So, you’ve just started your Etsy shop, and you have a lot of finances to manage. You probably want to keep your business organized so that you know where every penny goes and how much stuff you need to produce based on profit.
So how do you organize everything? Keeping proper records is crucial when starting an Etsy shop. Clean and organized bookkeeping will save you time and effort in the long run.
Try these quick tips and clear the chaos in the books.
Leverage Accounting Software
One of the best ways to simplify bookkeeping is by using accounting software that works well with Etsy. You can easily track expenses, sales data, taxes, and more, as well as run reports for information on revenue, costs, margins, and more.
Popular programs like QuickBooks Online and Xero offer features such as dashboards, invoicing, expenses, taxes, and more. According to a QuickBooks survey, 89% of small business owners find accounting software makes their lives easier by automating tasks and reducing errors.
Carefully Manage Your Inventory
Keeping accurate inventory records is crucial for calculating profits and preventing overselling. To effectively track inventory:
- Log supply expenses and deduct from inventory when an order ships
- Use a barcode scanner or app to update inventory automatically
- Set up alerts for low stock
- Regularly audit inventory for accuracy
- Save Important Documentation
You can use accounting software or dedicated inventory management tools to help you with these tasks. For example, Craftybase is a tool designed specifically for handmade sellers that integrate with Etsy and other platforms. It helps you track materials, costs, pricing, and profitability.
Save Important Documentation
Get in the habit of saving all receipts, invoices, and documents related to business expenditures. This provides support for taxes, calculates income, gives audit evidence, and helps analyze spending patterns.
Options for saving include scanning, taking photos, or using accounting software to import transactions. You can also use cloud storage services like Dropbox or Google Drive to store your documents online and access them from any device.
Reconcile Accounts Monthly
By reconciling your Etsy accounts monthly, you can quickly identify any errors, issues, or fraudulent transactions. It ensures that your internal records match your bank account balances accurately, giving you a clear picture of your Etsy store finances.
Analyze any discrepancies and determine the reason. This could be an Etsy payout that hasn’t been deposited yet, or a bank fee that Etsy doesn’t show.
Partner with a Bookkeeper
As your Etsy shop grows, keeping your books in order gets more complex. Avoid mistakes and maximize write-offs with an experienced bookkeeper who understands the world of online creative businesses.
I am a certified bookkeeper dedicated to helping Etsy sellers thrive. Whether you’re just starting out or scaling up, I can provide customized bookkeeping such as:
- Reconciling bank accounts and credit cards
- Creating insightful financial reports
- Handling sales tax
- Building a realistic budget
- Getting back on track
My goal is to make bookkeeping easy so you can focus on your creative business. If you’re ready to get your books in shape, contact me through my website or email me at cori@fatcatbookkeeping.com to get started. I look forward to helping your Etsy shop succeed!
