Yesterday, I mentioned my beloved Dome book. It looks overwhelming at first, but today I'm going to walk you through a day's work in it, step by step. It's so much easier than it looks, I promise!
We'll start with the easiest page - the Detail of Monthly Expenditures Sheet. Here is mine:
So in the far left column, you'll write the date. You have a new one of these pages for every month, so you don't even need to write the month. If you shopped on the third, just write a 3 in this column. The next column is to record who you paid. That would just be "Goodwill" or "Yard Sales" or if you bought something from a specific person, write their name here. The next column is for check number. I don't usually pay for things with checks. I just write "PP" for Paypal, a checkmark for checking account, or a $ for cash. This has helped me a few times, but not often. If I don't have a receipt, I can tell at a glance how I paid. If it was a check, I can print the check from my online bank account. If it was Paypal, I can print my transaction details page from them. If it was cash, well, I'm out of luck. The last column is for the amount. That should be pretty self explanatory.
Now let's look at the right side of this page. This is for other expenditures that are NOT inventory. This would be for shipping or insurance that you purchased, boxes, labels, tolls and meals from road trips (not gas, unless you are planning on taking exact expenses for travel, which I don't recommend), eBay fees, sales tax paid to your state, etc... It's the same layout as the left side of the page. Date, who you paid, check number, and amount. But there is one extra column for account number. You'll be getting this number from the page that we're about to discuss. After a week or so of entering data, you won't even need to look up these account numbers anymore. You'll have them memorized.
Now let's look at the other page you'll be using daily.
This one looks more complex, but it's really not. Just take it one line at a time. The left column will be for your daily income received. You're going to take these numbers straight from your Paypal account. These numbers will not match your eBay sales for the day. You're only going to write the money down on the date that the item was actually paid for. The numbers that I have along the far left (outside of the chart) are how many payments I received. I don't know why I write that down. It's useless information, and I probably won't bother keeping track of that next year.
I have added an extra column to my book. My state requires that I separate shipping out from the purchase for sales tax purposes. We don't have to pay sales tax on shipping in Pennsylvania, so I need to keep that amount separate. So my book has four columns in this section: Taxable PA Sales (my own column), All Sales, Shipping, and Total Amount. Down the left, you'll see there's a line for each day of the month.
So each morning, while you're waiting for your coffee to cool, log in to your Paypal account and do a basic search (top center of the screen) for the previous day's date. Once those transactions come up, add up any shipping you paid the previous day and write that on the first page we talked about (in the right column). Find any other expenses you had the previous day and write them in the right column too. Next, you'll need your income numbers, which are on the same screen. If you don't need to separate out your shipping for sales tax purposes, then just add up all your payments received and write them on the second page we discussed. If you have to separate shipping out, then you'll need to actually go into each transaction. I write click on "Details" for each transaction and open it in a new tab. That way there's no annoying back and forth. Open each transaction in a new tab. Then go through and add up the item prices and write them down in the All Sales column. You'll also need to add up the shipping charges and write them down in the Shipping column. If any of them were taxable, then write just the taxable sales amounts in the Taxable PA Sales column (using your own state, obviously).
Let's look at an example from my book.
On December 7th, you can see that I received 5 payments. I had one taxable PA sale. It was $9.75 plus shipping, so I separated out the $9.75 into the Taxable PA Sales column. The next column will be ALL my sales (including that PA sale). All 5 transactions (purchase price only) totalled $78.25. The total shipping for all 5 transactions was $28.24. I received 59 cents sales tax, so I jotted that down real small so I would remember to add that amount in. Then I added up the Total Sales, Total Shipping, and tax received and got a total of $107.08.
If I have any out of the ordinary transactions, I jot them down in the Memo block at the bottom left of this page. This is where I write any refunds that I have to issue, or any shipping refunds I received for labels that I had to void.
I know this sounds like a lot, but once you get the hang of it (after about a week or two of regular entering), you'll be able to do a whole day's entries in 5 minutes or so.
So to recap, each morning, you should be writing down this information from the previous day:
- all shipping/insurance paid
- any other expenses paid
- all payments received (separating out the shipping if your state requires it)
- any oddball stuff (shipping refunded to you, refunds you issued, etc...)