What chart of accounts should an art gallery use?
Art galleries need a chart of accounts that handles consignment correctly because that’s where most galleries get their accounting wrong. Standard retail setups treat all inventory the same way, but consignment artwork isn’t your inventory. It belongs to the artist until it sells.
Start with income accounts. You’ll want to separate gallery sales for artwork you own and resell from consignment commissions, which is your percentage on artist-owned work. If you offer framing services, teach classes, or rent studio space, each of those should have its own income account too.
The consignment distinction matters because what you deposit isn’t all your money. If you sell a $5,000 painting and your commission is 50%, only $2,500 is income. The other $2,500 is a liability you owe the artist until you pay them out.
For expenses, art galleries typically need accounts for cost of goods sold on purchased artwork, gallery rent and utilities, marketing and opening receptions, framing materials, shipping and handling, insurance including artwork floater coverage, and website or point of sale fees. Artist payments after consignment sales can either go under cost of goods sold or as a separate expense line. Either works as long as you’re consistent.
On the asset side, track only artwork you actually own as inventory. Consignment pieces aren’t an asset on your books because you don’t own them. You might track consignment pieces separately for insurance purposes or operational reasons, but they don’t belong in your accounting system as inventory.
Liabilities should include a consignment payable account. When a consignment piece sells, the artist’s portion sits here until you pay them. This keeps your books accurate and shows you exactly how much you owe artists at any given time.
If you want to track sales by artist or by exhibition, use classes or projects in your accounting software rather than creating separate income accounts for each artist. That way you can run reports showing which artists or shows generate the most revenue without cluttering your chart of accounts with dozens of individual artist income lines.
The setup matters more than most galleries realize. A generic retail chart of accounts will produce financial statements that make your operations look confusing or inaccurate. If your books show $50,000 in income when half of that is owed to artists, you’ll make decisions based on wrong numbers. Working with virtual bookkeepers in New Mexico who understand gallery operations means your accounts get structured correctly from the start, and you can actually trust the reports you pull each month.
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