Keep Those Tax Receipts! Basic Bookkeeping Concepts

August 25, 2017

 

 Most furniture painters are creative, innovative, ambitious, talented, and... terrible at keeping their financial records!

 

Owning a furniture painting business isn’t rocket science as far as keeping books but it does require some time and effort.  Many of us are small and hiring a full-time bookkeeper or accountant isn’t realistic.  I am NOT an accountant so this advice, is just that, advice. I have done record keeping for businesses large and small most of my life. But, I do my own bookkeeping as simply as possible!

 

 

There are many programs such as Quickbooks for Small Business you can utilize to keep track of your income and expenses.  This article isn’t going to go into how to keep your records, but what to keep!  

 

Two Important Tips:

 

1. Keep track of what you do. 

2. Keep all receipts.  

 

NUMBER ONE:

 

Tracking:

 

Your Milage - Use an app, day planner, or notebook. Write every mile you spend on your business.

Your Customers - Contracts, list of requests, personal notes, and basic info on each customer.

Your Inventory - Use a spreadsheet or notebook and write down every piece you purchase.

Your Supplies - Use a credit card to purchase supplies for easy tracking. Keep your receipts in a file.

Your Time - Manage your time well. It pays off!

 

NUMBER TWO:

 

Receipts:

 

Keep your receipts for everything you purchase that is business related. Create a file system that works for you.  Use a filing cabinet with labeled file folders or buy a large pocket accordian folder and file your receipts by category. 

 

I prefer filing by categories such as:

 

Inventory Pieces - Items you purchase to paint and re-sell 

 

Supplies - Paint, wax, brushes, sandpaper, products that are considered “consumables” go in this category.  

Tools and Equipment - Sanders, saws, sprayers, etc.

 

Auto Expense - I prefer to track my mileage as the deduction for mileage is always greater than tracking fuel, oil changes, car washes, etc

 

Office Expense - Office supplies, thank you notes, postage 

 

Travel - Business related travel (picking, seminars, workshops)

 

Insurance - Liability, vehicle, building

 

Taxes - Sales, property, etc

 

Business Training - Online or in person

 

Permits and Fees - Fees for listing pieces, local fees, legal, etc 

 

Marketing and Advertising - Any local or online advertising. Signs, car magnets, business cards, flyers etc

 

Rent and Related Expenses - Storage, booth, storefront, etc 

 

Freight and Delivery Expenses  

 

There are many other items you may deduct such as clothing used exclusively for work. When in doubt about taking a tax deduction, keep the receipt and ask your tax preparer! File it under miscellaneous until you know if you can use it on your taxes. If you can show proof that an expense was business related you can probably write it off. 

 

If you are detail oriented, create a spreadsheet and post each receipt at least once a week before filing. Keep your receipts in one place. Use a basket or shoebox until they are filed. 

 

This simple system helps keep me on track with my bookkeeping.  At the end of the year when you visit your tax preparer, accountant, or file your own taxes you will have a good head-start by being organized and ready! 

 

Remember how to eat an elephant... one bite at a time.  Doing a little filing consistently will make an easy task of your record keeping. 

 

 

 

 

 

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