Your browser (Internet Explorer 7 or lower) is out of date. It has known security flaws and may not display all features of this and other websites. Learn how to update your browser.

X

Navigate / search

C&T Q&A – How do you Track your Income and Expenditure? (+ Bonus FREE Spreadsheet Download)

This week’s question is from Liya:

I wanted to ask you if you could e-mail me a copy of the spreadsheet that you keep for your income and expenditure, as I’m new to this, will be eternally grateful if you think it’s not too much to ask!!

Many thanks in advance for your help!!

Kind regards,
Liya

I’ve gotten a few requests like this, so I thought it might be a good idea to talk money here today. Specifically – how do you stay on top of your business income and expenditure so you don’t have a massive freak-out come tax time?

Okay, first of all? You should NOT be leaving this sort of stuff till tax time. If you’re serious about running a business, you NEED to know where your money is coming from – and where it’s going.

I know it’s a tedious task, and something we’d all rather avoid (and I’ll be completely honest here – I was SUPER-happy the day I handed this task off to Nick to take care of for me – he’s kept the books for at least 2 years now). However, I kept on top of it myself before that, and it was extremely worthwhile.

Money is Motivating

I don’t know about you… but I find keeping track of my biz money very, very motivating! I LOVE looking at my income at the end of each month, knowing that I made that money by sheer force of will – because every dollar I earn in my business I have WORKED for. Not like the old days where I got my salary in the bank every fortnight no matter how hard (or not) I worked at my job.

The more I earn, the brighter that happy glow of achievement burns. For me, that’s a super-motivating feeling!

I also need to know how much of that money we have actually kept – comparing the gross income each month to expenditure is the only way to know just how much money I have actually made.

Money In – Money Out = Money Kept

If you’re not tracking this on a regular basis, how on earth will you know how successful (or not) your business is?

Are you Running your Business into the Ground?

When we start off in this whole crazy caper, most of us are a little bit addicted to buying supplies. Come on, you’re among friends, you can admit it πŸ˜‰

I dread to think how much money I spent at Spotlight in the bead section before I learned that there were better places to buy stuff from! If I go back and look at my income/expenditure for that very first year – when Epheriell was a hobby business that I ran in the down-time from my full-time job, I think I spent around $500 more than I earnt from it. At the time, I was pretty damn happy about that!

My only aim at this point was that the sales I made supported my ‘habit’. (Read, craft-supply-buying addiction…)

They did, and I was pleased… but I soon wanted MORE. And so the business turned from a hobby business into a ‘real’ business.

If I wasn’t tracking all of my expenses from the start, I wouldn’t know where I stood. I wouldn’t have had the confidence to grow my business, because I wouldn’t have had any idea how well I was doing.

Knowing where your money is going helps you to modify your business practices.

Maybe you need to cut back on buying supplies until you make a few more sales. Or maybe you’ve earnt more than you think, and you can re-invest that money into your business in the form of buying tools/materials or advertising!

It will also help you to avoid the pitfall of running your business into the ground by vastly over-estimating your income vs. your expenditure. There’s no way to really know where you stand unless you can see it in black and white.

An Example Spreadsheet (Free Download)

There are all sorts of fancy money-tracking programmes out there. To be frank – I’ve never used one because I don’t want to devote the time to learning, and the super-simple ones are always US based so don’t work with my Australian bank accounts (you know, those ‘automatically add paypal/bank income/expenses for you’ type programmes).

To this day, we just use a simple, straightforward spreadsheet to keep track of our business finances.

I thought I’d help you all out by creating a downloadable spreadsheet for you!

It includes an example page where I show you just how we use it, as well as all of the months of 2013, ready and waiting for you to just pop your numbers right in there.

Click here to download the spreadsheet

As you can see, it doesn’t have to be complicated!

The hard part is keeping up with it regularly.

Don’t leave filling this in until the end of each month, or it will be an onerous task that you dread. Break it up into tiny pieces – make it a habit!

My advice is to fill it in at the end of each day – or, failing that – weekly at the absolute least.

_______________________

Homework

  1. Β Download the spreadsheet above
  2. Spend time today getting this month up to speed. As I publish this it’s the 8th of February – so you’ve only got 8 days to catch up on for this month. Start there!
  3. Share your thoughts in the comments – do you use a similar system? Something different? Do you have any questions about this spreadsheet, or tracking finances in general?

_______________________

Do you have a question for Jess? Just click the β€˜Feedback’ tab on the left of screen and send it in!

Jess

Van Den has written 329 posts in this blog.

Jess Van Den is the editor of Create & Thrive, and has been a full-time creative entrepreneur since 2010. She makes eco-conscious, contemporary, handmade sterling silver jewellery under the Epheriell label, and blogs about her jewellery and other beautiful things at Epheriell.com. You can catch her on twitter @JessVanDen.

Comments

Mignon
Reply

Hi Jess, Great post. Love the spreadsheet, so simple to understand – uncomplicated. I also love how you have included the different currencies – wouldn’t have thought to do that. What I’m using at the moment is adaptation from what I was given to us for my business plan from the small business management course I did as part of the NEIS program. It’s a little more involved than yours, but I have downloaded yours & will see if I can incorporate it or maybe I’ll just use it in conjunction with the other one. Thanks πŸ™‚

Jess
Reply

Thanks Mignon. I reckon just take anything useful from mine and add it in to what you already use, sounds like you’re pretty much on top of this already – awesome!

Christie
Reply

So generous to share your ready made spreadsheet! Thank you, I will be downloading it!

Jess
Reply

Make sure to do your homework! ;D Start today and just keep going…

Melanie
Reply

Hi Jess. Love the simplicity of this spreadsheet. I had been considering buying MYOB to track my income & expenses etc but in all honesty, your spreadsheet looks much easier to work with!

Jess
Reply

Glad you found it helpful! Honestly, for me, I don’t see the need to use anything more, because my business is pretty straight-forward, as I’m not paying any super/wages/gst etc at this stage. Perhaps if my business grows I’ll have to upgrade, but for now, it’s good enough!

Tonya
Reply

How did you know I needed this today!!!?

A couple of days ago I sat down with a bookkeeper to learn how to track my husband’s business expenses for him, and she too recommends a simple Excel spreadsheet. That night I decided I really should be doing this for my own “business”/blog/madeit/etc. So the timing of this freebie is PERFECT for me. Thank you!

Jess
Reply

Awesome!! πŸ˜€

Lynda James
Reply

Thanks Jess. Just what I was looking for. Generous as always πŸ™‚

Elisa
Reply

Hi Jess, I just downloaded your spreadsheet… thanks for that! πŸ™‚ I have never worked in Excel. I am Mac based but I have a comparable program that it opens in so I’m going to try it out! Thanks again!

Jess
Reply

I hope it works for you on the Mac!

Hacklock (@hacklocked)
Reply

Oh Jess this is excellent, I have tried so many complicated programs or simpler but US based programs and always get the shits with it and go back to writting things down. This is exactly what I needed. THANK YOU

Jess
Reply

You’re so welcome, lady πŸ™‚

Tracy Rhynas
Reply

Thanks for the this article and the super easy income expenditure/spreadsheet. This is something I have known I should be doing properly, but haven’t – I am still in the “hobby/business to support habit” phase (and I have to say its a perfect description, right down to the supply buying addiction!!). I have just filled out the spreadsheet for this month (which has already indicated that I do not need to be buying any more supplies until I make more sales!)and have promised myself to keep it updated from this point on. Thanks for giving me the nudge I needed to get my books in order. Keep up the great work on the blog πŸ™‚

Jess
Reply

BRILLIANT, Tracy! Keep it up from now on in and it`ll be habit in no time πŸ™‚

Krista french
Reply

I can do the above but i also have to keep up with inventory value and cost of goods for everything i sell any hints on how to do this?

Jess
Reply

Alas, Krista, inventory is not something I’m terribly good at. I keep track of my most vital materials, so I know when to re-order, and with limited edition items, I just make sure that in my shop, I’ve only got so many available – so when they run out in store, I’ve run out of supplies, too. If anyone else can help Krista out, please comment below!

Grace
Reply

I read this post when it was first posted, and immediately downloaded the spreadsheet. Then I stuck my head back in the sand and filed it away in my ‘getaroundtoit’ folder. Well, now I am sitting here with Centrelink forms asking for Profit and Loss statements, balance sheets, etc and I am ‘slightly’ overwhelmed. Looks like I better go do my Homework for the past 3 months …… (it was good to know that I had your resource there to fall back on Jess… it was just the personal motivation bit I was short off … nothing like Aust Govt forms to bring that on!)

Jess
Reply

Glad to hear it’s going to get a workout! πŸ™‚

Grace
Reply

Jess … in trouble already!! do i enter income on the date I send the invoice or the date I receive payment? (Sorry…. totally forgot all my Yr 12 Accounting stuff… 5 kids does that to you)

Jess
Reply

I enter income once I have the money, not before.

[…] I’ve done for my business book-keeping-wise this year is bite the bullet and upgrade from our trusty spreadsheet to proper accounting software. After some investigation, Nick and I settled on Xero which did […]

esther
Reply

Thanks so much for the spreadsheet I love it. But unsure whether I should include postage money? Would you subtract the postage money before adding it as income? thanks in advance πŸ™‚

kelly - fredandpeppersplace
Reply

Thankyou Jess! I was only thinking about this on the weekend and was dreading finding a way to sort out a spreadsheet of some sort. This will be great πŸ™‚

Heidi
Reply

Thank you Jess for including the link to this in your latest email. I’m in the ‘research & development’ stage of my handmade business and knew this was one area I was going to have to eventually tackle (ick!) but now that I’ve played around with how the spreadsheet works, I think this is going to make tracking my income and expenses very straightforward…PHEW!! Thanks! πŸ˜€

What say you?

Google+