Simple Accounting Inventory program not named Quickbooks?

January 17, 2006 8:34 PM

I run a tiny record label. So far we have one release under our belt and book keeping has been relatively easy as far as keeping track of what outlets we sell the cd too, and keeping track of collections and what not...We have three releases planned for the upcoming months, and this is gonna throw a wrench into our book keeping.. I could very well, just adopt the same policy for every release as I do for our first one, but it seems like a lot more work then needs to be done.. I keep a simple ledger for each account with how may cd's they took in, what they ow, and when a check comes in subtract the payment from the existing balance. NOw with some vendors having two or three of our releases, and checks coming in for more then one of our releases, Im gonna need a better way to keep track of ... (more inside)

SO, most people tell me to use Quickbooks which I have a copy of, but to be honest, I have read the dummies guide, I have looked at tutorials, and I am simply not feeling it...Seems much more comprehensive then what I'd like...Can anyone reccommend a simple to use inventory /accounting type program that may fit my needs...I plan on keeping the label relatively small with no more then two-three releases a year, so growth is not going to be massive...I've considered doing what I'm doing currently, but setting it up through EXCEL...i dont know. Im kind of lost right now, and would like to have a plan in order for when the next set of releases come about....thanks

posted by TwilightKid to Work & Money (6 answers total)

Software and setup may be only part of your needs. You may also need some advice from an accounting professional about business practices such as cash application, recievables, and statements/invoicing cycles. And you may need some training and walk throughs with specific parts of a software package as it is setup. If your label takes off big time, you may need help with training additional people you add later to handle the growing order processing volume.

The good news is that many small accounting practices do such consulting, and also offer services such as system setup and auditing, in addition to traditional tax and financial statements preparation. You need to get on the phone and start shopping for an accountant that can do these things for you, or can recommend people who can, and see that your books and processes are set up correctly, and will grow with you. Chart of accounts, Accounts Recieveable, Accounts Payable, and General Ledger need to be automated in line with GAAP (Generally Accepted Accounting Principles) for your industry, and you need to adhere to recognized methods for handling more complicated business issues as you grow into them.

You're in the same boat as many small business people, who get into something they love, because they know something about the business, without knowing much about accounting. Those who are successful recognize their limitations, and get help. In your case, as a record label mini-magnate, this is even more important, because if you can't transparently and professionally show your artists that you have a way of handling their product and revenue properly, you will soon lose those artists and your reputation. In the record business, that is the kiss of death, and the start of expensive protracted lawsuits.

So get some advice, and then follow it. If costs are a concern (and costs are a big issue for most startups), you can get some good free or low cost help from various non-profit organizations such as SCORE. And a lot of small accounting practices have a sort of 'sliding scale' for the first year or so for clients in the start up phase of a business.

But don't be a doofus, and do the wrong things, because you think you can't afford to do the right things. If making your label a quality operation is important to you, you'll recognize this is a "must do," and you'll hustle to find the resources and help you know you need. With that in place, you'll be able to be transparent and professional with your artists, and that attitude will come across to other artists, as you build your label.
posted by paulsc at 3:44 AM on January 18, 2006

I don't have a specific software recommendation for you, but I do have an important bit that you need to keep in mind while you are exploring your different software options: make sure you wome up with a way to deal with returns. Returns are a fact of life in the indie label biz, and you need to manage that part of the biz VERY carefully, or in time, you will get swamped. So far you've only had the one release, so it hasn't really come up -- but it will.

Example: In your question you talk about how to divide up one check when it represents money being paid for several different titles. Later on down the line, it gets more complicated, because people will be returning unsold inventory of old titles to pay for new ones. So, let's say you put out a new release two years from now, and you have a distributor that orders 100 copies (or a store that orders 10 -- its the same principle). But then they come up with 5 of this, 2 of that, 7 of the other thing.... a big box of old stuff you'd been paid for a long time ago. They send that back to you, and that's your payment for the 100 copies of your new release. The longer you're in business, the more returns you end up taking back, and the more tangled your accounting web becomes, and the more difficult it becomes to manage your cash flow. Most of the time, when indie labels close up shop, the problem can be traced back to poor managemnet of returns. Of course, the label always blames it on the distributor being a crook -- and that may be true also -- but usually the real reason is that at some point the label's cash flow got choked by a big wave of returns, and they couldn't recover. This will most typically happen after you have your first big seller -- everyone will want to carry it, you'll think you have a big hit on your hands, you'll press up thousands of 'em, and all will be right in the world. Then, for years to come, you'll be taking returns back on that big title, as the sales for that one slow and people use excess inventory to pay you for your new releases, which probably won't sell as well.

Many basements and attics across this great land are filled with thousands of cardboard boxes full of unsold CDs for just this reason. Mine included.

Good luck -- and feel free to e-mail me if there are any other aspect of the biz you want to talk about.
posted by spilon at 7:24 AM on January 18, 2006

As an Accountant (in job description only--not licensed) I would highly recommend working with someone who does feel it. Accounting for the business is only going to get more complicated and the more you do feel the recording and distributing of new titles the less you are going to want to deal with the more accounting it will take to keep your underlying business running smoothly. A few years ago, as a fledgling accountant I would've worked for peanuts on the side to set up and keep your general ledger for you. Look into 'hiring' someone you know or someone who just wants the experience of working with an up-and-coming sexy music label [we accountants can be pushovers for interesting businesses, lets us brag to each other at conventions]. Kudos to you for thinking about this early on, but if you are not gung-ho about running the more generic and user-friendly QuickBooks, you won't find excitement in any other fancy software; and you're right about Excel. It'll work great for a small project, but trying to scale it to carry the General Ledger of a growing business is going to require learning more accounting than learning Quickbooks. Accounting is accounting, no amount of window dressing will change that.

*gets off soapbox*

To answer you question, I don't know of any other programs that might fit your bill.
posted by iurodivii at 10:49 AM on January 18, 2006

Response by poster: thanks for the tips...

i think an accountant on the side may be the way to go...

however, the label is going to be alot smaller then some of the examples that were provided in a few of the answers above. i'm talking releases with 1000 copies pressed max, selling to one stops on consignment....

i work in the music biz , so i know how tough it is to get product into stores. Im gonna focus more on the online sales and such, so alot of the stock will be in house with the exception of the few small distro's that may take 100 or so copies from me...

Quickbooks I have toyed with and toyed with, and I have a general understanding of how it works, I just can't seem to get comfortable with it.

maybe i can get a college kid or something majoring in accounting to be interested.

thanks though for the input.
posted by TwilightKid at 11:03 AM on January 18, 2006

TK, heres a previous thread that might shed some light on small business accountancy, I was especially interested in the MYOB products referenced; though i have no personal experience with it, just happened upon it.

hope that helps.

I personally got interested in accounting working for a family owned business, definitely never expected to do it for a living!
posted by iurodivii at 1:01 PM on January 18, 2006 [1 favorite]

As much as I like Excel, you probably do want to use Quickbooks or another accounting program. You want to do this because you have things like taxes on your profits to worry about, and Quickbooks understands costs, sales, and taxes. And you want to know your stock on hand, your total sales history, etc. - so keeping this information on separate pages (one for each account) isn't going to give you that.

I do second the suggestion of finding an accountant to help on the side. Most accountants don't get to see the entirety of a (small) business, so it's kind of neat when they have the opportunity. And most don't get to play with setting up software (like Quickbooks), which also (to an accountant) can be fun.
posted by WestCoaster at 11:01 PM on January 18, 2006