In a little more than a week it will be 2007 and people’s thoughts will begin to turn to those dreaded words - income tax. Are you ready? Or, will April 15th find you frantically shifting through piles of old receipts and invoices in a last minute effort to put your eBay house in order?

If you are serious about eBay, it is imperative that you also be serious about keeping accurate records of your eBay related income and expenses on an ongoing basis throughout the year. Having a system in place to keep track of these records, and keeping it up-to-date throughout the year makes for a lot less stress when tax time rolls around.

But, there’s an even more important reason for keeping accurate, up-to-date records throughout the year than just tax purposes.

If you don’t have a system in place with up-to-date financial information about your eBay business, how do you know if what you are currently doing is making money or losing money? Is your business operating at a profit or a loss for the current year? Is there an area where your expenses are way out of line with what they should be?

When I was four years old, my mother started a small income tax service out of our home that evolved into a full-time business. When she retired, she sold the business to my brother who still has it today. My daughter’s husband owns a business consulting firm that specializes in financial planning. I guess its only natural that when I started buying and selling antiques and collectibles at small flea markets more than twenty-five years ago, I started keeping good financial records right from the beginning. Those habits continue today.

I use a combination of Quicken and an OpenOffice spreadsheet to keep records for my eBay business. I have both programs on my laptop that I have with me whenever I travel on buying trips. Once a week they are backed up to one of the desktop computers at home.

The spreadsheet contains an inventory of everything I buy for resale. It has fields for an inventory number, a description of the item, the date it was purchased, what I paid for it, the date it sold (date I was paid for it), and the selling price.

I use Quicken to record and track every penny of income and expenses that are business related. My son-in-law has told me I have overdone it a little with all the categories I have set up in Quicken, but at any given time I can hit a couple keys on the computer and know exactly how my business has done in the last week, for the last month, or since the beginning of the year.

When I’m at home, the last business thing I do each day is enter all income and expenses for the day into the laptop. When I’m on the road, I do it at night in the motel room. When traveling, only expenses are entered and the income from while I was gone is entered when I get home.

If you haven’t yet set up a simple, yet effective, bookkeeping system for your eBay business, now is the time to do it so you will be ready to keep up-to-date records for 2007. There are several programs available that will track the information you need. Find something that you like and are comfortable with and make it one of your New Years resolutions to start using it faithfully.

If you aren’t sure what information you should be keeping records of there are plenty of books on-line or at your local library that will tell you what records you should be keeping and how.

Do it now, and you will love yourself when the end of 2007 comes around.

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