Why do you need to know about accounting as a photographer?
I hate accounting, and I believe you are on the same side. Collecting bills and invoices, tracking your expenses as well as the mileage of your vehicle used for your work is a pain. But keeping track of all your expenses is as important as your creative side. Here are some facts why:
- Records of your expenditure that you have collected throughout the year provide an actual figure of your expenses against your income. A lot of photographers underestimate the value of this process that is required to operate their business. You can count fixed expenditure like equipment or lighting, but your fluctuating costs could possibly go too far from your calculation. Financially stable entrepreneurs preserve some extra funds to cover unpredicted expenses and are precise when planning their budget.
- Being a photographer, an accurate invoicing tool is your best friend. Missing statements or receipts can indicate huge financial losses for your photography business, so you need to keep on top of it.
You will be able to charge your customers on the spot even you can take payments from credit/debit cards. Also by using online accounting software like Wave you will be mobile and send invoices on the go with pay now tab.
Creating a financial calendar will also beneficial to remind you to pay your bills on time.
You might be thinking why online, right?
Power of Wave
Note-taking is another skill which will make you habitual for recording your expenditure. Just little practice and having a notepad in your pocket or car will save your lot of time and efforts.
Even the tiny dime skipped every month could swing your income tax profile. Therefore it's better to track the smallest costs payed towards your business. For example, keep your parking tickets/pass, proof galleries costs, payment or credit card transaction charges and meeting expenses.
Alexa Coupland a retired accountant from Sarnia, ON suggests that keeping separate lists of expenses, income and receipts will not only organise your tax filing process it will also lower your accounting expenses and time of your accountant.