When you’re running a photography business, often the very last thing you want to worry about is your accounting. Shooting a session and interacting with your clients to create beautiful images, then editing your images to polished perfection can be exhilarating.
Recording your revenue from that photo session is… probably not.
I truly feel that the importance of having an accounting system in place cannot be overstated if you want your business to function properly. A good, well-designed accounting system should do at least the following THREE THINGS to help your business:
Organize your information about your customers
Your accounting system should organize the information you need information about your clients if you want your business to be successful. This should probably include their name, address, phone number, email address, and maybe even the date of their last session or the birthday of a newborn.
What this can do for you: Being able to have one organized place where you keep all of your customer’s data can be the difference between booking another session or not. After all, if your data doesn’t tell you it’s been a year since the Jones family last came in, how will you know to remind them they need another set of family photos? Or if your records don’t show that the Smith baby – whose newborn pictures you took – is turning one in a month, how will you know to contact them with an example of your latest and greatest smash cake photo shoot?
Track all of your income
You should be able to look to just one source in order to know exactly how much money you have made in any given year, or fiscal quarter, or month, or even day. You should also be able to see exactly what clients paid you that money and what type of photo shoot you did with them.
What this can do for you: The last thing you want is to know that your bank account is growing, but not be able to remember exactly why, and also did that one client ever pay you for their session? Your income is the lifeblood of your business. Keeping your accounting system current is how you protect that lifeblood.
Track all of your expenditures
Going along with the last point, you will probably need to spend at least some money in order to keep your business operating smoothly. Your accounting system is the place where you will track each expense so that you know exactly where your money is going.
What this can do for you: Knowing your expenses and your net income should become the solid foundation you use to make vital business decisions. You need to know if the prints you’re purchasing for re-sale to your clients have gone up in price enough that it’s time to raise your session rates. You need to know if you’re spending more than you really expected on newborn wraps or on hats and props for senior portraiture. You need to know if you have enough money in the bank yet to spring for that new piece of equipment you’ve been itching to get your hands on. Most of all, you can’t know how much net income you’ve actually made unless you track your expenses! This net income number should also be a very good guide for you to determine if your pricing structure is well-designed, or if it needs some tweaking.
As you can see, a well-functioning accounting system goes beyond just a place to input information and forget about it. Keeping track of your accounting might not be your favorite part of being a business owner, but it is of paramount importance to you because it can be the solid foundation your business needs. It should be a wealth of information that you can use to make practical, daily decisions to drive your business forward and make it better. And when you put it that way, maybe accounting isn’t so boring after all!
Are the records for your photography business totally complete and in order? Can you use the information your accounting system is providing in order to make smart decisions for your business? If not, let me know in the comments!
Ask your questions about accounting, and I’ll answer them!
TPE’s Extraordinary CPA
Her best adventures always happen with her handsome husband, her kindergartener who is too smart for his own good (or hers!), her brave toddler who seems to have no fear whatsoever, and her brand new baby girl. She loves photography and how it allows her to capture all her adventures, big and small, and to keep them forever. In order to fund her love of all things photography, she works part-time from home as a CPA.
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