How do I begin using an accounting program for the coming year?

Soapmaking Forum

Help Support Soapmaking Forum:

This site may earn a commission from merchant affiliate links, including eBay, Amazon, and others.
Status
Not open for further replies.

MelissaG

Well-Known Member
Joined
Jan 6, 2020
Messages
839
Reaction score
1,088
Location
Louisiana, USA
So I'd like to start tracking my expenses, purchases, sales, etc. Wave is perfect for that but here's the thing. If I attach bank accounts, credit cards, etc, it's going to transfer all the information from the past year. I've tried doing this before and I got so frustrated with trying to balance everything to correct numbers that I gave up. I want to start with a clean slate. So how do I transfer the numbers without going mad from the details?

Trying to explain is not as easy as it would seem.

I worked in hotels for almost 20 years. When moving to a new computer system, we had to transfer everything that still had to be paid from the last system as a negative (owing) and a positive (paid future) total. We transferred the basics of the upcoming reservations (name, address, phone number, number of nights, rates and notes) separately. We also transferred previous accounts with basic information (for things like event space). Then, in the new system, we would transfer the amount from the total, to the accounts owing, and already paid. At the end, the "total" that was original transferred would be "0" while the accounts would be the correct totals.

I don't think doing that with this would be possible. Or would it? How would it work? How do I transfer everything from paperwork and so many different online orders, and the like without it being a confusing mess? Do I factor in the last year? Do I just transfer current and enter this years stuff manually?

I think I just made this very confusing. But I'm not sure how to explain what I'm asking. Should I just enter everything manually?
 
Last edited:
I'll be watching this thread carefully! I am just getting started, so I don't have a ton of history to account for in my bookkeeping, but tracking raw material cost is a new thing for me, so I'm certain to learn from this.
 
I'll be watching this thread carefully! I am just getting started, so I don't have a ton of history to account for in my bookkeeping, but tracking raw material cost is a new thing for me, so I'm certain to learn from this.
For that I'd suggest Soapmaker 3. There's just much more than tracking materials. There's things like bowls and mixers, shelving, a website, fees for credit cards, etc.
 
For that I'd suggest Soapmaker 3. There's just much more than tracking materials. There's things like bowls and mixers, shelving, a website, fees for credit cards, etc.
You can track all of those in sm3 as well.
 
You are an exceedingly frustration person. You ask folks for advice and then ignore it and go your own way and then want help to do it your way when you can't figure it out because you have made it so complicated or you don't want to pay for it or you don't want to do the work yourself. I'm not trying to be mean here, just being bluntly honest with you

Money in...money out. That's all you need to track at this point and you can do that with any checkbook program for under $50. And most of them can be set up to download bank and credit card transactions and you can set the parameters on when to start and then every time you have it download, it will do so from the last time. And sorry to tell you, but you're going to have to put some effort into doing it that way...at least in the beginning because the software cannot read your mind...or checks or deposit detail any number of other things that you are going to decided that you don't want to do.
 
You can track all of those in sm3 as well.
Yes and no. SM3 is fairly robust, but it's not meant to be an accounting program. Yes, it will track "Other Expense Items"...I can print a Tax and Income Summary report and it will tell me how much money I spent on Equipment and Molds as a whole and then I can download a report for more detail in case I need pull something out so I can do a Section 179 or if I'm just going to expense it under Small Tools and Equipment.
 
Yes and no. SM3 is fairly robust, but it's not meant to be an accounting program. Yes, it will track "Other Expense Items"...I can print a Tax and Income Summary report and it will tell me how much money I spent on Equipment and Molds as a whole and then I can download a report for more detail in case I need pull something out so I can do a Section 179 or if I'm just going to expense it under Small Tools and Equipment.
Obv., it's not a complete accounting program.

But one can add & customize categories within Other Expenses, from Advertising to Fees to Tools to Supplies etc. and export them collectively or individually as desired.
 
Obv., it's not a complete accounting program.

But one can add & customize categories within Other Expenses, from Advertising to Fees to Tools to Supplies etc. and export them collectively or individually as desired.
There is no 'obvious' about it. It would not be unreasonable for someone without business experience to assume that since it tracks purchases, inventory, sales, etc that it is a accounting program.

Yes one could use Other Expenses to set up various Category for Advertising, Electric, Phone, Rent, etc and then turn it over to your CPA and I'd tell you the same thing I told an attorney who sent me his spreadsheet: "Oh hell no!" Again, SM3 in NOT an accounting program and should not be used as an accounting program. But what the heck do I know...I'm just a Senior Staff Accountant that oversees a dozen accountants as well as handles all state tax issues.
 
Money in...money out. That's all you need to track at this point and you can do that with any checkbook program for under $50.
YES!
Gosh, I did that for 15 years from the very beginning in 2004. I may have mentioned this before. You just need to set up a dedicated credit card and a dedicated checking account. Your checking account register is your "accounting program".

To keep it simple:
ALL income is deposited into your checking account.
ALL expenses are paid by CC.
CC balance is paid monthly with a single check.
You then have a balance of income minus expenses equals profit. At the end of the year, deposit 10% (or more) of profit into a dedicated savings account for emergencies or whatever.

After my first year, I paid back the $500 stake I borrowed from our joint account and left the rest in checking to get a head start on inventory for the next year. It was easy to plan ahead on taking advantage of sales throughout the year.

I usually left $500 in my checking account every year and saved the rest -- usually $2,000-$3,000. Small-time, I know but I never wanted to be "a business". Too much stress. I promised myself if it ever got to be more W-O-R-K than fun, I would quit. When it did; so did I.

My plan was to have enough money for a vacation every year. However, that rarely happened. I was able to cover our portion ($7,000) of a new roof after a hail storm; replace a hot water heater; and other stuff I don't remember atm. When I did retire in 2017, I had $25,000 in my savings account. Not bad for making an expensive hobby pay for itself. That was my goal. 😁

HTH :computerbath:
 
Last edited:
YES!
Gosh, I did that for 15 years from the very beginning in 2004. I may have mentioned this before. You just need to set up a dedicated credit card and a dedicated checking account. Your checking account register is your "accounting program".

To keep it simple:
ALL income is deposited into your checking account.
ALL expenses are paid by CC.
CC balance is paid monthly with a single check.
You then have a balance of income minus expenses equals profit. At the end of the year, deposit 10% (or more) of profit into a dedicated savings account for emergencies or whatever.

After my first year, I paid back the $500 stake I borrowed from our joint account and left the rest in checking to get a head start on inventory for the next year. It was easy to plan ahead on taking advantage of sales throughout the year.

I usually left $500 in my checking account every year and saved the rest -- usually $2,000-$3,000. Small-time, I know but I never wanted to be "a business". Too much stress. I promised myself if it ever got to be more W-O-R-K than fun, I would quit. When it did; so did I.

My plan was to have enough money for a vacation every year. However, that rarely happened. I was able to cover our portion ($7,000) of a new roof after a hail storm; replace a hot water heater; and other stuff I don't remember atm. When I did retire in 2017, I had $25,000 in my savings account. Not bad for making an expensive hobby pay for itself. That was my goal. 😁

HTH :computerbath:
Totally agree. In addition, it is super easy for you to really know if you are spending more or less than you are making and by how much. Keep the receipts in a box to support the deductions and calculate your end of the year inventory for taxes. Add complexity when you need it, not before.
 
When I did retire in 2017, I had $25,000 in my savings account. Not bad for making an expensive hobby pay for itself. That was my goal. 😁

My goals are broadly similar to these; my retirement is looming, and the retirement forecast software my employer uses claims I have enough to retire on, but... I want to have a little cushion, so my goal is to build up to a soap-biz 'take home' of ~$500 per month by around 2027, but the real reason I'm building this little business (my accountant calls it a 'side hustle,' but he's a youngster, so I tolerate it) is that older friends have told me that not having something complex to focus on in retirement is a great path to depression. I'm prone to that, so my hope is that this soap work will keep me engaged while leaving time for hiking, kayaking, rowing, writing, etc.
 
my goal is to build up to a soap-biz 'take home' of ~$500 per month by around 2027
That's only 3 years away! Making great soap is only part of the problem. What is your plan for selling? IMO and IME, in any business start-up you need to be capitalized for 4 years on average to cover your costs until it becomes profitable, so prepare for that.

If you're not already doing it, your 'side hustle' needs to start now. The sooner you start hustling the better. Just for the experience if nothing else. You will learn a lot from valuable feedback from customers that will shape your plan moving forward.

When I started selling, I was fortunate to be on a forum that had successful soap-sellers that had more demand than they were able to supply. That's when they contacted me to make stuff for them wholesale. They also sold B&B stuff as well as the soap I made for them. (The profit margin is waaay better for lotion and lip balms, for example.)

$500/month = $6,000/year gross. Soap is time & labor intensive. How much soap and how much time do you need to make it in order to reach that goal? And that 'take home' may not be doable considering Fed Tax on income. My CPA told me I could make up to $3,000 'Casual Sales' annually and not have to pay income tax on it. That varies from state to state and it may not even be available any more. I've read that some states are now taxing garage sales because so many people were doing that to earn living expenses while unemployed due to COVID.

If you haven't already done so, it might be worth your time and trouble to contact your local Small Business Bureau to find a mentor to help you to develop a business plan that works!
 
If you're not already doing it, your 'side hustle' needs to start now. The sooner you start hustling the better. Just for the experience if nothing else. You will learn a lot from valuable feedback from customers that will shape your plan moving forward.
I don't need to be at the $500 mark in three years! I just have to be heading that way; as I said, supposedly I have enough to retire on. My first table is scheduled for the end of March, and my wife and I are working on it already. If I need to, I can work until I'm 67 easily (my work doesn't want me to retire; I'm just getting weary of it), and I make a lot more than $500 a month doing that; every year I delay retirement makes it easier afford to retire. My stress around this is very low, and my accountant agrees with me (talking with him was very reassuring).
 
Add complexity when you need it, not before.
I'm an accountant with a CPA firm and I don't use an accounting program. That's not to say that I don't have one set up to handle Manufacturing and Point of Sale, but I'm not using it because I don't need it right now it would be a complete waste of time (and money if I paid for it). @Zany_in_CO's suggestion is great, but you really don't need a credit card if run all your business stuff through a separate bank account. While it is certainly handy when it comes to buying ingredients and supplies if you are cash poor, but I don't want anyone to think that it's a must have. And you're going to want to deposit all sales unless you plan on keeping a sales record so you can account for the cash from sales used to purchases ingredients and supplies.

And keep all your receipts. Sure, it's kind of a given that if you spent money and Nurture or Sage Mountain that it is a business expense, but what about Wal-Mart or Piggly Wiggly or Dollar Tree?

My goals are broadly similar to these; my retirement is looming, and the retirement forecast software my employer uses claims I have enough to retire on, but... I want to have a little cushion, so my goal is to build up to a soap-biz 'take home' of ~$500 per month by around 2027, but the real reason I'm building this little business (my accountant calls it a 'side hustle,' but he's a youngster, so I tolerate it) is that older friends have told me that not having something complex to focus on in retirement is a great path to depression. I'm prone to that, so my hope is that this soap work will keep me engaged while leaving time for hiking, kayaking, rowing, writing, etc.
Your older friend would be right, especially for the male of the species. Studies have shown that men who have regular hobbies/activities that get them out of the house (even if it is just to the garage/shop in the back yard) after retirement live longer vs men who have suddenly decided they are experts and try to tell their wives how to do things.

My goal is also to supplement my retirement income with my bath and body, but I don't want to trade one full-time job for another so my goal is to build up the business and eventually sell it to someone younger. It's why I have been taking my time with branding and product development.
 
I don't need to be at the $500 mark in three years! I just have to be heading that way; as I said, supposedly I have enough to retire on. My first table is scheduled for the end of March, and my wife and I are working on it already. If I need to, I can work until I'm 67 easily (my work doesn't want me to retire; I'm just getting weary of it), and I make a lot more than $500 a month doing that; every year I delay retirement makes it easier afford to retire. My stress around this is very low, and my accountant agrees with me (talking with him was very reassuring).
Do what you love while you can. My uncle retired at 55 and said he massively regretted it because he was incredibly bored. I think he's gotten used to it now.

$500 a month is actually pretty easy as long as you're going to markets. I usually make between $150 and $200 per market. Last year I was making closer to $300 a market. Though this year has been really tough and I'm not sure what happened. Because of it, we have had extra money when something has happened. Most of my money goes back into the business but it has paid for my cats cremation, new tires, a broken ac, that sort of thing.

If you get Soap Maker 3, it will allow you to track purchases, and will even give up a cost if you set it up correctly. There are some issues with SM3 though. For example, it doesn't have the ability to properly record reselling an item. Lets say you have something like Sodium Cocoyl Isethionate that's been sitting there a couple years. It's still good because it's powdered and it isn't currently in SM3 and you have no idea how much you originally paid for it, or how much you've exactly used. Adding it now will throw off the totals. You'll see what I mean. I asked if there's a way to do this from the creators and was told "This isn't an accounting program so there are things it can't do. You can add it but the totals will be wrong and you will need to adjust it when it comes tax time". Hence why I'm looking at alternatives. It doesn't track the method you paid with either.

SM3 is great for tracking inventory, material costs, etc. But not for everything.

To use hotels as a reference again because it's what I know... there are some programs that hotels use that are also complete accounting programs and can do everything you could possibly need. These programs are expensive, difficult to use, and deeply involved but they are a beauty once you know the program properly. One of the most expensive is called Opera (no not the surf engine). If you get the full suite, it could cost you thousands a month but it could do anything you can imagine and probably things you haven't even thought of.

Most hotels can't afford that and it's much cheaper to use other programs to achieve the same thing even if it takes more time. One company I worked with had 4 hotels and the owner kept changing the program we all used for them at least once a year (it was maddening). It threw everything into chaos every time he did it. But the program they used for accounting has always been the same... Quickbooks. Quickbooks is capable of tracking money in ways that all the programs he ever signed us up for could never do.

Hence why I'm looking at alternatives. I can't afford the expensive way. I can't afford an accountant to help me track things. So I have to figure out how to do it myself. I don't like admitting this and try to keep it light but I was in a severe car accident in 2004. It caused bleeding in my brain in the front and back of my head and a skull fracture, among other very serious damage to my left leg (I had to relearn how to walk). I couldn't remember most of my childhood for about 5 years. For almost a year, I couldn't smell anything and I cried the first time I actually smelled a cheeseburger.

Now... to the others who have seen fit to talk down to me when I have never done the same to you on this forum.


There are other effects it's had. My patience is much lower than it ever was. I used to be good at math, but now even basic addition can frustrate me almost to tears. My husband has seen me rage about math problems, and accounting is like another language to me. I can't keep it in my head. I used to be able to do complicated chemistry, algebra, etc in my head without needing anything to write it down. I can't do that anymore. I forget things easier and sometimes I forget to record things. I can't keep the rules straight on how to do any of it. I worked hard on my recipes and they are all recorded in writing so I can follow them. I can remember what oils and things do because I've been working with it so long. But accounting is too complicated for me now.

You have NO IDEA how hard this is to deal with. I was a genius level IQ and I lost it all when my skull hit the pavement when I was struck crossing the street.

So you insult me about how I am a frustrating person to deal with because I just don't want to learn it. I took accounting in college, do you understand? I lost it all. I can't handle it now. But I don't have the money to afford to hire people to do it for me, so I'm trying to figure out a better way of doing it that -I- can handle. A way I can learn it slowly, from start to finish. Repeating the same thing over and over and over again is the only way I can learn even if it takes a thousand times before I get it.

I'm sorry I'm frustrating you. You are welcome to scroll on by whatever I say.

Gecko, I could tell you've gotten frustrated with me. Hence why I stopped asking you anything and posted it on the wide forum. You don't HAVE to help me. You can scroll on by if you see something I've said that you didn't like.

I've been here for years. I've never felt so unwelcome. I've tried so hard to be nice and helpful here because I don't want to lose access. Anywhere else, I have a big mouth and can say mean things without thinking about it. But I read and reread everything I write here so I'm sure it isn't going to come across badly.

Yet I get this.

Thanks for making me feel so warm and fuzzy inside for frustrating you.
 
My goals are broadly similar to these; my retirement is looming, and the retirement forecast software my employer uses claims I have enough to retire on, but... I want to have a little cushion, so my goal is to build up to a soap-biz 'take home' of ~$500 per month by around 2027, but the real reason I'm building this little business (my accountant calls it a 'side hustle,' but he's a youngster, so I tolerate it) is that older friends have told me that not having something complex to focus on in retirement is a great path to depression. I'm prone to that, so my hope is that this soap work will keep me engaged while leaving time for hiking, kayaking, rowing, writing, etc.
I was fortunate to retire in 2006. I thought my soap making would be a 2–5 year hobby. Today, I am blessed with so many friends and acquaintances I have made from customers and fellow vendors that even if it is work some days, it is worth it. This was one of the best decisions I made for a positive and busy retirement. Although I have that $500/mo profit it took me more than 4 years to develop it. It is slow building that customer who purchases 1-2 bars to become a customer who purchases 12 per year plus soap for gifts (especially if there is still time for bridge, mahjong, writing, gardening).
 
Last edited:
Do what you love while you can.
DITTO
$500 a month is actually pretty easy as long as you're going to markets.
DITTO
Most of my money goes back into the business but it has paid for my cats cremation, new tires, a broken ac, that sort of thing.
DITTO
Hence why I'm looking at alternatives. I can't afford the expensive way. I can't afford an accountant to help me track things. So I have to figure out how to do it myself
DITTO
Now... to the others who have seen fit to talk down to me when I have never done the same to you on this forum.
I sincerely apologize if that's the way I come across. My only intention is to help where and if I can. I like @Zing's sage advice to always assume positive intent.
You have NO IDEA how hard this is to deal with. I was a genius level IQ and I lost it all when my skull hit the pavement when I was struck crossing the street.
Actually, you are not alone. I DO KNOW how hard it is. Same here -- but for different circumstances. My daughter calls it "drain bamaged"! 😅
I've never felt so unwelcome. I've tried so hard to be nice and helpful here ... I read and reread everything I write here so I'm sure it isn't going to come across badly.
I'm so sorry to hear that. Me too. It's not an easy path for sure. For example, I comprehended all that you wrote but I'm not likely to remember what brought you to this stage of Life. Sadly, that's just the way it is with me now.

I'm thankful for you and especially for @TheGecko because she shows up daily with sound advice more often than not. You can count on it! Also not an easy path when you consider so many other SMF members who used to share the burden and participate but rarely contribute on a regular basis these days. ☹️
 
Your older friend would be right, especially for the male of the species.
Thankfully, long ago my wife and I worked out a pattern that won't have to change much once I'm retired:

She cooks & grocery shops & does half the dishes.

I do all the cleaning and laundry & handle all of the household bills.

Sadly, with her back issue, I may have to take on much the grocery shopping and cooking, as it's getting harder for her to stand long enough to cook any but simple dishes; this is sad because cooking was a creative outlet for her for years. Getting old bites.
 
Status
Not open for further replies.
Back
Top