Our least favorite uncle makes his annual visit on April 15. Since my husband and I must surely be the Adam & Eve of all things DIY including tax returns, my stress level rises as the clock ticks toward the deadline.
All crafters know that inventory (what you paid for raw materials waiting to become "creations" AND already in "creations" ready to sell) is either a jumble of "stuff" stored in dozens of little compartments in numerous drawers or hundreds of little baggies in numerous drawers. In my case, I've got thousands of beads. And don't forget the coils of sterling, gold-fill & copper wire, all in various gauges.
Finally, imagine that you bought some of the same components like beads & gauges of wire several times from multiple sources at different costs. Given the hundreds & hundreds of tiny beads & yards of different wire purchased at different costs, trying to determine the cost of the components in finished items was a nightmare!
Remembering that nightmare of 2006, my first year as a business, I began fine-tuning a plan in 2007 with some success. (The picture above is the GOOD mess. You should have seen the 2006 mess!) Any crafters can use this method, provided they determine the cost paid for 1 "unit" of each material purchased. EXAMPLE: Whenever I arrive home with a stash of new beads, I whip out those receipts, calculator, some squares of scrap paper, and little baggies. I determine the cost of each bead on a strand, note that cost on a square of paper, & seal all like-strands with the cost note in a little ziplock. For new wire, I calculate the cost per inch of each coiled purchase & tape that cost onto the coil. Then whenever I make a piece of jewelry, I get a bigger square of paper to itemize the number & kinds of beads used, their per-bead cost, & the cost of x inches of each gauge of wire used in the piece. I calculate the total cost on that paper & label it with my creation's name, sealing my creation & the paper in a new baggie.
When I've made a few items, I head for the computer to add more entries into the a grid I created in Excel or Word for that tax year. For each item, I enter its ID, a thumbnail pic, the materials used, the total cost of materials used, item's measurements, and the base price, sales tax, & net price I'll charge. When my creation sells, I enter its date of sale & purchaser. (NOTE: In 2008 I added a column for city & zipcode where buyer received the item.)
(Click any image in the blog for a close up:)
I like this method because I can easily add new items at the bottom of the grid, then have Excel or Word sort the list on the ID OR on the DATE SOLD. Not only is the list wonderful documentation at tax time, but essential at craft shows when the price tag on an item disappears or your helper needs details about the stones in a piece.
I hope this concept helps another newbie out there, regardless of the craft. I'm no tax guru or accountant, but this grid each year, supported by hundreds of humble little scraps of paper, is the basis for the toughest part of my bookkeeping -- Inventory & Cost of Goods Sold.
You can dump the ziplocks on your accountant's desk & go home to a good book... which sounds really sweet to me right now!
Monday, March 31, 2008
Friday, March 21, 2008
I was so scatter-brained that I even tossed in an unopened tub of hummus for munchies. Honestly, I know better. Plus the tool TSA confiscated was the same kind of tool removed in my February trip! Does that qualify as a "Duh"? Or maybe too much sun really can fry a brain cell???
CHECK YOUR GUESSES on the TSA link or keep reading below. Click here for the current TSA list of items prohibited.
If you think I was lucky to lose only 1 tool, you're right. I should have lost the chasing hammer & mallet instead of just the chasing hammer. I believe all my other items are legal because they qualify in the rules as "Tools" & are =< 7". I even considered sawing short the handles on the hammer & mallet, before noticing that hammers have their own special rules, are not governed by "Tools," & are not allowed in carry-ons. Luckily my pointy scissor blades are < 4" long. I keep a printout of the page of TSA rules in the toolkit just in case. Despite kicking myself for losing another chasing hammer, I really enjoyed the flight home to Seattle, as I managed to make some items inspired by the sunny skies & warm weather of Florida & the Bahamas. The severe thunderstorms that stranded us & thousands of others in Dallas for 6 hrs on 3/18/08 made television news, but just gave me more time to make jewelry. So what's not to like? "Colors Bright" and "Sheba" are 2 of the projects I completed during that very long day. Plus the stewardess really liked Sheba :)
I know with absolute certainty that my carry-on with tools will always be flagged for a manual check by TSA & my carelessness will cost me an occasional goodie. Yet I'm hopeful that one day I'll save enough time to THINK while I'm packing! Regardless, the creative possibilities, especially when we're stranded somewhere, are definitely worth the hassle of lugging those tools.
It's nice to be home with my family & 2 little gremlins. To those of you who celebrate this special holiday, HAPPY EASTER :)