Bookkeeping for a photographic business is an artform unto itself. But beware as there are many potential pitfalls for the inexperienced. At Bizgro Bookkeeping we service a large base of photography clients so, from experience, here are our top 5 Bookkeeping Tips.
1) Keep good business records
Not only is it the law, but keeping accurate and up-to-date records can help you assess your financial position, cashflow status and comparison as against your competitors. In other words, with good quality records you can talk ‘real time’ with your figures. It may also save you time and money when it comes to your Accountant! We recommend Photographers use computerised accounting software like MYOB or Quickbooks (for a comparison see our Article “MYOB Vs. Quickbooks: a snapshot of the debate for Photographers”). Either software package will assist you to manage most (not all!) of the bookkeeping and compliance obligations of a small business.
2) Correct file set-up
We urge all small business owners to take the time to set-up computer accounting software, be it MYOB or Quickbooks, properly. This involves a process of assessing the nature of your transactions first and then customising the software around your Photographic business. As an example, some Photographers offer customers the opportunity to buy Gift Vouchers in exchange for future photographic services. The accounting treatment of this simple transaction alone has many implications from a point of sale and eventual redemption of the voucher to the treatment of GST (refer Goods and Services Tax Ruling GSTR 2000/D22). If setup incorrectly, then this could lead to incorrect treatment and makes tracking of gift vouchers a complete nightmare. We recommend you speak with your bookkeeper or Accountant before you setup a company file.
3) Deposits Collected: Categorise & track them correctly
Commonly, Photographers require a deposit from customers in order to secure a booking for a future photographic service. These deposits have a specific accounting treatment and if categorised incorrectly then you run the risk of reporting income (& GST) at the wrong time. If you are using either MYOB or Quickbooks, then it is important to track these Deposits Collected from Customers via linking a Deposits Collected (Liability) account to Sales (Income). Once an Invoice is raised then the software should transfer the deposit amount from the Deposits Collected account to Trade Debtors (Sales).
4) Invoice Regularly & Collect Outstanding Invoices
Once you have performed a Photographic service, it is critical to provide an Invoice in as timely a manner as possible. On this Invoice your credit terms need to be very clearly outlined. Via MYOB or Quickbooks you can easily customise an Invoice with all your business information. You can even advertise more Photographic services in your own unique Invoice Template. To track the payment status of an Invoice, MYOB or Quickbooks allows you to quickly monitor aged Debtors via Reports.
5) Keep entering transactions regularly!
As creative professionals, generally it is safe to say that Photographers would much rather be out shooting than pouring over ‘the books’. However, a small amount today equals not as much tomorrow. We find if you ‘chip away’ at entering transactions then it becomes less of an administrative burden approaching a compliance deadline. And, if it all becomes too much hassle, you can always employ the services of a good bookkeeper!