The year is almost over! As a creative entrepreneur, hopefully you’re taking time to enjoy the holiday season. Relaxing with your loved ones AND filling all those holiday orders is no small feat, am I right? Year end doesn’t just mean jingle bells and fireworks, it means it’s time to wrap up your financial records and prep for tax season.
Did you just shiver with anxiety? Just a little bit? It’s ok – it’s pretty common to procrastinate when it comes to dealing with your biz finances. You aren’t alone.
How to Play “Catch Up” on Your Bookkeeping – for Etsy Sellers
Today, I’ll be playing your helpful accountant. I’m compiling some tips and handy resources to help you go from totally stressed and behind to breathing easy and DONE!
Begin with the end goal in mind.
Your 2016 personal and business taxes are due on April 18, 2017. Your goal should be to have complete financial records and accurate totals in time to hand over to your accountant or tax preparer, or in time to do your taxes yourself (so, try not to plan to be done ON April 18th!).
Let’s be clear on what you need as far as “completed financial records” go – I’m talking accurate, detailed totals for all your sales and expenses for the year, with a solid paper trail to substantiate those totals too. I’m not saying you need a balance sheet, cash flow statement, etc. Or a double-entry journal of every transaction ever. Don’t make it harder than it has to be.
Start planning now and be realistic with your time.
Most makers will have a shipping cutoff for the holiday season a week or two before Christmas. You can begin wrapping up your books as early as late December (catch up on the early parts of 2016), or as soon as possible in January. Remember, the goal of this exercise is to catch up in the least stressful way possible! That means breaking up ALL the work you need to do in manageable chunks of time. Pencil in a little bit of work each week starting in late December or early January, and you’ll get everything done by your tax deadline. Nobody wants to cram in a year’s worth of bookkeeping in a weekend!
That being said…
Write it out.
Like on paper. If you write out your schedule in advance, you’re more likely to stick to it. Plus you’ll have a visual reminder of when you’ve fallen behind. My printable planning playbook includes two tools to help you schedule out your bookkeeping work – a tiny steps daily checklist and blank monthly calendars for December 2016 through April 2017.
The blank monthly calendars will help you allocate out the work for each week (see my next point), and the tiny steps checklist will encourage you to do just a tiny bit of “catch up” bookkeeping each day – even if it’s just 5 minutes, you’re making progress.
Come up with a plan of attack.
If you’re really behind, take a moment during the planning phase to come up with a “catch up” plan that makes the most sense for your work style and your business. Here are a few examples:
- Divvy it up by source: Week 1 – tally up monthly Etsy sales, Week 2 – tally up monthly sales from Amazon, Week 3 – enter all expenses from bank account 1, etc.
- Divvy it up chronologically: Week 1 – enter all sales & expenses from January 2016, Week 2 – enter all sales & expenses from February 2016, etc.
Don’t forget about that pesky inventory.
Dealing with your inventory is likely to be the biggest beast of playing catch up. First, brush up on how inventory and cost of goods sold work for tax purposes. You might need to catch up on entering all your inventoriable supplies for the year, then do an end of year count to determine your ending inventory amount. If you are behind, make sure you set aside enough time to count, measure, and do a whole lot of number crunching.
If you’re freaking out, I’ve got two things to help you.
First, I’ve crafted a handy printable planning playbook to help you through the process. These worksheets will help you with both the planning phase and the action steps. The bundle includes an Action Steps Master Checklist with a list of steps you can follow to go from blank to complete. If you aren’t sure where to start, this checklist will definitely guide you and keep you focused. It also includes the Tiny Steps Daily Checklist, and the blank monthly calendars for December 2016 through April 2017. With these tools in hand, you get the planning focus and guidance that you need to succeed. To grab your printables, just enter your info in the box at the bottom of this post!
If you’re really ready to dive in and want some extra hand holding from an accountant who’s been there, check out the 2016 Bite-Sized Bookkeeping Bootcamp. This course is like my action steps checklist on mucho steroids. This bootcamp is designed to get you through the process in the least stressful way possible in small, doable steps. The bootcamp includes the following:
- The bestselling Etsy Seller Spreadsheet for 2016
- An inventory & supply spreadsheet for makers developed especially to help boot campers enter their inventory and supplies in a manageable way
- Video & text tutorials to walk you through how to quickly perform every step you need to do (how to download your Etsy sales, where and how to find the PayPal expenses you need to enter, how to find your refund info, etc.). It’s like a very specific guide map to save you the time and energy of figuring out how to do each of these things on your own.
- Discussion forums to ask questions as you go
In the meantime, make sure to grab the free planning playbook to get your books in gear for the end of the year via the box below!