Thursday, 24 January 2013

Accounting Tips For Photographers


Accounting Tips for Photographers
If you are like me, the small details like accounting and bookkeeping could be the death of me… I am not a numbers guy… and if I do not set a few hours a week aside to go through bookings, accounting etc, I will quickly lose track… so I make the time, even if there is redundancy, to go through my records and my bank statements to check, double check and triple check what’s going on in my business.

Accurate Books and Records

Account Tip #1 for Photographers  – Keep accurate books and records

As a small business owner it’s very important that you keep accurate books and records in order to:

Assess the profitability of your business

Evaluate the financial health of your business

Cut costs by identifying excess spending

Have peace of mind when audited by the Canada Revenue Agency or the IRS

Apply for a long by presenting accurate financial statements to your bank

Review Financial Reports

Accounting Tip #2 for Photographers  – Review financial Reports Regularly

A proper accounting system should provide you with accurate, monthly financial reports such as:

Income statements

Balance sheets

Gross margins by product

Inventory listing

Cash flow statements

Budgets

Financial statements by company division / department

With monthly cash flow statements you can identify the sources and uses of cash, which enables you to better manage company resources.

With monthly budgets for your small business, you can better plan for the coming months, and effectively manage cash inflows and cash outflows.

With departmental financial statements you can assess the profitability and financial health of each department.

If your current accounting system cannot produce appropriate financial reports, then you should seek the advice of an accountant.

Purchase an effective accounting software package

Accounting Tip #3 for a Photographer – Buy the right accounting software

Your small business requires an effective accounting software package to produce reliable financial reports.

I recommend accounting programs such as QuickBooks Pro or Simply Accounting, both of which are great for small businesses

In addition to the right accounting program, your small business requires an excellent bookkeeper. If you have a good accounting software package, but you lack a capable bookkeeper, then the information produced by the accounting system will not be reliable or useful.

Financial Controls

Accounting Tip #4 for Photographers – Implement strong financial controls

Effective financial controls are a must for a small business. A lack of financial controls can lead to unreliable business intelligence, poor financial information and fraud.

Examples of financial controls are:

Keep receipts for expenses. Without receipts you have no proof of purchases made.

Maintain a separate credit card for business purchases only. The last thing that you want is a grocery bills or movie tickets appearing on your credit card. Imagine if a tax auditor saw that.

Have a separate business account for your deposits and your business expenses. There should not be any personal expenses whatsoever in your business account.

Keep a daily sales log and a deposit book so that you can track sales deposits. This will reduce the chance of employee theft.

Dual signatures should be required on company cheques. If only one person has signing authority, then that person has the ability to commit fraud by writing cheques for invalid expenses.

Review and approval all employee expense reports before they are paid, which will keep spending under control.

Regularly backup your electronic financial data so you don’t permanently lose it

Consult with your accountant on how to improve your small business’ financial controls.

Watch for my post this afternoon... there is a company that has a complete accounting package online... and the best part... its free.
 
If you would like to get a better handle on your photography business we offer a mentor program to help photographers manage the business side of their business. Please have a look at that program here... http://www.photographers-lounge.com/mentor-program/