posted on February 18, 2002 01:13:19 PM
I think what you need is a book that handles small business accounting. In essence this is just a variant of a mail order business, so you might want to see if something covers that.
If you keep all of your stuff in a spreadsheet format or database, it should be pretty easy to keep the good records you need to properly account for expenses and income.
posted on February 18, 2002 03:48:37 PM
That sounds right, but I just want to know if there is a book that addresses some of the accounting practices one should use when running an ebay business.
posted on February 18, 2002 04:17:43 PM
I would love an answer on this also. I currently sell magazine and magazine ads. I buy the mags at estate sales - sometimes hundreds at a time... the logistics of inventory are a nightmare. Especially when taking ads out of certain magazines.. and tracking other ads out of magazines... and then if they sell or don't sell..sigh..
I actually built my own access database to track every single thing that I buy. Then when I put it online, I track every single fee associated with the item, the bidder, payment, shipping, paypal fees... and after all of that, I do know how much money I made for that item. I can also tell how much inventory I sold, and how much I Have left for tax purposes. This does however take me many hours and seems almost anal. I wish I could use cost averaging, but I am not sure if that is allowed.
posted on February 18, 2002 07:26:21 PM
I actually think people make too much out of super detailed cost analysis. Some of my stuff ends up selling for about a $1.00 and others around $30.00. I don't need a calculator to tell me my latest batch of stuff breaks even in the first weekend of listing, but it does tell me that my average sale is quite profitable.
I would save database space and listing time if I wanted to track everything and see if the costs were taking a bigger bite into my hide; I'd do the conventional ledger scene in Excel. On one column, I'd put my expenses: eBay invoice for the month, shipping supplies, postage, ISP fee and any phone calls, services such as PayPal and AW, and whatever inventory I bought. In column two, there would be two numbers: the sales and the shipping amounts for the month. Now if you are buying a lot and not selling as much, it might not look so good, but this monthly accounting is really all you need to see if you were running towards profitability.
A completely separate column does a monthly accounting for capital expenses. I know I can justify buying a new computer for a write off whenever I feel like it, but there's nothing a new one will do to make me more profitable at this time. Some things will not show up no matter how fancy your bookeeping or cost analysis.
I think eBayers are prone to wasting a lot of time on all the little fees in each and every transaction and that makes for much unnecessary work. If you do the simple ledger as above, you can do a monthly accounting in minutes that will tell you if you are sailling, treading water or sinking.
posted on February 18, 2002 09:18:20 PM
I have a book called "Starting an eBay Business for Dummies", (not to be confused with eBay for Dummies, by the same author. It's by Marsha Collier, and I think it was released last December.
Chap 16 is 26 pages of "Practicing Safe and Smart Record-Keeping". It covers general accounting - debit and credits, which is a little confusing if you don't have any accounting knowldege. Also covered: how long you should keep records for tax purposes--if you should hire a tax professional to do your taxes--what financial records to keep--
Then the rest of the chapter is devoted to using Quickbooks for Bookkeeping. (she doesn't get into any other software). Quickbooks topics--how QB 2001 integrates with PayPal, setting up your company accounts (step by step detail), lists of which accounts in the chart of account you should use, and lastly, instead of buying the QB software, evidently you can "lease" and use the software online from Intuit (the software maker) for $14.95 a month.
I found the info helpful, but I have both a basic accounting background and Quickbooks experience. I'd recommend pairing the Collier book with a good Quickbooks manual, and maybe a basic accounting book on top of that. I also don't think it's necesary to have the latest version of QB (unless you're using it for paying taxes or the paypal integration).
Look to your library for the Collier book - it certainly shouldn't be bought just** for the accounting info.
posted on February 19, 2002 06:24:59 AM
you can probably make a appointment with a accountant for not much more than the price of a book and let them set it up for you
spock here......
Live long and Prosper
posted on February 19, 2002 08:07:47 AM
The ledger book idea was given to me by an accountant some years ago and it still works regardless of what kind of home business you have. What you might want to do before you go to an accountant is set something up first that covers all your expense categories including the capital ones and let the accountant help you refine it.
If you can do basic Excel functions, you probably don't need Quickbooks.
