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Are you dreaming of being on the road with a band, but you are a boring old accountant? Well you can become a music industry accountant, who travels and lives with the band. Fascinating right? Pearl Lemon Accountants bring to you the top tips to survive in the industry.
In your first and foremost capacity, you are an artist or musician, and you should focus your attention on developing your art, but as you progress in your career and earn more money, you’ll need to ensure that your financial strategy facilitates your success and protects your earnings in the long term.
You can save yourself time, money, and frustration by putting your accounting processes into place from the beginning.
It makes sense to manage your own administration at the start of your career, primarily for cost-saving purposes, but I also encourage people to gain a thorough understanding before taking on any big projects, which will help them make good business decisions later on.
However, this is often something that is put on the back burner of most people’s to-do lists.
One of the reasons is that it always seems like there are more important things to do, such as perform and make money through music.
The priorities listed above are hard to argue with, but if you’re planning to handle your business administration yourself, there’s a reason to take this seriously.
Make sure to to follow these tips to stay on top of your game :
- Keep two files for your costs-one for paid bills and one for unpaid bills. Be sure to indicate the payment date and method on an invoice when you pay it. Place it in the paid file once it has been paid. Make sure both files are alphabetized.
- Bypass cards and transfers-your bank will take care of the majority of your bookkeeping. Exactly how? The bank statement lists the date, amount, and name of the beneficiary if you pay with a card, direct debit, or electronic transfer. This provides a good starting point for bookkeeping. You should avoid paying with cash too often.
- Don’t keep receipts – if you don’t, you could be liable for paying more taxes than necessary because certain expenses might be overlooked. It doesn’t matter how small your expenses are–keep meticulous records of them. Make sure you keep receipts for your smallest Keep track of your music-related expenses, such as stamps, stationery, and bus and train tickets.
- If you made a profit last year, you need to pay taxes, even if you don’t have any cash at the moment. You’ll avoid any big surprises at the end of the year if you budget for it throughout the year. Place money aside for taxes in a savings account or a deposit account. You’ll be able to pay your tax bill if you save 25-30% of all income you receive.
- Making money from your music business without registering for taxes – if you intend to make money from it, you will be regarded as a business by the tax authorities, and they will expect you to file tax returns. Keeping the tax authorities in the dark about your trading activities could result in serious penalties. If you fail to report income, penalties may be imposed and you may face prosecution.