6 Tips for Effortless Bookkeeping
I know. I just said “Effortless Bookkeeping”. Most creatives are probably cringing right now. But fear not, I have some tips to make your bookkeeping a whole lot easier.
When you start your own photography business, you probably think of all the pretty photos you’re going to take. And then, oh yeah, there’s the whole business side to this photography thing!
Bookkeeping is one of those things that you can’t get away from, unless you’re outsourcing. But if you’re like me and like to keep tabs on your business, then keep reading. It’s really a lot easier than you think.
1. Sign up for GoDaddy Bookkeeping: It used to be called Outright until GoDaddy bought them a couple years ago. But listen, it’s the easiest accounting software to use! You can connect your bank accounts and PayPal accounts. You can send invoices and collect money. You can even send out recurring invoices for payment plans. And then the BEST part? The tax tab. Okay, so maybe not the “best” part, but it does take a lot of headache out of taxes. The software keeps a running tab on your sales tax as well as income taxes. (I live in Texas an there are no state income taxes here, but I believe it should keep track of that too for states with income tax.)
2. Profit & Loss: It may be scary to look at because it will give you a reality check on your business. You might feel like you’re rolling in it with all the retainers for upcoming weddings or big sales you’ve made with your portraits. However, to get an accurate reading of your business, you also need to take into account your expenses. To make it really simple: Income – Expenses = Profit. So if you’re bringing in a ton of income, but also spending a ton on overhead and other expenses, you might be operating at a loss. And because of the seasonal nature of this business, there may be months where this is true. Look at your P&L for a birds eye view of your business.
3. Automated Sales & Expense Tracking: Another great thing that I love about GoDaddy Bookkeeping is the automated sales & expense tracking. What does this mean? It means that I can hook up my bank accounts and that information will feed into the software. I can categorize my expenses so that they go to the right place. I can also categorize my sales and see where most of my income is coming from, which is really great if you photograph a variety of subjects or do mentoring or host workshops.
4. Invoicing & Recurring Payments: If you’re using studio management software that already enables you to send invoices, great! But if you don’t have a system set up, GoDaddy Bookkeeping allows you to send invoices and even set up recurring payments. Let’s say you break up payments into three or four payments, you can do that on GoDaddy Bookkeeping. You can send your client an invoice and set it up so they can pay you online or they can send you a check, too.
5. Taxes Made Easy: Once you become an entrepreneur and open up shop for yourself, taxes take on a whole new meaning. Especially when your business starts to make money and the tax bill comes. While I despise the thought of paying taxes, GoDaddy Bookkeeping makes it easy to see what you’re estimated to owe based on your income and expenses. It breaks it up into quarterly accruals so you know how much to pay for your estimated taxes each quarter. It’s a drag, but at least this makes it a little less anxiety-inducing.
6. Monthly Bookkeeping Day: Let’s be honest. We’d all like to keep up with bookkeeping weekly, but life gets busy. I make it a point to set a date and time on my calendar for bookkeeping. I categorize any expenses that the software couldn’t figure out and tag expenses so that I remember what it was for. I check out my Profit & Loss numbers. I check for any unpaid invoices and I take a look at what I’m supposed to owe for quarterly taxes.
By taking hold of your bookkeeping, you will empower yourself in knowing the ins and outs of your business. I know it’s not pretty. I know it’s not fun. But it’s a small concession to make for living the life you dream of and doing what you love, right?