FAQ : Bookkeeping + Taxes for Wedding Photography - Jasmine Star

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FAQ : Bookkeeping + Taxes for Wedding Photography

June 14, 2012 - Business, How To, Photography

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I received an email from a CFO from an energy company (Hi Andrew!) who also does accounting for small businesses. He asked how I did things in regard to my finances and I realized I haven’t touched on the subject lately…or at all, for that matter. When I started photographing weddings, I had so much to learn (everything to learn if I’m being honest) and adding the management of my finances was a whole new layer I wasn’t really to dig through.

Early on I decided to outsource the organization of my finances to free me to focus on photography. In light of this, I’ve shied away from talking about it because I fear I’m not in the position to, but Andrew asked direct questions I’ll dive into to offer a little more insight into how I run my business.

Do you take a portion of you bill upfront?
Yes, I require a 50% retainer fee to secure my services for a wedding. The remainder 50%, plus the state tax, is due 14 working days (about two and half weeks) prior to the wedding date.

Do you use an accounting system? Or do you track everything in Excel?
The most commonly used accounting system for small business owners is Quickbooks. Because I preferred to focus solely on the photography aspect of my business, I hired a bookkeeper to handle the categorization of my expenses. In order to make this as seamless as possible, I use a credit card that’s designated solely for my business expenses (camera gear, albums, the meal I eat before a wedding, etc), and at the end of the month I receive a balance sheet listing my profit and loss for the month, as well as a YTD update.
At any given point in time, I know my precise income, cost of goods sold, and a litany of business expenses. The best part of this type of organization is that I’m able to compare past yearly financials to determine how I’m trending for the year and when to thrust/throttle depending on my goals.

At the end of the year, because everything has been detailed and organized, I simply take the information from my bookkeeper and meet with my CPA. I pay quarterly taxes to avoid being reamed at the end of the year all at once, so the meeting with my CPA is simply to ensure everything is accurate.

Okay, so this is a totally random picture. JD keeps this photo I gave him when we were in high school in a change jar on his desk. Note to self: don’t ever, ever get bangs again.

Do you outsource bill paying or do you handle that internally?
Most my regular bills are set up to be paid automatically with my business credit card. For instance, when I place an album order for a client, my card is charged and I receive a receipt by mail. There are few business bills that must be paid on an a la carte basis, but when it happens, I create a profile for each recipient through my bank’s online bill pay that’s tied to my business checking account. For example, when my album designer invoices me for work, I simply log into my bank account, pull up her profile, enter the amount to be paid, and the bank sends a check to her by mail. The bookkeeper reconciles transactions from my business checking account and my business credit card and then provides the information for the month.

It’s important to clarify the importance of meeting with a Certified Public Accountant when a person is starting or sustaining his business. How I wish I had done so earlier in my career! In fact, when I had to pay all my taxes in one lump sum my second year of business, I was overcome with a wave of nausea…especially because I didn’t know I was supposed to collect state sales tax on my services. Thank goodness I had saved for incidentals, but it was one of those moments I learned a hard lesson I could’ve avoided had I just researched my options.

I hope this helps and if you have other questions I can answer, feel free to shout out in the comment box…and the ones I can’t answer, I’ll simply ignore! 😉

Happy Thursday!

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FREE PRODUCTIVITY PLANNER

Life is about to get a whole lot easier.  

Desperate for change, I created a Productivity Planner to help streamline my workflow and I kissed stress goodbye. 

[With cherry flavored chapstick.]  

FREE INSTAGRAM GUIDE

Oh, friend, it's time to start growing your business on Instagram.
  
Sign up to receive a free Instagram marketing guide, helpful tips, and free stock photos you can use for your business.  

It’s basically an Instanote sent to your inbox to help push you toward your social goals and help grow your following.

FREE STOCK PHOTOS

You're busy, pulled in lots of directions, and trying to run a business. 

In addition to all this, you know you should be posting on social media, so how do you balance it all? 

I'm dedicated to your success, so download five free stock photos to use online...I hope this empowers you to attract dream customers along the way!

I wouldn’t say we were business nerds but my husband just sent me a Slack message asking me to call him.

If you need me, just follow the trail of empty La Croix cans around my house.

"Margaritas make me sound smarter, dance better, sound amazing, and look like Shakira...