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Self Accounting? #2701550
01/02/18 06:54 PM
01/02/18 06:54 PM
Joined: May 2017
Posts: 3
S
Sydney Barrett Offline OP
Junior Member
Sydney Barrett  Offline OP
Junior Member
S
Joined: May 2017
Posts: 3
I don't know how many of you guys are just independent and do your own accounts, etc... I'm a mess when it comes to this stuff, and I want to fix that this year.

Do you guys use free/paid software? Just hire an accountant?

Some basic opinions/advice would be great!

Thanks!

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Re: Self Accounting? [Re: Sydney Barrett] #2701561
01/02/18 07:36 PM
01/02/18 07:36 PM
Joined: Aug 2011
Posts: 5,163
Reseda, California
J
JohnSprung Offline
Unobtanium Subscriber
JohnSprung  Offline
Unobtanium Subscriber
J
Joined: Aug 2011
Posts: 5,163
Reseda, California

Keeping track for my own use and not bouncing any checks I do myself using Excel.

Taxes, I go to an accountant.


-- J.S.

[Linked Image] [Linked Image]

Knabe Grand # 10927
Yamaha CP33
Kawai FS690
Re: Self Accounting? [Re: Sydney Barrett] #2701573
01/02/18 08:22 PM
01/02/18 08:22 PM
Joined: Jan 2012
Posts: 2,150
Toronto, Ontario
P
Peter K. Mose Offline
2000 Post Club Member
Peter K. Mose  Offline
2000 Post Club Member
P
Joined: Jan 2012
Posts: 2,150
Toronto, Ontario
Hi, Sydney. I've always enjoyed the bookkeeping of studio music teaching. There are plenty of software programs available, both free and not. I'm too outmoded for all that, though, and do it longhand on paper. Very easy. At tax time, handling a year's worth of deductions does takes some time, but it's still a fun challenge. To me your attitude is more important than whether you use software or #2 pencil.

If you just hate all of this, however, you could hire a bookkeeper for a few hours every month or two. An accountant seems like overkill to me.

Re: Self Accounting? [Re: Sydney Barrett] #2701610
01/03/18 12:03 AM
01/03/18 12:03 AM
Joined: Apr 2007
Posts: 16,349
Boynton Beach, FL
Morodiene Offline
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Morodiene  Offline
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Joined: Apr 2007
Posts: 16,349
Boynton Beach, FL
I handle the books for my husband's business as well, so for me I just use the same Quickbooks software, but that's overkill, really.

I have looked into some of those programs, but usually they charge you a monthly subscription and again, it may be overkill for the average private piano instructor.

Here are some suggestions on how you can take care of your own accounting:

-Learn to use Excel or Google Docs Spreadsheets. Make one spreadsheet for Expenses and one for Income (you can have two sheets in one document)

-For Income: Make a column with each student name, then a column for what they owe each month, and what they've paid. I also make a column for Notes. I have one set of these columns for each month, and they total up to tell me how much money I've billed and what I've received. I also have it calculate keeping 20% for taxes, and what's left behind is what I "pay" myself.

At the end of the year, I have a nice tally of what I've made.

-For Expenses: I actually think a paper system is easiest for things with receipts. Make a file for each category fo expense and then whenever you empty receipts from your purse/wallet, right away put it in the correct folder. Then once a month you can add up the receipts and enter that dollar amount on a spreadsheet.

At the end of the year, no need to add up all those receipts, you just add up the monthly amounts from your spreadsheet.

-For billing, find a free invoice template and just fill it with the info. Most students get billed the same amount each month, so save a copy for each student that you modify each month with updated info and email.

Really, the key is to have a system, and modify it as you find ways to improve it. And stick to it.


private piano/voice teacher FT

[Linked Image][Linked Image][Linked Image]
[Linked Image]
Re: Self Accounting? [Re: Sydney Barrett] #2701667
01/03/18 06:38 AM
01/03/18 06:38 AM
Joined: Jan 2012
Posts: 2,150
Toronto, Ontario
P
Peter K. Mose Offline
2000 Post Club Member
Peter K. Mose  Offline
2000 Post Club Member
P
Joined: Jan 2012
Posts: 2,150
Toronto, Ontario
Morodiene is a more helpful and detailed explainer than I am, Sydney. Heed her words as much as you are comfortable, and then leave the rest to a bookkeeper or willing spouse. Running a teaching studio does take some ongoing organizing and financial skills, but it's all basic and not very time consuming. You can do this, and you might find you even enjoy it.

Related idea: you could hire someone (like a bookkeeper or accountant) to hold your hand for a couple of hours of initial advice. Then just start muddling along on your own.

P.S. I've been a fan of this folksy book since its first edition long ago. It might get you started:
https://www.amazon.com/Small-Time-O...261X/ref=cm_cr_arp_d_product_top?ie=UTF8

Re: Self Accounting? [Re: Sydney Barrett] #2701716
01/03/18 11:17 AM
01/03/18 11:17 AM
Joined: Apr 2017
Posts: 149
P
PerAspera Offline
Full Member
PerAspera  Offline
Full Member
P
Joined: Apr 2017
Posts: 149
I”ve read this book too in the days when I was starting a little business and had no clue how to approach it. The book was very helpful. Then I took two accounting classes in school (not by choice smile ), learned how to use Peachtree and Quickbooks. My suggestion would be to get Quickbooks and pay an accountant to set it up for your business. He will then show you what and where to record, how to quickly generate invoices, how to see the snapshot of the financial state of your business at any time etc, and you’ll be doing it yourself all year and store/scan the paper proofs. If you want, ask the accountant to help you with taxes, and it would be a quick job for him as long as you keep accurate records.

Re: Self Accounting? [Re: Sydney Barrett] #2701916
01/03/18 10:06 PM
01/03/18 10:06 PM
Joined: Apr 2013
Posts: 3,382
western MA, USA
H
hreichgott Offline
3000 Post Club Member
hreichgott  Offline
3000 Post Club Member
H
Joined: Apr 2013
Posts: 3,382
western MA, USA
My system is not overkill, might be scarcely enough, but it's worked so far:

INCOME
I receive payment lesson by lesson, so the carbonless receipt book doubles as my ledger. There are entries for every payment I receive, the name of the student and the means of payment. Most people don't actually want to be given receipts but this way the few who want one can have one, and I have a complete ledger with everything in one place and no work that feels "extra". Even if I receive an online payment I still write it into the paper ledger.

An extra set of eyes looks over the ledger and the envelope of received cash/checks each week before I go to the bank, to make sure they match. (This alone has made me so much less of a mess, record-keeping wise.)

The ledger is only for teaching income. Gigging, performing and accompanying income goes in a separate excel spreadsheet and/or mailed to me as 1099 forms.

EXPENSES
A manila envelope contains receipts for all business expenses for the current calendar year.

AT END OF CALENDAR YEAR
I remove everything from the manila envelope, staple it together in a bundle, and put it with all other family tax paperwork that starts to arrive in the mail.

AT TAX TIME
I add up all income from the ledger for the calendar year and put the ledger on the shelf for the next 7 years in case of an audit.
I add up all expenses in the stapled bundle and put it in a file folder for the next 7 years in case of an audit.

WHEN THEY AUDIT ME
(not if, when; the self-employed are audited more often and it's already happened once)
I have to have a ton of other information and that's a lot of extra work. But the ledger in combination with my calendar is the key to getting all that information together. And for years in which I don't get audited, I don't have to bother with the extra work, and I like that part.

Last edited by hreichgott; 01/03/18 10:07 PM.

Heather W. Reichgott, piano http://heatherwreichgott.blogspot.com

Working on:
Cabaret (whole show)
12+ variations from classical ballets
Verdi: Stabat Mater
Copland: Appalachian Spring
Tangos and other fun music for piano duo

I love Haydn, Mozart, Beethoven and new music
Re: Self Accounting? [Re: Sydney Barrett] #2701944
01/04/18 12:53 AM
01/04/18 12:53 AM
Joined: Jan 2012
Posts: 2,150
Toronto, Ontario
P
Peter K. Mose Offline
2000 Post Club Member
Peter K. Mose  Offline
2000 Post Club Member
P
Joined: Jan 2012
Posts: 2,150
Toronto, Ontario
Heather, just curious about the inside of that manila envelope: do you file all your business expenses into their appropriate categories in an ongoing way - like Morodiene wisely recommends - or instead do you do this sifting just once a year, under the gun at tax time, like certain Canadians?

Re: Self Accounting? [Re: hreichgott] #2702064
01/04/18 12:03 PM
01/04/18 12:03 PM
Joined: Aug 2011
Posts: 5,163
Reseda, California
J
JohnSprung Offline
Unobtanium Subscriber
JohnSprung  Offline
Unobtanium Subscriber
J
Joined: Aug 2011
Posts: 5,163
Reseda, California
Originally Posted by hreichgott
WHEN THEY AUDIT ME
(not if, when; the self-employed are audited more often and it's already happened once)


I've never been audited, I've used the same tax accountant since 1985. Not cheap, but an experienced accountant can greatly reduce the odds of an audit.


-- J.S.

[Linked Image] [Linked Image]

Knabe Grand # 10927
Yamaha CP33
Kawai FS690
Re: Self Accounting? [Re: Peter K. Mose] #2702510
01/05/18 11:06 PM
01/05/18 11:06 PM
Joined: Apr 2013
Posts: 3,382
western MA, USA
H
hreichgott Offline
3000 Post Club Member
hreichgott  Offline
3000 Post Club Member
H
Joined: Apr 2013
Posts: 3,382
western MA, USA
Originally Posted by Peter K. Mose
Heather, just curious about the inside of that manila envelope: do you file all your business expenses into their appropriate categories in an ongoing way - like Morodiene wisely recommends - or instead do you do this sifting just once a year, under the gun at tax time, like certain Canadians?

Under the gun at tax time, was there another way? wink
(But it isn't really that many receipts, nor in that many different categories.)


Heather W. Reichgott, piano http://heatherwreichgott.blogspot.com

Working on:
Cabaret (whole show)
12+ variations from classical ballets
Verdi: Stabat Mater
Copland: Appalachian Spring
Tangos and other fun music for piano duo

I love Haydn, Mozart, Beethoven and new music

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