Updated 30 October 2026 · EcommFusion
You do not need accounting software to know whether your business is making money. A well-built spreadsheet, updated for fifteen minutes a week, will tell you what came in, what went out, what you kept, and how much to put aside for tax. This guide shows you how to set one up and keep it going.
The columns to keep
Keep one sheet called Transactions and put every sale and every cost on it, one row each. Resist adding lots of columns. These seven are enough:
| Column | What goes in it |
|---|---|
| Date | The day money moved |
| Description | What it was, e.g. “Order #1042” or “Packaging” |
| Category | One item from your category list |
| Type | Income or Expense |
| Amount | A positive number, without currency symbols |
| Payment method | Bank, card, marketplace payout, cash |
| Receipt / note | Invoice number or a link to the receipt |
Use one row per transaction, never merge cells, and keep dates as real dates (not text), so formulas can read them. If a payout from a marketplace like Etsy or Amazon bundles many orders, record the sales and the fees as separate rows so you can see what the fees cost you.
Choose a short list of categories
Categories turn a long list into something you can read. Pick ten or fewer, and put them on a second sheet so you can use a drop-down list in the Category column. A good starting set:
- Income: Sales, Shipping charged, Other income.
- Expenses: Cost of goods, Shipping and packaging, Platform and payment fees, Marketing, Software and subscriptions, Supplies, Other.
If you are not sure where something belongs, choose the closest category and add a note. Consistency matters more than perfection: the same kind of cost should always go in the same place.
A monthly summary with SUMIFS
SUMIFS adds up the numbers in one column, but only for rows that match the conditions you give it. In plain words: “add up the Amount column, but only where Type is Income and the date is in January.” It works the same way in Google Sheets and most other spreadsheet apps.
Here is a tiny example. Say your Transactions sheet has Date in column A, Description in B, Category in C, Type in D and Amount in E:
| Date (A) | Description (B) | Category (C) | Type (D) | Amount (E) |
|---|---|---|---|---|
| 03/01/2027 | Order #1001 | Sales | Income | 1200.00 |
| 05/01/2027 | Packaging | Supplies | Expense | 120.00 |
| 12/01/2027 | Ads | Marketing | Expense | 80.00 |
| 15/01/2027 | Order #1002 | Sales | Income | 450.00 |
| 20/01/2027 | Materials | Cost of goods | Expense | 300.00 |
On a Summary sheet, put the first day of each month in column A (A2 = 1 January 2027). Then:
- Income for the month:
=SUMIFS(Transactions!E:E, Transactions!D:D, "Income", Transactions!A:A, ">="&A2, Transactions!A:A, "<"&EDATE(A2,1)) - Expenses for the month: the same formula with "Expense" instead of "Income".
- Profit: income minus expenses.
The two date conditions mean “on or after the 1st of this month, and before the 1st of next month.” For the example rows, January income is $1650.00, expenses are $500.00, and profit is $1150.00. Copy the row down for each month and you have a full-year summary. To see spending by category, use the same idea with a Category condition instead of Type.
Profit margin and a tax set-aside
Profit margin is the share of each sale you keep: profit ÷ income × 100. In the example, $1150.00 ÷ $1650.00 × 100 = 69.7%. Watch the trend month to month. A falling margin usually means costs, fees or discounts are creeping up.
Tax set-aside: many owners move a fixed percentage of profit into a separate savings account each month, so the tax bill is not a surprise. The right percentage depends on where you live and how your business is set up. As an example only, setting aside 25% of $1150.00 would mean moving $287.50. This is not tax advice: ask a local accountant or your tax office what rate to use, and add a “Tax set-aside” row to your summary so you can see it build up.
Keep track of invoices
If you invoice clients or wholesale buyers, add a small Invoices sheet with: invoice number, date sent, client, amount, due date, date paid and status. Number invoices in order (for example 2027-001) and never reuse a number. A simple filter on “unpaid” shows who to chase, and when an invoice is paid, add it to Transactions as income on the day the money arrives.
A weekly 15-minute routine
Bookkeeping becomes a chore when it piles up. Put fifteen minutes in your calendar on the same day each week and work through this checklist:
- Download or open your bank and payout statements for the week.
- Add each income and expense row, with a category.
- Save receipts in one folder, named with the date and amount.
- Mark any invoices paid, and send a polite reminder for overdue ones.
- Check that the spreadsheet balance roughly matches your bank balance.
- Glance at this month’s summary: income, expenses, profit and margin.
If you would rather start with the formulas, categories and monthly summary already built, the Bookkeeping & Profit Tracker 2027 is a ready-made spreadsheet set up in exactly this way.
Frequently asked questions
Is a spreadsheet good enough for small business bookkeeping?
For many small businesses, yes, especially in the early years. A spreadsheet with clear columns, consistent categories and a weekly routine shows income, expenses and profit. Ask an accountant when your business grows or your tax situation becomes complex.
What does SUMIFS do in a bookkeeping spreadsheet?
SUMIFS adds up amounts only for rows that match conditions you set, such as Type is Income and the date is in January. It turns a long list of transactions into a monthly summary.
How much should I set aside for tax?
It depends on your country, income and business structure, so this guide does not give tax advice. Ask a local accountant or your tax office for a percentage, then move that share of profit into a separate account each month.