If you’re like most Etsy sellers, you’re passionate about your handmade goods and creative business. You’re probably not passionate about accounting and bookkeeping. But good financial record keeping is vital to the success of any business, large or small.
Accounting and bookkeeping are always vital. That is true whether you’re new to Etsy or have been selling there for a while. In this article, we explore why it’s important and how to do it well.
The Importance of Accounting and Bookkeeping for Etsy Sellers
It is important for Etsy sellers to keep accurate records of their sales and expenses. This can be done by using accounting software or by looking for firms that offer bookkeeping services for Etsy sellers.
By keeping accurate records, Etsy sellers will be able to track their progress and ensure that they are making a profit. Additionally, accurate records will help sellers if they ever need to file taxes or apply for loans.
3 Accounting and Bookkeeping Tips for Etsy Sellers
Now you know why it’s important to do accounting and bookkeeping as an Etsy seller. Chances are, you won’t ever overlook this part of your business ever again. But where do you start? What do you need to do?
1. Create Separate Business Bank Accounts
It is always a good idea to have a separate bank account for your business. This will help you to keep track of your finances and avoid any confusion between your personal and business expenses.
Having bank accounts and credit cards for business expenses only will help you organize finances. All receipts and bank statements from those accounts will help you track all business transactions.
2. Set Up a Simple Bookkeeping System
Next, set up a simple bookkeeping system to track your income and expenses. There are many accounting software programs available, or you can use a spreadsheet. You can also hire a professional firm to help.
Collaborate with the software or with an accounting services provider. Use whatever system works best for you, but be sure to keep track of all your inventory, income, and expenses efficiently.
3. Set Aside Money For Taxes
Finally, as an Etsy seller, you should set aside money for taxes. Practice this on a quarterly basis. This will help ensure that you have the funds available when it comes time to file your tax return.
A good rule of thumb is to set aside 30-40% of your total sales. For example, if you sold $1,000 worth of items on Etsy, you would set aside $300-$400 for taxes.
Be on Top of Your Etsy Business
Keeping good records is crucial to the success of Etsy sellers. The following tips above will help you stay organized and on top of your finances. By following these tips, you’ll be on your way to Etsy selling success!
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