2012 is Dead…… Long Live 2013….,, and Your Money!

Ok……….. so it’s no great secret to those that know me or have read articles about me in various places, but I was, in my previous life in London, a self taught financial accountant. I worked for many years in the advertising industry and ran multi-million $ accounts. Yes, it was stressful and looking back, wonder how I even coped, but those skills have stood me a good stead to run my own business, Lottie’s Trinkets.

So, what am I going to tell you to do to maximize your hard earned dollars this year……well….. this is what I do every year about this time and this year there is a new obligation when you fill in your Schedule C.  What another one? ‘Fraid so…   Hope you’ve kept good records this year. The key to being “clean” for 2013, is to make sure that all your dead wood and write off costs pertaining to 2012 are in fact in your books…. you pay taxes on your profits, so don’t overstate your profit! However, on the other hand, you can only run your business at a loss for so long, before you will get a knock on the door! It’s a balancing game.

 

Firstly, and this takes time, I go through my inventory of made items, judge each one to it’s standards; would I buy this?  Is it good enough? How long have I had this? Put each item into a pile -“good enough to carry to 2013” and “time to go”……   Ok, so now the “time to go” pile, either take apart these items and replace elements that you can reuse back into your stash and write off unusable elements; or maybe donate this items and take the cost to you as a write-off.  There is little point keeping items that you know in your heart will not sell.

 

 

Ok…..now a another big task is to go through all your stash and make sure what you think you have you actually do have, any discrepancies you can write off now in your cost of sales and reduce profits. I often find that I’ve miscounted stones and have less on hand than I thought.  It’s a good process and makes you look at all your stash and you will even see some new possible design ideas.  Maybe some stash you do not even want any more, could you perhaps sell that or donate it?

Next things to do are basically housekeeping chores, did you account for all your shipping costs this year, all your PayPal or other credit processing charges?  Is all the cash in your bank accounts correct…these are important functions of running a business.  If your company has assets, a computer, some art fair accessories are these all accounted for?

Go shopping………. You can buy anything business related that is not an asset or stash item that is related to 2012 and take the full cost against 2012’s profits.

 

Now, the new item on Schedule C that I mentioned earlier, there was a note on 2011, that they would require a breakdown in 2012 as to how you collected your sales cash……. was it cash/check or credit card/auto payments…..  you need to know that information and split your revenue accordingly.  Not a biggie really, but easier if you saw that note and keep an on-going record.

So now is the time, to start housecleaning…….do not leave it all until April or whenever the cut-off is…….start now…..and don’t pay too much tax, you worked hard for your sales and profits.

Good luck and see you in 2013.

Written by Lottie’s Trinkets

 

 

 

 

 

 

 

Tags: 2012, 2013, art, artisan, beads, craft, gemstones, handcrafted, Handmade Products, jewellery, jewelry, money, tax, write-offs

Posted in Information, Selling Tips