Hello and welcome to the first installment of my monthly series Bookkeeping & Accounting in Your Yarn Related Business” or BAYYRB for short. Each installment of this series will be published on the first Wednesday of each month.
Over the last year and a half as I’ve been S-L-O-W-L-Y launching Fanciful Things I’ve read a lot of articles, listened to a lot of webinars/podcasts and taken some classes on starting a yarn related business – I’ve gained a lot of useful information but the one area that seems to come up short is bookkeeping and accounting for your yarn related business.
Being a bookkeeper for most of my life, I know how difficult it is for many business owners to wrap their head around the number’s side of their business – let’s face it, none of us want to crunch numbers – we’d much rather be knitting or crocheting. We are creative people, not number crunchers!
Many small business owners simply throw all their receipts into a box or a manila envelope and take it to their CPA or tax preparer at the end of the year and let them sift through it. Others create a multitude of Excel spreadsheets and get frustrated because nothing really ties together.
I’d like to begin this series by talking about bookkeeping – you might call it record keeping, tracking sales, tracking expenses, saving receipts. But bottom line is – recording ALL of your expenses and your revenue from your yarn related business in one place – whether it’s via complex Excel spreadsheets or a software program such as QuickBooks (which I use for Fanciful Things).
As we come up on tax time you are probably scrambling to put everything together so that you can file your income tax returns – what better time to analyze your current system and implement changes for 2016.
Now if you are thinking about a software program, such as QuickBooks it’s an initial investment of between $200.00 and $500.00 but as long as you don’t want to link it with your bank account or issue payroll you can use that program for years. If you do want to link it to your bank or issue payroll then you have to figure on spending that same amount roughly every 3 years. (As a side note – I can help you to get a discount on QuickBooks software, if you are interested please contact me).
Bookkeeping takes time and the best time to update your books is when the transaction happens – meaning when you buy the yarn or you make the sale.
Join me in March for Your Yarn Related Business & the IRS where we will discuss the difference between being viewed by the IRS as a business or a hobbiest.
Until then – Happy Crafting!