Artists who are fairly new to being self-employed may not realize how cumbersome accounting can be until their taxes are due. To keep the process streamlined, having accounting software is a must. With many different types of software, it can be difficult to pick just one, but there are some features that should be considered necessary before you make a decision.
Sending a client an email and fleshing out the details is not enough. You want a way to formally invoice your clients, not only to keep all the details in a single place but also to make it easier for clients to pay. Assuming you select accounting software that can be integrated into your website, you can usually set up your software so clients can pay directly on your website through a secure payment processor. As part of invoicing you should ask clients to pay half of the money for the project up front, detail what is expected, and include information on any fees associated with the project. This will protect you and the client in the event of a dispute and will prevent you from creating a custom piece only to lose out on time and materials that you may not be able to sell.
There are many elements of taxation that should be included in your accounting software. One part is sales tax, which if you sell online will vary by state and even city. Every locality is also different as it relates to online sales. Doing taxes includes determining how much you will owe for state and federal taxes. As a self-employed person, you might choose to pay your estimated taxes quarterly or wait until the end of the tax year and pay it all in a lump sum. Having the information readily accessible will make it easier for you to set aside a portion of your sales for tax time.
Supplies And Time Sheets
Calculating the cost of supplies may be more challenging as an artist since some of your supplies might be used for personal projects or to create items that have not yet sold. Ideally, you will keep supplies separate and keep copies of your receipts. Some programs allow you to scan in receipts for easier record-keeping. Keeping track of your time may be less important for tax time, but it is critical for pricing your work. Most artwork takes days or weeks to produce, and accurately keeping track of your time will prevent you from undervaluing your work.
If you are taking your art seriously and want to sell items, you need your accounting to be equally serious. Investing in accounting software with features relevant to your line of work will make everything from invoicing to tax time easier. Reach out to companies like Agro Accounting for more help.