As a handmade business owner, I can honestly say that one of the most difficult things for me is keeping accurate track of my money. I’m not a numbers person, I don’t find accounting particularly easy, and I really really don’t like when it comes to bookkeeping time. I do, however, understand that keeping track of my money is vitally important to my business...so while I’m no accounting pro, I do take the time to carefully track where my business’ money comes from and where it goes.
Simple so far, right? See...it’s not THAT bad.
Here’s the catch, though: in order to really know that you are making money, you have to track EVERY SINGLE PENNY that your business spends and EVERY SINGLE PENNY that your business brings in. THAT is what can get difficult...but if you get yourself set up on a system, it gets easier and easier.
💸 continuing education (courses, conferences, etc)
💸 materials (including any sales tax and shipping you pay on the materials)
💸 office supplies (paper, ink, envelopes, etc)
💸 packaging (bags, mailers, bubble wrap, etc)
💸 shipping costs
💸 show fees
💸 subscriptions (i.e., email service provider, Canva, professional publications)
💸 travel expenses (gas, hotel, meals, tolls, etc)
💸 website fees
💰 online sales (i.e., Etsy, website, Amazon Handmade, etc)
💰 show sales
💰 wholesale/gallery sales or commissions
If you are wanting to “bootstrap” your bookkeeping efforts, the simplest way to do so is to track all of your expenses and income using a spreadsheet. I personally prefer to use Google Sheets because it is cloud-based and free, plus it operates pretty much the same way that Microsoft Excel works. Google Sheets also provides a gallery of free templates, and a quick Google search for “free Google sheets budget template” will yield a long list of free resources for you to review.
Paper + Spark has great resources for bookkeeping that are specifically created for handmade sellers like us. You can purchase her spreadsheets in a bundle or a la carte...and believe me, they are worth every penny! They are customizable for your business’ unique accounting needs.
In my business, I use the desktop version of Quickbooks to track all of my income and expenses. Quickbooks is a paid accounting software program that provides you with reports and tracking features that will make it easier for you (or your tax preparer) come tax time.
Whichever option you choose, the important thing is that you are consistently tracking and monitoring what your business spends and what your business earns. I personally have one day a month where I sit down and enter all of my receipts and income into my Quickbooks account, and at the end of the year, tax time is much easier for me (ok...for my accountant). This is one of the more challenging parts of being a business owner, but knowing your numbers is the key to knowing if and how you are indeed making money!