Keep Financial Records

keep financial records

Last time on The Ten Laws of Indie Success…

 

…We covered The Law of Indie Success #8 Get Legal AdviceWe discussed how Lil Wayne could have analysed aspects of his record deal with Cash Money Records a little more closely.

 

This week we explore if 50 Cent’s recent bankruptcy may have been avoided by simply living within his means.

 

Keep good and accurate financial records and pay your taxes. There is no joy in owing HMRC or any other government agency money. Instead, have a good accountant who will teach you how to minimise your tax liability.

 

Having an accurate up to date bookkeeping system will help you to pay the right amount of tax and avoid penalties. In addition to this you will save time and accountancy costs. Long gone are the days where it is seen as cool to turn up to your accountant’s office with a shoebox full of receipts.

 

Keep track of your expenses by staying aware of what you are owed by others and how much you owe them. Failure to do this can result in bankruptcy, a legal term used to describe the inability of a person or business to repay outstanding debts.

 

Are you keeping good financial records?

50 cent

 

Even the inability to pay outstanding debts needs to be documented before bankruptcy can be filed. US Rapper 50 Cent, real name is Curtis Jackson, filed bankruptcy in July 2015 claiming that his assets of $25 million diminished following two separate court-ordered payments, plus other high outgoings. 50 Cent was initially forced into filing for bankruptcy after owing $7 million to Lastonia Leviston, who won the payment in court after 50 Cent allegedly, released a sex tape of her to embarrass the father of her child, Rap rival Rick Ross. He also owes an $18 million court-ordered payment to the electronics company Sleek Audio after a partnership to make headphones fell through. The court orders total $25 million, the amount 50 Cent claims to have in assets. 50 Cent also claims another $7 million in liabilities stating that he has $108,000 in monthly expenses, which include his homes and personal expenses.

 

Documents from the US Bankruptcy Court show that 50 Cent has an income of over $185,000 a month from marketing and promotional deals, however he spends $72,000 on his 18-bedroom mansion, his Connecticut home, in addition to the mentioned $108,000 in other expenses. 50 Cent claims to have made $3.3 million from music so far this year. He also made about $372,000 from SMS, his headphone company. He has also made $771,000 from a number of films, touring, merchandising, and other business activities with his group G-Unit. 50 Cent has $10 million in cash and $500,000 in cars. He has previously stated that he made $100,000 each on the movies “Southpaw” and “Spy”. His hit television show “Power,” which he acts in and is executive producer for has made $150,000.

 

Are you living within your means?

 

Keeping financial records will enable you to keep track of all business activity including growth areas, areas for improvement, and areas in which money may have been lost. With this information you will be in a position to ask for a bank loan or credit if needed, plus you will have clarity on how to live within your means. You need good financial records to prepare your tax returns. These records must support your personal income and the business expenses you are reporting.  You must keep your business records available at all times for audits by HMRC. If HMRC or any other government agency examines any of your tax returns, you may be asked to explain the items reported. A complete set of records will speed up the examination.

 

Bookkeeping and accounting are two very different areas in which records are kept. Bookkeeping is when a log is kept of all financial transactions. You or a bookkeeper will compile the information that goes into the system, and the bookkeeping system provides the numbers for your accountant.

 

Accounting identifies, measures, and analyses financial information about your business. An accountant uses the financial information to advise you on your business performance, and provides strategic advice for improving profitability and building your business. It is vital that you read and understand your own financial statements, and that your financial recording and reporting methods are accurate and comply with HMRC. For legal reasons records should be kept for seven years.

 

Do you have a reputable accountant?

 

“There’s a small group of guys in hip-hop that really have money. The whole culture talks about money, but it’s a small group that actually has it.” ~ 50 Cent

 

 

Since his debut album release, ‘Get Rich Or Die Tryin’ which sold over 8 million copies on its release in 2003 50 Cent has had phenomenal business and music success. In November 2003, he signed a five-year deal with Reebok to distribute a G-Unit Sneakers line for his G-Unit Clothing Company. In a deal in which he sold Vitaminwater to Coca Cola in 2007 50 Cent made a reported $100 million. He has appeared in twenty one movies with a number of successes under his belt. In 2014 he made $78 million from signing with underwear brand Frigo-Revolution Wear. Earlier this year 50 Cent was on The Forbes list of Hip-Hop’s Five Wealthiest Artists at number 4 with a fortune of $155 million. He has been involved in many other business ventures, and has received a total of 73 music awards including 11 ASCAP Awards, 13 Billboard Music Awards, 16 Billboard R&B/Hip-Hop Awards, and a Grammy Awards.

 

Do you need to learn how to keep good financial records and budget your spending to increase your profit?

 

Book a 30 minute consultation to discuss if you should be seeking financial advice. Find out how to…

 

  • Choose a reputable accountant

  • Budget within your means

  • Keep good financial records

 

CLICK HERE TO BOOK A 30 MINUTE CONSULTATION NOW

Next time on The Ten Laws of Indie Success… The Law of  Indie Success #10 Know Your Market/Know Your Competition

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Deb McKoy