NEW ARTICLE FEATURED ON ARTIST UPRISING:
So, you’ve developed your product, you’ve honed in on your brand, you’ve worked hard to gather a social media following and have a gorgeous Squarespace website… but did you file your tax return?
1. Bite the bullet.
Invest in your “back-office” tasks as much as the product you’re selling. You buy the proper paint brushes, but have you bought a proper filing cabinet? Seriously. Set up a real office. Just go buy some paper clips, for Pete’s sake.
2. Crunch the numbers.
Take time to budget properly. Learn how to use spreadsheets. (We love Google Sheets!) And, most importantly, pay for a cloud-based accounting software. A real one, like QuickBooks Online or Xero, not Mint that does a half-ass job at tracking a few key budget items. It’s one more subscription fee to add to your monthly expenses, but the payoff is huge in the long run.
This will streamline your accounting tasks, as well as make sure you’ve kept up with the bookkeeping, which may even help you save on the tax that you owe!
3. Consult with professionals.
Don’t know how to incorporate? Don’t know how to set up your accounting software? Don’t even know where to start? Call a professional, like the ones at Pencil, Inc, and pick their brains. Most professionals will consult with you over the phone for FREE! (We like that F-word.) So, take advantage. Hire professionals. Then, once you have your *free* game plan in place: invest in establishing the foundation of your business like a good ol’ startup would. Pay the professionals to ensure that you do this right, from a legal standpoint and a tax position. You don’t want to incorporate as an LLC, for example, because you will not save a penny on self-employment tax. So how do you maintain limited liability and save tax?
4. Hire a professional.
Hire a professional well versed in small business startups, like those at Pencil, Inc, and they will make sure you do it right.
5. Don’t get behind.
The worst part about accounting is the cloud hanging over your head whenever you haven’t kept up with it. For bookkeeping, do it on a monthly basis. Don’t wait to code transactions. You will forget what they were for and will have to dig around for receipts or flip through your calendar of events. So many people take a stack of bank statements to their CPA and they charge extra to do the bookkeeping for you. Avoid that headache and stay vigilant. Then, when January rolls around, wrap up those books and send off the financials to your CPA immediately. Don’t wait to know what your tax burden will be, and try to avoid filing an extension, if you can. To summarize: You are running a business. So act like one. Your art is no longer the same cute hobby that it was in junior high. You’re a shrewd business woman making a living selling products, which happens to be your passion. (LUCKY!) Now, go have a blast with it, including the accounting part.
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