Why is bookkeeping needed for artists?
Do you keep a record of the income and expenses of your art business? A good bookkeeping system helps you to do that. As an artist, you need to keep track of how much you earn by selling your artwork and how much you spend on supplies, equipment, materials, etc. Bookkeeping is a process of organizing, categorizing, and recording financial transactions. This is essential for any business; the arts are no different from any other industry when it comes to accounting needs.
There are two ways to handle your bookkeeping. One way is to hire a bookkeeper or accountant. They can help you understand how much money you are making from your art and how much expenses are getting in the way of your profits. Depending on the type of person you hire, they may also be able to help you set up bank accounts and pay your taxes. This makes it easier for you to focus on your art without taking time away to work on your books. Having an accountant can be great for the bottom line of any artistic venture. Artists excel at the creative process, but can often feel bogged down and frustrated with the business side of things like bookkeeping. This is one of the easiest business tasks to outsource. An accountant or bookkeeper handles all of that while allowing you to focus on what you do best- creating art.
Another way to handle your bookkeeping is to do it yourself, but you should understand how you can do it efficiently. Don’t worry! In this article, we will share some bookkeeping tips and tricks for artists that will help you to do this efficiently, and make the experience less frustrating.
Top 7 bookkeeping tips and tricks for artists
The art industry is a difficult field for bookkeeping. It's difficult to keep track of all the pieces, time, and money involved in creating a piece of art. With these 7 tips, you'll be able to better manage your finances as an artist. Bookkeeping is one of the most important aspects of running a successful business. The following are some of the top 6 bookkeeping tips for artists:
1. Keep an eye on your cash flow:
This will help you determine how much profit you're making on each piece you sell. This includes amounts paid for your artwork, prizes, awards, fellowships, and endowments. When you buy anything related to your artwork, always keep a receipt for it. Anything like bills, invoices, check stubs, EFT transfer backup, etc. is important to keep on file in case you are ever audited. Keep a record of your income and expenses in a spreadsheet, this helps you to learn whether your business is in a loss or gain state in that particular month or the year. You should also keep track of your other expenses like
2. Organize your tasks:
Don’t let your bookkeeping strategy turn into the junk drawer version of your business. Staying organized ensures you are able to find the information you need, make important calculations to see where your business stands and file your taxes with more efficiency. You may want to organize by tasks, which helps you to keep track of transactions associated with each task. You can also sort each element into monthly and quarterly reports.
3. Track your time:
Tracking your time can be very insightful. It can help you calculate how much a piece of art should cost, or even teach you that you need to learn to work faster. If you want to do a thorough time/cost analysis make sure to list all your tasks and the time to be spent on each task. This can help give you an overview of where you are spending time and which of those things is most and least profitable. As an artist, you want to spend more time on your art creation. But, you also want to be strategic and ensure you are putting time into avenues that produce income. If any (unnecessary) task doesn’t give you any income do not waste your valuable time on that, instead, you can invest in other important work.
4. Track your materials:
This will help you figure out what materials are costing the most money and what types of materials are worth investing in more heavily (i.e., cheaper or more expensive). Some of this depends on where you are in your art career, and what you are able to afford in that phase. If you feel buying a material that is expensive yet helpful for your art business growth then you can buy it. If it isn’t helpful to your business, do not waste your hard-earned money.
5. Keep track of inventory:
You want to ensure that when someone orders artwork from you, they get it within a reasonable amount of time so they don't feel like they're waiting forever for their purchase to arrive. You should know which art piece is sold, which one is left with you, and which pieces are with a gallery or exhibition.
6. Open a Business Account
It is always a better idea to maintain business and personal bank accounts separately. Opening a business bank account helps in many ways:
7. Seek help from a professional accountant:
Businesses are undergoing significant changes in the modern era. There is a need for qualified accountants to help with the management of all day-to-day transactions and finances. From income tax filing to building budgets, a qualified accountant can be an invaluable resource for any business owner. Having an accountant on your side will make it easier to set up bank accounts, pay taxes, and more. Note that a “bookkeeper” may be able to help you with some tax-related forms, but cannot file taxes. For tax filing and tax advice, you need to work with an accountant.
What are the best tools for Bookkeeping? How to choose the right tool!
There are plenty of tools or apps for bookkeeping. However, you need to choose them according to your needs and abilities. Consider the following points while choosing a tool:
Top 5 best free bookkeeping tools
This list is based on “Best Free Accounting Software (2022)” by Forbes
1. NCH Software (for Financial analysis)
2. ZipBooks (for invoicing)
3. Sunrise (profit and loss statements)
4. Truly small invoices (for freelancers)
5. Wave accounting (best for ease of access)
Whether your art business is small or large you must adopt bookkeeping habits so that you can adequately track important financial information with efficiency. Bookkeeping plays an important role in helping you make financially sound decisions to grow your business.
Share your thoughts about bookkeeping! What’s working for you? Share your suggestions for bookkeeping tools in the comments section!
How To Avoid Scams Targeting Artists?
Like any other industry, the art business is also affected by scammers, and there are many scams targeting artists. As an artist, you must be aware of those scams and know how to recognize and stop them, so that you don’t lose your hard-earned money or artwork. Art Scams may occur through email, social media, job sites, and other websites. In this blog, we discuss some of the scams targeting artists and tips to recognize and stop art scams.
Types of Scams Targeting artists
This is the most common scam that every artist comes across. In this scam, you may receive an email from a person who says his wife loved your artwork and he wants to purchase your art immediately by paying the amount through a check or money order and gift his wife for her birthday. He may say that he has made an extra payment and ask you to send that money back. After a few days, the check bounces. As a result, you lose your valuable artwork and also your hard-earned money.
Unpaid Internship or Hiring Scams
This is a common scam, where “employers” post their unpaid job requirements on job portals, social media, newspapers, and even on tv or radio. They post their needs as legitimate employers and require you to create or provide previous artwork free of cost. They utilize your art and say you will get exposure.
Sometimes scammers may ask you to create a design or artwork just for test purposes. Once you submit your artwork they reply by saying that they will let you know if you are shortlisted. However, they may go on to use your work without notifying or compensating you.
*A note on internships and donations: While some internships and exposure opportunities can be valid, especially for causes you support, it is important that you know your business and the direction you want to go with your business to ensure that you don’t get taken advantage of. When you are first getting started or studying art in school, internship opportunities may be good for you to learn skills, gain connections, and sometimes add to your CV. Once you are running your business you need to be very particular about offering your work and time for free or at a reduced price. In some instances, like charity events and causes you are passionate about, it can make sense to donate work or time to support a good cause and gain connections. But remember “exposure” doesn’t pay your bills. Take time to consider all aspects of the “opportunity,” your business plans, and your goals for the year, to decide if it is a good fit for you.
Social Media Scam
Some people create fake social media accounts and comment or DM artists messages like, “If you are an artist you can be featured on our social media and get exposure. DM @___” If you contact them, they will reply that to be featured you need to pay some amount. Their interest is not in helping artists, but in collecting fees from them. These accounts are not targeted to a specific type of art and therefore not a good way to reach your target audience.
Sometimes social media scammers may hack your account or take all your content and create duplicate fake profiles. The main goal of this scam is to get information like passwords or to try and get money from your followers and friends. According to Facebook’s 2022 data, there are 1.6 billion fake accounts.
Gallery and Art Fair Scam
In a Gallery scam, the scammer will contact an artist and offer to represent them in their gallery, selling their artwork for a commission. These types of galleries overblow their reputation and charge artists to exhibit work. They make most of their money on artists’ fees, often exhibiting lower-quality work. Showing in a gallery like this will not build your reputation, and the gallery is unlikely to sell your work. These types of galleries have not built up a clientele interested in purchasing high-quality art, and since they aren’t particular about what they exhibit, they don’t have a reputation that brings in collectors.
Another scam is for new online art galleries, selling platforms, or an art fair to send a message through social media or email like “New XYZ art gallery is opening soon, please register for the show by paying $_ _. If you pay them after a few days they may disappear. If you ask them, they may send a message like an event/gallery expo has been cancelled. This is shocking, yet, this is also a way scammers fool unaware or desperate artists.
Here’s an example of an art gallery scam.
NOTE: In the above images, the names of the gallery and artist have been changed to protect personal information. Any resemblance to a real gallery is just a coincidence.
In Image 1.1 you can see the spamming nature of this gallery. Image 2.2. shows the scammer trying to get the artist to pay a fee to have their work published in a book. The importance of the gallery and the book is overblown. Also, note that the nature of the book is totally unrelated to the western artist who received this email.
In this type of scam, the attacker or scammers may send text or email messages to steal your confidential information. They may try to get personal information like a contact number, address, account passwords, and bank account details by tricking you to click a link or downloading an attachment. Scammers may send an email or text message by using reputed company names or bank names. NEVER click on a suspicious link. They may use your credentials and steal your artwork. Companies like Facebook, will not contact you in this way.
Here is the example:
How to recognize & stop art scams?
Art scams are usually easy to recognize. Here are some of the clues for recognizing art scams.
You may be in a hurry to get into a gallery, get exposure, and sell your work. Scammers try to take advantage of this desperation, knowing that desperate people ignore red flags. They post fake opportunities with fake company names and without any contact information. Always do research on the company and its location before accepting an opportunity. If the company is legitimate it should have:
Fake Name & Email Address
Scammers will not use their real names instead they use very suspicious names and email addresses. If an email address has an unusual name, uses a name similar to another organization, or lacks a domain-based name, it is a strong indication of a scam. Always check the name and email address of the person who is trying to scam you. Typically with organizations, you can search an email address and more information about that organization or person will come up.
If a social media account doesn’t have many followers, or if it has thousands of followers, but very little engagement, it could be a sign that this account is not to be trusted.
Grammatical Errors in the Email
You may notice there might be too many grammatical errors in the email or any content sent by spammers. This is a major warning sign of a scam. However, there are cases where a legitimate email does grammatical errors. For example, if the sender is not a native English Speaker. But, you have to be very careful with emails like this. Often you can copy the email or portions of the email and search in google. This may show you if it is associated with a common scam. If it doesn’t show up it could still be a scam. Pay attention to the contents of the email as well. Does it seem odd, or unnatural (too much background information, but otherwise overly general.)
High Pressure and/or Spamming
Scammers often try to pressure you into an immediate decision or action. They may offer short answers, diminish your concerns, and say that you have limited time to respond. They may also spam your account by sending tons of emails or using fake social media accounts to comment on your content and then direct you to the main account. This is a way the main account avoids spam complaints to Instagram.
Unrelated or Lacking Knowledge of Your Work
Scammers often use general terms when referring to your art, this allows them to send the same message over and over to a variety of artists no matter what type of artist they are. The opportunities scammers are promoting may be oddly unrelated to your work. In the example email above the book the scammer was trying to get the artist to pay to be in, was Leonardo da Vinci, but the artist is a contemporary western artist. Finally, a scammer will say things that make you think they haven’t even looked at your work (that’s because they really haven’t).
Vanity Art gallery or Art Fairs
Did you get an invitation to show your works in any Art galleries or art fairs that do not have a physical address? If you receive such an invitation, always check for a physical address. If they do not mention the location of the exhibition that is a red flag. Do a quick google search to see if the gallery has a website and location. If it exists see if it has any reviews, both on google and social media accounts.
NOTE: In the above image, the name of the gallery has been changed to protect personal information. Any resemblance to a real gallery is just a coincidence.
In Image 1.1 & image 1.2, we have shown emails from a scammer Gallery and in Image 1.3 we can see that there are no reviews for the Gallery in Google. That shows the gallery is not popular and trying to profit off of unsuspecting artists.
Check Payment/Money order
If the customer or art-selling platform sends a payment through check/money order, it is a sign of a scam. It is good practice to never ever accept check payments from any customer. If you do accept checks, wait for the payment to clear before providing any artwork. It is better to accept Paypal, Venmo, square, or other forms of payment processing.
Fake Social Media Accounts
Constantly monitor social media platforms for any attempts of impersonation by creating a fake social media account. Always verify your business profile, it helps you to grow your art business in an organic way. Include social media links on your website. So that customers can easily navigate to your social media accounts.
Trust Your Gut
Your intuition is a great resource. If something seems off, even if you can’t quite place why it is a good idea to slow down and do a little research or even ask for advice. Scammers are finding more and more ways to try and take advantage of people. They typically prey on desperate people because they know that desperate people ignore red flags, and don’t take their time to do research. If something seems “off” or “too good to be true” it most likely is. Proceed with caution.
One of the best things you can do is set up solid and reliable systems for accepting orders and commissions and taking payments. Take time to set your policies, and then refer back to them when you feel something might not be right. If someone is not respectful of your policies or tries to force you into something that feels uncomfortable to you that is a major red flag.
Have you undergone any scams? Do share your experience and ideas to stop art scams in the comments below.