As a creative, you may be more comfortable working independently than being part of a big company. But you should keep in mind the benefits of using an accountant or bookkeeper to help run your business.
You do not need to invest in bookkeeping and accounting if you are an artist. However, accounting for artists is essential to help you keep track of your payments, expenses, and invoices.
At the very least, you must understand business formation and structure. Consider tax considerations, legal issues, and accounting services.
Invoicing and income collection
We’ve already covered how to create a simple invoice in QuickBooks, but let’s go over some of the finer points.
When you’re done with an invoice, ensure its status is marked as “paid.” If not, ensure you have collected payment from your client before marking it as paid (the software will allow you to edit this).
It’s also important to keep track of all the invoices created for each client and which ones have been paid or are still outstanding. This will allow you to keep tabs on what work has been done and when payments were made or due for remittance—and then allows for a more accurate accounting of income at tax time!
Home office deductions
In addition to the tax deductions you can claim for business expenses, there are a few unique deductions artists and creatives can take advantage of.
One is the deduction for a home office. When you use part of your home exclusively for business purposes, it’s possible to deduct the percentage of your mortgage, utilities, and other costs from your income tax return. To qualify as a home office under IRS rules:
- The space must be used exclusively for business purposes; if you also use this space occasionally to eat dinner or watch TV, it will not count as a separate room used exclusively for business purposes
- It needs to be used regularly (but not necessarily daily) by employees or clients; if only one client comes in once every six months, then that doesn’t count as “regularly” being used by clients unless they come more frequently than that
- You need to show how much time was spent in each area—for example, if there’s one room where all meetings take place, but someone also works from their laptop at different times throughout the day, then each room will still count separately because work activity occurs there simultaneously
You should be able to easily track your expenses because it is important to know what each expense is for and how much money you are spending on it. For example, if you go out to dine and spend $100 on food, that money could also have been used toward your rent or utility bill.
It’s also important to keep track of how many hours you work so that clients know what their job entails. If a client wants an hour-long video edited in two weeks, that might not be possible—and without knowing this information up front before working with the client, they may not want their project finished!
Accounting for artists makes it easier to track your expenses which make billing easier for you. There are many reasons you should hire an accountant or bookkeeper. If you are trying to grow your business and want to be successful, you must understand how taxes work.