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Hi, I'm Brooke! I'm a believer, wife, mama to two, Oklahoma photographer, and photography business coach.
I help photographers grow profitable full-time businesses from home.
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Do you dread tax season and know you need a better system to organize and track your photography business expenses? Have you ever wondered what photography bookkeeping is, what a bookkeeper does, and if you really need bookkeeping for your photography business? If your answer is yes, read on as my personal bookkeeper, Jen of Numbers by Jen, shares everything you need to know to understand the basics of bookkeeping for your photography business. Because, after all, you are running a business, not an expensive hobby.
So often, when photographers think about ‘bookkeeping,’ they tend to roll their eyes, or feel like hiding under a blanket. You may think that bookkeeping is over your head, or that it sounds boring. Or, perhaps, you simply just don’t want to deal with bookkeeping in your photography business. But, bookkeeping doesn’t have to seem scary, and isn’t as complex as you may think.
According to my bookkeeper Jen, bookkeeping is: “tracking everything that is coming into your business, and everything that is leaving your business.”
Sounds simple enough, doesn’t it? Jen notes that: “bookkeeping is a step. And, even though it’s simple, it’s something a lot of people overlook or think they can catch up on later.”
Jen shares that a bookkeeper is not the same as a CPA. “It’s important to differentiate between the two. Bookkeeping is the organization, tracking of information, and making sure that it’s all accounted for. And then a CPA is going to keep you compliant at tax time, and strategize a little bit more. They’re going to help you with everything tax related. Bookkeeping takes all that data, keeping it organized so that it can then become powerful and useful information, versus transactions sitting in your bank account.”
Bookkeeping is organizing what’s going on in our business. It’s an organizational tool that gives you the power and knowledge of what is going on in your business.
As you’re looking at your numbers and what’s happening in your business, you realize that photography bookkeeping ties into a close relation with money. So, if we have a negative perspective on money, or our relationship with money is based on our level of discomfort and feelings around money, this money mindset could ultimately affect how we handle transactions and the implementation of bookkeeping practices in our photography business.
I love how Jen explains the relation between money mindset and our relationship with bookkeeping. She explains that:
“If you are approaching bookkeeping as it’s a chore, it’s something that I’m forced to do, I have to do it for tax season, then I think that you’re probably not in the right mindset around bookkeeping. I think we need to work on shifting it to – okay, this is data that’s available to me, and it’s something that is going to help drive decisions and put me more in the driver’s seat of my business. It’s not something that we have to dread doing. It’s a tool. And it’s a tool that a lot of people just leave in the toolbox and don’t use it, and it can be so helpful.”
Jen reminds us of the importance of knowing our numbers so we can invest in our photography business with confidence. She shares:
“I see a lot of owners that are scared to make investments because they don’t know what’s going on in their business. And especially with photography, you’re buying supplies for your studio, and if you’re constantly hiding under the blanket in the corner not looking at your numbers, you’re just taking a leap of faith on those purchases versus making them in confidence. Think about how awesome it can be to walk into the store, buy that new lens, know that you have the money for it – and not have to worry about it.”
Bookkeeping empowers you to make better decisions because it shows you the activity and action you’re taking, where you’re spending your money, where you’re not spending money, and what you could do better. And because of that info, you’re able to then evaluate your own actions.
So, now that you’re empowered to adapt photography bookkeeping into your business, you may be wondering what are some basic photography bookkeeping practices that all photographers need to be doing, regardless of their stage of business – and what exactly does bookkeeping look like on a month to month basis?
Here are some of Jen’s bookkeeping basics tips:
Tips #1 is to “keep your personal expenses separate from your business expenses.”
“It may be tempting to mix the two together, especially if you are just starting out and doing it on the side, but it’s really important to keep your personal and business expense accounts separate from the beginning.
First reason for keeping these accounts separate is because at tax time, if your expenses are all in one account, you’re going to miss something because you’re going through a whole year of transactions. So that’s the very first thing I tell people to do is to separate the two. You’re going to thank yourself in the long run. And when you do decide to start engaging in some form of photography bookkeeping, it’s going to be that much easier.
Separate personal from business. In the bookkeeping world we call this the golden rule. And remember, you don’t have to file and become an LLC to have a separate account for your business. You can open a separate account with just your social security number and us that account until you are ready to switch to a business account. And when it comes to business bank accounts, there are a lot of online banking providers that don’t require any minimums and don’t charge you any fees.”
“Start out with using a tracking system that you know, and will keep up with. Whether you choose pen and paper, a Google sheet, or Excel document – use what you know. There’s plenty of templates out there. I have one on my website called The Bookkeeping Buddy.
Begin writing down everything that’s coming into your business: all of your sales. Then, write down everything that’s coming out of your business: anything you’re spending money on. Then the difference between the two is going to be what you made for the month. “
And if you’re wondering what numbers you should be tracking in your photography business, checkout episode #211 of the Book More Clients Photography Podcast.
Tip #3 is to “use caution and educate yourself. For example, if you’re thinking of using QuickBooks on your own make sure you watch some videos or get help from a bookkeeper before you get started. Be careful, and always try to educate yourself before you dive into using a new software or tool.“
Perhaps you’ve already been running your own photography bookkeeping tasks and now you’re considering hiring a bookkeeper for your growing photography business. So, I asked Jen for her advice on how to know when it’s time to hire a bookkeeper.
“It’s time to hire a bookkeeper when you’re no longer consistent with your own bookkeeping. You’re working, you’re out on shoots, you’re getting busier and busier and you’re starting to let it slip away from you. If you’re at a place where your business is growing and you’re not paying attention to your bookkeeping anymore and you feel comfortable making the investment, then I think that’s a great tipping point.”
The importance of bookkeeping in your photography business is to help empower you to make better business decisions. Some key points of action are: