The Artist’s Financial Blueprint: Mastering Bookkeeping with Ease

Artist’s Art in a Studio

As an artist, you want to create, not count. But it all falls back to keeping a good hold on bookkeeping to stay on top of your creative love and keep it profitable. Whether you’re selling paintings, sculptures or digital art, managing your income, expenses and taxes can be complicated — but it doesn’t have to be.

In this guide we will demystify the basics of bookkeeping for artists, make difficult concepts manageable, and offer tips for keeping you on top of your finances. By the end, it’ll give you a step guide to taking control of your finances and then get back to your craft and spend less time worrying about your crap finances.

Why Bookkeeping Matters for Artists

Bookkeeping is all about keeping a tally of your money received and money spent. While it may sound like a chore, it’s essential for artists who wish to:

• Be organized: Keep track of where your money comes from and where it goes.

  
  

• Get ready for taxes: Good records help you prepare for tax season, and can help you minimize tax liabilities.

  
  

• Know how things are looking: Keeping up with your income and expenses helps you make smart decisions about pricing, projects and business investments.

Artists Bookkeeping Services at Book Tech

“ If you earn from multiple creative projects or client-based work, you may also benefit from our guide on Freelancers Bookkeeping, which covers simple methods for managing diverse income streams ”

Step 1: Create a Financial Tracking System for Yourself

To begin, it’s crucial to select a bookkeeping system that works for you. The two main alternatives are tracking manually or using software.

Manual Tracking (Traditional Method)

• Manual records: Maintain a register or paper notebook where you note down each sale, expense and monetary activity.

  
  

• Spreadsheets: Excel or Google Sheets is a popular and versatile way to go. You can create rudimentary columns for income, expenses, dates and categories.

Track it manually: Although this is effective for small operations, it’s time-consuming and can be subject to inconsistency, particularly when your business grows.

➡ If your creative work includes digital tools, subscriptions, or design-related expenses, our Graphic Designers Bookkeeping guide offers helpful ways to organize and categorize them.

Accounting software

All leading accounting software solutions have automation capabilities that save time while reducing mistakes. A few include the following:

• Quickbooks: it’s an excellent all-in-one choice for artists who want an accounting preparation and filing solution.

• Freshbooks: it’s simple to use and especially designed for freelance artists. Instead of just accounting, it also handles invoicing, time tracking, and expenses.

• Xero: it’s a good choice for small businesses wanting to track more information like income and expenses along with reports. You can also link to your bank account for real-time tracking.

You’re also able to generate reports, which is a valuable tool for monitoring your current financial situation while also planning for the future.

Step 2: Separate your personal and business finances

Separate your personal and business finances

As an artist and business entrepreneur, it’s always tempting to combine your business and personal finances, but doing so is risky and only causes headaches during your tax season. Therefore, your business should always have separate bank accounts from your personal one. Why?

• Royalties: Money earned from licensing your work for use in advertising, books or other media.

• Teaching and workshops: Earnings for leading art seminars, classes and workshops, offline or online.

Tip: Use your accounting software or spreadsheet to keep track of all of the following for every transaction you make:

1. Date

2. Source (from where income was earned)

3. Amount

4. Method of payment (check, cash, internet transfer etc.)

Keeping track of all your income in one location keeps you from forgetting any revenue, and helps prevent surprises at tax time.

Monitor Expenses and where money is spent

Keeping thorough records of your expenses is just as important as tracking income. Your art medium can determine how much you spend, but popular categories include:

• Art: Paints, paintbrushes, canvases, pottery, digital methods, etc.

• Studio rental: The cost of renting a studio.

• Marketing and advertising: Expenses associated with marketing your work (website, social media ads, business cards).

• Shipping and packing: Expenses for transportation of artwork to client or gallery.

• Professional services: Accountant, attorney, or business consultant fees.

➡ Creative entrepreneurs with varied project expenses may relate to the systems discussed in our full Musicians Bookkeeping guide, especially for tracking ongoing costs across multiple income streams.

Tip: Classify your spending to see where your money is really going. This may help you pinpoint areas where you might be overspending or look for places you can save.

Step 3: Keep Track of Taxes

Keep Track of Taxes

As an artist you should know the taxes that could apply to your art business:

• Sales tax: If you sell art directly to the public, you’ll probably have to collect a sales tax based on the regulations of your state or country.

  
  

• Income tax: You will be expected to declare all income from your art business when you file your taxes.

  
  

• Self-employment tax: If you are freelancing or in another type of independent contractor position, you might owe self-employment tax.

Tip: Save for taxes! Withhold a percentage of your income for tax payments so tax season doesn’t sneak up on you.

Step 4: Establish Goals & Do a Routine Financial Check-in

After you establish the system of monitoring the inflow and outflow of your money, it’s vital to check in on your finances on a regular basis. Allocate time every month or quarter to:

Routine Financial Check-in

• Examine cash flow: Make sure you are bringing in more than you are laying out, and if not, consider avenues to inflate sales or cut expenses.

  
  

• Update your goals: This can include selling a certain number of pieces or applying for grants, but the review should align with your artistic and business goals as well.

  
  

• Assess where you are: Are you on track to achieve your financial goals? Adjust your plans as needed.

Conclusion: Seize Your Financial Future

Bookkeeping doesn’t have to be daunting to learn. All it takes is a straightforward system for monitoring your income, weeding out your expenditures, and paying your taxes. You’ll soon be not only organized but also have a much better read on your financial health. This will enable you to spend more time making your art and less time worrying about money.

Book Tech's Artist Bookkeeping offers simple, artist-friendly bookkeeping solutions designed to help creative entrepreneurs stay on top of their finances — without the overwhelm. And remember, the more you can take control of money and finances, the more freedom you can create in your life to grow your art business and explore your creative passion.