Accounting checklist for launching a second-hand jewellery business
Starting a second-hand jewellery business is exciting. Picking unique pieces, finding the right buyers, and watching your collection turn into a thriving business can be quite thrilling.
But without a solid accounting system from the start, managing cash flow, tracking inventory, and staying on top of VAT can quickly become overwhelming.
You might find yourself scrambling to remember what you paid for each piece, unsure if your records are VAT-compliant, or stressed about missing deadlines. Small mistakes early on can lead to bigger headaches down the line.
The solution is simple: get your accounting right from day one. With a clear checklist, you can keep track of costs, sales, and tax obligations so you focus on growing your jewellery business..
Accounting Checklist for Jewellery Business
How to set up your accounting system from day one
From day one, it’s important to choose the right accounting software or method that works for you, whether that’s a simple spreadsheet or a dedicated accounting tool. QuickBooks, Xero, and Sage Business Cloud Accounting are popular options for small businesses.
Make sure your system can track sales, purchases, and VAT easily. This will save you time, prevent errors, and help you make smarter business decisions. Setting up categories for income, expenses, and cost of goods sold will give you a clear picture of your profits as your business grows.
Keeping everything organised from the beginning also makes tax time much less stressful. You won’t be scrambling to find invoices or receipts because everything is already in one place, ready to review or submit to HMRC.
Keeping track of your jewellery stock and costs
In a second-hand jewellery business, your stock is your lifeline and knowing exactly what you have and what it costs is crucial.
Every piece you buy should be recorded with its purchase price, any refurbishment costs, and other related expenses. This helps you calculate your cost of goods sold (COGS) accurately, which in turn affects your profits and VAT calculations.
A good practice is to tag or catalogue each item, whether digitally or in a physical log. Include details like purchase date, source, and any special features. This makes it easier to track sales, understand which pieces are moving fast, and spot trends in your inventory.
Keeping a close eye on costs also prevents surprises at tax time. By knowing what each item cost you, you can make sure your accounts are accurate, and you won’t overpay tax on your profits.
Getting VAT right for your second-hand jewellery business
VAT can be tricky for second-hand jewellery, especially if you’re using the VAT Margin Scheme. Unlike standard VAT, this scheme lets you pay VAT only on the profit margin of a resale item, not the full selling price. This can save money, but only if you record everything correctly.
Start by registering for VAT if your business meets the threshold, and make sure you understand which sales fall under the Margin Scheme. HMRC has a helpful guide on VAT for second-hand goods that explains the rules in simple terms.
Keep detailed records of purchases, sales, and any VAT charged. Your accounting software should let you link each sale to the correct VAT treatment, so your reports are accurate and compliant. Correct VAT handling from the start avoids penalties and keeps your business running smoothly.
Staying on top of sales, expenses, and regular financial check-ins
Do you have a clear picture of your money? Tracking your sales and expenses carefully helps you see exactly where your money is going and where your profits are coming from.
Make it a habit to record every transaction as it happens, including purchases, sales, repairs, shipping costs, and even marketing expenses. Small overlooked costs can add up quickly and affect your overall profitability.
Regular financial check-ins are key. Set aside time weekly or monthly to review your income, expenses, and profit margins. This doesn’t just help with VAT and tax planning; it gives you a real-time snapshot of your business health. You’ll spot trends, see which pieces sell fastest, identify slow-moving stock, and make smarter decisions about pricing and restocking.
Accounting software can make this process much easier, giving you instant access to reports, summaries, and alerts for overdue invoices or upcoming tax deadlines. Many tools also allow you to link each sale and purchase to the correct VAT treatment, reducing the risk of errors when submitting VAT returns.
At Rhombus Accounting, we always encourage new jewellery business owners to build these habits from the start. Because staying organised early on saves time, reduces stress, and ensures that your business runs smoothly. By keeping a close eye on your finances, you’ll be better prepared for growth, unexpected costs, and HMRC checks - giving you confidence that your business is on the right track.
Conclusion
Getting your accounting right from the start is about building a strong foundation for your business to grow.
By setting up a reliable accounting system, keeping detailed records of your stock and costs, managing VAT correctly, and reviewing sales and expenses regularly, you can make smarter business decisions and keep your finances under control.
Having clear processes in place also helps you avoid last-minute stress at tax time and ensures that HMRC obligations are met without hassle.
Thanks for reading!
Meet Lewis
Lewis is a professional accountant and the founder of Rhombus Accounting. He regularly shares his knowledge and best advice here on his blog and on other channels such as LinkedIn.
Book a call today to learn more about what Lewis and Rhombus Accounting can do for you.
