One thing I’ve realized I’ve never talked about in detail, is what to do after you’ve made money as an artist. I could go on about marketing strategies all afternoon (and I’m pretty sure I have), but the fact is that managing what you make is equally as important.
If you’re reading this, chances are you make money in the music industry. Chances also are that you file taxes. If you keep perfect track of all your music-related income and expenses, then you can claim a lot of them on your tax return, and get some money back. It’s also a good idea to keep track of your money for your own good. Don’t be like The Blues Brothers (from the 1980 Universal Pictures movie of the same name) – they played a $200 gig, and then were handed a $300 tab at the end of the night, owing the venue money.
A running theme on Pop of Colour is that artists need to think of themselves as small businesses. It’s a facet of your everyday attitude when not practicing. For that, you need a system to keep track of your earning and spending. This includes counting tips on the sidewalk, buying guitar strings, teaching piano lessons, ordering band t-shirts, knowing what sizes of said t-shirts you’ve got before and after the gig, copyright fees, printing business cards, collecting digital sale royalties, renting a van, paying the mastering engineer, hiring a session musician (and paying them union overtime), shooting a music video… You need to keep all your receipts and invoices, and tally gross and net income on a regular basis. This can become a near-impossible task, especially if you have multiple bandmates, or play in more than one group.
What I want to show you today is a little start-up (from my city, actually) called Bandbiz. This article was sponsored by Bandbiz, but all options and words are my own. Basically, it’s a computer and mobile accounting app made by a musician, for musicians. Bandbiz is the system that’s not only going to throw you a buoy, but teach you how to swim. You don’t need to drown in accounting, you can go back to making art. As independent artists, a paycheque doesn’t just appear by direct deposit into our bank accounts after handing our Social Insurance Number to a downtown bar on a fortnightly basis. Cash is the main way we roll in this industry, and you have to track it yourself.
I just got my 60-day free trial recently, here are some screenshots. Every time we get paid, we can input the amount and the date, along with details; whether it be for tickets, tips at the end of the night, or for merch sales. After that, we’re given the option to add expenses as we go; may those be litres of gas to get to the gig, website domain hosting fees or the upfront cost of making merch. You can also keep track of exactly what merch you have on hand to sell, right within the app. Personally, I think the merch tracking system is really well thought out, as it gives the option of adding a picture, and doing inventory of sizes (say, for band t-shirts). We can also upload pictures or digital files of receipts and invoices, so we don’t need to hold on to the shoebox under our beds, and view easy-to-read graphs. For those of you who have ever received funding for The Arts, you know the cashflow statements they require. Well, the government needs cashflow statements too. When tax season comes along, your files will be ready and we’ll be all set.
Here are examples of the type of music-related expenses you may be able to claim on your tax return. Note: no matter what country you are from, research the exact laws concerning tax returns for self-employed artists.
– Musical Instrument expenses (this includes maintenance, insurance and rentals)
– Legal fees (this includes copyrighting your work)
– Union and Professional Membership dues
– Travel expenses (such as for tours or auditions)
– Business Phone bills
– Music Lessons or other Self-Improvement costs related to your career
– Paid subscriptions to industry magazines and periodicals
– Sheet music and “How-To” books and manuals
– Donations to my Patreon*
Fiscal responsibility goes beyond claiming things on your tax return, though. You need to treat every earning as important. Even if you aren’t making enough to quit your day job yet, setting a strong foundation of knowing how much you make and where that money goes will propel your career forwards. We’ve all heard stories of promising talents, or even successful bands getting screwed over by their label or management taking what they didn’t deserve, simply believing that the performers would never notice. Good money management will protect you from those situations, and also earn you respect on the business side of the music industry.
Bandbiz is an easy accounting app, but more importantly, it’s fast. While accounting is important, you shouldn’t have to waste extra time on it. You are a creator of art, and should spend as much time as you can mastering your craft and improving your skills. Chris, the founder of this start-up, is a musician from my town. What his app does is give you more time to do what you love, and can help you track and save the money you need to turn this passion into a full-time career.
I, as not just a music industry blogger, but an artist and friend, want the best for every one of you reading this little opinion piece I wrote in a notebook, sitting on a chocolate-coloured sofa in my apartment on a Sunday afternoon; and the best, is making a living inspiring people with your passion, which for us, is through music.
* I don’t think you can actually claim donations to my Patreon on your tax return.