Best Way to Record your Etsy Shop Sales and Fees in 2024 - QuickBooks Without an App or Integration
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- Опубліковано 17 жов 2024
- Hey Etsy shop owners, I know it's tempting to just record each deposit from Etsy as Etsy Income and call it a day. Unfortunately, if you do that, you miss out on a clear picture of your shop performance, and you will never tie to your 1099 from Etsy at year-end! Each deposit from Etsy is a mash-up of sales, refunds, and a bunch of fees, yet there is no report in Etsy that shows you the breakdown of these components per deposit. So, I have found that the best way to accurately and easily record my Etsy Sales and Fees in QuickBooks is monthly, with a method I call the Etsy Bank Method.
This method is fast, easy, and accurate and shows you how to get the numbers you need from the new Shop Payment Account Activity Summary.
The Etsy Bank Method is perfect for anyone who does not want to use the Sync with Etsy integration, or for anyone who has a second Etsy shop, and can't use Sync with Etsy for the second shop.
If you are a new shop, or can't afford QuickBooks Online right now, then this is my recommendation for how to do your Etsy shop bookkeeping: • Bookkeeping Spreadshee...
I'll be using QuickBooks Online Simple Start which you can find here: www.SmallBusin...
That is my referral link because QuickBooks is the only program I use or recommend.
This video is for information purposes only and does not constitute tax or legal advice.
You will need to add some accounts to your Chart of Accounts in QuickBooks. This video makes it super easy to do that: • Etsy Seller's Customiz...
Check out my entire playlist of Bookkeeping for Etsy Sellers that walks you through your Etsy Shop bookkeeping in QuickBooks step by step. • Bookkeeping for Etsy S...
Questions about taxes for Etsy sellers? Get a FREE tax guide here: SmallBusinessSarah.com/etsytaxguide
Get a FREE Small Business StartUp Checklist:
www.SmallBusin...
Oh my goodness I have completed 2022 Etsy accounts in a few hours. Just amazing!! Anyone in the UK downloading the buckets will get some different options (mainly order of words) to some of the buckets shown, but once you have figured that out and added regulatory fees and VAT on seller fees buckets (I just added additional sub-categories to the Etsy shop expenses) you are good to go! Thank you so much Sarah!!
Glad it works for UK sellers too!
Any chance you can help me with this!
Amazing, thanks! You've been so helpful to us with our small business accounting!
Wow! Thank you so much Jordon! So glad my videos have been helpful!
Thanks for the Bank method! I struggled to set up my Etsy books when I opened in 2020. The bank, or receivables account, and the closing journal entry, work perfectly, and were just what I needed to make sense of the messy Etsy reporting.
Seems they've made good improvements for 2022, but I'm still glad I know how to dig for the data, just in case...
Hi Joe! I'm so glad that you have found my information helpful. My goal is to make bookkeeping as accurate but easy as possible. Really appreciate the super thanks!
Thank you, Sarah, just one question from a beginner please: How can I actually move money from Etsy Bank to my real bank account if a) I don’t have linked bank accounts at all, b) I have a linked bank account in QuickBooks. Should I move money via a Transfer? or should I use Bank Deposit (and choose the payee Etsy Bank)? I am afraid writing this down wrongly..
There is no extra transfer step you need to do. You should try to use a business only bank account and link that account to QB Online. When you get a deposit from Etsy in your bank account, you are just categorizing it to Etsy Bank. Categorizing it doesn't move it out of your checking account. It's still there. There is no extra transfer to do. Just categorize as instructed then do the journal entry, you will see it all works out!
@@SmallBusinessSarah Thanks, that’s the plan. But currently I have a personal bank account (I don’t want to link it to QB Online) which I have to use for everything till I get a business account. So I can create a "Bank deposit" (in QB) to record money from Etsy deposited to my bank account (and to «Etsy Sales:Etsy Income» account/category). But why would I need «Etsy Bank» at all then? Can I just put in/use my personal bank account in journal entries instead of «Etsy Bank»? Please advise.
In your situation, instead of using Etsy Bank as your ending value in the journal entry, I would use Owner's Pay & Personal Expense, since in essence, all of your Etsy earnings are going to your personal account.
Thank you Sarah! I have been following your youtube channel for a couple of years. Your videos have helped me a lot with my accounting!
I'm so glad to hear that they have been helpful. Really appreciate the Super Thanks!
This is amazing. Okay, question, my Etsy Deposits go in my main business checking account, with a lot of other things. So is that okay? I think this is where I'm scared. I had to let my bookkeeper go due to slow income right now and I'm trying to learn how to do this on my own. Do you do any paid training specific to my needs? Would love to talk to you!
I'm not offering paid training at the moment. It is perfectly fine that your Etsy deposits go into your business checking along with other deposits and transactions. Categorizing the deposits to Etsy Bank, is just like categorizing the deposits to a revenue account, except we are recording the deposits to the Etsy Bank holding/clearing account, and record the revenue and fees at month end with the journal entry.
Is anyone else struggling to reconcile their 1099 with this method this year? I've been excited to use this method all year, but as I'm closing out my books, I have a small discrepancy that I can't seem to work out. My numbers match perfectly to the monthly statements; I've adjusted for the 12/31 transactions that settle on 1/1, and yet I cannot understand why my Etsy sales don't align with the 1099 - they're close but not perfect. Sarah's videos have been incredibly helpful over the years, so I'm sure it's something I'm missing. Just wanted to see if I was the only one having an issue...or maybe, I just needed to write here for my own catharsis.
It sounds like you have done everything right. Don't sweat it if you are close! Use the journal entry at the end of this video to agree: ua-cam.com/video/hMc7W_rHsro/v-deo.html
Thank you so much for this video Sarah. I have been using your Etsy Bank method to create Journal Entries and was stunned when I tried to use the CSV reports for 2022. Your explanation of Etsy's new financial information has made everything clear and so much easier than previous years! I have a Canadian Etsy shop and don't think I can sync QuickBooks to my shop - hopefully this will also change in the future. Thank you for all your informative videos!!
Glad it was helpful!
This was so helpful, as all your videos are. Thank you for making such an informative video!
Thank you very much. Your videos are the most insightful and helpful. Been following along while using Wave. Most things seem to be similar. Only thing I'm getting hung up on is that in my etsy bank account i setup, the transaction stays positive instead of negative like in the video.
I'm not super familiar with Wave, but I'm glad a lot of this can translate to that program. It sounds like you are not categorizing your deposits from Etsy to your bank account to the Etsy Bank account.
Thank you very much for this! I opened my shop in December last year with one initial sale. Etsy lists the shipping cost in the January statement! How are we supposed to deal with that?
There are definitely some timing issues, but I wouldn't worry about it too much. Just use the statement to do the journal entry like usual. It will all even out over time.
This helps me so much! I need to get my books up to date for 2022 and I wasn't confident in using the new finance section to enter monthly amounts, even though I wanted to! (yay!!). I have 2 questions about the sales section: first, I don't need to record the sales tax collected or remitted at all? (I have been doing a little workaround the last couple of years to try and get the right number and match my 1099 :P ) Second, I am confused about my refund amount. How is that recorded? Looks like it already taken out of that green sales number- but wouldnt I need to record the sale and then record the refund for it to balance? To enter the green number as my revenue number, I would need to ignore the refund number and not record it at all, wouldn't I?
Hi Tiffany, Etsy has changed what they do with sales tax and the 1099 over the last couple of years. Now that they are collecting sales tax for almost every state as a marketplace facilitator, they have not been including sales tax collected in the 1099 number (unless you are in MO). So we don't need to include it in our figures either, plus it really isn't income to us. Here is my video on refunds: ua-cam.com/video/s2IGsrI3swY/v-deo.html
@@SmallBusinessSarah thank you so much! That's what I thought with sales tax, and I will watch this refund video!
What do you do with the Sales tax paid by buyer (Remitted) part? Do you have to pay that amount into Sales Tax or does esty do it for you? Where do you put it in your books?
Etsy collects and remits sales tax for all U.S. sales, so it's not something that needs to be recorded in the bookkeeping, and therefore does not need included in the journal entry. You never get that money, so you don't need to pay it out to your state.
Thank you for this video. Should I Sync Printify to my Quickbooks account?
If you Sync your business bank account or credit card to QB, all of your charges from Printify will come through your bank feed, and then you can just categorize that. I haven't seen an integration directly with Printify an QB, but I don't see a need for it.
Sarah, thanks so much for putting out these videos. I would be at a total loss without them. Based on this video and looking at my January 2022 Etsy statement, my numbers don't seem to be matching up. I previously used your Etsy entry app which was amazing. Wish we could still use it. Is there a way for us to know what the "Debit Etsy Bank" amount should be so we can check to make sure all the other figures are accurate before entering our general journal entry?
Usually the Net Profit number in green at the top of the chart is the Etsy Bank Debit number. But, you can always post your journal entry and then double-check that your ending balance agrees with Etsy.
Is this a good system for someone just starting out, has never done bookeeping, and has very little income as yet? Also, is you have any inventory at all, should you be using accural method, and how do you change from cash to accural? I am trying to help someone with information, and they do not have inventory yet but will next year..
This method is great for someone just starting out because it's very easy. Most small business operate on the cash basis of accounting, and that is what I recommend for all small business owners, even those with inventory.
Should my “etsy bank balance” always be the amount that is deposited into my actual bank and therefore zeroing the etsy bank (if starting with a zero balance)? Or should it equal the balance it says on Etsy? Let’s say it says I have an etsy bank balance of $5 but $3 is in reserve so only $2 is being deposited, but then I don’t make any sales the next month and all of that $3 goes to marketing fee. It still says I have a $3 balance in quickbooks but technically etsy isn’t depositing any money
After you post your monthly entry, the ending balance should equal the end of the month balance per Etsy. In your scenario, the $3 would be there at the end of the first month. But then, when you post your entry for the second month, you will be recording all of the fees that used up the $3, leading to the zero balance. Do a few months following the instructions to see how it all works together.
Thank you for your video. Do you provide bookkeeping service virtually?
Yep. My bookkeeping agency is www.EvergoldAccounting.com
Hi Sarah, I have an Etsy shop and my QuickBooks entries were not matching up. If I have a shop account with Etsy, do I sync with Etsy or manually input the sales and transaction fees in the journal entry? Thanks!
That's up to you. But you just pick one method, not both. Sync with Etsy has in general worked well for me, but this month there was a two week time period where it stopped bringing in sales information, but continued to bring in fees and other information into QB. This has been fixed, but I'm leaning towards using the JE method for all of my clients going forward for that reason.
Hi Sarah! How do I record Sales tax paid by buyer (remitted) in Quickbooks? Do I have to create a diff chart of account for that, or can I just subtract it from the total sales? Kindly help. Thank you!!!
Just like I show in the video, you can ignore the sales tax portion of the Etsy sales summary because Etsy is collecting and remitting sales tax for all states in 2023. (Advice only for U.S. sellers.)
Very helpful! I'm curious when I see the "Etsy Sales" Account and then you have an "Etsy Income" sub account. In your previous video of setting up the etsy accounts I think you had the "Etsy Income" as your parent account and then the others as sub accounts. Maybe I misunderstood but could you clarify? If I have other online sales sites, should those be grouped under a parent like"Online Product Sales" then "Etsy Income" with subs, "website income" with subs, etc?
I may have changed what I call the parent and sub-accounts, it doesn't really matter. But I do like utilizing parent and sub-accounts to make the P&L statement easier to read. And yes, you can create other parent and sub-accounts for other types of income as well.
Hi Sarah, Great videos! I'm wondering how to find the Shipping Revenue. Your app used to calculate it but this method doesn't have it. Our shipping costs us a little less than we charge. Thanks!
Hi Mark, you can find Shipping Income on the Etsy Orders CSV file. In your journal entry, reduce your sales figure by the amount of shipping income you record.
Do you know why the Monthly Statement>Activity Summary "Total Sales" amount isn't matching up with the Taxpayer ID Monthly Sales Amount? I know "Sales Tax Paid by Buyer (Remitted)" isn't included in the Monthly Sales Amount on the 1099 but even if I subtract the "Sales Tax Paid by Buyer" from the "Total Sales" the numbers don't match up.
Two things. First, the Taxpayer ID monthly sales is before refunds. Second, there can be timing differences between various reports in Etsy, frustrating but true. So while the monthly statement may include a sale one month, it may not appear until the next month in the other report. Happens all the time!
How do we include in our Journal Entry the amount Etsy lists in Sales and Fees as "Sales tax paid by buyer (Remitted)"?
You don't need to include that. Etsy is a marketplace facilitator, they are required to both collect and remit the sales tax. The 1099 Etsy gives you at year-end will not include sales tax, so just calculate your figures the way I show you and you will be good, no need to account for sales tax with Etsy.
@@SmallBusinessSarah - Thank you, Sarah. 😁👍
Hey Sarah - I'm confused about the Etsy Bank as opposed to my actual bank account where the funds are deposited. Is this transaction journal where you are entering the actual payments received from your bank checking account?
Hi! If the word bank is confusing (it can be) then you can call this Etsy Holding or Etsy Clearing. If you look back through the video, you should see that the deposits from Etsy into your actual bank account (connected to QB) will be categorized to the Etsy Bank/Holding/Clearing account we created. This is instead of categorizing those deposits directly to income. We can't categorize the deposits directly to income because then we would be missing all of the fees that Etsy took out. That's where the journal entry comes in. We capture all the income and fee information we need for the month. I realize this can be hard to wrap your head around! I promise if you try it out you will see that it works!
@@SmallBusinessSarah thank you for your reply, got it!
Your videos help me tremendously! Thank you for sharing your knowledge with us. What do I do on my end of the month journal entry (for my second shop) when Etsy shows my money was sent on 5/31 but it won't actually deposit in my bank account until 6/2?
Hi Cindy, that is called a deposit in transit. At the end of the month the balance in Etsy will be lower than your Etsy bank balance in QB. But once that deposit hits your bank account, then the end of the month balance per Etsy will agree to the Etsy bank balance in QB. It's simply a timing issue, that doesn't affect how we do the bookkeeping. No need to adjust your journal entry.
Thank you Sarah
Hello Sarah! Thank you for the revision of this video! I was wondering how do I reconcile a journal when my net profit is a negative number. Thank you!
Post the revenue items as credits and the expense items as debit in your journal entry, just as I show in the video. However, to balance your journal entry, your Etsy Bank amount at the end of the journal entry will be in the credit column rather than the debit column, and that is okay.
@@SmallBusinessSarah Thank you so much!
Really appreciate the video!
Try as I might, not able to balance the journal if I put the Sales Refund amount in the debit column. In fact, unless I don't enter it in the journal at all, or create a credit account specifically for offsetting it, the balance is always off by the refund amount.
What am I doing wrong?
Did you watch this video on the refunds? ua-cam.com/video/s2IGsrI3swY/v-deo.html I think it should help. When I made the video you watched, I didn't have a refund example to use, and I wish I had so I could have had a more complete example to share.
Thank you Sarah. I wasn't aware of that video and it does nicely cover the refund issue. Glad you covered that and glad a link to the refund issue as a part of this one.
I was still trying to figure out the most streamlined way of having that information ready for filing.
Had you thought of editing and adding it to the description?
Hey Sarah, the amount of income on the Etsy Monthy Statement for sales, doesn't match my 1099 amount - for any month in 2022, it was working perfectly for 2021 with the shipping income but its not matching up as easy per this video :(
Have you tried watching this video: ua-cam.com/video/hMc7W_rHsro/v-deo.html
Month to month the amounts may differ due to a timing difference between various reports within Etsy, but I assure you at year-end this method works great. You may have a tiny timing difference at year-end but that's easily solved.
@@SmallBusinessSarah seems to be something with the shipping. On the spreadsheet it’s more than on the monthly statement :(
Hi Sarah, how would you record just fees incurred for an etsy store that didn't make any sales? I have a period of 3 months where my client didn't make any sales but still had listing and marketing fees. Thanks! Edited to add there is a balance in her etsy account where the monthly fees are being deducted I'm just not sure how best to record that so the account will balance.
You can do the journal entry as usual, but the ending balance to Etsy bank will just be a credit instead of a debit. To pay for these fees, Etsy is either pulling from the balance, or they might be charging the clients bank account or credit card to get them up to zero at the end of each month. If Etsy does charge the bank or credit card, that transaction should also be categorized to Etsy Bank.
Thank you so much!@@SmallBusinessSarah
Hi Sarah, this doesn't work when you have a refund amount for the month. Because the Sales number that you enter first in the Journal has the refunds already deducted from it. Therefore, you are deducting the refunds twice.
Look at my video about how to calculate with refunds. Card pops up in upper right corner to take you to that video.
@@SmallBusinessSarah Got it. Thank you
Hey, could you use this same method with eBay? I get paid weekly on eBay so I assume the eBay bank figures might be slightly out at the end of the month?
I personally have found the eBay reports to be much more difficult to work with. So I use A2X for eBay: ua-cam.com/video/xTVwroHFJD0/v-deo.html
Hi Sarah-it seems that my net income is affected by the sales tax remitted number in Etsy. I am off in my JE by that exact number compared to my net income in Etsy. Any ideas? Thank you for all the help!
Are you starting with the green number for your calculation? Not the sales line? It really should be working the way I describe in the video. Are you not a U.S. seller? I suppose that could effect things but I'm not sure.
@@SmallBusinessSarah If I pick up the green number then I can't record the refunds separately or I will be off. In your video, you didn't have refunds so I am wondering if you would not use the green number if you had refunds?
Hi Cathy, yes my initial video didn't have refunds, this companion video expands on what to do if there are refunds. ua-cam.com/video/s2IGsrI3swY/v-deo.html
Is this method all we need to do ? I saw a comment about shipping income. What is that? What else do I need to record in my journal entries ?
This is all you need to do. If you want to break out shipping income you can (run the Orders CSV file). Shipping income is right now part of just the overall sales figure.
Hi Sarah, how can I find the video when Etsy is integrated with QBO? Thanks!
This is the video on Sync with Etsy: ua-cam.com/video/dDQUS3b9bMo/v-deo.html. However, Sync with Etsy ha several glitches this year. So now I just stick with this monthly journal entry method.
@@SmallBusinessSarah Thank you. I am struggling with learning how this all works and Sync with Etsy seems to make it seamless though. Are you familiar with Etsy Connector? I used that but I don't think my fees are being broken out. So frustrated!
Would you now recommend no integration with Etsy?
I personally now do not use any integration, for me or my clients. However, I do agree that when Sync with Etsy works correctly, it is seamless and easy. You will just need to know how to fix your numbers if and when the integration temporarily breaks, as it did in April 2023.
HI Sarah, I am bit confused to record Etsy sales of my client
Can you help if I drop an email with the spreadsheet of sales and order for Dec21
I'm sorry, I can't provide that level of customized help.
@@SmallBusinessSarah Can you then update you Etsy App for UK , at the moment it is not working as this only for US sellers
Thank you so much Sarah, this was so helpful! I successfully entered Jan - May (using the Etsy Bank method) with all the balances being correct, then I got to June and am off. I double checked all the deposits and redid the journal entry...anything I could be missing? Thank you again!
You know just recently I have had several clients where the balance is a little off, and I have triple checked everything. I have no explanation. I'm hoping the balance resolves the next month. If not I will adjust my journal entry through an expense account. Crossing my fingers this doesn't happen again because it is a mystery!
@@SmallBusinessSarah Thanks! It's so strange, I'm $12.80 off. Maybe I will enter July's numbers and see if it fixes it. Thanks again!
@@noellegriskey6896 did you get it fixed? Both my shops were also off on June and July. Other than that, every month was correct. June was off by around $6 for me and July was off around $0.58 or so.
@@chriseee86 I'm just now getting back to Quickbooks to finish up last year. For your June and July, did you make adjustments to correct the months or did it just resolved itself moving forward?
@@noellegriskey6896 I had to make an adjustment with the journal entry. Sarah has a video about it. I think it was in How to tie to your 1099
Why do you still recommend manually uploading the Etsy chart of accounts? QB now add these automatically right? You even mentioned this in your earlier videos. This is really confusing.
The chart of accounts is automatically uploaded if you use Sync with Etsy. From your earlier comment, it looks like you have two shops. You can use Sync with Etsy for one, but you will need to use this journal entry method for the other, and you will need to upload income and expense accounts for that one. And I agree, this is confusing if you are new to bookkeeping. Bookkeeping is a skill!
Thank you Sarah! I found that if I wanted to add sales from the beginning of the year, those transactions were already reconciled, so I'm just starting from this month of May and will fix what is ended to match for taxes at the end of the year. Also, my profit and loss report doesn't pull in the etsy income along with my other income. I'm sure I can find it but perhaps this would be a good video suggestion as I have multiple streams of incoming for main business, from consulting, products, and offline jobs of sales of goods.
Huh. If you are doing the journal entry correctly, your Etsy Sales should show up on the P&L. If you haven't done a journal entry yet, that would be the only reason why they wouldn't show up on your P&L.
What the easiest way to get etsy, ebay, amazon, paypay and shopify sales into quickbooks? Even if it is using app or integraton ? what app help ?
Sync with Etsy. A2X for eBay and Shopify. I personally still prefer the journal entry method for Amazon because it's so easy. And I just connect PayPal via the bank feed.
Thanks!
That was very sweet of you Sandy especially since I wasn't really able to answer your question!
In the past I have been using the Etsy Bank method but not the Journal Entry method. Opps. I would like to fix it. Is there a way to fix my Etsy bank. Of course and balance is out of wack.
If I'm understanding you correctly, you were categorizing your deposits to Etsy Bank but not doing the journal entries? I would just go back and do the journal entries. Otherwise, if you just fix Etsy Bank, whatever account you put the difference to will be off. Basically you need to find out what the right balance of Etsy Bank, Sales, and Fees should be and then post that adjustment to get everything to where it should be.
When there is sales tax amount listed in sales box on etsy, how do we input that into the journal entry. Or do we just ignore that?
As long as you are not located in the state of Missourri you can ignore it.
Do the ending and starting balances matter ?? Can’t I just record the journal entry each month?
Reconciling to the ending balance each month ensures that the journal entry was done correctly. In accounting, it's often called a roll forward.
@@SmallBusinessSarah ah, is it necessary? Will my books still be accurate?
Thank you so much for the videos. I do not know what is wrong with me, but since the new finance page on Etsy I cannot balance to the ending figure. No how no way. Every single month. When I get credits for a return item I do not know where or how to apply them Nothing I do seems to work. Even tried the Data file and that is a mess lol any help would be great. Thank you.
I would go back and with one of the past months where you were not balancing, and post an adjustment so that you do balance. That way you are starting with a clean slate for future months, and see what happens. I tend to post adjustments to Etsy transaction fees. I only occasionally have a problem balancing, and usually that resolves the next month. I would carefully look at how I record the sales portion in the journal entry, and watch my video on the refunds (card in corner of video and in description) because it is a bit wonky what you need to do to get the right numbers. But really, it should be balancing each month.
@@SmallBusinessSarah Thank you. I did go back and find that I was missing payments for credit card charges. Phew. But then I came to June just like another lady and it was off. So I just made an adjustment. Thank you again
how can we add tax (remitted) in xero from etsy?? in jv we can not add all state taxes and calculate?
I'm sorry I don't work with Xero, so I'm not sure. But if I understand your question, you don't need to record the sales tax Etsy collects and remits. That is all their responsibility. The only exception right now is if you live in MO.
what is a tax id ? i dont have a business first time on ebay as a shop integrate POD?
A tax ID usually refers to an EIN number that you get from the IRS. However, you don't necessarily need an EIN to do business. Often your social security number works as your tax ID
Sorry I meant Etsy
Thanks!
Thanks so much! Glad it was helpful!