Accounting 101: Accounting Basics for Artists

You can use Xero on your phone, tablet, or computer. Invoicing and invoicing tracking have been simplified with quicker access to accounts and new payment modes like direct deposit. Hiveage launched in 2014 and was designed for small businesses.

Which means that it needs to have a sales tax license, track sales taxes, and remit them to whichever government is collecting it. Depending on the artist, they can sell every single piece that’s displayed in these shows, and sometimes it’s even sold in advance. That’s because most artists have a following of collectors, who want access to their artwork before anyone else can buy it. So that’s what happens – the collectors buy the artwork in advance, and then its displayed at the show, with a little red dot in the corner, which signifies that it’s already been sold. Most of them make very little money, usually less than $200,000 of revenue per year. Half of that goes to the artists, so they don’t have much money left over to pay for the rent and utilities and employee pay.

Weekly Bookkeeping Tasks

It wasn’t as hard as I thought, but it still wasn’t enjoyable. We’re using an online system called Xero, it’s xero.com. And it is probably a little bit more expensive and robust than what most of you will need. Once we have everything inputted into their system, we can see all our numbers and it’s something that has really helped us move forward in our business.

• I have felt the relief and I want you to feel that as well.
• Then, you hire people that know what they’re doing.
• The first step to getting the right kind of help is figuring out what kind of help you want.
• And then we have other forms of revenue to account for.
• Another advantage of Xero is access from any device.
• Although an artist does not have to submit their tax quarterly, reviewing and updating tax info every three months is still a good idea.

He uses an accordion file for the receipts and statements. And finally, a gallery might even pay for scholar services. This is needed for authentication purposes, usually when the gallery owner suspects that something he’s about to buy on the secondary market is not the real thing.

Profitability Reports

Good bookkeeping allows businesses to understand their profit margins, know how much money is in the bank, and confidently file their taxes. Artists who don’t enjoy math might find bookkeeping confusing, but there are many resources available that explain bookkeeping for freelance artists and those who are forming small businesses. I know record keeping and taxes can be a bit overwhelming and not the rewarding part of our passion. Hopefully with this knowledge you are not as “overwhelmed”.

When you start earning income from your art, you are no longer just an artist. You are a creative entrepreneur, a professional artist who performs art to make money and earn a livelihood. The other thing is, what products can you create that would then be more profitable? So get your wheels turning and start coming up with ideas. What kind of products can you create that will be profitable?

Accounting 101: Accounting Basics for Artists

With this system, you can monitor the performance of your bills and automatically issue payment alerts. Take a picture of a receipt and upload it to record your banking activities. When it comes to keeping tabs on your investments and budget, Quicken is one of the best-known programs in the industry. CO—is committed to helping you start, run and grow your small business.

And, a scholar might be hired to write material for an exhibition or a catalog. A gallery contains a lot of expensive stuff, so of course the inventory insurance on the artwork is also very high. The insurance covers the in-transit period and while works are stored in the gallery, and transfers to and from art fairs, and while the works are being displayed at the fairs.

Bookkeeping Checklist for Artists

Which is why most of them only have a couple of people on staff. However, about 15% of the galleries generate more than $1 million of revenue per year. These galleries are in the sweet spot of the industry, because they’ve been able to attract the best artists, whose works sell for a lot more money. These perks come in cashback or cash credits, shopping 10 quick ways to drive organic growth vouchers, complimentary travel insurance, air miles, waived foreign currency charges, and more. Sunrise provides professional accounting services to upgrade their free application since most business owners do not want to get complicated with bookkeeping. Zoho Invoice is the best online invoicing cloud software for artists and musicians.

Account Junction can calculate and even schedule your projected payments for you to ensure you stay on track throughout the year. There are tools and services out there to help you as an artist get your finances in order and keep them that way. The first step to getting the right kind of help is figuring out what kind of help you want.

Accounting for Artists, Painters, and Musicians

For free, they offer almost the same services as the major suppliers. Automating regular invoices, payment reminders, and client follow-ups can save you time and money in the long run. You must manage your budget, create and sign contracts with studio spaces or freelancers, save money, then make it all legible to the IRS come tax season. Nobody becomes an artist because they secretly want to be their own accountant. However, if you begin your creative profession, you will undoubtedly have to deal with your own finances. Weekly bookkeeping tasks focus on keeping necessary supplies and labor available and efficiently billing for completed projects to maintain a healthy cash flow.

• The National Council of Nonprofits isn’t an end in and of itself, but it can help organizations link up with their state-specific Council of Nonprofits.
• We often get asked if we can help artists manage their finances more directly.
• Instead, all accounting information can be digitized and accessed wherever you are, whenever you need it.

The National Council of Nonprofits isn’t an end in and of itself, but it can help organizations link up with their state-specific Council of Nonprofits. This resource is most useful for organizations with 501(c)(3) nonprofit status. Individual state councils offer a variety of services and structures of support for nonprofits regarding finances.