The Kiss Theory

by Rita.
(Portland, Oregon USA)

I Love Donuts

I Love Donuts

Here I go again, LOL. Speaking from experience, and I might add I paid prem-o dollars learning about life, I will suggest some things to think about when dealing with the fear of life.

You might call it:
“Absolutely Frightened of the Possibilities”;
“The Business of Beads – Bookkeeping”;
“I Lost Trust in My Own Forces”;
“The Difficulty of Selling Jewelry”;
“Struggling With Balance”; etc.

If you compare these subjects with what really is something to fear – such as sickness, disability, homelessness and hunger – it might not seem so scary.

What we experience I think, is more of being overwhelmed than actual fear. The only thing I have ever done to kill the feeling of being overwhelmed is to get organized.

The brain is well equipped to handle organization, even the brain is organized in sections, specific areas do specific things. If you don’t know what the KISS theory is, and please don’t be offended, it means Keep it Simple Stupid.

Ok, let’s make a plan: Who, what, when, where and how.

You are the who, what will you call your business?

What are you going to sell? (that’s obvious).

When are you going to sell? (Read this website, there are hundreds of suggestions – Internet, home parties, craft shows, consignment, etc.)

Where kind of goes with When.

How = ahh, that is the big question isn’t it.

I personally am self taught, that is why I paid the prem-o dollars because I made mistakes. However, I learned from my mistakes and yes I am probably much older than you.

I didn’t have an entire world full of information at the click of a mouse.

There is so much free information on the Internet it can be scary, so narrow it down.

Read all the information in this web site to start!!

I’d like to put my two cents in about bookkeeping and business. I am an accountant by trade.

Please don’t concern yourself with cost of goods sold (CGS). Please don’t waste your time counting all your beads. All you have to do is (kiss) keep track of the money you spend on your business and the money you take in. We are not talking about a full set of books with, general journal adjustments, general ledgers, accounts receivable and payable.

I personally would have to take off a month or two to count all my stuff and log it, now that I think of it three months would be more in line, LOL.

Before I started actually thinking about starting a jewelry business I had a ton of beads and cabs, yes I too went nuts and bought so much “stuff” I still can’t believe it.

I had a good idea of what the “stuff” was worth so my business bought it from me. I established a starting point. I can ballpark the cost of anything I make to establish a selling price and you can too.

The easiest way to keep track of income and expense is with a spreadsheet. Be advised, I used to do a full set of corporate books manually so don’t even go there if you think a spreadsheet is too much work.

We can all look and sound professional without being complicated.

Got beads? Then make jewelry and be happy, don’t worry, LOL, and keep it simple!

Bless you all and your endeavors.


I’m NOT a lawyer or an accountant, so please note that while I’ve researched this information carefully, NONE of the information in the website is intended to be legal or financial advice.

Please use your own good judgment in determining when the services of a lawyer, accountant, or other professional would be appropriate to your situation. 🙂

I highly recommend that you have a session with a professional accountant who specializes in home businesses.

Explain what you do, and ask the accountant to outline a simple system for tracking the things you need to track.

That way you’re not wasting time tracking the wrong things, or coming up at the end of the year without the info you need.

Depending on where you live and how much jewelry you sell, the whole accounting / record-keeping procedure may be surprisingly simple.

Also where you live, there may be tax deadlines you need to know about.

It’s well worth it to get a professional account’s input, especially when you’re starting out.

Rita Juhlin
Private Stock Jewelry Blog


Thanks for the Info
by: Val

You boiled it down in a nutshell, I do taxes and also make jewelry for pleassure and to sell – for those in the jewelry business – keep track of all your rcpts – get a copy of a Schedule C and Taxes for Dummies – keeping records is simple – I put all mine in a folder and go through it once a month to organize the various rcpts and come tax season I am ready. Fear can hold you back – just jump right in and listen to Rita! Thanks Rita!

Thanks Rita and Val!
by: Rena

I so appreciate you accounting-experienced ladies sharing your tips here!

Rita, you hit it on the head with the word “overwhelm”. I struggle as much as anyone else with being wimpy about starting something if I just don’t know how to go about it. I blow it all out of proportion into something much bigger than it really is, and then sit there feeling overwhelmed by it.

How silly is that? Yet the biggest hurdles are the mental ones.

But the approach of breaking it down into the tiniest possible baby steps, and then taking just one of those little steps at a time, can get us over any mountain!

Also, YES to setting up a simple, do-able system like Val’s tax folder, and just dropping each relevant piece of paperwork into it all throughout the year.

I do that too, only my system is a hanging “Pendaflex” folder for my annual taxes, which has manila folders for each of the various categories of paperwork I’ll be adding to the folder throughout the year.

I make myself put all tax-related info immediately into the proper manila folder (which takes less than 5 seconds each time I add a receipt or piece of paper to the file!).

It does indeed make my taxes a snap for me to take in to my accountant. And when I hand her my folder she always says, “You’re so organized, Rena!”

(Of course, she hasn’t seen my living room or the desk I’m sitting at right now, or she’d never say that again!) 🙂

I simply smile mysteriously and say modestly, “Why, thank you.”

Tax deductions
by: Anonymous

It sounds like you’re talking about using a cash method instead of an accrual method – is that correct?

I have a question – if you don’t track inventory and calculate cost of goods sold, how do you legally deduct the amount you spend on raw materials on your tax return? (When the raw materials are in your inventory, they’re still an asset.) Do you estimate when your finished goods will be sold and then claim the deduction for the raw materials during that period?

Single Ledger for the Computer doofus
by: Elizabeth


I wonder what you would think about a single ledger book? I agree that we could go NUTS using advanced forms of cost accounting (OMG! let’s put overhead up to the last light bulb that blew out, and beading wire to each piece!) and even WIP, or to those who do not know, Work in Progress. Ouch. More like, Work in Pity.

I have so many computer problems i.e. internet disruptions and ISP glitches (including that of complete illiteracy) that I find it much easier to use a single ledger book where I merely put down my expenses and revenues, and only AR as a reminder.

With that said and done, could you tell me which spreadsheet for dummies and which version is best? I use MAC.

I would also like to know how long it takes all of you beading buddies out there to realistically bring in a decent income when first starting up your jewelry business?

Thanks, Rita.

I appreciate your advice. Rock on Rita!

Making it official
by: Dawn

Rita – thanks for all your great tips. Here is my question….does one need to make their business official if just working it out of their home? Right now I report all income and all supplies purchased on my personal taxes. But, that is it. My business is not incorporated, LLC or any of that – just simply in my name. However, I find that without a tax id#, I can not purchase from sites at a discount….what is your advice on this?

Thank you!

Dear Anonymous,
by: Rita

I don’t do taxes for a living, maybe Val can jump in here.

You appear to be talking about a balance sheet not a profit and loss (P&L) statement. You don’t need a full set of books to have a home jewelry business. If you’re doing a full set of books with a General Ledger and a General Journal for a small business, that’s great but you don’t need all that unless you are a corporation.

Your choice of cash vs. accrual would depend on a number of different situations. To Keep It Simple, a Cash Receipts Journal and a Cash Disbursements Journal is all you need. Well, if you really want to keep it simple a paper bag will do, LOL.

I personally prefer the cash method for a small home based jewelry business; let’s call it MIMO, Money In Money Out. I take in $200., I spend $195. I made $5. I pay tax on $5. (You can add some zeros if you like examples with big money.)

If I incorporate, then yes I would do an inventory but if you are going to do an inventory then you should automate it with a program like QuickBooks or whatever program you choose. I use QB for most of my accounts, I can adjust the inventory whenever the owners take an inventory, everything has a value, with stock numbers, when you post a sales invoice the inventory is automatically reduced by the sale; when you receive a shipment either the stock number and value (cost of what you paid for an item) it’s entered and the number of an item is entered automatically and the inventory is increased. Then you are dealing with payables; etc. Personally, I would rather be working with my jewelry than counting all my beads.

Then you run into the situation where each “piece” is made up of several different pieces, it just is not worth it.

The bottom line is simple bookkeeping is legit, yes you have to keep receipts and keep track of income. I just don’t see any reason to make things complicated.

Dear Computer Doofus,
by: Rita

LOL, you must be from the Midwest; I haven’t heard the word doofus for a long time.

I am clueless when it comes to a MAC; however if you have a simple spreadsheet that would work perfectly. I use excel for all my personal business (jewelry), same principal MIMO. I do that so I don’t spend more money than I have. I cut up my credit cards years ago.

The manual spreadsheet (gee I wonder if you can still buy those) works the same way as a computerized spreadsheet. MSWord, MSWorks, Excel, and there is a free version, of course I can’t remember the name right now, that is comparable and compatible with MS Office.

The cash receipts Journal in a simple form: 1st column: Date, 2nd column: Description (invoice #, name, etc.), 3rd column: Bank (the total cash received per sale) , the following columns will break down where the money came from. For example, 4th column may be necklaces, 5th bracelets, etc and the last column might be sales tax.

If you are a big seller you might want to total weekly or monthly, but you could do it once per year for that matter. You total and cut and paste to a second sheet all your totals or just re-enter the totals to another sheet. If you are good with spread sheets you can write your own formulas to add, subtract multiply and divide to produce reports for yourself.

The cash disbursements journal (spreadsheet) works the same way in your columns: date, paid to, amount, then list where you are spending your money. The columns might read, 1st beads, 2nd findings, 3rd wire, 4th show expense, etc.

It’s simple, and accurate. If you can open the file using a MAC I’d be happy to send you an example all set up for you, I’m a PC.

Dear Dawn,
by: Rita

I might be wrong but you might be referring to a Business License and not a Tax ID. Business License requirement details are different in every state. In Oregon, since we don’t have sales tax is a simple form to fill out online, pay $50.00 and you get a license number and certificate. The county where I live also has a business license however if a business is small you can apply for an exemption. Tax ID’s are free, you can call and get one from the IRS; corporations need a tax ID but for the most part self employed people use their social security number.

I guess the first question I have is how much is the license in your state and would you gain enough savings in discounts to justify the license expense.

You brought up something interesting about discounts. Sorry, I’m changing the subject. Many of the so called wholesalers charge more than I can buy over the counter. I do a great deal of comparison shopping; recently I had a price of $19.00 and change for silver from a wholesale only online store; I called a local store the price was $18.00 (and no freight!); then I checked a retail online store and got a price of $14.50!!! Go figure!!

“Spend your money wisely”, old lady saying.

LOL to you all.

I am from N.Y. and love Bagels
by: Elizabeth


Thanks so much for your advice. I am in fact NOT from the mid-west nor have I ever been there. Just bicoastal living experiences as well as Europe and Asia. I am from N. Y.

I actually do not remember WHERE I picked up the word doofus, but I think it is spot on in my description of computer savvy. Thanks so much for your EXCELlent (ha-hah) advice, and yes – I have this program but once again, my computer is down. Arrrrrrgh. I need next door neighbors like you and NO, I am not a big bread winner in this, but recently a celebrity bought one of my designs which tuned out to be a sellout. No – nothing to pay the mortgage with. I wish.

Wish I were earning the bread to have to worry about accounting as much as all of you great designers out there. Yet I am patient and I just LOVE creating my designs.

Keep up the good work. Great article, Rita.



by: Anonymous

is there any way to get a few sample templates of these wonderful spreadsheets? i am trying to to do all in excel and it’s getting all so overwhelming. I have been reading several articles, this site is a GOD send! thank you!!!

by: Marlies

If you really want to drive yourself nuts and be certifiable– try having a business where most of your inventory is seed beads!! Forget counting lol. I do Native- inspired beadwork and if I ever got audited (dreadful word, I know) let them worry about it.

by: Anonymous

I’m trying to figure out what is legally allowed as an accounting system for jewelry crafts people. I thought that as “manufacturers” we had to choose the accrual method and therefore do a year end inventory count. I’m in the same shoes as others here; I’ve been doing this as a hobby for 15 years and now want to be a legit business but have a large collection of materials that may need inventorying. I’m probably going to take the advice of just counting what I bought last year, but I’d really like to know if using the cash method can be done.

Figuring out Mark-up in Jewelry Design Manager

by: Marianne

Would you please explain the Mark-up section of JDM? I am lost. Thanks.

cash vs accrual method

by: Susan C

Ditto to the questions in the post entitled ‘Legality’ a couple of posts back. I also am trying to figure out how to set up the bookkeeping for my new small business. I too, have thousands of beads from over the years and no idea of their original cost. I have been dreading the idea of counting everything because if that is what is needed, I might as well forget it. It would not be feasible. The best I can do is record what I’ve spent on beads and stuff for the past few months since I’ve been keeping my receipts. But I cannot match up money paid for each type of bead or finding, display item, etc.

I can set up an Excel spreadsheet as long as I don’t have to do formulas. I have done so for my existing ‘inventory’ of completed items (not raw materials).

I would like to know from those accounting pros that commented:

Question 1) if you are using the cash method or accrual method. Even just thinking about this boggles my mind. I also was under the impression that I had to use the accrual method from something I read which considers the business to be ‘manufacturing’.

So far, from what I’ve read here there are a number of different ways to handle the accounting. I like the what Rita said about ‘selling’ your existing raw materials to the business.

Question 2) if you don’t track how much went into your completed items, how can you deduct cost of goods sold when you do your taxes?

Question 3) if one does retain a bookkeeper or accountant to get advice or help, what is a reasonable amount to pay?


by: Rita

You don’t need to do cost of sales.

Your expense is Supply.

Your sales are your income. Period.

Do you keep receipts for what you buy and have bought? If so, add up your receipts and use that amount to sell to your new “small” business. If not use a fair market value or replacement value. Yes, you will have to do some research. I know, boring but you have to do it.

Sales less expense = net income. That’s it.

Don’t mean to be so blunt, but everyone seems to make everything so complicated.

Hope this helps.

Note from Rena:

Be sure to scroll down and read the newest comments below – lots of excellent information there!

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