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.
- 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.