An Arts and entertainment accountant also referred to as a music accountant, is not your usual general-purpose financial advisor. Even though their work is to help you handle challenging financial tasks, invest, save and identify viable money-making opportunities, their creativity levels sets them apart. Creative professionals such as musicians are different from regular enterprises. This makes it essential to hire a music account that is well attuned to handle concerns unique to your profession.
So, with some of the best-paid music accountants taking home a cool $133,500 per year, is hiring such an expert worth it? Are the services of such a specialist an avoidable expense or a necessary investment? Well, whether to hire an entertainment accountant or not is a very personal decision. It will highly depend on your accounting prowess, stage in your career, and your goals, among other aspects. In this post, we will discuss the pros and cons of having a music accountant. Hopefully, you will learn all you need to make an informed decision.
- Music Accountant Defined
- Important Skills to Look For In the Best Music Accountant
- Music Accountant Defined
- Should You Hire A Music Accountant? Pros and Cons for Artists
Music Accountant Defined
Unlike regular certified public accountants (CPAs) who merely need to be intelligent and personable, a music accountant must also be articulate and creative-minded. After all, such experts work with artistic clients, making it imperative to offer a little more. A qualified and experienced professional will be well-acquainted with navigating the concerns and goals unique to the art and entertainment industry. If you want to flourish as a musician, a music CPA may just turn out to be a vital asset that can set you up for success.
You can expect your specialist to handle recordkeeping, bookkeeping, tax preparation and planning, budgeting, contract review, and bill paying, among other duties. While these duties are not so different from those of a typical accountant, the difference is that you will receive boots-on-the-ground kind of services. Thanks to the industry-specific know-how of a music accountant, you can expect detailed recommendations that can keep you on budget. This is irrespective of whether you want to tour, choose bank accounts, expand your band exhibitions, plan a gig or just opt for a credit card.
Important Skills to Look For In the Best Music Accountant
There is more to what makes a good music accountant than merely the ability to keep and interpret financial records. Even though qualified experts have outstanding mathematical skills that allow them to compare, analyze and interpret data and figures, it is necessary to seek more. The ideal specialist should have what it takes to handle a wide array of financial tasks with remarkable grace. It is also imperative for the expert to be well-acquainted with current accounting trends, including accounting automation, data analysis, and transparency and security. Apart from glowing credentials, you owe yourself the favor of finding a specialist with a creative mind.
Let’s have a look at the top skills to look for in the right music accountant:
Hiring a music accountant who lacks a detail-oriented and meticulous eye is a waste of time and money. You need a specialist that can sift through piles of financial records and affirm that all details are current and accurate. Once you invest in branding for musicians and proper marketing, the last thing you want is to have a bookkeeper whose analyses don’t yield consistent results.
Music Accountant; Organization
Music accountants wear many hats. As such, they often have to juggle multiple tasks, meet deadlines and still adhere to proper reporting guidelines. Depending on your level of success as a musician, the duties of a specialist may involve handling significant amounts of documents. A well-organized accountant will make your life easier and help you stay on top of budgets and deadlines.
Yet another essential skill to look for in the ideal CPA is critical thinking. This skill will assure you that your specialist will have an eye for detecting discrepancies, inaccuracies, and errors in your financial records. Moreover, this skill ensures you receive proper guidance when making financial decisions. For instance, if you want to invest in new equipment, you can expect your music accountant to consider all variables before offering guidance. This includes the potential risks allied with an investment.
Music artists thrive when they maintain strong interactions with essential people in the music industry and their fans. As such, you may cripple your chances of success if your accountant lacks good interpersonal communication skills. It remains imperative to find a specialist that can serve as an avid data interpreter. This ensures that your team understands complex financial concepts, especially those intertwined with your activities as an artist.
Music Accountant; Industry Knowledge
Hiring a CPA who understands financial statements and how they work is good. It is even better to hire a specialist with technical expertise specific to the music industry. This will enable them to enlighten you about different topics that assure your success as a musician. For instance, competence in matters specific to the music industry will allow your accountant to offer specialized services when handling ledgers, trial balances, initial public offerings, and more.
The accounting profession constantly evolves, just like all other professions. Gone are the days when accountants would work alone at a desk and remain in solitude for most of their careers. Today, bookkeepers and music accountants in specific provide better value by working with teams. It is generally easier to achieve positive results by collaborating with a musician’s team of specialists. You can also expect a top-tier accountant to adapt to standard and protocol changes, including workplace dynamics.
Should You Hire A Music Accountant? Pros and Cons for Artists
Ask any music accountant whether you should hire them, and the answer is likely to be the same—yes! In fact, accountants will constantly flex muscles and talk about the invaluable nature of their services, whether you are just getting started as a musician or you’re already thriving. The truth is that there are both pros and cons to hiring such a specialist.
Let’s have a look at the unbiased advantages and disadvantages of hiring a music accountant:
Grow Your Business
Contrary to popular belief, the music “business” is not so different from any other kind of business. Therefore, hiring a music accountant is one way to ensure that you grow to your best potential. A competent, skilled, and creative specialist can be a great source of wisdom and advice that will help you achieve your set career objectives.
Peace of Mind
Like most musicians, the business side of being an artist may not be your strong point. Working with a CPA will free you from dealing with the financial aspects of running a career. Consequently, this will save you time, allowing you to focus on what you do best—making great music!
Humans are prone to making errors. This is more so the case when they lack proper accounting training. Even if your publisher handles your accounting, your CPA can perform periodic audits to unveil possible mistakes in setting up contracts or songs in the royalty system. Identifying and rectifying any legal deficiencies, accounting mistakes, or misinterpretations can make the big difference in your overall income.
Music Accountant; Affordable
One of the biggest myths that cannot be further from the truth is that hiring a music accountant is expensive. What you should know is that such an expert may help you save a lot of money. Typically, the money you spend hiring the bookkeeper is paid by the savings you make. Moreover, the specialist may help you expand your revenue streams, meaning you will still have more money in your wallet.
It is crucial to consider hiring an arts and entertainment accountant as an investment and not an expense. The specialist will work on the numbers as you concentrate on the core operations of thriving as a musician. You’ve heard that time is money, right? Well, when it comes to “business,” cost is measured in both money and time. The time and money you save each month will make retaining a music accountant a worthwhile investment.
Make Smart Choices
Accountants are business savvy. This allows them to provide invaluable advice when making crucial business decisions. For instance, if you want to buy a car for your touring plans, a skilled CPA may advise you to buy it under your brand name instead of your name. Such a move can make a significant difference in your personal and business finances.
Generally, the professional will prevent you from making small mistakes that can cause significant problems in the future. Moreover, the services offered can improve business processes. This is possible by ensuring you are always aware of where your money is, what it is doing, how you can access it, and the best time to access it.
Another major perk of retaining a music accountant is privacy protection. As a musician, data protection is a key cornerstone to your operations. Your specialist will ensure you know all there is to know about your finances and even handle music publishing royalty audits. At the same time, the specialist will keep all your information under lock and key, ensuring it doesn’t fall into the wrong hands.
Another Load on Your Funds
Making money and saving as much as possible is likely to be a top priority, especially when getting started as a music artist. At some point, you may have to stretch every penny as you work on producing new music and building business momentum. The truth is that it may make sense to use your financial skills and experience, at least until you begin making the big bucks. Once you are on your feet, it will be more justifiable to hire a music accountant.
Under-Utilized In-House Skills
Musicians have creative minds. If you also happen to have some mathematical skills, the chances are that you can handle your financial affairs in person. Furthermore, you may already be working with a team of business savvy specialists, including music managers. Such experts can lend a hand with your accounting, especially before your records become overwhelming. Even though music CPAs are qualified and accredited, some of the duties they handle can be managed by your in-house team.
Let’s Sum Up
There you have it, the pros and cons of hiring a music accountant. Even though retaining an expert is a significant investment, it’s not the only way to ensure your accounts are in order. It is best to consider the stage you are at in your career before hiring an expert. Just like music managers, hiring a bookkeeper is only justifiable once you have done some serious heavy lifting. The idea is to grow your revenue streams and fan base before you can consider expanding your team.