There are few things of more importance than bookkeeping for resellers. Accounting may be your least favorite task – it certainly is for me – but if you aren’t keeping track of your income and expenses how are you going to know if you are really making money? Not to mention, you are going to be a hot mess come tax time.
Below are a few must-haves I employ to help keep my money and progress on the forefront. None of it’s too complicated. All of it’s affordable.
I have long been a Quickbooks user for my online business endeavors. Recently, Quickbooks introduced a more affordable and simplified option called Self-Employed that has been a blessing for my reselling business.
I spend a lot of time on the road as a reseller. There is sourcing to be done. There are packages to be taken to the post office. I wasn’t doing too well keeping up on all of that mileage with just a pen and paper. And that mileage can be a great tax write-off.
Luckily, Quickbooks Self-Employed is app-based. Every time you get in the car and start driving, the app starts tracking those miles. You then just need to click the button for Personal or Business. It will even create rules for those frequently visited places and categorize those miles automatically.
At the end of the year, just print off the mileage report and hand it to your CPA.
A Good Spreadsheet
One way I like to make money online is selling on Poshmark. From this work, I’ve learned that it’s crucial to keep good records of inventory being bought for resale. Not only do these numbers let you know whether you are making or losing money, but they are also necessary for reporting on your tax return. At a minimum, you should keep track of:
- the date you bought your inventory
- what you paid for it
- the date it sells
- what it sold for
I love Airtable for tracking my inventory simply because it’s so much more robust than Google Sheets. However, Google Sheets or Excel will work as well. You can even use a pen and paper if that’s what it takes.
Sarah Styles Sales & Inventory Dashboard
I’m a big fan of data. The more information and statistics I have, the better I can see what’s going on with my business. No guessing.
The reports you can download from many selling platforms can help. But it inevitably takes a lot of formulas, tweaks and time to get a visual of what’s performing well and what’s not.
I was so excited to find Sarah Styles™ Sales & Inventory Dashboard spreadsheets. This nifty dashboard takes in all of your sales data and shows you in simple charts and lists what brands are selling for you, how long it’s taking you to sell stuff, your average sale price, your sell-through rate and more.
It can even help you set and reach monthly goals. I love it!
Designated Bank Account
Your life is going to be so much easier if you keep your business income and expenses separate from your personal bank account. The better – and easier – records you keep, the less chance for error.
There are a lot of banks out there that offer free checking, even for business checking accounts. You can then have your sales income deposited in this account and use this debit card, or get a designated credit card, for your reselling expenses. You will then know with confidence that everything going in and out of that account is strictly business. The IRS will know as well should they come knocking.
Reseller Tax Academy
At the end of the day, there is a reason to keep track of “all the things.” It’s called taxes. If you are making money, the government wants its cut. Even if you aren’t receiving a 1099 from a platform, you are still required to report that income.
This is the part of a reselling business that most people hate. I know I do. Taxes cause me a lot of undue stress. That was especially the case in the beginning when I really didn’t know what the heck I was supposed to be reporting or how.
Luckily, I ran across Mark Tew online. He owns Not Your Dad’s CPA and specializes in helping resellers with all things accounting and taxes. Mark’s self-guided course, Reseller Tax Academy, breaks it all down in a way that’s easy to understand and implement.
A few things you will learn in Reseller Tax Academy:
- Understand how taxes relate directly to your ultimate goals.
- Understand what your tax responsibilities are during the year and how to easily check them off your list
- Learn to distinguish a “hobby” from a “business” and see which is more beneficial for you
- See what it truly means to “set up a business” and how to do it correctly
- Find out which business structure, if any, is right for you.
- Deduct & track all of your inventory properly to stay compliant and for maximum visibility
- Account for all of those personal items you sell and learn how to leverage them to reduce your tax bill
- Manage inventory donations and how to deduct them properly
- Learn how to take advantage of the QBI deduction (worth 20% of your profit!)
- Understand how to track and deduct mileage, meals, travel, and other common reseller deductions
- Learn the truth about IRS audits and how to be ready for them
- Follow the basics of where to start with bookkeeping setup and day-to-day operation
- Analyze your business trends, make decisions based on that information, and the follow-through by taking action
And that’s just to name a few things! And there are several worksheets and checksheets included. I love that!
It’s never too late, or too early, to start getting your bookkeeping in order. It helped me so much and I think it can help you too.
Those are a few of my must-haves for making reseller accounting a lot easier. I’d love to hear what’s in your online arsenal.