All That Glitters Isn’t Gold: Record Keeping Tips For Your Jewellery Business
According to government statistics gathered from June 2007 to June 2009 in the Australian Bureau of Statistics’ “Counts of Australian Businesses, Including Entries and Exits,” there were 1.96 million active small businesses in Australia with 20 or fewer employees, and the number of small businesses continues to grow each year. Some of these small businesses are in the jewellery industry, and run the gamut from retail jewellery outlets, custom jewellery creation and design, and even shops that offer jewellery repair.
If you have a genuine love for jewellery, and a flare for creation, repair, or even just selling, starting your own small business in the jewellery industry might be your ticket to fame, fortune and independence. However, there are some record keeping requirements that you should keep in mind before you jump right in. Failing to keep and maintain the proper records can cause you to lose out on valuable deductions, or report an incorrect amount for your income and lead to penalties and fines. So keep this record keeping list handy when you start your jewellery business.
Keep Accurate and Thorough Records of Your Expenses
Keeping an accurate record of the expenses related to the operation of your jewellery business is crucial not only at tax time, but it’s also important so that you know the true costs associated with running your business so that you can make accurate cost analysis statements, and present documents and reports that reflect your true income, return on investment, and ultimately the net worth of your business.
It’s impossible to make workable plans to trim costs and control expenses so that you keep more of the money that you’ve earned without accurate records of your costs, so at a minimum, make certain that you keep records for all of your expenses.
Common expenses for your jewellery business include things like supplies for making and repairing jewellery, as well as supplies to display the jewellery for sale, or even cleaning supplies that you use when your office and establishment are cleaned.
If you have employees that help you in your business, or even if you hire independent contractors on an as needed basis, make certain that you get a receipt for all work done, and keep accurate payroll records.
Things like your light and phone bill, or even an internet connection if you conduct part of your business online, can even be deducted on a percentage basis, so make certain that you keep all of your receipts.
If you must travel to sell your jewellery items, or to attend trade shows in the industry, many of the expenses related to this type of travel are also deductible for tax purposes and affect your return on investment, so make certain that you collect and keep your receipts for these items as well.
Even if an expense seems like a small, one time charge, any cost that is related to your business should be recorded and the receipt saved.
Next week we will look at some of the other records you need to keep. In the meantime, if you have any questions just give us a call on 02 9997 5662.