone i'll wait for next month to come by and add in..this however doesn't really help with online or impulse purchase. No, don't think I'll ever break even.

[BaloolahB]

http://Outright.com/ thanks Dara!
Does that work in the uk?? Can I put in data that exists already?? And what about postage?? Can I put in exact figures or is it just the ones quoted on etsy? I'm going to look at that now, thanks for your input everyone!
Only started this business in jan, bought new (to me) machine, steam iron, new high cutting table etc so yeah loads of set up expenses! Miss belluk, I know what you mean, thought I was almost breaking even..... Oh no I'm not!!!!
Easy to account positively in your head, rounding purchase down and sales up!!!!
Hence attempt to get it right!!
Thanks for all your input!

[Former_Member]

Oh if you only started in January you're bound to have heaps of expenses haha don't worry. I read somewhere that it takes an average of 5 years for a business to establish and start making a good profit/income : )

[BaloolahB]

Oh don't tell my husband that!!!!

[Former_Member]

I'm very far from breaking even... especially because of impulse shopping for new materials (trying to work on that). Great tips in here. I use an excel sheet too but the column of purchases is way higher than the sales one, totally out of proportion.

[AnneLondezGlass]

Claire, I've looked into Outright over the past week and yes, it works in the uk and does everything you need. The only thing that bothers me with it is that you have to give them access to you Paypal account if you want everything automated, or else enter all the data by hand.

Right now I am trying to rationalize my work process so I'm looking into all sorts of accounting software (I have a brick and mortar glass studio, which is may day job) and the best I have found is In Flow Inventory but it is not cheap. Well there is a free version but it doesn't suit my purpose. And it is a lot of work to keep up to date !

[BaloolahB]

Oh, so handing over access to PayPal, not really fancying that either! Where is it based?? Anyone know??

[Former_Member]

I use Outright and have not gone the automated route with PayPal - it only takes a few minutes to enter things in myself. I have been told by some very successful business friends that it will take 5 years to turn a profit that doesn't go directly back into the business. It takes time and hard work and patience!

[Former_Member]

My hubby (also my CPA) makes me keep an excel spreadsheet (tabbed ofcourse) for inventory, purchases, fees, supplies,and sales. I know at a glance how I'm doing and trying to get my inventory down.

If your business doesn't see a profit by the 5th (I think) year, the IRS considers your business as a Hobby, which puts selling online in a whole different ballpark. I keep my fingers crossed for my little venture.

[ThisNThatbyNikki]

I've kept all my personal accounts in quicken for at least the last 10 years, when I started selling on etsy a couple months ago, I just added a new category in my bookkeeping with sub categories for things like sale/product/permit/taxes etc. Then I created a report which I keep pinned to the top which shows me how I am doing. Like the others I am totally out of balance, but this way I can keep track of everything in one place. It will also make graphs and charts for me.

[TheMillineryShop]

Outright is fabulous. Seriously.

[PALEOLOCHIC]

I use Outright and I am very happy about it, the only thing that bother me at the beginning was that I have to convert U$D into Euros and it was a real hassle so I decided to put my prices in Euros at Etsy and that make it very easy as I know exactly what is comming in and what is going out

[kidsstore]

Claire, talk to some others in the UK about what you can deduct on taxes and other expenses. Here in the US, I keep track of my mileage every time I run an errand for my shop (post office, buying supplies, etc.), any license fees, all internet and telephone fees as I must have then for my business, office supplies, etc. Also, I use about 17% of our house so I can deduct 17% of the taxes, insurance, utilities, maintenance, etc. When you add all of those deductions up, you can often show a loss unless your business is doing very well. But, as Nana said, you can only show a loss for a few years, then it is considered a hobby. Just make sure you keep receipts and records for everything.

One other down side to showing a continuous loss in a home based business is that you are not paying into Social Security and when you get ready for it, they base how much you get on how much you actually paid in during your total income years.

[Former_Member]

It should get better! Last year I spent twice as much as I made, but am on a different track so far this year. Last year I had to buy a lot of things i don't need to buy again this year. This is what I've heard is normal for all businesses starting out.

I suggest speaking with a CPA about what to deduct. I was all excited to deduct things I'd heard others talking about, and my CPA was like, No, that will ruin the resale value of your house. I still got a nice refund this year, so it seems like he knows what he is talking about!