An accounting plan for your business might include items such as:
- Who will handle money matters (will you hire an accountant?)
- What kind of business bank account and which bank
- Will you have a business credit card and how it will be used
- How often you'll send out invoices and the terms of payment
- The kind of bookkeeping system you'll use (including type of software, if any)
- A system for filing receipts, recording deposits
How Not to Choose a BookkeeperIn my pre-design and desktop publishing days I worked in commercial real estate for a start-up company. I was a 20-something fledgling Escrow Officer / Legal Secretary / Part-Time Receptionist / Girl Who Stocked the Bar (yes, we had a bar in the office). With only a handful of people we had a lot of slash titles. Several weeks into the venture I got another slash -- bookkeeper. My selection went something like this:
At that first meeting with the CPA he started shoving boxes of papers at me and talking in what might as well have been a foreign language about debits and credits, double entries, balance sheets, and what not. If I hadn't been a salaried employee I would have been raking in the overtime dough trying to play bookkeeping catch-up while handling the new daily bookkeeping duties.
Joyce (Owner / Founder): "Does anyone here know anything about bookkeeping? My CPA says we need an in-house bookkeeper."
(Silence from our little group of slash employees)
Joyce: "Does anyone know how to balance a checkbook?"
(Again, silence -- I almost raised my hand but thought better of it)
Joyce: "OK, Jacci, you haven't been out of college long, right? Did you take any accounting classes?"
Me: "Uh, yeah. One or two." (I know I signed up for some, can't remember actually attending)
Joyce: "Good. You're our new bookkeeper. Meet with our CPA tomorrow and he'll get you set up."
Anyone want to take a wild guess how well that new business venture went? All those numbers. All that money passing through. All that booze just steps away from my office. (OK, I'm exaggerating just a touch. But the business did fold a year or two after I moved on.)
So what's the moral of this story?
A real business needs a real bookkeeper.
How to Manage Your Business MoneyIf you can't afford the real thing for the day-to-day number-crunching at the very least seek out advice and guidance on the proper way to set up your books (on paper or computer) and track income and expenses. Do this before you start spending loads of money and collecting checks from clients.
If you're a natural-born money manager the bookkeeping aspects of freelance design may be just another item to check off on your daily to-do list. If not, while you're shelling out money for new software or a software class or stocking your design library, look into a small business accounting class as well.
When you're just starting out and money is tight you may think a shoebox accounting system will tide you over until the money starts rolling in. Keep the shoeboxes in the closet. Sure you could just collect receipts and paid invoices in a box or folder that you hand to an accountant or professional bookkeeper at the end of year. But then you won't know until the end of the year how your business stands financially. And the invoice you get from the bookkeeper who has to sort through that pile of paper will cut even deeper into whatever profit (or loss) you might have experienced.
- Hire an accountant or bookkeeper to handle the accounting work or as a consultant to help you get started.
- Buy a book or take a class specifically about small business accounting.
- Set aside time every day or at least every week to do the mundane but necessary chore of organizing receipts and invoices, sending out billing statements, and recording income and expenses.
- Invest in and learn how to use accounting software. The money you spend now will be money you save later.
Bottom Line: While design may be the reason for your business, good accounting and bookkeeping is the reason you're able to stay in business. Whether you hire a professional or do it yourself, have and use an accounting plan from day one of your freelance life.
|Pick Your Path to Desktop Publishing|
|Get Started:||Basic Guidelines and Requirements for Desktop Publishing|
|Choose Software:||Desktop Publishing and Design Software|
|Make Something:||Things to Make Using Desktop Publishing|
|Tips & Tutorials:||How to Do Desktop Publishing|
|Training, Education, Jobs:||Careers in Desktop Publishing|
|In the Classroom:||Back to School With Desktop Publishing|
|Use Templates:||Templates for Print and Web Publishing|