by Amy Smith for The Dance Journal
This column in the Dance Journal seeks to improve the financial literacy of dancers and artists in all creative disciplines, so that they may develop sustainable practices and further expand the reach of their creativity. Questions for Amy may be mailed to firstname.lastname@example.org for consideration.
This is Shaily Dadiala of Usiloquy Dance. First, thanks for being an accessible resource to artists and non profits. Finances are never easy! In Usiloquy’s case, we have a stellar Treasurer in Barb Baur. As we grow older, we are considering ways to divide some of her work load. She has been using QuickBooks Mac 2009 for record keeping. Do you have any thoughts on QuickBooks Enterprise- with regards to multiple users (windows and Mac) and cloud data storage so more than one person can make data entries? Appreciate your advice and suggestions, Shaily Shaily Dadiala Artistic Director www.usiloquydance.org
Thank you for writing in! You are so lucky to have a Treasurer helping you with Usiloquy’s finances. I personally use Quickbooks 2010 (a desktop version) for Headlong’s finances, but I know some people that are using Quickbooks Online and really liking it. The interface with bank accounts makes the monthly bank reconciliation process really easy. In addition, your data lives in the cloud so you can access it from anywhere, so you don’t have to worry about your computer crashing and losing your data. Anyone with the password can access the data, so you can have multiple users. QB Online is also about $13/month, which is much cheaper than QB Enterprise, which starts at $1000 and probably has more features than you need. And dear readers, I do NOT secretly work for Intuit, but I do like their products, and they are by now the industry standard, so it’s well worth the investment of time and money.
After reading some of your columns, I decided that it probably is not an advantage for us to register as a 501 C 3. So my question is how do you go about selecting a fiscal conduit? What should I be looking for? Any issues I should be cautious about?
Dear Looking for Love From a Fiscal Sponsor,
Of course I am being cheeky (what else is new?), but the metaphor is apt. You want to find a fiscal sponsor who is the right fit for you and your particular situation, just like in your romantic relationships. As your matchmaker, I would advise you to start by doing some online research and asking your friends who they are dating. Luckily you don’t have to worry about infidelity – you and your friend can be in a relationship with the same sponsor! Narrow the field to 2 or 3 sponsoring organizations and contact them. Ask about how much or little they do for you and how much or little they charge for that work (usually a percentage of the money you raise, and usually in the 5%-12% range). Get the “vibe” of the sponsor. Ask for a contract or letter of agreement and make sure you understand the terms of the agreement before you enter into a sponsor/sponsee relationship. When you have done your due diligence and chosen carefully you can relax and enjoy the benefit of the 501c3 without having to deal with all the reporting and governance requirements. Then, get to work on the thing you do best, which is art-making!
What are your thoughts on the Cultural Data Project for preparing financial reports for grants? Is this the best way to go?
Dear WTF, CDP? LOL,
I must admit that over the years I have had a love/hate relationship with the CDP. When it was first developed there was a serious learning curve for me and for a lot of people in the arts community as we all tried to figure out how to put our info into the CDP. I know from serving on Philadelphia Cultural Fund panels that a lot of dance entities are still very confused about how to enter their data into CDP correctly. But what I decided to do long ago was to actually adopt the way the CDP does their record-keeping into my own record-keeping. So I changed Headlong’s chart of accounts to match the CDP’s categories, and asked our auditors to create a statement of functional expenses that uses the CDP’s line items. So now, making the transition from audit to CDP every year is quite simple. And there are two really nice things about CDP. We don’t have to rejigger our budgets for every grant-maker out there – we can just use the CDP Funder Reports (anything that saves time and energy when grant-writing is a blessing). And you can use the CDP to look at other organizations’ data to see what macro-trends are happening in the field. Fun for data-geeks like me!
It seems like I am always off on my budget projections from year to year. I tend to estimate under what is actually spent. Is there some guideline for calculating this or somewhere I can read or learn more about making these projections?
I’ve been there! No one is perfect when it comes to sticking to budgets. But it is important to learn from your mistakes. The best way to do this is to create variance budgets after you complete a project or a year. (If it’s a big project you need to track variances mid-project, not just after.) Do this in Excel so it’s easy: your first column is what you budgeted, second column is what you actually spent, and the third is the difference (plus or minus) between them. Ignore any small variances (less than 10%). But make note of big ones, and then the next time you are creating a budget, refer to them and make sure you adjust appropriately. There will always be one-time budget busters (for example, when we were working on “Hotel Pool” and realized we had to buy LED lights for the piece, which made us go WAY over budget on the production expenses line). But if it’s something like “wow, I always think I can buy costumes for $300 and then it’s always actually $500”, save yourself some future headaches by budgeting $500 for costumes next time.
So I made it through tax season and some of your advice in this column was really helpful. My biggest downfall is my bookkeeping. While I save every receipt, I just never have time to enter this in quickbooks, etc. Is there some system that works, so this does not have to be such a labor intensive chore?
Dear Chored Up,
I feel your pain. I’ve been doing this stuff for 20 years and even to me it still can feel like a pain in the ass sometimes. Just ask Thomas Choinacky, who is Headlong’s fearless Programs Manager and recently did the March bank reconciliation for me because I was putting it off, putting it off, putting it off. So the first thing I want to say is, There is No System. Everyone is different and needs the system that works for them. For me, there are three “tricks” that help me get to it. First, change your attitude. Instead of thinking of the task (non-artistic, be it QB entry, adding up receipts, bank rec, etc.) as something that takes away from your dance practice, think of it as a thing that makes your dance practice possible. Give it the time and respect it deserves. Second, make it routine. Instead of putting off all that stuff until you MUST do it and by then it’s hard to remember what the receipt from CVS was even for, just do it every week at the same time. For example, every Monday afternoon you get that admin stuff done and off your desk and off your mind. You’ll find that the ‘slow and steady’ approach means that the money and admin stuff STOPS being at the center of your consciousness all the time, and STARTS being just one of the things you are doing, which is much more healthy and sustainable. Third, keep it simple. Round up to the nearest dollar. Or ten dollars. Make guesstimates. If you don’t remember what that CVS receipt was for, it’s probably office supplies, just move on. There is an important concept in accounting, which is that when something is really small, amount-wise, it’s “immaterial”. Don’t sweat the immaterial stuff. Good luck and please let me know how it goes!
The information provided on this site and accompanying material is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs. Neither PhiladelphiaDANCE.org, The Dance Journal or Amy Smith does make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, PhiladelphiaDANCE.org, The Dance Journal or Amy Smith disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.