Wrapping up the instructions on how to set up a spreadsheet to quickly and easily organize your arts and crafts expense records, this page discussed the rest of the expense columns and recaps using a spreadsheet to organize your arts and crafts business expenses.
Have you come in this series in the middle? Here's your guide to the first few pages in the series: the first article in this series discusses using an off-the-shelf accounting software program such as QuickBooks. It also introduces using a spreadsheet program such as Excel, the second gets into the nitty-gritty of using an Excel spreadsheet by walking through the first few columns, the third goes over fixed assets, education expenses and meals and entertainment.
Now that you are up to speed, let's get cracking! Reference the image on this page, keeping in mind that the last column, miscellaneous expense is cut off.
Travel expense includes expenses you incur for trips away from home to conduct arts and crafts business like attending shows. In this column you record all trip related expenses such as airfare, hotel accommodations, parking, tolls etc. Do not include your meals for the trip here. As those are reduced by 50%, record them in the M&E column I explain why in the third page of this series.
Wondering what to do with mileage? Well, if you expense your arts and crafts business related mileage costs using the standard mileage rate method, I recommend using your auto log to calculate your expense for the year and recording it as a car or truck expense. Ditto if you use actual cost.
I break my actual cost arts and crafts related car and truck expense out separately regardless if incurred in or away from my local area. You could add a column to this spreadsheet to reflect the expense. I don't bother as I just load in car and truck expense at year-end. This gives me a buffer expense if I somehow manage to short my estimated tax deposits.
Read my article on the subject of expensing vehicle expenses for more information about the difference between actual cost and the standard mileage rate.
Put any unusual or odd arts and crafts expense in this column. I do not use my misc expense column frequently. At present I have no misc expenses in the actual spreadsheet I use for my arts and crafts business. And I can't even think of an example I have had in the recent past.
Now at this point you may be wondering what the heck I do with standard arts and crafts expenses such as rent, telephone and high-speed internet. Well, my costs for all of the three are pretty much constant month-to-month. So at year end I just take my regular month payment, multiply it by twelve and record that figure on the appropriate line of my income statement and tax return.
Totaling the Columns
I total the columns in my spreadsheet at least quarterly to get a handle on how well I am managing my costs. After making an adjustment for costs still sitting in inventory, I compare my costs to my income to see if I need to make an estimated tax deposit. I'll be talking more about estimated tax deposits when I tackle the tracking income part of this series of articles about organizing your arts and crafts records.
The next page in this series discusses taking inventory, which affects your cost of goods sold.