by Guest Contributor Shannan Painter
Accounting for photographers was founded based on the concept that photographers are, by nature, creative, right-brain-dominated individuals. Photographers are incredibly gifted at making portraits into a work of art, but would rather clean the bathroom, get a root canal and sit at the DMV before dealing with the accounting and tax portions of running a business.
As much as we wish this part of our business would just do itself (just like we wish we could wave a magic wand & have the laundry done). It is important to understand this aspect, and have a method for keeping track of income and expenses. There are a lot of choices in accounting software that are available, but most are quite complicated, expensive, and require some basic understanding of accounting. At the end of the year, you – as a business owner – simply need to know how much revenue you generated and what you spent money on that qualifies as a business tax deduction.
One of my first suggestions would be to go out and buy an accordion file with at least 12 dividers. Make a tab for each month, and file away copies of invoices you give to clients along with receipts for anything you spent money on that was business-related. Once a month, you can pull out the receipts and enter them into something like my SNAPSHOT spreadsheet. This spreadsheet is designed specifically for photographers. With this spreadsheet you will have a better understanding of where your money is going in one organized place. I also include tips for tax treatment of business use of home, large purchases and vehicle use.
If you haven’t done so already, it is important to open a bank account dedicated solely to your business. The less your personal & business finances mix, the better!
About the Author: I graduated Magna Cum Laude with an Accounting Degree from the University of Montana. Instead of pursuing a career in public accounting and being stuck behind a desk for 70 hours a week, I turned down jobs at big accounting firms to pursue a different love. I chose instead to work from home where I live with my husband, two boys and a puppy named Growler. I live a glamorous, exciting life working from my living room in my pajamas, cleaning crayon off the walls, driving kids to school, playing superheros and taking care of a little dog that likes to refinish furniture with his teeth. I get to work with fun, creative & artistic photographers and help them understand that numbers can be our friends!
Visit Shannan at her website Accounting for Photographers and on her Facebook Page
Awesome! We can always use more help in the accounting area!