Inventory strategies, software, apps, or templates?

[Wichman]

A question came up about what to use for inventory control.

Do any of you use any software to deal with this, paper trails, insurance needs, or ???

I can see three major areas to track; tools and the consumables that go with them, raw materials, and finished products. Each of those main areas could have more than one subclass.

Any ideas?

[kmmcrafts]

15 years ago when I looked into software it was very pricey. Tech has advanced a lot now so maybe there is something more reasonable. 

My understanding is in a theft, fire, or? for finished products they do not pay out for the retail value and they only pay out at a material value investment so.. like my ornaments are minimal for a material investment like a $20 sheet of BBply can net me $1000 in retail value as an example but, if I'm only going to get my $20 back I'll take the loss rather than invest hundreds into software to track it.. Many things now days are not even stocked and are just made to order so for me it was never worth the effort to keep track on such a small crafter level scale. 

From a insurance standpoint.. I hear that if your shop burns down and is a total loss and you are a business making money out of that shop and do not have your shop covered as a business they'll not cover.. There was a laser crafter YouTube video about this and many people get burned on this.. If you're making money even on a very small scale they'll weasel out of a payout. This is something I need to look into myself. Lasers are easy to start a fire with too.. LOL

Edit to share the video:

 

Edited April 21 by kmmcrafts

[JTTHECLOCKMAN]

Over the years as I was selling my items and tracking my income and deductions, I would basically just save receipts and at the end of the year do some homework and tally things up. I never did the shop in a house thing because as kevin said the insurance is more than I made and the payoff is a hassle if you get anything. Unless you have a huge business that takes in large income then it may be best to hire an accountant to do the paperwork. At first start up I deducted my tools and you get to depreciate them over so many years. After that buying small tools I would list under mis. tools and those numbers were never earth shattering. I kept tract of sales with recepts copies and again yes it is extra work but that is what you signed onto when starting a business. There are many aps out there that can help but I never used any. I did just fine with pad and paper sort of speak. I will say this, I was audited the very first year I started my business and that is no fun. But it was something different to my name so I guess they needed to check. Thankfully I did have all receipts and paperwork to prove my business and yes I had to pay an additional $2000 for some dumb things I did not know I needed to not deduct or something like that. I forgot what it was. I chalked it up to the agent had to get some $$ from me to make her worthwhile. For over 40 years after that not a word from them. 

Edited April 21 by JTTHECLOCKMAN

[kmmcrafts]

With online selling so long as you keep your listings up to date you have a sort of inventory record to look at in a total loss situation.. On the back side of my etsy shop it shows me my "made to order" and my numbers for inventory of each piece and of coarse all the photos of the item etc.. but this is tough for me to keep updated with selling on Amazon and other places.. though I do keep fairly accurate with it most of the time.. as I don't do a lot of sales on the other platforms anymore so something sells most times I go over to Etsy or Amazon etc. and change the quantity available so I don't sell something that I don't have in stock, LOL.. however that does happen now and then because I get busy in the holiday season and don't update as I should.  

As for bookkeeping etc. I use QuickBooks software.. since my business is mostly online sales and most of my purchases for supplies and tools is also online.. The app can pair with your Etsy, Paypal, and other online venues.. Anytime I have a sale this is picked up automatically in the app for the income, sales and payment fees auto deducted in the software so I don't have to do any manual entrees other than my cash sales which are not much at all since I don't do much in person selling. 

When I do have to make supply runs to the store or drop things at the post office for shipping the app has a feature to keep track of my mileage too so no need to manually enter that. The app on the phone allows you to instantly take a snapshot of in person purchase receipts too.. so if I go to Harbor Frieght and pick up something for the business such as sandpaper etc. I can snap the receipt right in the parking lot before I lose it, LOL. It shows me my income, profits and spending etc. right on the app when I open it up so I can see how bad or good each day, week, or month is going, LOL..

[Wichman]

8 minutes ago, kmmcrafts said:

With online selling so long as you keep your listings up to date you have a sort of inventory record to look at in a total loss situation.. On the back side of my etsy shop it shows me my "made to order" and my numbers for inventory of each piece and of coarse all the photos of the item etc.. but this is tough for me to keep updated with selling on Amazon and other places.. though I do keep fairly accurate with it most of the time.. as I don't do a lot of sales on the other platforms anymore so something sells most times I go over to Etsy or Amazon etc. and change the quantity available so I don't sell something that I don't have in stock, LOL.. however that does happen now and then because I get busy in the holiday season and don't update as I should.  

As for bookkeeping etc. I use QuickBooks software.. since my business is mostly online sales and most of my purchases for supplies and tools is also online.. The app can pair with your Etsy, Paypal, and other online venues.. Anytime I have a sale this is picked up automatically in the app for the income, sales and payment fees auto deducted in the software so I don't have to do any manual entrees other than my cash sales which are not much at all since I don't do much in person selling. 

When I do have to make supply runs to the store or drop things at the post office for shipping the app has a feature to keep track of my mileage too so no need to manually enter that. The app on the phone allows you to instantly take a snapshot of in person purchase receipts too.. so if I go to Harbor Frieght and pick up something for the business such as sandpaper etc. I can snap the receipt right in the parking lot before I lose it, LOL. It shows me my income, profits and spending etc. right on the app when I open it up so I can see how bad or good each day, week, or month is going, LOL..

I don't remember the how or when but if I make a purchase at HF I have an email copy in my inbox by the time I get home, and HF is only 5 miles away.

[Wichman]

2 hours ago, kmmcrafts said:

 

My understanding is in a theft, fire, or? for finished products they do not pay out for the retail value and they only pay out at a material value investment so.. like my ornaments are minimal for a material investment like a $20 sheet of BBply can net me $1000 in retail value as an example but, if I'm only going to get my $20 back I'll take the loss rather than invest hundreds into software to track it.. Many things now days are not even stocked and are just made to order so for me it was never worth the effort to keep track on such a small crafter level scale. 

 

I think I need to discuss this with an insurance person. I can understand if items are just value added, with minimal physical time involved ( no offence intended ) but I track my time when I'm cutting a project, it's what I base my prices on, the time involved in cutting project is, by far, the most expensive aspect of what I do... 

[kmmcrafts]

21 minutes ago, Wichman said:

I don't remember the how or when but if I make a purchase at HF I have an email copy in my inbox by the time I get home, and HF is only 5 miles away.

Yes, I do to.. It has something to do with giving your email when you give them your phone number it automatically sends you a copy. Haven't been in a while so I forgot about that part.. anyway it was just a example of how the bookkeeping is done. Someone ( think it's my sons friend ) keeps using my phone number when they go there because I keep getting emails of purchases I didn't make, LOL. Used to keep track of what my son was spending there because he just used my account, LOL. 

[kmmcrafts]

3 minutes ago, Wichman said:

 

I think I need to discuss this with an insurance person. I can understand if items are just value added, with minimal physical time involved ( no offence intended ) but I track my time when I'm cutting a project, it's what I base my prices on, the time involved in cutting project is, by far, the most expensive aspect of what I do... 

Yeah, much of the wood I get is free from my brothers lumber mill.. so most everything at one time was just my labor.. I'd be curious what the insurance agent says.. maybe things are different now.. but you'd have to have some sort of record of your prices or your time.. too many ways to fudge the labor rate numbers.. in my case with items being online with photos and prices etc.. could maybe a way to prove the value? I don't know.. Also a lot has changed since I first started this venture 25 years ago, LOL and there are a lot of online small business's now so there has to be something out there geared for the smaller business's. 

[JTTHECLOCKMAN]

Not sure what insurance company has to do with your hourly wage. Even when you calculate price for the item you are calculating the time and materials to somewhat give you an idea. You will never get what time you put into anything you make unless you jack the prices way beyond selling points. Because you are not calculating time to get materials, research materials prep materials and so on. Keep it simple as possible. Unless you are doing it for a income career then you are wasting time. In my opinion. What happens your accountant starts the business end of your taxes. You now start a material bought list and each year you now must supply a material used list. You are not using all materials bought in a year. Impossible.  But the accountant now does % of bought to % of used and this goes for just about all other things. Example you bought $1000 worth of materials (wood). You used 50% of that material to make 100 items. You sold 50 items so now those left over percentages go toward next year and if you buy more material they keep adding onto what was left over. It is alot more complicated than this but that is the jist of it. You do this with expendables as well such as sandpaper and finishes and so on. All other things as postage and all are seperate. I just made up basic sheets when I first started and after that it was very easy to fill in the blanks. Nowhere did I put any mention of salary and unless you have workers working for you then you opened a whole big other areana. And I mean big. Because now you have to collect taxes, pay insurance and many other things and boy that is alot of work. Keeping some gauge on milage is good but % is not much. I wish you luck if you are just starting out. 

If you are looking to include a shop within the house or stand alone shed and want to take insurance on it then talk to your agent. They all handle them differently and each state is probably different rules too. Lots of safety rules you need to follow if have a shop in or on the property so need to ask about that too. Now one thing these days if doing shows, show insurance has become a thing. So you need to look into that as well. Some shows require it and some not so much. Again a state thing. 

Edited April 22 by JTTHECLOCKMAN

[barb.j.enders]

I haven't read all the comments because most will not be relevant to me.  I will comment about the insurance as I am a retired broker.  Keep in mind that I am in Canada.  Have a discussion with your broker.  Some businesses are allowed out a home and can certainly be insured.  Sometime it is simply a ryder on your home policy.  Regarding stock, unless you are insuring the stock for it's full value, yes, you will only get the cost of materials.  In all cases, you should let your insurance company know about you hobby as should there be a claim, it could ALL be denied.  It isn't that they are weaseling out of trying to pay, you have broken the contract you entered into.

[BadBob]

I use QuickBooks connected to Etsy and upload any receipts I get. I don't use any phone apps or track any vehicle expenses since they are so small that it is not worth the trouble. 99.9% of my materials are delivered. Anything else is in Google spreadsheets.

Whatever methods you use, they need to be backed up with copies off-site.  My Etsy files are backed up in four places. Two of these are off-site.

 

Edited April 25 by BadBob

[Mike Crosa]

Many accounting and bookkeeping softwares have come out through the years.  One that comes to mind right now for the more basic business is WAVE accounting software.  It even has a free copy that provides much of the bookkeeping requirements of the small one person business.  Give it a look.  I have a few clients on it and they love it.

 

Mike

[kmmcrafts]

22 hours ago, Mike Crosa said:

Many accounting and bookkeeping softwares have come out through the years.  One that comes to mind right now for the more basic business is WAVE accounting software.  It even has a free copy that provides much of the bookkeeping requirements of the small one person business.  Give it a look.  I have a few clients on it and they love it.

 

Mike

I used this free version for several years before going to Quickbooks.. My only complaint is nothing was automated at the time I used it ( maybe automated now? ) I had to manually enter every sale and the fee for each sale etc. etc. So it was basically a fancy ready made spreadsheet.. NOW, Maybe that was just the free version that I was using I don't know. It did help me out a lot so not saying it's not worth using.. as business grew it became very time consuming to input every single business transaction.   

[kmmcrafts]

22 hours ago, BadBob said:

I use QuickBooks connected to Etsy and upload any receipts I get. I don't use any phone apps or track any vehicle expenses since they are so small that it is not worth the trouble. 99.9% of my materials are delivered. Anything else is in Google spreadsheets.

Whatever methods you use, they need to be backed up with copies off-site.  My Etsy files are backed up in four places. Two of these are off-site.

 

I thought the same about the mileage but tried it one of the years and learned that I drive for the business more than I thought.. I typically get in the $300 range of deductions for mileage so every little bit helps. Starting in mid November I typically get enough business that the mail carrier will not do a pick-up so I end up driving to the post office almost daily until after Christmas.. 10 miles each way to the post office.. I used to not count that because I used to drive and pick up the kids from school which it right by the post office so it really wasn't a special trip.. now it is, LOL.  

[Mike Crosa]

Kev, I think you will find it has changed a lot.

[kmmcrafts]

Well, I just went to my wave account to see what has changed.. appears you have to have the paid version to automatically import the sales data from etsy and amazon, and doesn't have any mileage tracking options etc.. It is $5 a month cheaper but I guess for me I'm spoiled with the features I use with Quickbooks. Still is a great option though.