Hello, I’ve been an Etsy seller for approximately 3 months. I’ve now crossed the £1,000 threshold and registered as sole trader, but now I’m looking into my accounting to ensure I stay on top of my finance.
I get regular sales on Etsy and the system they have for breaking down each transaction is very detailed but poorly laid out and in random order for that day. There are sales, VAT processing fees, VAT delivery fees, VAT transaction fees, VAT on advertising, Etsy ads, listing renewals… it’s a jumble. I don’t charge VAT and I’m not VAT registered, but loads of Etsy VAT related fees.
My question is really just this… when I get money in from Etsy, this arrives daily and it would be for random sales (I believe Etsy pays out every 3 days). I don’t issue invoices as my Etsy listing takes in the orders and I then fulfil them and pay for postage. So how do I show this money in from Etsy, or will I have to go through the .csv and try grouping together (manually) what lines go with what, and then enter that as my “money in”? Hopefully the answer isn’t as daunting as the question… thanks in advance!
You may find the best way to deal with your Etsy sales would be to do something similar to those using Shopify. This would be to have a holding bank account called Etsy and transfer all of the money to this holding account. You can then create invoices to cover the sales/vat/postage etc and pay them down from the holding account.
Hi Beth! Thanks for getting back to me on this! I currently have a separate current account for Etsy, I assume this is what you’re talking about?
Also, when I create invoices, do I enter “Etsy” as the client or do I create new clients for each person who has placed an order and enter all of their details?
I also assume when I create an invoice that I can then mark it has paid since I’ve been receiving payments automatically when someone places an order?
Yes I would set up Etsy as a client and yes you can tag the invoice as paid from your Etsy bank account. If you search through the forum there are a few posts about ebay/paypal/amazon/shopify. These may give you some ideas on how best to set up the invoicing etc.
You don’t actually have to create invoices for every client in Quickfile. You can just treat Etsy sales as till sales and follow the procedure for daily takings in the knowledge base. All you have to do is keep records for if HMRC ever want to see them so just keep your Etsy invoices as well to show the breakdowns.
All depends how much information you want (obviously the more time you spend entering the info on Quickfile the easier it will be to use Quickfile for reporting etc) and what you want to send to the client, e.g. do you want to send your own invoices out too or will the automatically provided ones do from Etsy?
