No matter how big or small your Mary Kay business is, one of the most important things you can do is get organized ASAP and track EVERYTHING when it comes to money management. The ultimate goal of having a business is to make money but in order to make that happen you will need to keep track of where everything goes!
Mary Kay has also created an AWESOME tracking sheet for all beauty consultants to fill out once a week before their weekly meeting to make sure they know what money they are making, what they did that week, what they need to do next week, and exactly how their year of sales breaks down in tax season. You will do one of these sheets every week- get yourself set up by printing 52 sheets (one a week)- even if you don't sell something for a week, still put the date on it and write "No Sales" so that when tax season comes around you won't wonder what happened that week. Place your 52 sheets in a binder- now it won't be a burden to update this once a week and when tax season rolls around you won't run the other way- you will jump in with confidence!
Another HUGE reason for great money management and organization is TAXES.
The dreaded word, I know.
The first thing you need to know: No matter how big or small your Mary Kay business is, if you sold something you must report it.
As a Mary Kay Independent Beauty Consultant or Independent Sales Director, you are the sole proprietor of a business and are considered to be a self-employed, independent contractor for federal income tax purposes under the Internal Revenue Code Section 162. The law requires the Company to issue a Form 1099-MISC to any Independent Beauty Consultant who, during a calendar year, orders more than $5,000 in wholesale merchandise or receives $600 or more in commissions, prizes or awards. The form will only indicate that $5,000 or more in wholesale merchandise has been ordered, but the exact amount will not be stated. Youmust still file taxes even if you do not recieve a 1099-MISC, it is just not the responsibility of Mary Kay to send a 1099-MISC. Be careful not to confuse a lack of 1099-MISC as a sign that you do not have to report Mary Kay income on your taxes.
Mary Kay understands that you are not a tax expert. That's why they have created a Tax Essentials Guide to give you a better understanding of what you are required to do as a small business owner to prepare for tax season.
Here is an incredible recording from Accounting Unlimited on how to keep track of all your receipts and income for the year. Click on the clip to the left to listen to this one hour audio and click on the link to the right to download all of the documents referenced in the audio!
Documents references in the audio.
Tracking expenses play a huge part in owning your own business because it sets you up to have a stress free tax season, as well as allows you to understand where your money is going so you can pay yourself and work towards specific goals.
There are many ways you can track your expenses and different people will choose different methods based on their learning style and preferences. Below I will show you a few different options that you can use. Feel free to adjust them as need be, but first check out this list- no matter how to decide to track your expenses we all need to track the same things as follows:
Product given away
That may seem like a lot to track, but don't forget- every week you will fill out a plan sheet which tracks 4 of the items on that list: product purchased, product sold, product given away, and tax collected.
That leaves milage, time worked, and spending.
Let's take a look at how you can track those.
Tracking Expenses: Online
An app I love is called Expensify and it is available for both iOS and Andoid. It's a free app which allows you to track spending, time worked, and milage without having to do any math yourself or store old receipts.
Track your spending: The "smart scan" feature allows you to snap a photo of your recepts and it will automaticall fill out when you made your purchase, how much you spent, and where you made your purchase. It will also store a copy of your receipt so you can print it if you ever needed to.
Track your milage: The GPS feature allows you to turn on GPS tracking whenever you get in the car and need to track milage. Time that you track milage are when driving to an appointment, driving to your weekly meeting, dropping an order off at the post office or a customers house, etc. This feature will track your miles driven and average fuel cost for that trip.
Track your hours worked: Finally, you can track hours spent working. So, before a class, when you go out to meet new leads, etc you can essentiallly punch a time clock for yourself. Knowing how many hours you worked is not necessarily huge for taxes, however it does allow you to understand exactly what you make per hour, or what your yearly salary is.
Organize it into reports: Finally, you can make expense reports for yourself which really wraps the whole up up and makes it perfect. When you download the app go right into the expense report section make 12 for yourself: one for each month. Then, at the end of the year you can track what you spent each month!
Save your information: And the best part? Expensify is backed up online, so you can access your records from any computer, your app, or any internet ready device: what this means is that if your phone crashes and your app is lost? No worries! Jump on expensify.com- your data is all stored there.
Tracking Expenses: On Paper
The hardest part of tracking on paper is keeping your paper organized and rememebering to bring it with you, or update it after the fact. For this reason, I love the use of an app- everyone brings their phone everywhere, so it's sure to follow you.
That being said, not everyone is comfortable taking the time to learn an app so below you will find ideas for paper tracking:
Track your spending: To set up to track spending for a year you will need a filing system which includes 12 file folders, one for each month. Every time to spend money that relates to your business (supplies, gifts, career coffee, inventory, etc) you MUST keep your reciept. On your receipt you should highlight anything business related. For example, if at the grocery store you purchased a week of grocery but also picked up bottles of water to hand out at a class, highlight JUST the bottles of water. This eliminates any confusion a year later as you count everything for your taxes.
Track your milage: To track mileage on paper you will want a small notebook to keep in your car at all times. Every time you get in the car write the date, where you are driving from with your starting odometer reading and then where you are driving to with your ending odometer reading. Often you can get tiny spiral or composition notebooks at the dollar store in packs of 3- this is inexpensive enough that you can have one notebook per month if you wanted to that way you can file your mileage log with your receipts at the end of every month.
Track your hours worked: Finally, you will want to track hours spent working. So, at every class note what time you begin and what time you end. Please note: hours spent driving are NOT hours worked- if you are questioning whether something counts as hours worked, run it through the filter of "if I worked for someone else, would they pay me for this?" Knowing how many hours you worked is not necessarily huge for taxes, however it does allow you to understand exactly what you make per hour, or what your yearly salary is.
Organize it into reports: Everything you track should be copied over to or filed away in one of the monthly folder you created in your file system. At the end of the year, you should be able to track every dollar you make and spend between the first day of the year and the last- which is exactly what you are expected to do for taxes, so tada! You are all set!