Getting Your Business Finances Ready for the End of the Year

Well, it’s here…time to start on your annual tasks to get ready for the new year! A big part of getting ready for 2012 involves organizing your taxes. We know it’s a giant pain in the Christmas sweater, but it has to be done, or else you risk a giant payment to the IRS!

But don’t fear, because there are several things you can do to prepare yourself for this yearly paper shuffle.

Organize Receipts and Categorize Expenses

If you haven’t been doing this all year, you may have some task ahead of you. But organizing your business receipts can go a long way towards getting you ready for what lies ahead.

For one, when doing your taxes, you want to have as much information as possible. If you only have a vague idea of how much you spent on your business over the year and no valid proof, it may end up costing you. Printer paper is one thing, but what about all the travel expenses you racked up? You want all that info in hand so you can properly log it (and claim the tax deduction!).

Another reason to properly organize your receipts is again about proof. You can write all the expenses you want on your tax forms, but in the end, the IRS needs proof they exist. If you submit your tax forms and you can’t back up your claims, there will be trouble ahead indeed!

You should also consider categorizing your expenses ahead of time. This way it’s much easier to add them up when it comes time to actually do your taxes. Some of the most common categories will be utilities, transportation, supplies, and advertising, though your business may have some unique ones.

Verify Income

Now is also a good time to check all the numbers regarding how much money you made in 2011. Many of Outright’s users are self-employed or independent business owners, so they must worry about paying in quarterly taxes. This is usually calculated based off yearly income, which for obvious reasons needs to be up to date.

Some freelancers or business owners like to go off the numbers they had the previous quarter. However, you may be paying too much if you do this. This is why we recommend recalculating your income as much as possible in order to be accurate. (Confused about quarterly estimated taxes? Check out our Quarterly Estimated Tax Cheat Sheet.)

Integrate Your Financial Accounts Into Outright

There’s no sense in doing this all by yourself. Keeping track of all your business expenses and income can be tough to do, especially when you have so much else to consider. So instead of tackling tedious data entry every time you collect from a customer or buy supplies, why not let Outright help?

Integrate your bank accounts into our intuitive software, and we’ll pull in all your transactions so you never have to spend hours and hours entering them by hand. We’ll also help with the aforementioned categorizing so that you can quickly and easily fill out your Schedule C at the end of the year and file your taxes.

This way, getting ready for the New Year is as easy as pumpkin pie. Now you can concentrate on redoing your shipping model and revamping your website instead of tackling annoying paperwork!

About the Author:
Laura Messerschmitt is the Vice President of Marketing at Outright, a free online accounting software for small businesses. She loves helping the self-employed and small businesses to be more successful and grow their businesses.

Money – It’s not a Dirty Word!

Wallet by LolaFalkDesigns

Last week, I was speaking to a crafter who sells on Etsy. I asked her how she manages her money. Her response may sound familiar: “Oh, yuck! I’m not a corporate type – I don’t pay attention to that stuff.”

In my job working with Etsy sellers at Outright.com, I see this happening again and again – many crafters don’t want to think or worry about money. It is scary to them and is something they avoid.

Yet, knowing where you are spending and making money in your business is critical to making a crafting business work. By keeping an eye on your finances, you can make decisions about what expenses to cut, how much to charge customers, when you can afford to invest more in your business, and what products you should be selling.

It doesn’t have to be scary and it doesn’t have to be avoided. In fact, paying attention to your business’ money situation can be rewarding and helpful. If you simply pay attention to two things: 1. Where is your business spending money and 2. Where is your business making money, it can mean the difference between a great business that supports your lifestyle versus needing to close down shop to take a “corporate” job. (And, who wants to do that?)

So, don’t avoid your money situation – take a small amount of time each week to take a quick look how you are doing financially. Your business will thank you.

About the Author:
Laura Messerschmitt is the Vice President of Marketing at Outright, a free online accounting software for small businesses. She loves helping the self-employed and small businesses to be more successful and grow their businesses.

Introducing Our New Financial Guest Blogger


The {NewNew} is please to introduce a new guest blogger,  Laura Messerschmitt. 

Laura is the Vice President of Marketing at Outright, a free online accounting software for small businesses.   She loves helping the self-employed and small businesses to be more successful and grow their businesses.    Some of the topics Laura will be writing on are: 

- Women and Money: Why you should track your money
- Getting Your Etsy House in Order for the Holiday Sales Rush
- End of Year Financial Checklist for Crafters



We are all looking forward to Laura's posts which will be on the last Tuesday of each month.  If you haven't subscribed to our blog yet you'll want to.  Subscribing is easy just scroll on over to that little subscribe box to the right, fill in your e-mail and hit submit.



The NewNew and Hello Etsy

For the past year Etsy Berlin has been working on a global conference on Sustainability and Small Business. The summit is loosely organized around the process of "coming up with an idea, turning it into a product, taking it to market, and building a business that is mindful and sustainable." While Berlin is the hub of this event, there are conferences around the globe including a location near you such as:
Among the offerings in Brooklyn are a presentation by Matthew Crawford author of Shop Class as Soulcraft discussing the case for working with your hands, a workshop on small business finance, another workshop on workplace sustainability, a panel discussion on "The Challenges of Sustainable Design in a Local Ecosystem," and a presentation by Sara Horowitz of the Freelancer's Union on how in the age of interconnectedness, mutualism will help us maintain and create our social services.

The {NewNew} will be at the conference to represent our Etsy street team and to greet attendants with a small special project.

If you can't physically attend one of these events, you can join us virtually by watching the presentations via Livestream in the Etsy Online Labs on September 17 and 18.

See you at the labs!

Simone
groundsel.etsy.com