INTERVIEW: Kylie Thompson from Sorrento Strategic Music
Kylie graduated from Edith Cowan University with a Bachelor of Business (Double Major in Accounting & Finance) in 1991. Following ten years honing her skills working with public accounting practices and gaining her Certified Practising Accountant qualification, Kylie opened her own firm in 1998 and quickly built a solid reputation in specialist accounting for musicians.
Q. Tell us about what Sorrento Strategic Music do other than accounting and tax returns?
Sure… accounting and tax returns are only a part of our service! In fact our first port of call is an initial consultation to understand the musician’s business (the genre, level of gigging/touring, song writing, activities and any other form of income that may be necessary to support their passion for music).
We aim to assist our clients grow their music business and a thorough understanding of their position and future goals underpins every service we provide including:
– Cash flow forecasting and budgeting advice and assistance
– Effective billing and cash collection
– Record keeping
– Ensuring all tax obligations are met (BAS, income tax, PAYG, fringe benefits, capital gains etc)
– Business structure/entity advice and establishment
– International touring and taxation obligation management
– Licensed Financial Planning
– Accredited Self Managed Superannuation Fund advice
Q. Why or how did you find your way into your current field of work?
Like many of my clients, I am fortunate to work in a field that I also love! With previous experience in an accountancy practice dealing in the creative arts, I established my own accountancy firm in 1998 with a solid client base of emerging artists and bands.
Word of mouth has always been my best method of advertising and I am always honoured when musicians recommend my services to their fellow muso mates, managers, music teachers and friends. A memorable example of this was a young Freo street busker who was referred to my accountancy firm – that young busker was John Butler and 20 years later, Sorrento Strategic Music is proud to name John and his wife Danielle as long term valued clients.
As one referral has led to another, I have been able to use my depth of knowledge and experience in music and arts accounting to create a bespoke accountancy and financial services business specifically geared towards assisting musicians and creatives.
Q. What is it about the WA music community that drew you to working in the industry?
I have always found creative people especially driven with a real focus on the outcome they wish to achieve. However I have also seen this focus being weighed down by the burden of paperwork and lack of knowledge of how to run a business.
I thrive on being able to assist clients’ in their creative endeavors by removing the stress and anxiety associated with their tax and money matters.
WA musos are loyal, passionate and determined – what better client base could I ask for?
Q. From which area of music business are most of your clients (eg performers, managers, labels, etc)?
Over the past 20 years, my client base has evolved to include people involved in all facets of the music and entertainment industry. Although the majority of my clients are performers, I have been heavily involved with setting up labels, tour management and international dealings.
Q. In your opinion, what are the key factors involved when looking to manage your music as a business?
– Get an easy system for record keeping and use it regularly so that your receipt log is up to date and stress around taxation time doesn’t start to block your creative work.
– Open a separate business bank account for your music activities and treat it like a business (don’t mix up private/business costs).
– See a specialist music accountant to ensure you are set up correctly from the outset and that you have everything in order. Forming a relationship with a trusted advisor will be one of the best decisions you can make to keep you focused on your goals.
– Make sure you get all your tax returns up to date to avoid the burden of paying unnecessary fines.
– Ask your accountant about the differences between a music hobby versus a music business. Any “verbal” band deals should be formalized in writing to help prevent disputes down the track.
Q. What are some of the changes you’ve seen in your business or field over time?
Technology and the new digital/streaming era have changed the music industry dramatically. The days of the album sales driving the tours have now been replaced with the focus on the touring income. Festivals have exploded and the need to be well advised and organized is more important than ever. The young musicians are taking a lot more of a “hands on” role with managing their own music careers. They need to be especially savvy with marketing on social media and streaming sites and ensure they build strong followings on Youtube, Instagram, Facebook etc.
Q. What are the most common mistakes musicians make when trying to manage their music as a business?
Some musicians get too bogged down with the detail and others don’t do enough! It is important to know when you should seek outside assistance from experts in their field and fellow colleagues who may have already tread your path. Take your music business seriously and keep your records up to date!
Q. What challenges do musicians face around finances and running their music as a business? What are your tips to overcome these challenges?
Money is generally always a challenge. The more organized you are, the better your life will be.
– Do your research on the venues, ask for upfront deposits when possible (there is nothing worse that waiting a month or more to get paid for those hard-earned gigs).
– Do your homework on grants/competitions as these can be invaluable sources of funding.
– Keep all of your receipts, every dollar you spend on tax deductible items reduces the eventual tax you will owe when you are successful
Q. What are your top tax tips for the upcoming end of financial year?
The key leading up to end of financial year on June 30th is to minimize earnings and maximize expenditure on deductible items. For example, if you have a tour planned to commence sometime after June 30th – you may look at pre paying some associated expenses such as accommodation before June 30th as this will reduce your taxable income. Similarly, if you have money owing to you and can wait until after June 30th to receive payment, this will also reduce your taxable income for the 17/18 financial year and therefore the tax payable.
You can still get up to a $20,000 deduction this year for musical equipment or even on the business portion of a motor vehicle (logbook necessary) – check with your accountant to see what you may be able to claim!
Q. What’s the best part about working with musicians?
Seeing them perform or listening to their latest song on the radio and knowing that maybe I played a small part in their creative process by reducing their tax and money management stress!
Find out more about Kylie Thompson and Sorrento Strategic Music