Accounting Tools & Tips
Hey Phil back with another lesson on accounting. So you've probably been doing this as you've started getting clients doing jobs paying for things with your business credit card or your business bank account that you've set up. But I did want to just go over some basic accounting principles to keep in mind. First off what is accounting? It's it's the basic understanding of the money flow of your business. So this is your income and your expenses, the income is any money that you have coming in from. This could be clients paying you for a job. If you are selling fine art photography this might be you selling photos on the street corner, maybe you're a stock photographer and you are selling photos online and you're getting residual income that way. But any sort of money that you're making is considered your income and it's a good idea to keep track of all your income in one place so that at the end of the year or whenever you have to pay taxes or whenever you're paying yourself you have ...
all this in one place and then your expenses are any equipment expenses, anything you're paying for, travel expenses, things you're paying for to run your business, any apps accounts you have online that cost money. These are expenses. So again it's important just to keep track of these things now this can be done with easy to use tools and apps such as Quickbooks, fresh books, there's a free app called wave accounting and they have mobile desktop apps that make it super easy. You can even do things like connect your business accounts, your credit debit cards so that if you make any money or if you have any expenses it's automatically going to bring all of that information in there and basically do it all for you. Or you could simply use something like an Excel sheet or a google sheet where you are just every time you make money you write down how much you made when you made it what it was for and then if you have any expenses, same thing when it was, how much was it for, what it was, what it was for. And it's a good idea for any expenses to keep track of your receipts as well. Again one of the reasons why having an app or using an app like Quickbooks, fresh books to keep track of your receipts is really easy because most of those have mobile apps where you can just snap a picture of your receipt and it will save it for you. So it's important to be doing this as you run your business for me whenever I'm doing my business, if I make money or if I have expenses, I typically just jog that down in my own Excel sheet which I personally use for my income and expenses because it's fairly simple and I just do it right then and there um at least every month you should be doing this so that every month, your understanding are you making money, are you losing money? How much if you're making a certain amount of money, how much should you be saving for taxes? How much can you pay yourself? Is your business growing? Is it not growing? And then you can look back month after month, year after a year to see that growth or that decline as well. Ultimately this is important for tax season. Again, this is in our region and the United States, it's going to be different for you for us. I have to pay quarterly taxes or estimated taxes. So four times a year I gotta give a chunk to the government. And that's just because I'm making throughout money throughout the year and they want to get their money throughout the year as well and by keeping track of my accounting and knowing exactly how much I've made, exactly how much expenses I have. I can see and kind of estimate how much I have to pay in taxes every quarter. Or if you're just doing it at the end of the year, how much you owe at the end of the year. If you ever get audited, having good books and having all this information written out is really important. And one other quick tip is because as a photographer, depending on what kind of photography you do, there might be for better months and slower months. And so if you can track your income and expenses and kind of budget for the slower months and know that you're gonna work a lot more during the summer and it's gonna be a little bit slower during the winter or whatever it is. That's another reason why accounting is so important.