Taxes and other not so fun stuff....

Today I'm wearing the hat of "Bookkeeper" and "Accountant".  Can't seem to get around it--it has to be dealt with!  I've been a professional artist for over 20 years--so I should be good at all of this stuff.  Keeping records for the business side of my artistic life always seemed to sneak up on me.  I'm good with the files but the pain and suffering (and procrastination) that goes into actually sitting down and organizing "the books" can be too much sometimes! Making and designing jewellery is much more interesting than the greyness of bookkeeping! With so many years experience with studio bookkeeping I thought I could share a few tips with those who are either new to it or struggling with it. (And it is a great way for me to procrastinate!!)

Bookkeeping and taxes for some artists can be compared to diet and exercise.  For some people--it comes easy and they run like the wind or actually like fiber and "healthy" foods.  For me--bookkeeping is as interesting as running on a treadmill.  But over time I have found a few tricks to make it all less painful.

The greatest part of my "system" are these accordion files.  I use them over and over and over.  I  mark them with the year and once taxes are filed I tuck it away with an "expiration" date.  In Canada we have to keep our records for 7 years.  So I mark on them "keep until....." and then after that I shred or burn the papers and reuse the folder.

Inside them I have marked the tabs for the months of my tax year and I have extra pockets for bank papers, insurance documents, and tax forms.  I leave a few pockets at the front for "to enter" and "to file".  These spots are the drop off place for the papers and receipts.  Once entered into my "books" I file them by month.  After many trials and errors with hanging files, file boxes, drawers, envelopes, labels....this works for me and I am able to move it around and store it easily.

I have also set a rule in our house...that if anything leaves the file it must be photocopied/scanned.  I sleep better at night knowing that our files are in order and all records there.  So that if we are audited by the government we can start by giving them my accordion file and everything that was entered and claimed, will be there. And audit they will!  I've been going through my first one starting last May!  It's been dragging on as I think they work on it in dribs and drabs but I will be very happy to have it over!  Every once in a while they phone and ask me something or for a file from some previous year.

Another tip I have, I learned near the beginning of my "home bookkeeping".  Find out from an accountant or tax filer what the categories are and keep your records accordingly.  For example, you should keep all of your raw materials in one category and things purchased to display your jewellery in another.  Technically you will use up the raw materials, but a tent, tables or trailer will be capital gains and can be used for several years.  Find out what the categories are and use them.  It will make tax filing so much easier and if you pay someone to input your numbers or file your taxes it will take them less time and cost you less money.

And the last tip I have--is to keep up with your files.  Just like exercise that "should" be done on a regular basis--so should bookkeeping.  This rule is easy to adapt to your life style.  When I owned a bead store, I sat down once a week and organized our sales and invoices and entered all the numbers.  It was just too painful to do once a month.  But in my studio once a month is sufficient.  I try to file things directly into the accordion file as the mail comes in or when purchases are made.  I keep my accordion file on the kitchen counter.  A large filing cabinet or file box in another room--was "out of side and out of mind" for me and that's when I'd fall behind or lose receipts.  One of my first accountants nearly fell off his chair when I came in for tax filing with my little accordion file.  He was so used to artists bringing him their receipts in a plastic grocery bag, a pizza box or even in a cereal box!

Well if you've made it to the end of this "article" then you must also be trying to procrastinate and not do your bookkeeping!  Good luck--may the force be with you!

Jeannette