Slightly Confused about Income

I get that all dollars need to be assigned when they come into their corresponding accounts, unless of course they are a transfer or a re-imbursement to a category.

How do I handle needing to track income events for tax reasons.

Sales Revenue (sole proprietor, etc.)

I'd like to avoid having to run a completely separate accounting system just to get the right reports for my CPA.  Thanks.

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  • Do you need to track by source? If so use unique names in the Payee field and it will show up in the Income vs Expense report. But at the end of the day, YNAB is not really meant to be an accounting system.

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  • Yes, I guess "who it came from" is sufficient for reporting.

  • I'm a sole proprietor but work in service, essentially, as an editor, rather than selling physical goods, but hopefully this helps.

    I keep an Excel spreadsheet with client names, project title, amount, date invoiced, date paid, total less fees, with pie charts for income by category type and source, and a graph of my monthly income. Which is to say, I keep granular records for myself.

    But in YNAB? I have four income categories: freelance editing, freelance writing, [company who pays me to host webinars], [W-2 I get from a university for semi-regular work]. Since I get paid usually in chunks by the hundreds or more, I input it all as I receive it, and assign to Income for Next Month.

    If you work with, say, Etsy sales at $10/each, and especially if you aren't a month ahead, it might be better to have a separate, unlinked business account, and record only a transfer weekly/biweekly/monthly of the income you've earned in that time from business to personal.

    Because my supplies are infrequently bought, my costs are low, and I'm used to YNAB, I just have a category group in YNAB for my business where I track expenses, and pull from that at tax time when I need to add up supplies, subscription, website hosting fees, etc. But it's also possible to run a business budget separately in YNAB.

    I hope this helps!

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  • I run a separate excel spreadsheet for my business, but then I don't mind crunching numbers and keeping track of things even though my stuff is pretty messy.

    It is doable to use YNAB for your business, but what I found was that the categories that I want to divide things out into are often not the same as what I need for business tracking purposes. I prefer to have different levels of detail in YNAB than I do in my actual business records. What I do like YNAB for is that it is easier to show where money is coming from and going in a tracking sense than an excel document. So should we ever get audited, I will probably present both sets of records for them to review (obviously taking the lead from my accountant to provide whatever she wishes).

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  • Different ways to track. 1) use the payee. 2) use a hash tag 3) use a tracking account/s 4) use income categories. 
    You can rename payees to suit. Jones purchase . Jones contract.

    When an invoice is paid in i split it with a percentage for tax and the rest into ready to assign.


    But you could bypass rta and put income into categories. But. Keep those categories in an income category group— you have to move it from there to RTA for it to appear in reports.
    Jesse did a podcast on how he used ynab to manage his business accounts. Worth searching it out. 

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