I am not a tax expert. We did our own taxes for a long time until the past few years when things got more complicated. I thought I understand the “bottom line” of running a business but was far from it. I was exploring for ways to better manage my bookkeeping. Outright is a popular choice for Etsy sellers but I was having problems with importing data. So I decided to try Handmade Bookkeeping Complete from Handmadeology.
Handmadeology is a site created by Tim, an Etsy artist. It is a great resource of information and inspiration for handmade sellers.
I purchased the bookkeeping spreadsheet when I still had Excel 2003 and an older computer. The spreadsheet is very large and it would hang up. I was refunded my purchase and when I upgraded my excel, I purchased it again. This time I had no problems opening the file.
It helps to have a working knowledge of Excel. There are cells in which you enter data and then there are cells in which the spreadsheet performs calculations.
Like any system, it is only as good as the information you put in. But it has helped my understand Cost of Goods Sold (COGS) and all the costs going into my products and running a business.
I enter every transaction as it is shipped, or at least by the end of the week if I am too busy. Monthly, I enter all the fees from Etsy and PayPal. The spreadsheet gives a nice monthly summary and a yearly report of your sales.
If you wish, you can track other information such as fees, social media traffic, and marketing.
There are a few entries that feel redundant. But, overall, I feel like the spreadsheet has been worth it. Read about it here to consider if it will work for you and your business.