| Income in and expenses out being recorded into their | | | | and then add the cost of the paper/canvas and other |
| proper accounts is the essential tasks of bookkeeping. | | | | materials as they are purchased. If you are using items |
| However, each type of business needs special | | | | that have been bought previously for other projects, |
| treatments of these items. And the art business has its | | | | then add the estimated cost of what is used for this |
| own unique requirements. If you are an artist then I | | | | new piece. If when a project is finished and small |
| apologize for being so blunt, but the fact is when you | | | | amounts of materials are left over or if materials are |
| are considering your financial records, you are | | | | discarded then you may chose to include the entire |
| manufacturer of a product to be sold. And such your | | | | cost of these materials in the current project's job cost |
| "product" is treated as any other manufactured item | | | | record. Don't forget to include framing costs, shipping |
| would be. This means that each of your creations is | | | | charges, commissions, show expenses and any other |
| entered into an inventory account until sold. This is the | | | | expense incurred to get to a sale. I am using painting |
| accounting theory that says you must match | | | | as an example in this article, but this bookkeeping |
| expenses with the appropriate revenue. | | | | method would apply to any type of art creation or |
| Both the manufacturing and construction industries use | | | | craft such as sculpture, pottery, jewelry, etc. |
| job costing to track the expenses incurred for each | | | | I know that most artists or craft persons will not have |
| product assembled or built. An artist's bookkeeper can | | | | the inclination or time to devote to these tasks - after |
| take advantage of the job costing tool as well. In the | | | | all they are busy creating. But hiring a bookkeeper that |
| cost of a piece of art work the costs of materials, | | | | has experience with your unique needs is well worth |
| such as paint, paper, ink, brushes, and miscellaneous | | | | the money. The Internal Revenue Service looks closely |
| small tools should be considered. But if you are using | | | | at tax returns filed within these fields. They are looking |
| many colors and other items creating your piece than | | | | to determine if what you do is a hobby or a true |
| just how do you determine the cost of one piece of | | | | business. Having good records can make all the |
| art? And what do you do if you go through several | | | | difference in whether they allow you to report certain |
| pieces of canvas or paper to create just one piece? | | | | expenses. |
| Set up a job cost record for the piece to be created | | | | |