Management of student finances

I didn't pay much of an attention to my personal finances, comings and goings of the money in my hand when I was a starting student – money was anyway a scarce resource then so there wasn't any sense on keeping strict records. I remembered most of the buying’s I made since there wasn´t many and the source of income was limited to only two: my employee and the monthly government grant for the students, which wasn't much. The salary came also once a month, and that wasn´t much either. The planning of the future finances or financial management (in Finnish = taloushallinto) of personal incomes was quite senseless since the situation would be the same for years ahead.

After few years however, when the professionalism grew and work opportunities started to come, the sources of the incomes started to be more numerous. Many students work as a free lancers or trainees on their future field of profession and I did the same – wrote articles, did some short term publicist work and so on. Money started to come in as well, and this needed more attention, especially when being on the government grant still. The government grants have conditions for other incomes – this is because by that way students are pushed to give effort on their studies instead of working. The issue is however quite complicated as my situation showed. I was working and learning on my field and getting money for it but if I didn't take strict care on my accounts and received more income that was allowed, the grant was claimed back, with high interest.

This can actually lead to the breaking off the studies, since the actual work, with added bonus of income is much more attractive than eke out a living on the government grant and all the time counting the money what comes in and possibly paying back the government money with the high interest from money hard earned. The level of financial management skills required from the students who are working on their spare time and who are receiving the study grant is far higher than can be expected even from their parents or the professors teaching them.

Festival management and finances: artist fees

The financial management of a festival is a complicated process since there are hundreds of different sources of incomes and hundreds of small payments to small companies, artists, stuff, technics and others. Also, many festival related payments feature special circumstances and methods of payments, which are not many times compatible with the accounting formulas of the accounting software’s (in Finnish = kirjanpito-ohjelma) and the ways of the accounting companies. Added to this, rules and regulations for taxation take very poorly into account the life of the artists or event managers and accountants.

Of course the easiest way for both parties is simple billing between them and this is what mostly happens – however, the thing which makes this a tricky question many times is that festival production needs many services already way before the actual event, but many times only a small share of the money needed to put up the whole thing is already there – the main finance being the quests who buy the tickets and use their money on the festival area. Many event give large efforts on their pre-sale just for this reason. And of course there is also the more convenient way of arranging the event when knowing approximately what size the audience is.

The artists give some headache with their payments sometimes. Most of the recording artists have a company through which they are billing their performance fees, or they have a manager who does the billing for them and then pays fees for the musicians. But in these days of do it yourself culture many artists have decided to handle these businesses (as many others as well such as the work of a record label) themselves, mainly to keep the share of a manager, PR, booking agency or any other middleman for themselves. In these cases you can come across with variety of ways of payments the most common being the paying of the fee in cash and getting a receipt on spot. This makes however very difficult to keep the records up to date during the event and since needs a precise handling on the accounts.

Double entry book-keeping explained by Pacioli

Double entry bookkeeping was first introduced by an Italian mathematician and a monk Luca Pacioli in his famous book Summa de arithmetical, geometria, proportioni et proportionalità. The book was published in 15th century and it described the method of accounting used by Venetian merchants of the time. Double entry book-keeping became the standard method of accounting (in Finnish = kirjanpito) very soon, and the Pacioli's book became a bestseller.

Double entry bookkeeping is a system where each transaction is recorded twice into the columns on the sheets of the ledgers. These columns were named debit and credit, the first being the left side column and the other one the right side column. The basic idea is to follow two different financial transactions: where the money has come from and where it has been spent. In double entry book-keeping the money spent is also the money which is staying in the company account for the time being as well.

All transactions must be recorded in the both columns and that serves as an check for any mistakes or errors, since the sum of total credits and total debits of different accounts must equal and if not, there is an errors. In case of this the debit and the credit can be traced back with the help of the marking of the date and identifying code which is usually attached to the record.

Double entry bookkeeping features two different kind of approaches to the accounting, named Traditional Approach and Accounting Equation Approach. In Traditional approach the accounts are divided into real, personal and nominal accounts. Accounting equation approach, which is also called American approach, transaction records are based on the equation Assets=Liabilities + Capital.

Accounting tools

In the old days the records on credits and debits were written by hand on actual physical account books and the whole process of accounting took a lot of working hours and work effort and was quite hard work which needed accuracy and precision with numbers and money transactions. However, what has happened to actual paper money or books for example, has happened to accounting too. These days almost all accounting and financial management is done digitally with the help of computers. Like money, bills, receipts, tax deductions and announcements all travel from sender to receiver on the digital routes via internet and they are archived in the endless corridors of some server space, maybe physically far away place from the actual owner of the archives.

Modern accounting tool can run as software on a computer of as a cloud service used via internet. If in the old days, before the whole information was turned into digital format, the person who actually did the markings to the actual physical accounts needed to be a bit of an expert in accounting, while modern day electronic accounting (in Finnish = sähköinen kirjanpito) system enable for example uploading the information to the system without actually having extensive knowledge on bookkeeping and accounting. The account books needed some space as well, while the records on some remote server doesn't claim space, only money which runs as well as a digital information in the web.

As with digitalizing the information usually is, the physical manifestation of the actions and information vanishes and becomes maybe only an emanation from the digital world's events, such as is a receipt from the actual money transaction, which is actually a numbers in digital format moving through internet connections from digital bank account to the other. Bookkeeping is not actually any more bookkeeping as such, writing the records into actual books.

Failing IT-projects

There has been many news about cases of failed and unsuccessful IT-projects in public administration and state administration in past few years. The most known probably is the catastrophic start of the new e-ticket system of the national railways, which caused a massive chaos on railway stations, queues on the ticket counters and many internet customers being unable to buy their tickets. There are others like that as well and also those, which are still under work, after five or even ten years. Good example is the national information software project, which includes a development of a national archive on patient information and an electronic doctor's prescription. The first one has been under development at least over 10 years and the first version of the e-prescription didn't work in practice.

The reason for failing IT-projects cannot solely be found from the side of the software company, since the coder who actually constructs the whole software possibly has little relation to the field the software is targeted for. An IT company usually tries to meet the needs of the customer, but that isn't an easy task, if the customer self doesn't actually know what she is after. The more complicated the functionalities and the user profiles are, the more difficult is meeting the needs of the customer. Some software’s are probably easier to build to work, such as accounting software’s (in Finnish = kirjanpito-ohjelma) or customer register software’s since the general function are all the same and not depending on the special needs of the special situations. But for example an e-ticket system can be a very complicated thing to tailor for all kinds of situations where the vast variety of users, such as customers or ticket counter workers can be in.

However, many times also, if the customer hasn't been precise with the requirements, specifications and functionalities, the coder starts to think these by it. This is also a situation where the project usually ends up to the interfaces and functionalities which the regular user doesn't understand, since the coder rarely is a specialist in the user experience of a regular people who don't have any expertise in using the e-services and need just simple, working functions.

Rationalizing the billing of a small business

The growing and emerging small businesses find themselves many times in situation where the number of customers increases and due to this the hours spent on the accounts increases as well, starting to spend time from the professional work. While being still a small business, hiring someone to do all the added paper work can be, despite the increased incomes, a financially impossible move, since it would spend more money than it saves the time for other work. Keeping up the records on billing and payments and other things will also take lot of intellectual effort.

There is however many solutions for this kind of situation, and most handy might be the electronic accounting systems and electronic billing software (in Finnish = laskutusohjelma). There are many kind of options for this software’s, varying from the ones running on your own computer into those which are run as a cloud service, working through internet. The latter mentioned can be handy in taking care of the whole billing and accounting since they can be connected to bank via internet and this way keeps the accounts in balance in real time.

The electronic billing systems also keep up with the billing in real time and write the reminders if the payments are missing. Many of these software’s have also a build-in customer relationship management feature which is very useful not only in keeping up with the billing but in marketing and other work as well. When in situation where the small business is taking off and growing, the number of customers starts to be more and more. The need for organized records can be met with an electronic billing system and there will be no need for all kinds of manually updated lists of customers.

Paying bills attention

For freelance self-employed professionals the money earned can be from a multiple small sources. Companies’ professional deals can be numerous, at least in a good situation where the business is flowing and there is enough work. The more there are money transactions the more confusing the accounting (in Finnish = kirjanpito ) becomes, and usually professionals are only skilled in their profession, not necessarily in the art of accounting and numbers.


When the collaborators' and partners' number grow the different ways and practices of billing become familiar for the freelancer. Keeping up the records of the payments and credit balances can start to consume the time from the actual work if the numbers are not the natural means of expression for the self-employed. The bills to write in a month can be numerous, and the added payments, taxes and deductions varied.


Even if the business is very small one, employing the professional only, the investment for proper tools for accounting is advisable and much recommended. These days becoming a customer of some accounting company isn't necessary any more since there are computer software’s and other electronic tools for keeping up the records and saving time for the professional work and core knowhow. These tools, such as billing software’s, can count the payments and taxes, add those numbers into accounting records and keep the accounting organized in real time. Added to the time saved by doing the accounting electronically, it can save money as well since the using of the accounting software can many times be much cheaper than paying for an accountant.