Record Keeping – Ok, this isn’t the most exciting business topic but it is something you need to do. Good record keeping will:
- Keep you organized
- Make your more productive
- Save you time when filing and paying taxes
- Keep you informed on how your business is doing
- Allow you to spend more time doing what you do best – creating!
Tips On Record Keeping
- Examples of records you need to manage include: sales invoices, accounts receivable, bank and credit card statements, receipts, contracts, employee time and payroll, accounts payable, travel and entertainment, equipment and supplies purchases, sales tax , project proposal and estimates, correspondence etc…
- You need a place to store your records whether they are paper or electronic. Create an office or business space.
- Get a good file cabinet or folders to organize your paper records. Organize them by subject such as correspondence, invoices, contracts, bills to be paid, paid bills, bank records, receipts etc.
- For your electronic records make sure you have a good backup system. I recommend that you purchase an external hard drive and make complete and frequent backups of your data and don’t forget your emails . It is not a matter of if your computer will fail but when. Don’t be caught without a current backup – trust me it isn’t fun, fun at all!
- For important documents get a document fire safe or bank deposit box. You may also want to use the fire safe to store backups that you have on CD or DVD.
- Get a separate bank and checking account for your business. This will allow you to keep your business and personal expenses separate.
- If you use credit cards in your business look into getting a separate account for your business.
- If you make cash purchases for business purposes, keep the receipt and write on the back what it was for.
- For travel and entertainment expenses keep a record of your appointments and mileage. You can use a daytimer or computer program like Outlook to record this information.
- For tax purposes the IRS has a good publication on the types of records you will need to keep – IRS Recordkeeping.
- Accounting system – a great deal of your records are financial in nature. You have many choices when choosing an accounting system to fit your needs. If your art business does not have a great deal of transactions then you might be able to get away with a manual system. You may prefer to have someone else keep your books such as your accountant or bookkeeper.
- You may also want to consider purchasing a computer accounting system such as QuickBooks – the basic software can be had for less than $200. QuickBooks also offers an online system and one of its advantages is that you don’t have to worry about backups and updates. Check with your accountant before you make a choice of the type of system that is best for you.
- Lastly stay up to date and don’t get behind on your record keeping.
Good record keeping will make your business life easier so you have more time to do the things you started your business for – making art and other creative products and services. If you have comments or ideas on record keeping I invite you to post them in comments section that follows.