Forum Replies Created
- September 19, 2020 at 8:11 am #73632
I tried asking this (as a sample chart of accounts) a couple of years ago, but never got any real responses. Since then, I have started using Wave Accounting and it has been VERY easy to use.
Here are my expense categories from Wave. Much of this is from the default categories initially provided by Wave, but some are categories I have added to suit my business. A few of these don’t apply to me (e.g. Computer Hardware, since I already had the computer and my business use of it is not more than 50%)., but I have left them in the list, anyway. Having these categories definitely makes things easier when it comes to tax time. In fact, I even discovered things I didn’t realized I could deduct (e.g. Bags and labels necessary to package products for sale are considered part of the Cost of Goods Sold – something I didn’t know to deduct in my first two years).
I hope this helps at least somewhat as you get everything organized.
Advertising & Promotion Advertising or other costs to promote your business. Includes business cards, web or social media promotion.
Business Liability Insurance Business Liability Insurance
Business Licenses & Permits Fees for licenses and permits your business requires to operate.
Computer – Hardware Desktop or laptop computers, mobile phones, tablets, and accessories used for your business.
Computer – Hosting Fees for web storage and access, like hosting your business website or app.
Computer – Internet Internet services for your business. Does not include data access for mobile devices.
Computer – Software Apps, software, and web or cloud services you use for business on your mobile phone or computer. Includes one-time purchases and subscriptions.
Disposable goods Parchment, paper bags, trash bags, etc. not integral to product packaging.
Equipment for market Tents, tables, etc.
Kitchenware Pans, utensils, etc.
Market Fees Fees paid to rent market space
Office Supplies Office supplies and services for your business office or space.
Repairs & Maintenance Repair and upkeep of property or equipment, as long as the repair doesn’t add value to the property. Does not include replacements or upgrades.
Sales Tax Sales tax taken out of income from items that have the sales tax included in the price.
Telephone – Land Line Land line phone services for your business.
Telephone – Wireless Mobile phone services for your business.
Training and Education ServSafe certification, etc.
Cost of Goods Sold
Product packaging Bags and labels necessary to package products for sale.
Purchases – Food & Beverage Ingredients, etc.
Payment Processing Fee
Merchant Account Fees Fees your business pays in order to accept credit card payments. Includes transaction fees, monthly subscription fees, and one-time fees for processing software or equipment.
Uncategorized Expense A business cost you haven’t categorized yet. Categorize it now to keep your records accurate.August 24, 2020 at 4:49 am #73198
Bags would certainly be less expensive than bottles.
The thing to compare would be bulk prices on small zipper-closure bags versus some kind of bag where you would use a heat (“impulse”) sealer. For my baked goods, I use plastic food bags and a heat sealer ($30 – $50 on Amazon). Of course, you could use something like a Foodsaver or Seal-a-Meal, if you have one, but the added expense isn’t necessary unless you absolutely must have the capacity for vacuum sealing.
For labeling, you could just use address labels and a laser printer (an ink-jet printer would probably run through ink too quickly) and then stick the labels directly to the bags. To be a little more elegant, you could attach a piece of thin cardboard to the top of the bag (if you use staples, don’t puncture the bag below where it is sealed) and then slap a label onto that. Of course, the ultimate would be to have the cardboard tops preprinted, but that would probably raise the cost too much.
Remember: whatever method you choose, the cost of packaging, labeling and any associated equipment must be factored into the price you charge for the item. Otherwise, you could be spending more on preparing the product for sale than you make when you sell it. On the other hand, also remember that the costs of the packaging and labels that are an integral part of displaying your product for sale are deductible inventory (cost of goods sold) expenses.July 10, 2020 at 11:39 am #72779
Don’t know about California – I’m in Florida, but the following may be helpful as some general guidelines to help you find the answers that would be specific to California.
Here, in Florida, most items sold under cottage-food law would NOT be taxable, but CANDY is ALWAYS taxable. Thus, bread, cookies, cakes, muffins, etc. would not be taxed but caramels, fudge, chocolates, etc. would be taxed.
There is also one more thing to consider: does the venue where you are selling charge admissions for customers to enter? If so, then items that are big enough or packaged for taking away from the venue are not taxable. Things that are sold to be eaten on the premises, however, are taxable. Thus, if you sell a blueberry muffin at a regular farmers market, it wouldn’t be taxed, but if you sold it at a fair where the customer had to buy a ticket to get in, then it would be taxed.
I hope that helps you at least somewhat, but do check with whoever oversees California’s cottage-food laws (perhaps Department of Agriculture) AND California’s sales-tax laws (perhaps department of revenue), since California’s laws are often vastly different from those of any other state.May 19, 2020 at 4:24 am #68204
Sandy, in which state are you starting your cottage-food business. Some require inspections and some don’t. It’s also possible that some municipalities may require inspections, even if the state does not.October 25, 2019 at 11:21 am #49682
Since I’m in Florida, I don’t know about Oregon, in particular, but the main thing would be that all of the cooking would have to be done in your home kitchen. That means that, unless there is something specific against frying, you may fry the doughnuts AT HOME, then package them and sell them at, for example, a farmers market. You would NOT be allowed to fry them at the farmers market.
Also keep in mind that any samples would have to be cut and packaged (e.g. in small cups with lids) at home and you would not be allowed to break doughnuts apart as samples at the market – only the home-packaged samples would be allowed.
Again, remember, I’m in Florida and the rules may be different in Oregon, but these are relatively common constraints.October 9, 2018 at 9:38 am #42319
Wish I could remember what made it work, but I finally was able to add my CFO.
Unfortunately, now, when I try to add products, the form won’t submit.
As with Angel, I have tried multiple browsers and platforms (Firefox and Chrome on Linux, Android and Windows).September 5, 2018 at 4:25 pm #42020
Welcome back, David, and thank you for making the Add-CFO page available again.
Unfortunately, it is not fully functional, since the location search never finishes, thus making it impossible to submit the form.August 27, 2018 at 7:49 am #41643
Where are you located?
Most cottage-food laws do not allow selling across state lines.
Even within state lines, they often don’t allow shipping. You may deliver personally or customers may come to you (at your home or at an accepted venue such as a farmers market), but you may not ship (e. g. UPS, USPS, FedEx, etc.).
Even considering all of the above, many states do not allow sauces, salsas or condiments as cottage-food items. Instead, a commercial kitchen and food license are necessary.
Again, it all depends upon the state in which you live, but very few – if any – would permit out-of-state sales and shipping of a BBQ sauce under cottage-food law.August 26, 2018 at 7:08 am #41621
It depends upon the laws for your state. For example, in Florida, you CAN sell the cupcakes online, but the customers cannot be outside of Florida and you may not ship the orders (UPS, USPS, FedEx, etc.). You may deliver the orders personally or customers may pick up the orders at your home (if your HOA, etc. allows it) or at a farmers market where you may already be selling.August 17, 2018 at 9:08 am #41585
Being an LLC doesn’t change anything with regard to actual cottage-food law – just the way some aspects of the business may operate. For example, because of the way the name of the LLC is registered, you won’t have to go through the separate process of registering a fictitious name. None of that has anything to do with the products you make and how you sell them under cottage-food law.
Also, be sure to read the cottage-food guidance PDF file from freshfromflorida.com to learn what you you can and cannot do. There are no licenses or permits other than the county (and, in some cases, municipal) “occupational license” (nowadays called “business tax receipt”) which just allows you to run the business but has nothing to do with cottage-food law, in particular.
Any other requirements for permits, food-handling or food-management certification, etc. may be imposed by specific markets (if at all) but are not part of Florida’s cottage-food law.August 11, 2018 at 7:14 pm #41552
Pepper jellies and tomato jellies are not allowed under Florida’s cottage-food law.