Friday, August 8, 2008

Ah, Payday!

There are three ways mystery shopping companies get my paycheck to me: direct deposit, PayPal and hard copy check in the mail. Regardless of how the money comes in, I deal with it in the same manner.

First step is updating the master spreadsheet on which all my assignments are listed. I sort the data by company to determine what is owed me and write my assignment reference numbers on the check stub or a piece of scratch paper.

From my filing drawer I pull the manila file with those assignments. I go through each piece of paper in each folder, shredding all but my receipt and my shop notes. For each assignment, I enter the data from the check: amount, date paid, check number, PayPal reference number, direct deposit reference number, etc. into my spreadsheet and print out a “cover sheet.” This cover sheet is a tax record and includes:

Shopping company name, address and phone number
Shop name and address
Assignment Date
Mystery shopping company’s assignment number
My assignment reference number
My shopper identification number with the company
The amount of the shop fee, reimbursement and bonus
The date payment was received, payment method and amount

I attach the cover sheet to the front of the packet of papers I intend to keep, one packet per assignment, and file it in a storage box in the attic until tax time. I reuse the now empty file folders for new assignments. I enter the deposit in my Quicken application, including the amount, check number and my assignment reference numbers. Eventually I'll I take the check to the bank and deposit it in my business account. PayPal payments wait in my PayPal account until the end of the month when I make a lump sum transfer to my business account.

While my spreadsheet is open, I can quickly browse it to see what payments are due in the next few days, which are in danger of becoming problems, and which problems (if any) need my follow-up.

If I have dipped into our family checking account for any business expenses, I pay that back first before I pay myself.

I like to “pay” myself once a month, usually on the last day of the month. I have a formula I use to determine how much to withdraw from my business account. The exact percentages can vary, but this month’s paycheck will be disbursed:

10% of my gross (total income before taxes are taken out) to donate
10% of my gross to my retirement account
10% of my gross to the savings account that holds my tax liability
20% of my gross to my checking account for personal use (my paycheck to myself)
50% of my gross remains in my business checking account as seed money for next month’s shops.

Dull and boring stuff, I know, but good record keeping is a must. You'll thank yourself at tax time for keeping meticulous records!

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