Craft Business Bookkeeping With One Simple Spreadsheet

You sold forty pieces at the spring fair, a dozen more online, and somehow you cannot say whether the year made money. That is the usual state of craft business bookkeeping: receipts in a shoebox, sales spread across three platforms, and a vague hope that it all evens out at tax time.

I sell upcycled furniture and small home goods, and for my first two years I tracked nothing properly. When I finally sat down with the numbers, I found I had been losing about 4 dollars on every side table I sold once shipping boxes and sandpaper were counted. One spreadsheet fixed that. Here is how to set it up in an afternoon and keep it running in 20 minutes a week.

Why simple craft business bookkeeping beats accounting software at first

Bookkeeping apps cost 15 to 40 dollars a month and are built for businesses with employees, invoices and payroll. A maker selling a few hundred pieces a year rarely needs that. What you need is a single place where every sale and every expense lands, sorted into a handful of categories you actually understand.

A free spreadsheet in Google Sheets, LibreOffice or Excel does that perfectly well until you pass roughly 30,000 dollars in yearly sales or start hiring help. At that point software and an accountant start paying for themselves. Before then, the spreadsheet teaches you where your money goes, which no app does on your behalf.

Setting up the spreadsheet

Create one workbook for the year with four tabs. Keep it boring. Boring gets updated.

Tab 1: Sales

Columns: date, item, where sold (fair, Etsy, own website, wholesale, commission), sale price, shipping charged, platform fees, payment processing fees, and net received. Net received is the money that actually reached your bank account, and it is the figure that matters.

Tab 2: Expenses

Columns: date, supplier, description, category, amount, and a receipt reference such as "photo 0412" or "email March 3." Use no more than eight categories, for example:

Materials (wood, fabric, paint, findings)
Consumables (sandpaper, glue, blades, thread)
Packaging and shipping supplies
Postage
Selling fees (fair pitch fees, listing fees, subscriptions)
Tools and equipment
Marketing (business cards, photo props, ads)
Travel to fairs and suppliers

Tab 3: Monthly summary

Use SUMIFS formulas to total sales and each expense category by month. One row per month, one column per category, and a final column for profit. This is the tab you will actually read.

Tab 4: Mileage and hours

Log trips to fairs and suppliers with the distance, and log making hours roughly per batch. Mileage is often a deductible expense, and hours show if your prices pay you anything at all.

A weekly routine that keeps it current

The spreadsheet only works if you keep it current. Once a week, ideally the same evening, do this:

Download sales reports from each platform and paste the week's lines into the Sales tab. Etsy, for example, exports a CSV of orders and a separate one for fees.
Photograph every paper receipt from the week, name the file with the date and amount, and save it to one folder. Then bin the paper if you like.
Enter each expense and its category.
Check that the bank balance moved by roughly what the sheet says. A gap of more than 20 or 30 dollars usually means a missed fee or a forgotten purchase.

That is 15 to 20 minutes. Skip three weeks and it becomes a three hour job you dread, which is how the shoebox starts.

The numbers worth looking at each month

Once the summary tab fills up, three figures tell you most of what you need.

Materials as a share of sales. For most handmade goods this sits between 15 and 35 percent. If yours is above 40 percent, your prices are probably too low or you are buying supplies at retail. Our guide on pricing handmade work so it actually pays walks through fixing that.

Fees as a share of sales, per channel. Online marketplaces commonly take 10 to 15 percent once listing, transaction and payment fees are added. Fairs can be cheaper per sale or far more expensive, depending on the pitch fee and footfall. A 60 dollar pitch where you sell 200 dollars of goods costs you 30 percent before travel. The breakdown in Etsy seller fees and how to price around them shows how to compare channels fairly.

Profit per making hour. Divide monthly profit by hours logged. When I first did this, my figure was 6 dollars an hour on furniture and 19 on small cutting boards made from offcuts. I now make far fewer side tables.

Do not separate hobby and business spending too early

The standard advice is to open a separate business bank account on day one. I think that is premature for many makers. If you sell a few pieces a month and have not decided whether this is a business, a second account adds fees and admin without telling you anything the spreadsheet does not.

What matters early is recording every craft-related transaction, whichever account it comes from. Add a column marking "personal account" or "business account" and carry on. Open the separate account when sales become regular, usually once you pass around 300 to 500 dollars a month, or when your tax rules make it necessary. At that point, mixing becomes genuinely confusing, and the split is worth it.

The bigger risk is the opposite: treating every hobby purchase as a business expense. If the expensive yarn was for a jumper you kept, it is not a business cost. Being honest here keeps your profit figure meaningful, and keeps you on safe ground with the tax office. If you are still at the hobby stage, budgeting for a craft hobby may suit you better than full bookkeeping.

Tax basics to check for your country

Rules differ widely, so treat this as a list of questions to ask, not answers. Find out the income level at which you must register as self employed or file a return. Check if you need to collect sales tax or VAT, and if marketplaces collect it for you. Ask how long you must keep records; five to seven years is common. Learn which tools count as equipment spread over several years rather than an expense in one year.

A single one hour appointment with a local accountant, often 80 to 150 dollars, is worth booking once your first full year of numbers is in the sheet. Bring the summary tab and you will spend the hour on advice, not on sorting receipts.

Frequently asked questions

Do I need bookkeeping software for a small craft business?

Not at first. A spreadsheet with tabs for sales, expenses, a monthly summary and mileage covers most makers selling under about 30,000 dollars a year. Move to software when you hire help, invoice wholesale clients regularly or your accountant asks you to.

What expenses can a craft business deduct?

Materials, consumables, packaging, postage, selling fees, tools and business travel are commonly deductible, though rules vary by country. Items you make for personal use are not. Keep a receipt or record for everything you claim.

How do I track materials used in each handmade item?

Record material purchases as expenses, then estimate the cost per piece by dividing a batch purchase by the number of items it made. Recheck the estimate each season, because supplier prices change and offcuts often go further than expected.