Why keep records at all
Without records, most makers guess what their products cost, and guesses tend to be low. Time spent on small tasks disappears, receipts get lost and costs blur together. A modest system turns these into figures you can use for pricing, for deciding which products are worth making and for tax paperwork.
This is general information on record keeping. What you must keep, and for how long, depends on where you live and how your business is set up, so check with local authorities or a qualified accountant.
Three things to record
Materials
For each purchase, note the date, the supplier, what you bought, how much and what it cost. Then work out the cost per unit of use: per meter, per gram, per sheet, per piece. When you make a product, note how much of each material it used, including offcuts you cannot reuse.
Receipts are worth keeping, either on paper or as photos stored in a labeled folder. Many sellers also need them as evidence for tax.
Time
Time is the item most often missing. You do not need to track every minute forever, but a few weeks of honest timing teaches you a lot. Use a notebook, a phone timer or a simple spreadsheet, and record time for:
- Making, including setup and cleanup
- Buying and collecting materials
- Photography and listing
- Messages with customers
- Packing and posting
- Admin such as bookkeeping and accounts
- Time at markets, including travel
Splitting these out shows how much of your working day goes to things other than making, which often surprises people.
Expenses
Other costs that are not materials include tools, packaging, platform fees, stall fees, postage, advertising, software, insurance, workspace and travel. Record them as they happen. Separate personal spending from business spending as clearly as you can, ideally using a separate account or card.
A simple spreadsheet or notebook layout
Two or three sheets are enough.
Sheet 1: Purchases. Date, supplier, item, quantity, total cost, cost per unit, category, receipt saved (yes or no).
Sheet 2: Products. One row per product, listing the materials and quantity used, minutes spent, packaging used and any fees. Then work out a total cost.
Sheet 3: Sales and expenses. Date, what was sold, the price received, fees taken, postage paid by you and any other costs related to the order.
A paper ledger works just as well if you will actually keep it up. The best system is the one you use regularly. Setting aside a fixed time each week, even 20 minutes, keeps things from piling up.
A hypothetical worked example
The numbers here are invented to show the method.
Suppose you make a batch of 8 items. You record:
- Materials used: 24.00 in total
- Packaging: 8 x 0.75 = 6.00
- Time: 6 hours making, 1 hour of preparation and cleanup and 1 hour of photographing and listing, 8 hours in all
- Your hourly rate for this exercise: 12.00, so time is 8 x 12.00 = 96.00
Total: 24.00 + 6.00 + 96.00 = 126.00. Divided by 8 items, that is 15.75 per item. If you had counted only materials and packaging, the figure would be 30.00 / 8 = 3.75 per item, a large difference.
Then add selling fees and postage on top, as is usual when pricing handmade work. Your records make those additions straightforward.
Using the numbers
Once you have a few weeks of data, look for answers to practical questions:
- Which products take the longest compared with what they earn?
- Which materials account for most of your spending?
- How much material is wasted, and could the design or the cutting layout reduce it?
- Which sales channel costs the most in fees and time?
- Are packaging and shipping costs eating into thin margins?
This is where small batch production methods or design changes might pay off, and it helps you decide whether a product should be repriced, simplified or dropped. It can also reveal when you are working long hours for little return, which connects to avoiding burnout.
Keep it up to date
- Record purchases when you make them, not months later.
- Check your numbers monthly and compare them against your bank or payment statements to catch anything missing.
- Update unit costs when supplier prices change.
- Back up your files, and keep a copy off your main device.
- Keep records for the period required where you live.
Know when to get help
If you sell regularly, have employees, deal with sales tax or sell across borders, a bookkeeper or accountant can be worth the cost. Accounting software can also simplify the work, though a spreadsheet is enough for many small sellers at the start. Good records do not guarantee success, but they replace guessing with information.