Finance is the core of a business. You need money to create an item, you need money to list the item, you need money to send the item, and you receive money from the customer. This is the pretty cycle that our money takes when we have an Etsy store. It is actually true of most stores. We the creative people selling our goods have to be aware that the government only wants to see the cycle.
Things to keep in mind:
Receipts
You want to keep them, all of them. If you are buying supplies, reference materials, booth space, organizational tools are all important. I suggest going to Target and getting a receipt folder. I sprung for the sexy one with 12 pockets and a cute blue polka-dot pattern. You can list them as the months of the year. At the end of the year pack everything into month labeled envelopes and those into a larger envelope. Then you can put those away and not worry about them until tax time.
Records for Supplies
You need to keep a list of supplies that go into your pieces and cost. Make sure if the item comes multiples in a pack that you divide the price by the number in the package, then round up to the nearest penny. I have many supplies that are .007 for a single bead. Keeping track of this will do several things for you. First it will help you make sure that you never loose money on a piece. Second you can make sure that the profit margin you are receiving stays consistent in your shop. Third is it allows you to keep tabs on what items you have and need to restock. I have an excel sheet that I have uploaded to Google Docs and a copy on my iPhone. The records of what goes into your piece might also be useful at tax time.
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