bookkeeping tax

Get your Etsy Accounting and Inventory Management Done...Without the Dramas

Need a bit of a push to get your Etsy accounting done, so you can get back to doing what you love? We take a look at some Etsy accounting tips and tricks to help you get motivated.

One of the most tedious tasks of any small manufacturing business is often bookkeeping and inventory management.

For this reason, many Etsy sellers push this task down to the bottom of their “todo” queue until tax time, when things get….stressful. To attempt to catch up with your bookkeeping obligations with this overwhelming time pressure while also making and fulfilling orders is often a recipe for disaster.

In our post, we discuss some ways to keep your Etsy bookkeeping and inventory management in order, for good, by using some standard motivational techniques.

What is Etsy bookkeeping?

The term “Etsy bookkeeping” is a broad term that covers all of the accounting, tax and financial record-keeping activities associated with running an Etsy shop.

It includes tracking your sales and expenses, managing your inventory levels, ordering supplies, filing taxes and creating financial reports. Bookkeeping can be an essential part of any business but, when it comes to Etsy bookkeeping, there are some unique challenges that need to be considered.

This is mainly as Etsy sellers are usually small businesses that are also manufacturers of the products that they sell - this means that they have a need to keep a firm eye on their raw material and product inventory levels.

Start With Small Habits, Then Build On Them

If you have a small Etsy business where most of the bookkeeping falls in your lap, this tip might help. One of the best pieces of advice to get yourself to do something you aren’t particularly interested in, is to tell yourself to start off doing just a couple of minutes of it.

Many people who struggle with procrastination agree that it is the start of a task that is often the most difficult to do. When you convince your brain to initiate something for, say, only 5 minutes, it will seem far more doable than beginning something that can take an hour to do. Most often than not, once you start a job, you will most likely end up completing the entire task no matter how long it takes, anyway.

James Clear, the author of “Atomic Habits,” recommends that to create and firmly cement in a brand new habit, you need to start by committing to do a tiny, achievable task regularly.

For Etsy bookkeeping, this may be as simple as making sure you sit down and log into your accounting or inventory software daily to review your dashboard numbers.

For this step, don’t attempt to do anything more than what you have agreed with yourself to do - the key is to make this a repeatable action that you can “tick off” and thus feel a sense of achievement.

From here, once you have this step regularly happening you can then start to build on your new habit by adding more. Some examples might be:

  • Enter and reconcile five expenses every second day

  • Log your manufacturing records in your inventory system each Wednesday afternoon

  • Cycle count 10 materials in your inventory each Monday morning

  • On Friday morning, run your manufacturing picklist report and place any orders for supplies required.

As you can see, the schedule and task size is completely up to you - start small and then build up from here.

Make Use Out of Your “Completion Bias”

There is another way you can motivate yourself. It is scientifically proven that task that are pending to be completed can linger in your mind, deviating your concentration from any other tasks you would be doing.

This means that as much as you have an urge to procrastinate, there is also an innate tendency to want to complete unfinished tasks. This is called the “completion bias”. Remember those times when you skip a question in a test and end up not doing so well in any of the questions after that one? Given this, it may be a good idea to give time and finish anything important that needs to be done, no matter how mundane it is.

This means that the best time to do some of your habitual bookkeeping tasks you have set yourself is either first thing in the morning or at the very end of your day: this practice sets yourself up for a clear head for your working day where you can fully concentrate.

Do Something You Love (While Doing Something You Don’t)

When you have a task that doesn’t excite you, it may be a good idea to pair this activity with one you like.

A classic example would be listening to some upbeat music that could lift you up. You could even listen to your favorite podcast or audiobook if what you have to do does not require too much of your attention. This is an extremely simple trick that has been around for ages and has also undoubtedly proven to be very effective.

Accountability Buddies

Another option is to pair up with another craft entrepreneur who also struggles with bookkeeping and make them your “accountability buddy”. Answering to someone else other than yourself can be a great way to focus your motivation and get things done.

Arrange a zoom call when you are both free to complete your tasks together at the same time, or create a system where you have to let your accountability buddy know via a phone call, email or DM that you have completed your task and they need to do the same.

Communicating the “Why” With Your Employees

If you have staff designated to do your accounting for you, these next tips might help you keep them motivated.

You may have specific procedures on how you do your bookkeeping, invoicing and billing in your company. These procedures may be elaborate and many times employees who engage in them, may not know why they are so important. This can have an impact on how motivated they are to do these tasks.

This is why it is important and useful to openly communicate to your employees the purpose of such procedures. It can help to know why they are the most effective way of getting those tasks done and why there cannot be any shortcuts. This could avoid any misinterpretations your employees could have about tasks that need to be prioritized and given the necessary time. This is a great way to keep your employees inspired and may possibly help cut down on control costs that could accumulate in the long run.

Automate, automate, automate

Suppose your business relies on manual systems to record sales logs and inventory. In that case, you may want to consider replacing them with automated systems to speed up tasks and avoid errors. For example, you could consider investing in a computerized point-of-sale system, onto which staff members can scan purchased items, instead of having to input the item numbers manually.

Instead of manually keeping tabs on your stock using paper-based or excel based systems, professional inventory software like such as Craftybase Inventory for Etsy can track and calculate your product and material stock levels in real-time for you.

Craftybase features a completely no-strings-attached 14 day trial that you can use to see how much time you will save with your Etsy bookkeeping.


While bookkeeping may sound too tedious of a task to do more than once a year for the tax man, the results that it brings can change your life for the better. Not to mention, beating procrastination to complete tasks boosts your dopamine levels and makes you joyful.

We hope the tips provided here help you crush procrastination for good and keep your Etsy finances in check.

Nicole Pascoe Nicole Pascoe - Profile

Written by Nicole Pascoe

Nicole is the co-founder of Craftybase, inventory and manufacturing software designed for small manufacturers. She has been working with, and writing articles for, small manufacturing businesses for the last 12 years. Her passion is to help makers to become more successful with their online endeavors by empowering them with the knowledge they need to take their business to the next level.