Tuesday, June 9, 2015

Accounting Essentials for Artists

Porch view, Topsail Island (photo by me)

After a nice, relaxing vacation where we enjoyed beautiful weather everyday, I am back to continue examining the business of art.

It may seem obvious, but tracking finances is a critical chore that any artist will have to deal with. How else will you know if you are making or losing money and what your costs are?

Software makes this a bit easier than it once was. For instance, Quicken can create many different reports for you that you once had to create by hand. Mint is the free version of Quicken and can work for many artists. Quicken Home & Business offers more functionality and costs about $115. 
A good place to start organizing and thinking about your finances is to follow the IRS Schedule C. This will help you see an outline of how to sort through expenses, deductions, and profits.

Another critical point here is to keep your personal and professional accounts SEPARATE. It is easier to find areas where you can save money or where you are losing money if you don't have to sift through what are business or personal items.

Keep your files (paper or digital) organized. Don't wait to update your accounts after a big show or flurry of sales. Take the time to make sure you get all of the sales receipts and any expense receipts of your own (parking, food, mileage, etc.). Make sure that you are taking advantage of options to download transaction details from your bank, PayPal or credit cards. This saves you time and is more accurate than hand-typing your details.

The Small Business Administration is a resource for your business that includes sources for grants and loans, starting and managing your business, and local assistance.

Then keep at it. Don't set up your accounts and get sloppy. Review your accounts regularly (weekly or monthly) and do the balance sheets monthly. Sometimes it's tempting to think that you know it was a slow month or a big week, but you'll need to track everything to really know what's going on.

May all of your scores run true!

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