How Artists Can Use an ERP

Artists who earn a living by creating and selling their work can use an ERP too, to manage their business better. In cases like these an ERP can be used in two ways:

#1. For tracking sales and producing various kinds of report

In this case the works are entered as "services". That means the business does not track its own stock, but instead records all sales of items as sales of services. Even without stock tracking, artists can still get a good deal of useful insight into their business this way. They can create categories and subcategories and sort their works into them. An artist who paints, for instance, can take paintings as a category and create subcategories according to the technique used. That division then makes it possible to produce various reports that show how the business is doing:

• A sales report by item category and subcategory (for example, how much oil on canvas was sold in total, by quantity and by value)
• A sales report by client (for example, how much each client bought)
• A sales report for a given period (for example, total sales for last year)

If the artist decides to use the finance module as well, they can also track what clients owe them, provided they post entries regularly. Artists can also build a client database with all the relevant details, such as client name, tax number, VAT status and other important information.

#2. For tracking stock and the materials consumed in creating the work, as well as reporting

If they wish, artists can use an ERP to follow their creative process very precisely, in terms of what they spend on materials and how those materials are consumed. In this case they can create bills of materials (recipes) setting out everything needed to produce a single piece. One painting, for example, might require one canvas of given dimensions, a set of paints and so on. They can then use the ERP to track these materials coming in, by booking them into a warehouse. Once a piece is finished, they can use what is called "assembly" or "kitting", which removes the materials from stock (according to the bill of materials) and puts the finished work on stock in their place. The benefits of working this way are:

• An accurate record of the materials consumed in producing a given piece
• Visibility of material stock, so you know when to buy more if something is running out
• Establishing the exact margin achieved when the piece is sold

Everything to do with the various reports, as well as the client data, can of course be produced under this option too — and arguably gains further value, because the entire process is being followed end to end.

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If you are an artist and are not sure which option suits you better, we suggest asking yourself the following questions:

• How complex is the production process? If it is complex, option #2 is probably the better long-term choice. If it is not, you can probably start with option #1 and track material consumption some other way, outside the software.
• How important is it to me to know the exact production cost of a given piece, and the margin I can achieve on it? If it matters, option #2 is the better choice. If it does not, again, you can start with option #1.

== If you are an artist thinking about using an ERP to keep track of everything you do, get in touch and we will help you find the best solution.