Knowing where your business is financially is detrimental to its success! I remember the days when I began having no organization when it came to the finances in my business. We’re talking checks laying around still needing to be deposited, cash in the pull down visor in my car from different sessions, and having no idea how much I was making! That can only work for SO long before things quickly turn into chaos, and ignorance to how your business is REALLY doing! Thankfully since then I’ve implemented new ways to keep track of my business’s finances!
Here are 5 ways to keep track of your business finances:
Have a separate bank account for your business.
Even if you aren’t a registered LLC yet, you can still open a DBA (doing business as) account at your bank! And do this asap! Then keep ALL your business transactions in that one account. When clients pay you (even if it’s with cash!), deposit it right into that account. When you buy memory cards, lenses, a camera bag, etc, it comes from that account. Whatever money coming in becuase of your business goes straight in, and even the smallest expenses for your business come out of this account! I regularly do two separate transactions in the checkout line if something is for my business and something else is personal! The extra step saves so much time in the end, makes tax season WAY easier, and also lets you see how much you REALLY have! Mixing business & personal finances is a HUGE mistake! Keeping things separate from the start with make things a lot easier!
HoneyBook allows me to keep clients organized along with their contracts and invoices! AND it also keeps track of what is coming in from my clients! Yes, I already have my business debit card hooked up to HoneyBook so money goes into my business account from clients. But I can also check what payments are coming in between specific date ranges. This gives me peace of mind knowing what’s coming in certain months after making my clients’ invoice schedule! And it keeps all payments in one place for me! Click HERE to get 50% off of HoneyBook!! I wouldn’t be able to run my business as efficiently without this program.
Hire a Bookkeeper.
If you’re an expert at keeping track of expenses and doing your taxes, that’s awesome! BUT there are so many business who fail becuase they just didn’t keep up with taxes, and didn’t plan for that! Hiring a bookkeeper allows an expert to keep the finances of your business organized and let you know what’s coming up! You can also have a profit and loss statement so you can see what’s coming in and going out each month, and what you were left with. And this will make the next tip easier!
Pay Yourself a Salary.
Figure out what amount is needed for you to live on in the means you’d like to live, and pay yourself every month! When I started, I used to just transfer money over to my personal account when I was running low. As you can imagine, this didn’t lead to saving, discipline with spending, or keeping track of how my business was doing! Now, I pay myself the same amount every 2 weeks. My bookkeeper takes care of it, and so I get a paycheck just like if I worked at a retail store! This is important for a few reasons!
First, the money coming into my business fluctuates month to month. A month before 5 weddings when the final payment is due for brides is going to have several thousand more coming in than a month before no weddings! If I saw that large amount and spent it all, things would be really tight when the slower season came! I also can forecast easier how much I need to be making to pay my expenses, myself, and have some left over! If you’re not full-time yet in your business but would like to be, figure out what you need to be paying yourself each month so you can see when your business reaches that point!
Know how much you’re REALLY making, and how much business is costing you.
Here’s a common mistake many business owners make: Someone charges $3,000 for a wedding, and shoots 10 weddings in a year. But did they actually make $30,000? No! There are other expenses that go into weddings and portrait sessions. You also have to take out your other expenses for the year as well as taxes! It’s important to know what you’re REALLY making with your services. This makes it easier to know what to charge, how much of your services you need to book, and allows you to forecast your income!
I have a guide in the shop for tracking your business finances! I even include a tutorial video to walk you through the ins and outs so you don’t have to be confused any longer about how much your business is really making. You can finally know what areas are producing the most income, and what your largest costs are! The Excel formulas are already in place so all you have to do is enter in your numbers- easy peasy!! And if you’re visual like me, you’ll love that it’s color-coded and crazy easy to use! No need to be in the dark any longer about how your business is actually doing!
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