One of the things that baffles artists and crafters is how do I manage the money for my business.
First see my post on business licenses requirements. Having a business license is actually an asset to your business that allows you to open a business account, buy wholesale, do business in your location and more.
After you have a business license and have registered in your state as DBA (Doing Business As) go to the bank and open a business account. Mine was inexpensive (something like $5 if I remember correctly plus an initial deposit). My bank included a stamp that basically says:
Pay to the order of xxxxxxxx Bank
For Deposit Only
Business Name
Account Number
Be sure and get a checkbook register and record that first deposit. Put this in a safe location that won’t easily be forgotten.
Get a lock box that you feel is secure. A keyed lock box that is fairly heavy will allow you just a little more security at shows. Get petty cash just before shows so that you will be able to make change for your customers. See my hint on things to take to shows including change. Record how much petty cash you put in the box.
When a customer makes a purchase always write them a receipt which should include your business name, address, web address, email and phone number. A stamp or printed address label can make this easy to add. It should also include the customers name, address, phone and email (you can ask them if they would like to be added to your mailing list at this point and write it on the receipt with a simple “Y” or “N”). A memorable description of the item or items purchased, for instance jade and pearl necklace and earring set. Recording an accurate description of the item will help you determine your best sellers later on.
If they pay in cash place the money they hand you next to or on top of the lock box and make the appropriate change. This way you will know if they handed you a $1 bill, a $10 bill, a $20 bill or even $50 or $100, no confusion or debates. Then don’t forget to place the money in the appropriate place in the lock box and lock it if you won’t be using it again right away.
If they pay with a check immediately take out your stamp and stamp the back of your check. Place all checks in the bottom of the lock box.
If you accept credit cards follow the procedure defined by your merchant account and place all slips in the bottom of the lock box.
After shows:
- run credit card purchases if they aren’t processed automatically at shows.
- Count cash, checks, and credit card purchases.
- Subtract petty cash from the total and verify that nothing was lost or stolen.
- Deposit cash and checks into business account.
- Transfer funds from merchant accounts, wait for check, or wait and verify direct deposit for all credit purchases.
- Record all transactions in your business account register and on any accounting software you run.
At the end of the month balance your account with the statements from the bank or have your accountant do it. Immediately correct any mistakes.
If you use good accounting software that is it. You will simply need to print a profit and loss statement at the end of the year and give your accountant the invoices from your income and receipts you’ve saved for all your business purchases. You can create a handmade profit and loss statement if you don’t have accounting software (I recommend the free trials of accounting software though). Your profit and loss statement should include all sources of income broken down by categories such as purchases, interest, rebates etc. It should also include all expenses such as supplies and materials, travel, discounts given, donations, and more. Add all the income, add all the expenses, subtract the expenses from the income.
KEEP ALL PERSONAL EXPENSES SEPARATE FROM BUSINESS EXPENSES
Art and Craft Show Expert Shasta McLaughlin provides articles, hints and tips, checklists and more for artists and crafters that sell handcrafted products who want to save time looking for shows, packing for fairs, and get more sales at festivals. Now she is revealing how to collect your customers contact information, follow up with them and make more money while working less. Go to http://www.extravaganzacrafts.com to get her newsletter, The Extravaganza Craft News, that will help you avoid mistakes, save time and money when preparing your craft show booth.
