Good Habit for Expense Tracking

[esavvymom]

I'm still reeling with how much I spent last year vs how much I earned. So is my DH (and he has the "tweaked" report). I know where I went wrong NOW...and at the end of the year, had already started making those changes, but I don't want to do it again next year! My DH won't let me stay in this business if I can't show a profit....nor do I want to. It's too much work to lose money. So this year HAS to be better!

Ok...this is as much for ME as anyone...but a tip for newbies (and seasoned consultants as well)

When you are scheduling time on your calendar for calls, meetings, etc....be sure to block 30 minutes to enter your Receipts and Mileage WEEKLY! This will do 2 things: (1) make tax time smoother ;and probably more importantly, (2) help you keep track of your costs throughout the year!

 

[ChefLoriG]

I am so bad in entering my costs, end up doing it at the end of the year, still after all these years, heh

 

[pamperedchef88]

I see where you can enter in costs for a specific party but is there a way to enter in costs that are just general Im just starting and I had to buy things like folders, pens, files, ect should i just assign it to a random show or can i enter it in without specifying which show

 

[NooraK]

I went back to plain and simple: I have a running ledger of my charges from my account. I started with the balance in my PC account, and I add commissions when they're paid, and I deduct charges when I make them. I make sure I take out "profit" for myself and then only purchase supplies etc when I need them.

I don't worry about mileage as much, I suppose I could track that too. I'm hoping that by taking profit off the top (paying myself first), whatever my mileage ends up being at the end of the year will be less. My big thing is not spending my money before I get it. I tend to have all these grandiose plans in my head about how great my shows will be, spend with that in mind, and then it doesn't turn out as well as I thought.

I know, I'm going really simple and to the basics, but I have to do what I have to do.

 

[NooraK]

I see where you can enter in costs for a specific party but is there a way to enter in costs that are just general Im just starting and I had to buy things like folders, pens, files, ect should i just assign it to a random show or can i enter it in without specifying which show

There's a little dollar bill looking icon at the top of P3 that you can use to enter expense records.

 

[esavvymom]

I see where you can enter in costs for a specific party but is there a way to enter in costs that are just general Im just starting and I had to buy things like folders, pens, files, ect should i just assign it to a random show or can i enter it in without specifying which show

In P3, the little icons at the top where you can select to add a new contact, show, order, etc....there is one that looks like a Dollar-bill with the Plus-sign on it (it matches the symbol on the Income/Expenses Tab)- That's how to enter a new Expense. You can add Categories also to fit yours - like I added Advertising, Training, Recipe Test, and a few others I can't recall at the moment.


I'm good at keeping my receipts in a separate file folder- just not entering them, which would really help me track my spending. I have a budget for my household expenses, I need to do one with my business! Starting with the tracking..!!

 

[beepampered]

Noora - track your mileage. I drove 2600 miles in 2009 for a tax credit of more than $1000! That is so worth the time to track. (I made $7600 and do about 3-5 shows a month).....

 

[NooraK]

Noora - track your mileage. I drove 2600 miles in 2009 for a tax credit of more than $1000! That is so worth the time to track. (I made $7600 and do about 3-5 shows a month).....

I do track it. I just didn't do as good of a job at it last year as I could have. I made so little in commissions last year (I don't think I even averaged 1 show a month) that after I entered mileage and supplies, I was pretty much wiped out. Since I've been in the business for 3 years now, I was concerned about not showing a profit (again) for 2009.

This year, I've already earned more in commissions than I did in all of 2009, and I'm pushing forward. I'm also paying close attention to my expenses and not spending more than I have on hand.

 

[kitchen chick]

are you sure you understand that having a business allows you to take as expenses things you can't when you are a wage earner? Groceries for recipes you practice (even though your family can taste test them for dinner), your mileage...lots of other expenses that are supposed to reduce your taxable income to help you pay less in taxes each year. That is sometimes the "goal". For instance, I took a large item that I purchased as a section 179 so that my taxable income is less this year...does that make sense?

 

[NooraK]

I do understand what items I can deduct on my taxes. However, I have also been told, from many sources, that if you have a business that does not show a profit after 3 years (or I've heard 3 out of 5 years), the IRS will no longer consider it a business, but will consider it a hobby, and you will not be allowed to make said deductions anymore.

The concept of expenses is to reduce your tax burden on the pure profit you make in your business, not to reduce the tax liability you have on an income earned outside of that business. If that was the case, everyone would be setting up businesses that lost money all the time and just claim it against their salary to avoid paying taxes.