In any artist business, keeping good financial records will help you understand your business and grow it each year. There are also other benefits. Among them, the Arts Council values record keeping for grant reporting, knowing where your biggest profits are, and understanding your legal obligations as a grantee.
Here are a few suggestions.
Invest in the right software: Founders Grid, a blog for tech startups, recommends
KashFlow, but there are many options. Intuit offers a suite of bookkeeping software options and services, many of which automatically generate tax forms. This helps in navigating some of the trickier aspects of bookkeeping that only come up a few times per year. Software also organizes your records, making it easier to hand your accounting history to a bookkeeper or tax preparer.
Make your system scalable: when you start a business, you want it to grow. Think ahead. Where do you want to be one, three, five years from now? Choose an accounting system that will grow with you. If you hope to have employees in three years, choose a product that has payroll options. Right now, you might be writing bills by hand. But if fee-for-service is in your future-like becoming a teaching artist-you'll need to produce invoices.
Don't mix business with pleasure: it can be easy to blur the lines between business and personal expenses. Don't get in the habit of mixing your business and personal finances. To understand what the true cost of doing business is for you, separate your personal and professional bank accounts, budgets, and revenue and expense tracking.
Schedule time: It is important to focus on your finances. It is also important to make time to do things more important than bookkeeping. Find a schedule that works for you; make sure you're giving time to both your artwork and you bookkeeping.
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Accounting Best Practices for Small Businesses that Founders Grid offers.
