The biggest financial f*ckups made by creative businesses
The creative industry’s inability to manage its finances is no secret. Here, Figure Eight Finance’s David Thomas recounts the biggest mistakes creative businesses make time and time again.
There are many different types of people who run creative businesses. While they face different challenges, there is one area that tends to unite them all: the dreaded matter of money.
Finance isn’t just a dirty word for many creative types, it can actually inspire genuine fear. After all, many creatives have actively avoided all things math-related since high school, so getting up to speed down the track can be tough indeed.
“After all, many creatives have actively avoided all things math-related since high school, so getting up to speed down the track can be tough indeed.”
So no type casting here then …
By the way it is “maths” as an abbreviation, not “math”. You don’t say “mathematic” do you?
I’ve been part of several organisations that have used a part-time bookkeeper / accountant in order to keep things in order and it can work very well (especially in chasing up late payments – it’s nice to have a ‘Finance Department’ who can play the bad guy when an invoice is outstanding!).
Plus they can also provide some business advice from what they see with other clients.
However, I did experience one person where an accountant superficially looked like they were doing the appropriate job, but was actually very lazy and entered things incorrectly, resulting in a several thousand dollar tax issue at the end of a financial year.
So it is important to still keep an eye on what your accountant is doing, but even a barely competent accountant can offer a lot of business benefits.
No allegations but I always worry about the outsourcing of being the bad guy. No responsibility = no oversight = big trouble down the track. There are some genuine scandals out there about the role of organised crime in debt collection. That’s outsourcing at its worst. Even on a more benevolent level it smacks of cowardice.
Finance Director says a Finance Director is the answer.
I LOVE Xero…it has made my life so much easier… but it’s true I still have no clue about how most of it works… i feel like I rely way too much on my accountant and constantly scared he’ll miss or forget something…I keep getting passed around to different accountants at the same firm too which i hate. Any tips on finding an accountant that actually gives a damn?!