Thursday, March 27, 2014

My Household and Small Business Accounting Method: How Do You Track Spending?


In a perfect world we'd all have accountants to organize our receipts, paperwork, and spreadsheets, but most of us don't. I refuse if I can do it myself- for now. I love to track every cent I spend for not only my business but my personal life to analyze trends, keep myself accountable, to save and for taxes. Here's how I keep it all organized:


1) Upcycled Manila Envelope(s) to hold business receipts 2) Manila Envelope of Personal Receipts 3) Mini File Organizer 4) Envelopes 5) Small Notebook and Pen 6) Binder Clips


I've seen the same portable organizer at The Dollar Tree, you can try to find one near you for a buck. This is great to carry with you in your purse or car so you organize your receipts properly on-the-go instead of having a receipt pile in your bag or pockets. I carry the little notebook with me to note yard sale/flea market and write down what I pay for finds as I go, the notebook lives in the file folder.


From there I sort my receipts into their respective envelopes within the Manila Envelopes. Yes I'm Old School, I also didn't get a cell phone until I was literally forced to (age: 20) and didn't switch to a smart phone until last year! Above are my personal envelopes. I spend money on more than groceries and a tiny bit of "random" things but the rest of my expenses (cell phone, cable, rent) are scheduled as automated direct-deposits (highly recommend the auto-magical way! So simple, so clean!) so I don't print receipts for those expenses.


These are what my business expense envelopes look like. I write it all in pencil in case I want to use my envelopes for something else later with my cheap self. The business receipts include: supplies, thrifting, southern crossing rent, gas and post office trips (good to keep for tracking numbers, too). I clip them together by month.

Columns: Date (found) | Item (description) | Cost | Estimated Value | Where Found | Condition | Retail (Price) | Date Sold | Profit | Quantity | (Where) Stored | Wholesale | Item #  ------>> Am I leaving anything out?

From there I enter the expenses into a spreadsheet. I use Google Documents, it's free and you can share the spreadsheets with partners to edit together if need be. I keep tabs at the bottom to separate types of merchandise for easy-hunting. My personal spending spreadsheet looks much the same, divided at the bottom by type of expense. I highlight in groups by date with different colors for easier scanning, it really helps the eye find things.

Another step people miss- receipts should be scanned. Not merely to have the files digitally but because they fade completely -sometimes within mere months! I've yet to scan mine, when I do I'm going to sort them in digital folders the same way they're stored in my envelopes. You should keep your receipts for 7 years, that's the IRS audit expiration date.

How do you store/organize your receipts or track expenses? Any tips? I do this an antiquated way but I like the process, it keeps my spending tangible to have so much of it "in-hand". Going through all these steps every time I buy anything definitely discourages me from spending more than absolutely necessary, too!
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33 comments:

  1. I appreciate all of your posts, but this one... I am loving. :) I am a material / financial analyst by day, volunteer VP of Finance for a non-profit, and small business owner of "The Oakley Office" - which is payroll, bookkeeping, accounting, and consulting for small businesses. Your methods are GREAT!

    So many self-employed or small business owners don't keep up with their original costs nor their Inventory (Blows.My.Mind.) but I believe small business is what makes this country so great and I want to help them understand their budgets, their costing structure, and most importantly, their profit.

    What does Column L say on your Google Sheets?

    -Lana

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    1. No prob, I know it's not super clear ;D For anyone else reading it says "Stored"- will eventually add the resting place in my home of every single item in my inventory (like "pantry, closet, box #1" etc.) but haven't yet merely because I'm still trying to find the best way to store everything.

      Knowing where it's stored is such a huge help when it comes to shipping stuff out.

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    2. Do you calculate your profit from the spreadsheet or from what Etsy/eBay actually deposits?

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    3. I feel the same way about small biz, so passionate about helping people succeed at it which is why I always posts inspiration to get started, help for those working on it, and am working on helpful eBooks next. Most of my artist pals do not track inventory or receipts at all and I can understand why, it slows you now and isn't right-brain friendly. But it's so vital!

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    4. Oh, double post, ha. I track by:

      1) Writing the daily sales on the calendar day in my planner's calendar (for future reference) and on a large calendar by my desk so I can see the sales as they come and always glance at it to see how I'm doing. I like to hand-write all sales, helps me remember them.

      2) I add them up at the end of the month from my calendar.

      I don't calculate via spreadsheet formulas. I need to learn how to do that, to be honest, have always been bad at that in excel-type programs. Didn't think to include that in the post, made have to edit with that info. Thanks for asking! Let me know if this is way too old school/bad to do in your pro opinion?

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    5. IF/when you calculate by item in the spreadsheet, you will need a new column for fees (i.e. insert a column by G just for fees).

      I am still learning about Etsy... Do they have a download options for your sales? I am thinking of the Square Register & (the long gone) Google Wallet- there is the option to download into Excel from those sites and it is easy to formulate into a pivot table or just to filter out what you need to see.

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    6. I don't see anything for that other than the "sold orders" tab but I'll investigate that more when I get back from my kitchen shift. May have to get with you on a step-by-step post or info to help people do this stuff if you're game. :D Definitely agree on a fees column. I'd do one for Etsy and eBay for each item. Need to keep better track of that, it adds up.

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    7. Thanks Lana! What's the best e-mail to reach you at? That or you can e-mail me at info@thriftcore.com and I'll follow-up later this evening.

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    8. Ahhh! How did I miss this post?!

      I came back to this post because I did some more research on etsy. I will email you! I am sooo sorry for the delay.

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  2. Am starting to track my mileage today. You system looks great.

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    1. Thanks Nancy, yep, that's a big one I started this year. I started last year but didn't keep up with it.

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    2. Went to the post office to drop off packages for ebay and a thrift today and recorded it in a notebook that is now kept in my car. Thanks for the post!

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    3. No prob. Glad it helped!

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  3. Yes, very good system. I suffer from the "artists shouldn't have to worry about money" syndrome and keep most of that info in my head! I know-- not too smart.

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    1. I didn't track things the first couple of years while I was doing this part time. Super easy to lose track if you don't keep on it.

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  4. Pinned for later reading - thanks! I just started my business in September and I'm still trying to work out a good system.

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    1. Glad it helps. I'm writing my indie biz help eBook, I hope you'll check it out when I release it :D

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  5. So last year, I pretty much put all my receipts in a shoebox. Well, which ever receipts I happened to find. Then my husband pretty much scolded me....So this year, I have been wayyyyyy better and organized. I am putting my monthly receipts, gas, any expenses in an envelope, and I write down on the front the total expenses and my total revenue. Good enough for me. Anything more complex than that, I will hire an accountant. Seriously, I am not good with that sort of stuff....

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    1. It is one of those weird things you have to discipline yourself to do, even though it's so simple!

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  6. Since you now have a smart phone, you can download an APP or use your phone's camera to scan/photograph the receipt and email it to your self to download to a file in your email.

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    1. Oh that is awesome, do you know what it's called? Would save me some time for sure.

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  7. we use the home budget app and i love it! it is 5 bucks but totally worth it, and it syncs between mine and my husband's phone. with each expense there is an option to take a photo of the receipt which is awesome and cuts down on paper i have to hold on to! we've been doing so well on our budget since getting that app.

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    1. Oh that sounds awesome- what's it called? I haven't transitioned into aps yet, I love hand-writing everything.

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