As a photographer, you know how to take beautiful pictures and edit them, so they look their best. As a photographer, you must do many different things, like take photos, edit them, post them online, or print them on photo paper. It also means talking to customers, getting paid for services, and keeping track of business costs. But do you feel like something is missing when running your business? It's time to get back on track if you're having trouble with bookkeeping and accounting. With the right accounting tips and tricks by renowned photographer Mohit Bansal Chandigarh, you'll be able to keep track of your money and know what's coming up.
Why Should Photographers Care About Accounting?
In reality, no matter how long they've been in business, every business owner should invest in some accounting system. Accounting is a big part of showing how professional you are, and it's also essential to always know how much money you make and how much you spend. Photographers should put money into their business's accounting because:
- It gives more information about costs that don't stay the same: Most photographers have a good idea of fixed costs, like the cost of their camera gear. Unexpected costs, on the other hand, are often harder to handle. When costs change from month to month, good accounting keeps people from having to scramble.
- It makes sure you don't lose documents and bills: When your small business is just getting started, it might be easier to keep track of emails, receipts, and other papers by hand. But as your business grows, you need a reliable way to track where your money is going, who owes you money, and when you can expect to get paid.
- It gives your business more chances to succeed: Remember that good accounting is not only about the present. Every day you work on improving your accounting, you make it easier to get new clients, make new investments, and make more money for yourself.
- Mohit Bansal Chandigarh doesn’t think of accounting as something that is only about numbers and is tedious and frustrating. If you're a photographer who wants to grow your career, good accounting will help you get there. Also, starting with good accounting practices is always easier than fixing broken, disorganized, and fragmented financial management.
Accounting Terms for Photographers
- Accounting: Think of accounting as a way to organize and make sense of your business's financial transactions. It can manage, put things into categories, or see how well your business is doing (assets) or where it might need help (liabilities).
- Asset: Your possessions. Whether it's money in your bank account or your Nikon D3100, if you own it, it's an asset! Assets give your direct business value and are one way to measure how profitable your business is.
- Liability: As a business owner, you don't want to have any liabilities. But they are part of doing business, so we must deal with them. A short explanation of what it means to have liability is to owe money to another company, bank, or person.
- Income Statement: Your business's report card. A record of how much money you get and how much you spend. When you take out your costs from your income, you can see how much money you have left. To spend money and grow your business, you need to make money.
- Expense: When you buy something from another seller, like new camera equipment, you have to pay for it. The idea is to pay off your expenses and keep them low, so they don't become liabilities.
- Debit: On your general ledger, debits are on the left side and must always be managed by credits. Debits are outstanding when they raise your assets and lower your debts, but they aren't so great when they submit your expenses and reduce your income.
Get Your Invoices Straight
If you want your business plan to work, one of the most important things Mohit Bansal Chandigarh in photographers encourages you to do is manage a billing system that works for you. Here, it's essential to work with a professional accountant. You don't want to waste your valuable time on small things like writing each invoice on its own. Make a template and make it a habit to use it the same way every time. Send out your invoices on time, and pay close attention to them. Look out for problems with payment, and give people a reason to pay upfront. It can save you a lot of trouble with the books if you do it.
Adopt Financial Software
All modern businesses use software programs to keep track of invoices and other financial information. Keep notes if you want to look something up quickly. It is one of the things you might want to do that will be very helpful to your accountant. When choosing software to help you do this, you might want to choose something simple and reliable. You might want to put ease of use and accessibility at the top of your list of priorities and not always go for all the bells and whistles.
If you are starting and don't have enough money for full-fledged financial software, you could use powerful accounting software that can handle accounts payable and receivable. It will let you automate a good portion of your financial needs without going over budget. Remember that you won't be using this to run a huge business, so you don't need to spend much money on software with many complicated features. Photographers always Choose something strong, easy to use, and cheap. Do your research and choose what you think is the best deal for your needs right now. You can change it at any time.
Can I Write Off A Home Office Or Home Studio?
People often don't count a "home office" as income. You CAN do that, but you must show the IRS that your office space is used ONLY for business. You can deduct a part of your home's operating expenses (utilities, insurance, phone, real estate taxes, etc.) based on the ratio of office and studio space to the overall square footage of your home. Remember that the IRS looks at "home office" write-offs when they do an audit. They want to ensure you are taking the proper percentages and doing it right on photographers side. An accountant or tax preparer can be very helpful here because they know what you can and can't deduct and can check your math.
Some people also count the value of their home going down as a business expense. The only problem is that when you sell your property, you will need to go back and count ALL of that loss as a gain. Don't forget to write off all the Pretty Lightroom Presets and Pretty Photoshop Actions you bought this year!
Invoicing & Income
One of the most important things you can do for your business's accounting is to devise a simple, standard way to send invoices and get paid. In addition to helping you keep track of your income and expenses, most online accounting programs also let you send and track bills. Other apps, like Freshbooks.com, are also designed to make, ship, and keep track of invoices. No matter which method you use, the invoice should be sent as a finished document, not as a Word file that is easy to change. Also, when you record income from a deposit for future work, be careful to put it in the correct category and not report it at the wrong time.
Separate Your Business and Personal Expenses
To establish credibility as a professional photographers service, Mohit Bansal Chandigarh considers this a must. You should get bank accounts and credit cards that you will only use for your business. It makes it much easier to figure out how much your company makes and how much it costs.
Create a Business Budget
You understand how crucial it can be to have your budget. It can be just as important, if not more important, for a business to have a budget. If you know how your money works and stick to a budget, you can prepare for tax time and plan for significant expenses. It's also a good idea to save enough money to pay for business costs for three to six months.
Learn About Business Tax Laws and Responsibilities
Your corporate structure and handling of your income and expenses will significantly impact your overall tax situation. No matter how big or small your business is, it is important to know about certain taxes. Mohit Bansal Chandigarh explains a few of them below -
- Federal income tax: a tax on the money you make as an individual. But how you file with the federal government is very important, especially if you have employees or file as a corporation instead of a sole proprietor.
- State income tax: You also owe your state government money based on your income for state income tax. Check if your state lets you pay once or twice a year.
- States sales tax: This kind of tax varies from place to place, so check with your state government to find out when, how, and if you need to charge sales tax on any goods or services you sell.
If your business is ever audited for business tax purposes at the federal, state, or local level, having good accounting practices can help.
For more details visit- These 5 Photography Business Tips Will Empower You To Succeed In Business