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So a fun thing happened this weekend, here at the homestead. We made our first little bit of income from our farming endeavors! Our happy chickens have been laying so incredibly well, even in this frigid winter chill, that we've had eggs coming out our ears. And our beautiful Welsh Harlequin ducks are just blowing me away with how productive they are. Most mornings, we find five duck eggs in their favorite communal nest, all carefully tucked in and nestled under a layer of shavings. And we only have five ducks! So I put a quick ad in our facebook group, and on Craigslist, and what do you know - we've had an awesome response. Looks like we're in the egg business, girls!
As our first customer gave a cheerful wave and pulled out of the driveway, I found myself standing at the door with a little wad of crinkly cash in my hand. And it hit me. "Hmmmm. I'm going to need a way to keep track of this!" Now, you know me - I adore systems. HOW had I not forseen the need for a cash tracking system for our homestead income before now? (I'm going to chalk that one up to pregnancy brain.)
This is also the first year we're really going to be working to establish the farm & forge as income-producing enterprises, which means we need to keep track of all our expenses, so we can settle up with the IRS, come tax time next year. FUN! (For a little light reading on keeping records for farm taxes, let me hook you up with the link to this year's Farmer's Tax Guide, IRS publication #225.)
Now, one might generally look for a financial organization type of post around, say, January 1. But it's not too late to start the year off right, as a faithful receipt saver. If you're anything like me, you've still got last week's receipts kicking around. They're in your husband's wallet, in the back pockets of two pairs of jeans that are chilling in the dirty laundry, in several diaper bag compartments, and in that little cubby by the inside handle on the car door. It's not too late to reel them in, and start 2016 with a good receipt-keeping track record.
A system for keeping track doesn't need to be fancy. But if I learned anything from a decade of office management for some pretty creative and free-rolling peeps, it's this: any setup for keeping track of money going in and out absolutely must be EASY.
So here's what I whipped together this weekend. It's not terribly exciting or pretty, but it certainly is easy! Here's what we've got on that bulletin board:
- A big manila envelope, for holding all of our receipts from the month. The new policy around here is that all receipts get saved in this envelope, just to be safe. I'll go through them when the month is over, highlight the farm expenses, and toss any receipts that we don't need to keep.
- Blank expense receipts. (Those are the little squares, over the envelope.) Because sometimes receipts do get lost, or you forget to ask for one, or it's an informal cash sale and asking for a receipt seems dopey. These little blank receipts have spots for all the basic information about the purchase, so we don't forget to claim it on the tax return. (Feel free to download and print these here.)
- An income ledger page, for jotting down the information each time we make a cash sale from the farm. (Feel free to download and print it here.)
You'll notice that the envelope and ledger sheets are already sporting holes for a three-ring binder. At the end of each month, I'll take the envelope of expense receipts, and the filled-in ledger page(s), and throw them right into my homesteading binder. (More on that binder in another post soon!) With each new month, I'll put up a fresh ledger page and a new envelope. Hopefully this will all help make doing the taxes just a little less miserable, come next January! I'll keep you posted on how it works out.
Do you have any great farming or work-from-home income tracking systems you use? This is the kind of stuff that makes my little heart beat...I would love to hear your organizational tips!
Michele says
I’d love an update on this! And thanks Lori for your comment too! Two great ideas!
Anna says
It's been working really well, Michele! Now that blogging is my full time income, I'm using this system to keep track any blog related expenses as well - and between that and the farm it amazes me all the applicable expenses that I would totally have forgotten by the end of the year, if I weren't keeping everything in one place! It's been super helpful!
Wendy G Mayer says
I like your idea of keeping an envelope handy! My husband is suppose to give me all receipts but they are found in cars, pockets, etc. having that handy wold be a great idea. I use an old Microsoft My Money program that is so user friendly. I can enter things with new categories that fit us, and at the end of the year, I can just print off reports for any info the tax guy wants and let the computer do the adding. lol. It takes a little dedication to enter the info, but in the long run it saves us thousands in lost deductions. But since some receipts never seem to make it into my hands, lol, maybe I will adopt your great envelope idea, or my hubby's favorite gallon zip bags! Thanks for the ideas
Anna says
Hi Wendy - YES, isn't it SO worth it, keeping track of those expenses for the deductions? It sounds like you've got a good system down...and gallon zip bags work for sure! Whatever helps reel in those receipts! ; )
Lori says
Loved this! I used to do our receipts sort of this way...but at end of year I was going back and then categorizing them for our tax lady...(fuel expenses, chicken supplies, building supplies, grease/oil, etc). So for this year I am trying something new...I have my book set up with all the categories and as soon as I get a receipt, I record the expense under appropriate category...because sometimes one receipt might have items on it that go in different categories. When I know the receipt has been looked at and all items categorized, I put a big checkmark on the top...At the end of year, my goal is that all I have to do is add up the expenses in each group and give them to our tax lady...Loved your books and your templates, especially for blank receipts.
Anna says
Lori, I'm so very glad you enjoyed the post and templates. It sounds like you're really rocking a great system, that's such a good idea categorizing right away! SOOOO much easier than going back at the end of the year! Thanks so much for the kind comment, and hope you have a wonderful day!!
Erin says
You should check out wave accounting online. It’s free and you can track everything from your computer. The best part is it’s free.
Lisa says
Yup, I used a system of a simple ledger book to write stuff down in plus kept track of everything in Wave. The ledger book is used only because here in Northern country our internet can be sketchy. It works well for my farm (I contract out heritage pigs plus sell honey, chickens, turkeys, eggs and salves). Easy to use Wave and it's free as Erin mentioned.
Anna says
Thanks Lisa! I will have to check out Wave - I've never used it! What a lovely site you have, by the way!
Karen Merhalski says
Anna, your blog is awesome! I just read your article on how to keep your farm receipts!. Great idea and a wonderfully written article!
Karen