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Tracking Net Income as an Artist

Tracking your Net Income as an Artist

If you’re selling your artworks, you should consider tracking your net income from your art practice: that’s how much money you make after subtracting out expenses.

Why? Because only by calculating net income will you know if your art practice is profitable (“Can I quit my day job yet?”) and whether you might owe the government money in taxes.

In this post, I share how I track my net income as an artist today, and how I got here. I also provide a spreadsheet you can download to get started tracking yourself.

Tracking Income as an Employee

For the longest time, I didn’t pay attention to money. I worked as a software developer and could depend on my paycheck being deposited twice a month, while my employer took care of paying my taxes.

The Sunshine Coast: An Artist's Paradise

That changed when I married, and my husband and I decided to move to a semi-rural community, three hours away from the city we had been working in. The upsides? A beautiful coastal location with an island-like ambiance, friendly people, and homes that cost about 20% as much as in the city. The downside? Virtually no full-time jobs. Most locals make ends meet by working multiple part-time jobs or becoming self-employed. I tried both, ending up self-employed.

Tracking Income when Self-Employed

Changing from a salaried employee to self-employment was eye opening. Along with having to learn marketing, sales, and new technical skills, I also needed to learn the basics of bookkeeping and how to prepare taxes for my business.

On top of that, I had to adjust to income which fluctuated month to month, and had to put aside enough money for taxes. In short, I had to start paying attention to money.

I created a system to track all the hours I worked for clients, tagging those hours as either being part of a fixed-price project or as being paid hourly. The system generates invoices and allows me to track which payments are outstanding, so at a glance I can see what money is still owed me. It also lets me see how much effort I put into fixed price projects, and where most of my time went. And I can see which clients – and which types of work – provide most of my income. That information helps me make strategic decisions about what direction to take my business in.

That system continues to serve me well after a decade, and has helped me identify what data to track for my art practice: both for accounting purposes and for making strategic decisions about where to focus my efforts.

Tracking Income as an Artist

While I was launching my new self-employed life, I was also pursuing an art degree part time. A few years after I completed the degree, I started selling some of my paintings. My goal was to sell enough art to cover the cost of the art supplies, occasional workshops, show fees, and art organization memberships. Essentially, I wanted a self-funding hobby.

Using Spreadsheets

Although I don’t make or sell a lot of art, within a year or two I discovered I was having trouble remembering which paintings I had sold and the details of the sale. So I started a spreadsheet tracking my artworks and sales. I had a row for every painting I’d made. I had columns for:

  • Using Spreadsheets to Track your Net Income as an Artistthe name of the painting
  • status of the art work (available, NFS, sold, in a show)
  • the medium
  • its dimensions and weight
  • the year it was made
  • its current location
  • the price I wanted to sell it for
  • who I sold it to
  • how much I actually sold it for
  • when I sold it
  • where I sold it
  • sales taxes collected from buyer
  • commission paid (if sold in a gallery)
  • extra notes

One of the things about being self-employed and doing my own taxes is that I became very conscious of the government’s desire to receive taxes for all my net income, and the threat of penalties if I don’t pay that money in a timely fashion.

If and when I actually start making more money from art sales than I spend in art expenses, I’ll have to be ready to declare the net income and pay taxes on that. To know if I’m making a profit, I have to track both my art sales and my art expenses. So I made a separate spreadsheet to list expenses . There was one row for each expense, and the following columns:

  • date of the expense
  • amount of the expense before taxes
  • how much GST (one type of sales tax we pay here) I paid
  • how much PST (another type of sales tax we pay here) I paid
  • total cost including taxes
  • category of the expense (e.g. art supplies, workshop cost, show fee, membership fee)
  • who I paid the money to (a person or a business)
  • extra notes

Pros and Cons of Spreadsheets

The upsides of spreadsheets are that they are free (if you have Microsoft Excel or choose to download a free alternative) and flexible. You’ll have all your information in one place, and you can do some simple tallies and totals without having to learn Excel in depth.

But personally, I don’t enjoy working with spreadsheets. Visually, they can be cluttered and lacking focus. To fit every column I want to see onto the screen, I end up with a smaller font size than I’m comfortable reading. And I’m constantly having to sort by different columns depending on what I want to know. (Sort by year to see how many paintings I have I sold this year. Sort by person to see how many paintings person X has purchased. Sort by location to see which paintings are currently in show Y.)

Also, I’ve never been savvy with Excel. There’s probably lots more I could have done with Excel if I’d known it better. But because I can write PHP code, I never learned to use Excel functions. When I wanted to analyze data, I would just write my own PHP code to do exactly what I wanted. Eventually, that’s just what I did to replace my art sales and expenses spreadsheets, creating

I still have to type my data into ArtistClerk, but now I have more aesthetically pleasing environment to do that in. And the real payoff comes when I want to know something. I just visit the Reports page and click on the question I want the answer to. Like these:

  • Tracking your Net Income is Easy with ArtistClerk!What media sells the most?
  • What original artworks have been purchased and by whom?
  • What sizes of artwork have I sold the most of?
  • What events have I sold the most artworks during?
  • How much have I earned (before expenses)?
  • How much have I spent in expenses?
  • How many works have I completed?
  • How many people are in my contact list?

Should You Use Spreadsheets to Track Your Net Income?

In spite of not loving spreadsheets, I still think they are a great way for artists to track their net income, if you’re not ready to commit to a monthly cost for software. And if you ever do decide to move to software, the software provider will be able to import your data from the spreadsheet into their software. (At ArtistClerk, we import data at no cost when you purchase an annual subscription.)

I’ve prepared a spreadsheet with columns that you can download and use. It has one sheet for artworks and another for expenses. (Excel has tabs at the bottom that let you switch between sheets . Other spreadsheet programs will likely be similar.)

If you are just starting out tracking your artworks, sales and expenses, I hope you’ll find this useful.