Written by Eddy Hood
Artists typically enjoy producing art more than they enjoy producing business records. However, artists who want to make money from their work should adopt good business practices to ensure a long-lasting income stream. Bookkeeping is the backbone of good business practices. 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.
The main goals of bookkeeping include:
Bookkeeping is largely made up of a series of repeating tasks, so setting up simple systems to schedule and complete the steps of this routine can help artists run their businesses efficiently while focusing on their art. Tasks will need to be completed on different time scales, so plan out your routines accordingly. For instance, daily tasks will include:
Weekly bookkeeping tasks focus on keeping necessary supplies and labor available and efficiently billing for completed projects to maintain a healthy cash flow.
Monthly tasks allow for the owner to see a bigger picture of the business and should let the artist focus their attention briefly on what art has sold, what art is available to be sold, and what commissions are outstanding before returning to their creative work.
Many freelancers and small-business owners will be required to file quarterly tax documents accompanied by estimated tax payments. Even if an artist doesn't need to file quarterly, looking over and updating tax information every three months will make completing an annual tax return simpler.
Annual financial tasks should allow the business owner to take a larger view of the financial health of the business, understand where money is being spent, and hopefully find ways to run the business more efficiently.