Let’s clear something up right away.
Most handmade business advice doesn’t tell you to track everything.
In fact, most of it stops way too early.
You’re told to:
✔️ Separate personal and business money
✔️ Open a business checking account
And then… nothing……….
No one really explains what comes next.
So makers do what makers always do — they fill in the gaps themselves.
Some track too much.
Others track almost nothing.
Most second-guess everything.
And that’s exactly why bookkeeping feels confusing, heavy, and weirdly stressful — even when you’re “doing the right things.”
Because the real question was never:
“Should I track everything?”
It was always:
“What actually matters enough to track — and what can I totally ignore?”
That’s what bookkeeping for makers — what to track (and what you can totally ignore) is really about.
Not overwhelm.
Not complicated systems.
Not accountant-speak.
Just clear, practical bookkeeping for real-life handmade businesses — so you can focus on the numbers that actually help you run (and grow) your business.
Short on time? Here’s what’s covered in Bookkeeping for makers: What to track:
What Actually Matters (So You Can Ignore the Rest)
Imagine this:
You open your books and instantly see the numbers that matter — not noise.
Here’s what you should be tracking in your handmade business:
1️⃣ Money In (Sales)
Why: It tells you how much you earned.
Without this? You don’t have revenue. You don’t have a business.
Track:
- Sales from every channel (shop, fair, custom orders)
- Refunds & returns
Hint: This is the headline number. The rest flows from it.
2️⃣ Inventory (For Product-Based Makers)
Why:
Inventory tells you what you have, what you used, and what’s still sitting on your shelves.
If you make and sell physical products, inventory is the missing link between:
- what you buy
- what you make
- and what you actually sell
Without tracking inventory at all:
✔️ Costs get messy
✔️ COGS gets blurry
✔️ Profit becomes a guess
You don’t need fancy software or perfect counts — but you do need a basic handle on it.
Track:
- Materials you purchase to make products
- Finished items you have on hand
- What gets used up vs. what’s still available
This doesn’t mean counting beads every day or tracking every skein down to the inch.
It means knowing, at a reasonable level:
- what you start with
- what you use
- what you end with
That’s enough to support accurate costs, cleaner books, and way less second-guessing.
3️⃣ Cost of Goods Sold (COGS)
Why: Because it tells you what it actually cost you to make your stuff.
If you’re not tracking this:
✔️ You might think you’re making money when you’re not
✔️ You can’t price your work properly
✔️ You can’t forecast profit
Track:
- Materials that become part of the finished item
- Packaging specific to the product
- Direct labor (if you pay yourself or others by the hour)
4️⃣ Essential Expenses (Money Out)
Why: This keeps your profit real.
Track only what truly affects your bottom line:
- Bank/processing fees
- Tools & supplies used for business
- Marketing costs
- Studio/space expenses
- Shipping supplies
🙅♀️ You don’t need to track:
- Your lunch while designing (unless it’s a client meeting)
- That random office plant
- Every sticky note you ever scribbled on
If it doesn’t affect money coming in, money going out, or taxes — it’s noise.
5️⃣ Tax-Relevant Categories
This one matters when April (or October) looms.
Track categories that matter for taxes:
- Sales taxes collected
- Deductions vs. non-deductions
- Home office (if you’re claiming it)
- Mileage (if you’re tracking business travel)
You don’t need every category under the sun — just the ones tax laws actually care about….PLUS the ones you care most about.
What You Can Ignore (Seriously)
Let’s get this out of the way swift and sweet:
❌ Every. Single. Spreadsheet for Every. Single. Scenario
You do not need 17 documents color-coded with formulas you forgot how to use.
❌ Fancy Profit Forecasts
Stop predicting profit for Q4 in February. Do real bookkeeping first.
❌ “Just In Case” Expenses
If it’s not deductible, not tied to sales, and not recurring? Let it be.
Your New Mantra……
Track less. Track smart. Track what actually matters.
When you focus on:
✔️ Revenue
✔️ COGS
✔️ True business expenses
✔️ Tax-relevant categories
… bookkeeping suddenly becomes not scary, but useful.
This isn’t busywork.
This is decision-making power.
Quick Links
📌 Previous post – Is Your System Set Up Right? (Because setup changes everything):
https://yarnybookkeeper.com/bookkeeping-system-set-up-right/
📌 Why Good Records Matter (Especially at tax time):
https://yarnybookkeeper.com/good-bookkeeping-records/
If you'd rather be working with yarn, fabric, paint or clay than deal with a pile of receipts or bookkeeping spreadsheets, you're in the right place.
I help you get a handle on your numbers, make sense of what's coming in and going out, and actually feel confident running your business -- without accountant-speak or guilt.
👉 Want help figuring out your bookkeeping (without overcomplicating it)? Join the free bookkeeping community.
I am a coach/educator, not your bookkeeper or CPA.This information is for educational purposes, NOT financial or tax advice.
