How to Track Small Business Income and Expenses in a Spreadsheet

You don't need accounting software to keep clean books when you're starting out. A good spreadsheet and a 15-minute weekly habit will cover most freelancers, online sellers and side businesses.

1. Separate business money

Open a separate bank account (or at least a separate card) for the business. It makes every later step faster, and it makes your records far easier to defend.

2. Choose your categories once

Income: product sales, services, consulting, affiliate income. Expenses: advertising, software, supplies, shipping, platform and payment fees, contractors, phone and internet, education. Keep the list short and consistent so you can compare months.

3. Log every transaction in a ledger

One row per transaction with date, description, income or expense, category, amount, payment method and an invoice or receipt number. Save the receipt in a folder named by month. Platform payouts (Etsy, Shopify, Stripe) arrive with fees already taken out, so record the gross sale as income and the fees as an expense if you want an accurate picture.

4. Read your monthly profit & loss

Total income minus total expenses equals net profit. Look at it by month: which months are slow, which expenses grow faster than sales, and what your profit margin is.

5. Set money aside for tax

Every month, move a percentage of your profit into a savings account for tax. Many self-employed people use 25–30% as a starting point, but the right number depends on your country and income. Confirm it with a tax professional. It is much easier than finding the full amount at once at the end of the year.

A weekly routine

1. Download the week's transactions from your bank and platforms.
2. Add them to the ledger with a category.
3. Check the dashboard: profit so far, tax set-aside, top expenses.

A ready-made tracker gives you the ledger, the monthly P&L and the tax set-aside in one file, so you only enter the transactions.