4 Lessons Teachers Can Learn from Accountants

Delivering a top notch fine arts education requires a highly specialized skill set. But I’m guessing most band, choir, orchestra, theater, and dance teachers never imagined that they would need to tackle accounting tasks as part of their job description. Unlike other core scholastic areas, fine arts programs entail a significant amount of financial stewardship that requires a heightened level of supervision and focus.

Whether you took one accounting class or barely balance your personal checkbook, educators need to become familiar and comfortable with a few accounting basics to ensure their programs remain financially healthy for the long run. As a founder of a successful accounting software company in my early career, I saw how make or break sound financial knowledge can be for a small organization. Here are four best practices I picked up from the accounting pros that any teacher can master.

Lesson 1: Keep Detailed Records

Just like in music, dance and theater, where precision and commitment matters, keeping detailed financial records is crucial. Track every dollar coming in and going out. It’s vital to categorize ALL of your program expenses and income or you’ll face a documentation nightmare in short order. Even more, a regular tracking practice ensures transparency amongst organization members and helps in making truly informed financial decisions. For example, make sure to capture cleaning costs relating to attire and uniforms so you can have a full picture of your program’s wardrobe budget. Ditto for instruments. Use the same approach to capture your repair expenses for both of these inventory areas as well. CutTime makes all of this super easy by enabling you to capture repair expenses per item, and assign a ‘cleaning cost’ per program member or group.

Lesson 2: Separate Personal and Program Funds

Mixing personal and program funds can lead to confusion and potential legal issues. Establish a separate bank account for your fine arts program to maintain clear boundaries between personal and booster club or other non profit organizational finances. Why go to this extra effort? Three big reasons from my experience:

• Liability - a business’s structure affects the owner’s personal liability. There are different types of business structures, Limited Liability Companies typically offer good protection from personal liability and debt risks. Learn more from Bank of America's guide to choosing a business structure
• Financing - it is important to build credit history for the program that is separate from a Director’s or Booster President / Treasurer’s personal credit history. Likewise, mixing personal and organizational transactions can potentially negatively impact if either encounters financial challenges with payments.
• Clash Flow Visibility - separating personal expenses from the program helps to provide a clearer picture of the cash flow situation. How many times have you thought you had X amount of money available in your account, and then discover you’re in danger of being overdrawn or over your limit at the worst possible moment? (as in paying for a BIG tank of gas for the bus or meal for the group on the way home from a performance!)

Lesson 3: Budgeting and Forecasting

Creating a formal budget is akin to planning a Winterguard or Spring festival competition performance. It provides a roadmap for your financial decisions throughout the program season. Regularly review and adjust your budget with your Director and Booster Club Leadership to reflect key changes in income and expenses. You can identify ongoing problems by analyzing your organization's past performance from the previous seasons. Apply both ‘quantitative’ (data analysis of trends) and ‘qualitative’ (analysis of expert opinions) methods to your forecast for the best balanced view.

Lesson 4: Regular Financial Reporting

Just as students need formal feedback on their performance, financial reports provide reliable feedback on your program’s financial health. Share financial reports including the balance sheet and income statement with booster club members and other key program stakeholders such as your Fine Arts Coordinator/Director, Principal/Assistant Principal, and School Board to ensure everyone is informed and accountable. Not only will this practice help your fine arts program stay ‘audit ready’, but it also is a great tool to help your team further optimize your fundraising strategy!

By adopting these accounting practices, fine arts educators, their booster clubs, and other community organizations can ensure their programs are financially sound and well-organized, allowing them to focus more on what they love—creating a lifelong passion for the arts and elevating their students' enjoyment and artistic growth.