Friday, June 6, 2014

Keeping Good Records

It was recently pointed out that if you keep good records all will go well if you are audited. I keep good books for tax purposes, too, but an even better reason is to keep track of all the sewing machines and what I paid for them. I also enter additional items like parts and accessories, mileage, anticipated selling price, actual sold price, and profit or loss. After I set up this spreadsheet I realized I needed a date of purchase and sale. I opted to color code rows for year sold (pink=2013, tan=2014), those to keep (yellow), and those for parts (blue).

I love spreadsheets. Maybe only librarians and other highly organized people can love such a thing (I also organize my spices in alphabetical order), but it sure was easy at tax time. I could print off my spreadsheet with its totaled columns and simply hand them over. It all sounds so simple, right?

You know that nothing is simple! There have been times when I didn't enter expenses on a regular basis and had to enter up to six months at a time, wracking my brain to remember what a dollar amount represented. Then there is the sewing machine that ends up costing more than it's worth. Do I hold out for the cost of the investment or just consider it a partial loss and learn a lesson? What about those sewing machines that were bought for only $5 but worth $125? Do I seriously charge that higher cost or consider giving someone else a real deal? How about those cases where I spent 30 hours bringing a machine back into usefulness? I can hardly charge for all those hours because no one could ever buy it! So there is quite a bit of gray area and judgement calls. Here's an example:

Singer 401A
 This Singer 401A was the first one I bought and kept this one for myself. Came in a cabinet that was real wood but I didn't have room for it or even like it much. I paid $35 and drove 32 miles but it has been worth every penny. I have bought 4 more with costs averaging $40 each. Some came with little, some came with all of the accessories.
Singer 403
This is a Singer 403, and I've bought 3 of them, 2 in good cabinets and one portable. They are not quite as high end as the 401 because they have no build in cams for extra stitches but have to use cams for even a basic zig zag stitch. Still very nice sewing machines and perform great. Costs were, again, about $40 average. yet for some of these I had to buy power cords and foot controls that can add up quickly. I have more invested in this slightly lower end sewing machine. Do I charge more or make less profit?

My conclusion is to charge what they are worth, not what they cost me. I will make less profit but they are not worth over $125 in my market. It should balance out with those that cost less, need less, but are worth much more. Over the long run I hope that is true!

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