You want to understand the financials of your jewelry business, but think it’s too complicated. You're overwhelmed and don't know where to start.
You aren't alone. Did you know the #1 pain of any business is doing their accounting?
Many small businesses, especially artists, and specifically jewelers that are not business savvy, think by putting expense receipts, purchases and sales records in files is “doing their books.” And those are the good ones! Some just look at their online statements and think recognizing transactions and knowing their balance is enough. Then, they bring it to an accountant to file their taxes.
Most people recognize they should be doing more, but the fear of not doing it right holds them back. (and often it should!)
We help jewelers, like you, take action by implementing an accounting system that affects every facet of how your business operates and helps you nurture your business. Plus, it’s a system that grows with you.
Bookkeeping is not for the sole purpose of paying taxes. Reap the benefits of timely bookkeeping to understand your business in real time and have everything prepared to file at the ready. Capitalizing on cloud based accounting helps you get back to the bench. More importantly, our aim is to make sure you don’t overpay your taxes.
The answer starts with discovering the few simple things that are most important at your stage right now. To do that, I encourage you to take my free Aptitude Assessment.
It takes only 5-8 minutes. At the end, you’ll be routed to your results that assess your specific accounting challenge—and I’ll give you suggestions for what to do next.
Take the Accounting Aptitude Test and you’ll discover:
- Your starting point on the journey to making a difference!
- Clear steps to move from where you are to a greater level of compliance, control and confidence with your bookkeeping.
- Specific instruction on the tools and strategies that will benefit you in your current stage of growth.
Q. Do I have to offer the 2/10 Net 30 discount? Is it expected? And should I include penalties if paid after 30 days? I'd like to be paid a deposit with the balance paid within 30 days of product receipt.
A. No! You can do whatever you want! Most people do not expect a discount, while some (like Uncommon Goods) enforce it.
- For first orders, I recommend 50% deposit to place the order, and balance paid UPON SHIPPING. Meaning, you either retain their credit card info (this can be stored under the Customer info in STRIPE), or you call them and process payment over the phone the day you ship. You aren't a bank; you're a small business. When you are delivering the goods, you should get paid. This can vary with turnaround times, so you may be able and willing to be more flexible.
- However, if you take an order, buy the materials, make the goods and your turnaround is 4-6 weeks, then waiting another 30 days after that can be too much on your cash flow.
- Studies have shown that most people will wait until the due date on the invoice to remit payment, so keep that in mind. For Retail Sales Invoice, it should be DUE UPON RECEIPT, and at most put 7 or 14 days, then they will most likely pay as soon as they receive the invoice. The more flexibility, the more used. I always think of Sebastian from The Little Mermaid: "give 'em an inch and they'll swim all over it!"
- For wholesale stores who are placing reorders, then their terms can change to NET 30, and again, depending on your turnaround time, this is usually after Shipping, but may be after the Order is placed.
- For penalties, such as charging interest on late payments, yes, you should charge at minimum 10% interest for each 30 day period past due. This one is hard to enforce – I find that I don’t have the backbone to do this even to my own clients, but it does make sense to do so. You’ve already spent the money to provide the service or product, and just like a credit card collects interest, you should too. Everyone has a reason for not paying, just as the squeaky wheel gets the grease, so you have to decide if you’re ok with not getting paid (right away), or if by requiring interest on overdue payments you will get paid faster.
Do what feels right to you. You set the terms, and usually (I have seen a few stores require meeting their own terms, but that's unusual) if it's typed and presented, then that is what is followed.
Use this document to customize your own Returns, Exchanges and Repairs Policy copy.
You probably already know that if you are self-employed, then you are to pay self employment estimated taxes to the IRS each quarter, right?
But you may think you have to mail in the remittance slip that came with your filed return for the prior year, and you can, but that's not the easiest and safest way.
You may also think you need to spend hours, which intimidates like days, to calculate what you owe. This is just not true. It's not that complicated and it's an ESTIMATE for goodness sake.
You should refer to your prior year return for the minimum estimated payment based on what was owed last year. If you owed tax last year, you will have payment remittance slips with the estimated amounts typed on there for you!
See below for the link and instructions for the easiest way to pay Self Employment Estimated Taxes online at IRS.gov
IMPORTANT UPDATE: July 2017 Shopify to Xero Integration is under New Management
Still Free! Still the same great app!
Shopify has sold the management of their Xero Integration to BOLD Apps; however, nothing has changed regarding the functionality and features.
Why Accounting for Jewelers prefers Xero over any version of QuickBooks...
For the first 17 years I did bookkeeping, I never loved the actual programs.
I enjoyed the purpose of organization and reporting outcomes, but the process was a chore.
Xero Accounting Software changed my world. It was the missing key that made everything understandable for me. This was the turning point in 2013 that allowed me to feel comfortable helping jewelers understand their numbers and help them be successful with less stress. [read more]
Robin from Flourish and Thrive Academy asked us:
Q: What Reports should be run each month?
A: There are 3 main reports you should review each month. We call these your key Management Reports.
Q: I am in the process of setting up our Shopify POS. I've had two sales on it. Is there anything I need to do to document these sales or are they all going to be registered on Shopify? Can I run reports for retail/shop sales in Xero or do I need to do that in Shopify?
A: Shopify and Xero work seamlessly together! Here are the details and step by step instructions for the integration.
Shopify is my favorite e-commerce integration.
Ever filled out a tax form and wondered what the heck an NAICS (North American Industry Classification System) code was? Here are instructions on how to select the right NAICS code as a jeweler that manufactures a finished product and sells both wholesale and retail.
You can use the search feature at www.census.gov/naics. In the "2017 NAICSSearch" box on the left side of that page, enter a keyword that describes your kind of business. A list of primary business activities containing that keyword and the corresponding NAICS codes will appear.
2 Step. 2 Step. 2 Step. Now that we have you moving to a beat, go enable 2 Step Authentication in Xero.
Enable two-step authentication on your Xero account today!
Click here for instructions.
Of our 64 Xero clients, two of you have received messages from Xero that someone in a different location has logged into your account and notified us. 2 step authentication in Xero is the key to prevention. [read more]
Inventory, oh Inventory!
Alexia, Brooke, Karina and many others have asked:
"What is included in inventory? Is Inventory just my finished jewelry? Do I include metals and gemstones that haven't been made into anything too?"
Short answer: yes, include the following:
- Raw Materials available for production
- Works in Process not yet ready for sale
- Finished Goods available for sale