Anyone have an experience they want to share with how they do bookeeping and accounting on coins and collectibles? I filed my taxes yesterday through a well-known tax company. What I have noticed is that it is hard to find accountants and bookeepers who know how to help people both from the standpoint of rigorous analysis of gross and net income, and for analyzing expenses and profits on a quarterly or monthly basis. Personally accounting has been a bete noir; there were relatives around me who are expert at this, I never had a high school or college course or accounting or business in general. Why doesn't the ANA offer resources to help collectors with accounting and record keeping with relevant programs to do this?
Professionally or personally? Personally I just write it on the flip what I paid, and never sell. Pretty easy. Professionally, (CPA, CMA, MBA Finance, etc), accounting for it is like any other business. Someone could easily use a quickbooks type of program, assign each coin a stock number to keep track of, keep track of expenses, and track P&L easily. Someone who just does it as a sideline could possibly just build Excel spreadsheets to do the same basic function, just not as easily. The most important aspect of it is the data. If you have the data any bookkeeper coudl do it for you instead, but many collectors do not keep purchase price, date of purchase, sell price, and expenses well enough to prepare such things. Not sure if that helped. If not, let me know what other questions you have. Chris
Thanks for the professional response. You buy 20 or 30 nice coins coming to several thousand dollars; get the coins certified or send them to an auction company that does this for you and then lists them at auction after grading. Then hopefully they send you an itemized breakdown of costs and net revenue. I find many dealers buying a "deal" will not itemize the coins and rolls of coins, they just send a lump sum payment without the itemization. Heritage will write out a check to the seller at a show and then provide a generalized pay stub without itemization. So that will be up to the customer. I would have thought that accounting and bookeeping had advanced to the modern age 110% in the U.S. where we have more lawyers and accountants than any country.
I always reported profits and losses on coins every year. Never had any problem with it. Of course I always got and kept a receipt for every coin I purchased, and one for every coin I sold. Then I just put all the info in an Excel spreadsheet, when I bought or sold a coin (meaning at the same time) and gave my accountant a copy of that spreadsheet every year. Always seemed pretty easy to me and I never once had a problem, an never once had anything questioned. But you do have to follow the rules. You get receipts and keep receipts for everything, no exceptions. You create the spreadsheet and keep it current - no exceptions. Don't follow the rules, then you got a problem. And if you can't find an accountant that knows how to deal with all of this, then you aren't looking in the right places. If you want, I'll give you an accountant's name, address and phone number that does know how to deal with it correctly.
Don't take this the wrong way, but it kind of sounds like you want everybody else to do your work for you. Everything you need done, you can do yourself. It just takes a little effort on your part.
I just want the same level of accountability from companies that I deal with as what I require of myself. Many people are not that good with taxes and accounting. In my case at one point I was overwhelmed in running a landscape and tree business, in terms of doing estimates, getting the job; getting workers to make the job happen; deal with a bunch of issues connected to making the customer happy and getting paid. We live in a division of labor economy. Yes, there are people who are like one man bands who do everything themselves. To be in that position with delegating responsibilities to others better able to address them, because they are experts at it, frees us up for other things. Like I said, I am not good at bookeeping or accounting, not everyone is.
What companies are you talking about when you say that - the coin dealers, or the accountants you used ? And you don't have to be. All you have to do is keep records. And anybody can keep records. Then you just give your records to a good accountant and they do the rest.
There can be advantages to this. It can allow you to distribute the profit among the coins so at to reduce tax liability, or you can lump the expenses of the coins and subtract from the Heritage check to give a lump sum profit. Choose which one gives you the lesser tax bite.
Its a side issue, but with the coins you were buying and selling, I bet you did get all the receipts. Those babies were serious money. Ruben
