Accounting for Musicians & Artists


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Here at Linda McGowan Pty Ltd we have been providing accounting, tax and financial planning solutions to musicians and artists for over 15 years. Our clients span the whole musical spectrum - solo recording artists, bands, songwriters, publishers, studio musicians, freelance classical musicians, well known pop groups, music and instrument retailers plus small record labels.

While you won’t find Linda McGowan’s face on the front of a CD cover, she always strikes the right note with her musician clients. In fact, the music industry has become a real niche area within the practice. Her in depth knowledge and understanding of the industry stems from her husband’s long term involvement in a band spanning several decades. She recognises that you invest heavily in your craft and that your world is evolving with uploading music to the internet and virtual distribution costs with itunes, mp3 and cdbaby.

We are not your average accounting firm that just keeps the score. We aim to help you convert your creative capabilities into profits and make your financials more meaningful. Our extensive knowledge of the music industry has enabled us to develop a portfolio of services that meets the exact needs of our niche clients and we invite you to download our accounting for musician's brochure from this page.

THINKING OF STARTING A MUSICIAN OR ARTIST BUSINESS

Musicians and artists are one of our specialist client groups and Linda McGowan has personally mentored hundreds of business start ups including dozens of artists and musicians. Linda says, “The harsh reality is that enthusiasm, money, talent or a great idea is not enough to guarantee success in the music business. Like a chess game, to succeed you need to make the right opening moves and we are passionate about helping musicians and artists make the transition into their own business.”

Having previously assisted so many musicians and artists you can benefit from our experience. It all starts with the question, are your activities a business or a hobby? Sometimes the lines are blurred and the ATO have established criteria that we can share with you. The start-up phase can be a period of great anxirty and there are
numerous issues to consider. You need to establish your business structure, complete tax and GST registrations, consider insurances, select an accounting software program and possibly explore your finance options. It can be a maze but as accountants and business advisors we can assist you in all of these areas plus provide advice on the preparation of a business plan, marketing plan and a cash flow budget. If you are contemplating employing staff we can also assist you with human resource matters including payroll, WorkCover and superannuation guarantee obligations.

Over the past two decades our team of accountants have helped dozens of musicians and artists get their business off to a flying start. We offer you experience, technical tax knowledge, marketing expertise and most importantly, an intimate understanding of your industry.

Starting a business is a bit like building a house that requires solid foundations. In a business sense these foundations include the right tax structure and accounting software, adequate and appropriate insurances together with a marketing plan and a lead generation website. Your choice of business structure is absolutely critical and there are a number of different options including sole trader, partnership, company and trust. When selecting the most appropriate structure for your business we always recommend you ‘start with the end in mind’ because Australian tax laws are complex and changing your business structure at some point in the future can trigger a capital gains tax event that could prove very costly.

Whenever we provide advice on business structures we always take into account:

  • Income Tax Minimisation
  • Maximize Asset Protection
  • Allow for the Admission of New Business Partners or Investors
  • Comply with all Legal Requirements in your Industry
  • The Risk Profile of Your Industry
  • Consider Future Entitlement to Discount Capital Gains Tax Concessions

As a consequence, we often find the business structure is a compromise based on the relative importance of each of these issues.

Another brick in your business foundations is your choice of accounting software. Poor record keeping is one of the biggest causes of business failure in this country and up to date, accurate financial records let you to make informed business decisions. The wrong choice of software can be catastrophic and too often we find business owners produce what we describe as ‘computerised shoebox’ records that cause frustration, waste time and create additional fees. This conflicts with our mission of helping you slash the time and cost associated with bookkeeping and GST compliance.

Here at Linda McGowan Accountants, we want to be your accountants and business advisors, not just an expensive bookkeeping service. We do more than ‘keep the score’ for our clients and when selecting the most appropriate accounting software for your business we always recommend you match your business needs with your level of accounting skill. You’ll find we support a range of different software options but we do have a preference for cloud based solutions like Xero because of their flexibility and the fact that you can access your financial data via the internet and invite your accountant or bookkeeper to view your accounts at the same time. This means you can get bookkeeping support and valuable advice in real-time. You can also log-in anytime, anywhere on your Mac, PC, tablet or smart phone to get a real-time view of your cash flow. Your data is automatically backed up and users have access to the latest version of your financial data plus you never need to worry about installing software or program updates.

To build a house you also need the right tools and when 'constructing' your business we have developed a number of tools including a start-up expense checklist broken down into various categories including: 

-  tools and equipment
-  professional advice and software
-  information technology costs – software and hardware
-  marketing and website
-  vehicle costs

This checklist will help you identify all your potential establishment costs and these figures then feed through to our cash flow budget template and allow us to produce a projected profit and loss statement for your first year of trading. These reports can also tuck neatly into our business plan template that is designed to help you secure funding from external sources like a bank. Another useful tool is our business start-up checklist that walks you through key business registrations you might require, insurance options, legal issues, branding and domain name registrations for your website.

For a musician, your vehicle is arguably your most important business tool. To learn more about the alternative methods of claiming your vehicle expenses and the distinction between a business and private trip, you can read our Motor Vehicle Tax Guide. In addition, through our affiliate partners we can also assist with vehicle finance (chattel mortgage, CHP or lease) and get you fleet pricing on your new car, ute or light commercial van that could save you thousands of dollars. Through another affiliate group we can also help you source funds to finance your business purchase or equipment.

In summary, if you're contemplating starting a business you don't need to reinvent the wheel as we have all the tools and resources to help you get off to a flying start. In fact, that’s just the beginning because as accountants we can do some financial modelling and prepare some ‘what if’ calculations based on different price points so you know your business’ best and worst case profit scenarios.

When establishing your business it's important to seek sound professional advice from qualified accounting and legal sources. Your business success is important to us because Small Business is Our Passion . To support this claim and to help our clients starting or buying a small business we have produced a valuable booklet that contains information on a number of topics including :

  •    Choice of Business Structure
  •    Tax and Business Registrations
  •    Buying a Business
  •    Record Keeping Requirements
  •    Accounting Software Options
  •    Business Insurances
  •    Employer Obligations
  •    Legal Issues
  •    Permits & Registrations
  •    Claiming Motor Vehicle Expenses
  •    Preparing a Business Plan
  •    Preparing a Cash Flow Budget
  •    Vehicle & Equipment Finance Options

MARKETING YOUR BUSINESS

As accountants we operate in a very crowded and competitive industry. We recognise the fact that your marketing could be the difference between gloom and boom and while we have a small firm personality, we have big firm capabilities. One feature that distinguishes us from other Melbourne accounting firms is our marketing expertise.

Most artists rely on their reputation and referrals to grow their business. While these ingredients certainly remain important in the digital age, you need to shift your marketing focus online. Increasingly local searches like ‘artist or musician Brunswick’ are driving traffic to your website which is often the first touch point with a potential new customer. As you know, in business, you only get one chance to make a good first impression and your website is your 'online shopfront' and silent sales person working 24/7 to promote your business.

Over the past few years we have worked with dozens of clients to help them create quality, affordable lead generation websites that are responsive to smart phones and tablets. We can help you plan and build your website, optimise it for Google and the other search engines plus assist you with your content creation including video production and digital publishing. If your website is missing features like lead magnets, calls to action or landing pages we'll help you build them plus we'll also introduce you to strategies like re-marketing and search engine optimization to drive more traffic to your website.

Your brand should resonate with your target market and we can assist you with the development of your business name, logo and slogan, your corporate brochure plus we can help you write blogs and newsletters plus help you harness the power of social media to win more referrals. If you aren’t using some of these marketing techniques your business probably won't reach its full profit potential.

Most importantly, we understand that business owners like you want more sales, more customers and more profit so we also give you access to one of the world’s most successful marketing programs, the ‘Business Growth System’. It contains more than 80 breakthrough marketing strategies supported by videos, templates, checklists and 2,500 pages of instructions. Access to this ‘vault’ of resources would normally cost you $500 per month, however, as a client of the firm you get unlimited FREE access. In addition, you also get access to the ‘Grow Your Business in 5 Days’ video training course that could have a massive impact on your future business growth. That's over $7,000 of valuable marketing tools you receive when you come on board as a client with us.

We will help you understand the four ways to grow a business plus identify the key profit drivers in your business. We can walk you through a number of profit improvement strategies and even quantify the profit improvement potential in your business. Our role is to make sure you know your numbers and don't leave any profit or tax savings on the table. That’s really just the beginning because as accountants we can do some financial modelling and prepare some ‘what if’ calculations. This lets us project your business’ best and worst case profit scenarios.

Our unique Business Accelerator Process is all about fast tracking your business success and the team at Linda McGowan Accountants offer you a range of accounting, taxation, marketing and business coaching services including:

  • Start-Up Business Advice for Musicians and Artists
  • Advice regarding the Purchase or Sale of your Business
  • Tools including the Start-Up Expense Checklist and Templates for a Business Plan, Cash Flow Budget, Letterhead and Business Card
  • Advice and Assistance with the Establishment of Your Business Structure - Company, Trust, Partnership
  • Tax Registrations including ABN, TFN, GST, WorkCover etc.
  • Preparation of Business Plans, Cash Flow Budgets and Profit Projections
  • Accounting Software Selection and Training – Bookkeeping, Invoicing, Quotes & Payroll
  • Preparation and Analysis of Financial Statements
  • Preparation of Finance Applications - Loans to Buy a Business, Expand, Franchise Fees
  • Bookkeeping and Payroll Services - MYOB, Cashflow Manager, Xero, Reckon & Others
  • Tax Planning Strategies
  • Assistance with your Marketing including your Branding, Corporate Brochure etc.
  • Advice and Assistance with your Website Development, Content, Videos, Blog Posts and SEO
  • Wealth Creation Strategies and Financial Planning Services including Transition to Retirement & SMSF's
  • Industry Benchmarking and Management of Key Performance Indicators (KPI's)
  • Vehicle & Equipment Finance (Chattel Mortgage & Lease)
  • Monitoring and Controlling Labour and Sub-Contractor Costs
  • Advice & Assistance with Pricing your Services and Claiming Motor Vehicle Expenses
  • Recession Survival Strategies
  • Advice regarding Employee Relations and Workplace Laws
  • Business & Risk Insurances (Income Protection, Life Insurance etc.)
  • Business Succession Planning

What can you Claim?

Generally speaking if you are running a business you can potentially claim expenses ‘necessarily incurred in deriving your assessable business income’ including :

  • Musical Instruments*
  • Equipment* & Accessories (amps, pedals, effects, straps, carrying cases)
  • Consumable Supplies (such as drum skins, drum sticks, guitar strings & picks)
  • Music Business Books, Record Company Directories, Venue Directories
  • Subscriptions to Trade Magazines
  • Travel & Gig Costs
  • Sheet Music and "How-To" Books and Manuals
  • Promotional - CD/Tape duplication (for demos), photos, bios
  • Office Supplies & Stationery - paper, envelopes, photocopies, stamps
  • Website Development and Hosting Expenses
  • Fees related to e-mail access for your music-related activities
  • Rent for storing your gear and for your practice space
  • Membership of Professional Bodies including Associations & Unions
  • Professional Fees (Solicitor, Manager, Agent and Accountant)
  • Copyright and Registration Fees
  • Lessons & Instruction
  • Travel & Accommodation Expenses
  • Home Office/Studio Expenses

* Some of these expenses are fully deductible while others must be depreciated and claimed over a number of years

The musician’s world is fascinating for an accountant because of the potential different sources of revenue including publishing, recording, merchandising and touring. We know that the small struggling band could be tomorrow’s star but it all starts with the right opening moves. If you're a musician or performing artist contact us today about how we can help you succeed in business.  

We are so much more than just tax Accountants. We are business and profit builders who genuinely care about your business success. We service the accounting and taxation needs of a number of musicians and if you're a committed and ambitious musician or artist looking to accelerate your success we invite you to book a FREE, one hour introductory consultation to discuss your business needs. You'll get an hour of practical business, tax, marketing and financial advice that could have a profound effect on your future business profits. To book a time, call us today on (03) 9383 2700 or complete your details in the box at the top of this page.

Linda McGowan Pty Ltd - Strategies & Solutions for Business Owners