Simplify Your Billing Process with the Photographer Invoice Example for Accounting

Photographer invoice example for Accounting

what are we talking about here well things like revenue deductibles bookkeeping accounting and taxes we notice those can be some scary words but don't be afraid we understand how complicated these things can get complicated to the point where your eyes may go crossed and drill starts to drip from your mouth because they can be equally as boring as they are confusing fear not you don't have to know everything when you start to feel overwhelmed is when you seek help help from professionals that specialize in knowing the confusing boring stuff so you don't have to and thank goodness for those people being an employee you tend not to concern yourself with what goes on behind the scenes so to speak but you're running a business now and you're going to have to understand the basics of business financials revenue what is that revenue is the money that the business makes from the sale of goods and services in your case the goods might be albums and prints and the services would be the photographing of weddings revenue is also referred to as sales but let's be honest revenue just sounds cooler here's where we see people get tripped up on understanding revenue i think when they hear that someone did a million dollars in revenue that means they must be a millionaire well it doesn't mean that at all actually if they're particularly bad at business they could be in the red which means in debt but again it just sounds cooler say for example they're selling a product for a dollar but the cost of goods sold was a dollar one cent with a million dollars in revenue there would actually be ten thousand dollars in the whole which takes us to our next point deductibles what is that well they're expenses essentially what it costs you to run your business understanding business expenses can be a powerful tool you probably started off your photography journey as a hobbyist using your hard-earned savings to purchase your camera your lenses all of your gear that's how most people start hey we did that too but you're business now that means you have super powers well kind of now you don't want to have expenses but what expenses you do have you want to make sure you're squeezing every last cent out of them like this course this is a business dispense you can write it off as continuing education so make sure you do that how does this work well let's say you make fifty thousand dollars this year but it costs you ten thousand dollars in business expenses to make that fifty thousand you can deduct that ten thousand from that fifty thousand scenario only going to pay tax on the forty thousand we know you're smart enough to understand it's more complex than that but if you're able to wrap your head around that simple concept you're on the right path bookkeeping what is that well to put it simply it's the recording of financial transactions money in money out good news there's plenty of software out there to help you keep organized so you don't have to be handing a shoe box full of scrap pieces of paper to your accountants at the end of the year we know people that do that don't be those people some studio management software includes bookkeeping capabilities integrated right there with everything you need like our favorite all-in-one wedding photography studio management software sprout studio for free options there's way financial and even google drive has google sheet templates you can use so there's no excuse not to be keeping on top of things if nothing else you're going to want to make sure you're keeping track of your sales and your expenses anytime you get paid for an invoice or receive any payment for your business make sure it's logged where it needs to be anytime you pay for an invoice or make any payment for your business make sure it's logged where it needs to be category date description and amount all should be recorded many of these tasks can be automated but if you're not there yet you can manually input everything this tracking is paramount not only for your accountant at the end of year but so you will be able to clearly see how your business is doing at any given moment these insights will truly help you make important business decisions down the road if bookkeeping still seems too daunting for you there's always the option to hire a bookkeeper they will do most of the work for you and because your type of business is fairly simple the fees associated shouldn't be too high accounting what is it well that term can be pretty broad it can actually be interchanged with bookkeeping depending on what you're talking about but we're talking about the end of the year accounting we get all of your business financial affairs in order to keep it simple your best bet is to have your fiscal year be the same as your calendar year so once the year ends you can start your accounting process now this is where we absolutely recommend hiring a professional a competent professional account should in theory save you more than you're paying them that's a good deal if you'd stayed on top of your bookkeeping then this process will be much easier then you'll be able to provide your account with an income statement also known as a profit and loss a summary of your revenue and expenses and you can work with them from there if you don't yet have an accountant we recommend reaching out to other local photographers or small businesses to get a referral that's your best bet to find someone you can trust your accountant should be someone who looks up for your best interest and doesn't make you feel small when you don't understand something i mean we're creatives give us a break right the first year of running your business is usually the toughest in terms of understanding how the tax system works we've seen most people struggle is not fully grasping that's their responsibility to save enough money to pay their own tax the percentage will change depending on where you live but an easy rule of thumb to get you on the right path is to save 30 of what you make and set that aside for taxes think of it as holding someone else's money for them that someone being the government if you don't think of it as your money it may make it easier to save put that money into a separate account so you're not tempted to spend it as if it were sitting in your personal checking account don't spend everything you make because it will be tax season before you know it please do this if not anything else you will thank yourself later there's a countless number of rabbit holes we could go down when talking about any one of these subjects but you don't have to know all the ins and outs of each one just understanding the basics is enough to put you on the right path to success we're lucky to have help when we need it so we can focus on taking beautiful photos for our clients