Today I will be covering the Customer Invoices tab. Thank you IRS for requiring us to maintain receipts for all sales that we make. For my payments through paypal this is all tracked, but I occasionally get a cash order and therefore don't necessarily have paypal invoice from it. This is one way of me tracking all of my sales for tax purposes.
As I inferred earlier, not all sales will be taxable. You need to know your states requirements for collecting sales tax, if any. There are several states actually trying to crack down on this. This article from My Money Blog discusses California's current fight with Amazon.com regarding this issue. Therefore in my next column I track whether the sale was taxable and at what rate. For me in Virginia it is 5% of all sales. I then subtract any discount out and add in the applicable tax which gives me the total paid value.
Next I need to figure out how much is actually staying in my accounts, i.e. how much money is Etsy, Paypal, Square, or some other processing agent taking from me. I then subtract out those values from the amount paid and viola I have the amount of money that is actually going into my bank account. WAHOO! I typically carry over the fees from my inventory tab which is where I do most of those calculations.
We'll discuss that next week. Until then...Happy Independence Day!