At the 2017 FMO Symposium, farmers’ market educator Michelle Wolf emphasized the benefits of keeping good records, whether you’re a vendor or market manager:

  • Keeping good records makes it much quicker to prepare your accounts at year-end and helps you plan for tax payments. It also ensures that you’ll be able to take advantage of all the expenses you can claim as deductions when filing your taxes.
  • Good records will help you stay on top of your financial commitments so that you can live the life you want. You’ll be able to account for what money must go where on certain dates. This will help you feel less stressed – which is priceless!
  • Having a clear and useful paper trail is crucial in case your business is ever audited. It means you can easily pull up accurate, historic information about the processes your business follows.
  • Good record keeping gives you the opportunity to look back at previous years to identify the strengths and weaknesses in your business. This is where you’ll find the information you need to run your business successfully and help it grow. The information in your records can help you manage changes and make improvements.
  • Should you ever want to expand your business, a good paper trail will make it easier to get a loan. If you ever choose to sell it, good record keeping will make it easier because the buyer will have a full history to reference.
The recipe for keeping good records

Plans and systems (and a dedication to sticking to them!) are the key ingredients to keeping good records. Being well organized then comes as a result of sticking to these plans. (See weekly, monthly and yearly planning templates here.)

Having a system in place that works for YOU will help you streamline your records, book-keeping, inventory and sales.

It’s not nearly as scary as it sounds.

Business records can be maintained manually in notebooks and binders or electronically on a spreadsheet you keep on your computer or online. The system you use should be right for you; it should be easy to operate and meet the needs of your business. Make sure you hold onto paper files, too: receipts, bank statements and invoices. Tip: Use labelled boxes or a filing cabinet.

Are your records adding value?

The documents you keep should contain details of payment, receipts and credit purchases and sales. If you’re not able to get a receipt for an expense, make a note of it that includes the details. What’s the point of keeping records if they aren’t complete?

Create a simple and reasonable system for yourself.

Michelle said the key is to break things down into a series of manageable tasks.

Every time you receive a receipt, bank statement or invoice, file it in the correct place right away. Or, if you know this won’t work for you, create a place where you can temporarily store everything. Put a note on your calendar or a reminder on your phone that you must sort through the “everything” box on the 14th and 25th day of each month, for example. This will be less overwhelming and will help you stay on top of your filing without letting the paperwork pile up.

Keeping track of your money does not make you greedy.

Michelle said it’s important to realize that keeping track of your money does not make you greedy. Money allows you to do the things in your life that are important to you – like buying the things you want and need, supporting people in your life and contributing to your community. Wanting to earn money in your business – and keeping track of where your money is going – is a way to give yourself the compensation you deserve for all the hard work and time you put in.