Sales

Each sale on eBay must be recorded. Some people use a spreadsheet, a computer program, or print out the weekly Completed Auctions by Seller sheet. Find a system that works for you and stick to it. You will need this information for your sales tax report and your income tax report. You will also need to keep a separate record of the sales in your state if you are required to file state sales tax. My method - I print out the weekly Completed Auctions by Seller sheet and staple it to a manila folder. Inside I keep all correspondence and papers relating to that week's sales. When all the items in the folder are sent, I total it, noting any NYS sales for sales tax purposes, enter the totals on a spread sheet and file the folder away.

Purchases

A purchase is something that you buy to resell. Each purchase for resale must be recorded. Again, this can be done in a manual spreadsheet or a computer program. I suggest using Quicken®, it is a great program where you can catogorize you purchases and expenses. It will balance your checkbook and give you a list of what you spent by catagory. My method - I use Quicken® - it is such a timesaver.

Expenses

Expenses are the costs of doing business. They can include supplies, such as bubblewrap, peanuts, boxes, your PO box rent, paper and ink for the computer, etc. Checking with your accountant is a wise choice if you are not sure if something is an expense. My method - Yep, Quicken® again. TIP - You might want to consider having a separate checking account for your eBay purchases and expenses. Also, if you are using a debit or credit card to pay your eBay fees, use it just for those fees. It makes life so much easier.

Inventory

Inventory is the items that you have for sale that have not already sold. This will be either things that you haven't put up for sale yet or things that didn't sell the first time. Wouldn't it be nice if everything sold the first time they were listed! Unfortunately that doesn't happen so you will need to keep track of your inventory. Again a spreadsheet or a computer program can help. The IRS requires that once a year you do a physical inventory. This means actually counting each item and determining it's cost. You will need this information when you do your income taxes. Consult your accountant if you are going to use any inventory valuation system other than cost. Small inventory method - Add a column to your purchases spreadsheet so you can record the date sold. If you add a column for the sales price then you have the Sales record too. Just remember to start with a new record each year or items can get "lost". Large inventory method - get a computer program, good old Quicken® comes to mind!