Running an interior design firm means there may be unavoidable situations where you may be required to urgently put your cash into buying goods or services you’re your clients. This means you end up using your company money or trade account for the same. Keeping track of sales and income tax and submitting filings in a timely manner helps keep your company from defaulting. Complying with government regulations payroll taxes must also be filed.

• Expenses like travel during a project or site visit can be billed to the client and reimbursed.
• This is particularly relevant for your interior design business, as it is one of the most complex businesses to manage, with numerous moving pieces, participants, stages, paperwork, and accounting.
• Clear and systematic communication with vendors, prompt creation of purchase orders, processing payments, and tracking order status are all vital for efficient bookkeeping.
• The deadline for filing your taxes is April 15th each year but you can typically pay them beginning in late January.
• Designers can contribute to retirement savings plans such as a 401(k) or an IRA.

Tips for Finding a Good Bookkeeper

• Interior designers need budgeting and financial forecasting.
• And you must decide whether to hire a bookkeeper or outsource bookkeeping services.
• Effective bookkeeping ensures these expenses are recorded accurately, preventing them from cutting into company profits.
• They may also include expenses such as office rent, utilities, and marketing costs.

With the right bookkeeping cheat sheet, you can simplify complex financial tasks and dedicate more time to your creative pursuits. Whether you’re a seasoned interior designer or just starting out, mastering bookkeeping for interior designers is essential for long-term success. At Bench, we understand how captivating design requires a robust blend of creativity and precision, and that’s a concept we apply to our bookkeeping services too. We’re specialized in helping interior designers with their unique set of bookkeeping needs. Whether it’s tracking your materials and furnishing expenses, accounting for client deposits, or managing vendor payments, we’ve got you covered.

It All Comes Down To Proper Procedure

You can find the full webinar below, but here is a quick guide if you are short on time. Bank statements should be reconciled in real-time to ensure all transactions are accounted for accurately and to prevent discrepancies. The process begins with invoicing once a proposal for a design or item is approved by the clients. Everything you are ordering at one time can go on one proposal. It also minimizes the chance for human error, which will be a huge relief for your bookkeeper. Before the project starts, be sure that you and your staff are properly trained on how to make the most of Design Manager’s vast capabilities..

Personal and business account

Depending on your clientele, consider abandoning paper altogether and implementing an online client payment process instead. “Make it easy for clients to pay with clear wire instructions interior design bookkeeping or an electronic payment option,” explains Deena. While creatives aren’t necessarily known for their financial prowess, proper bookkeeping can be a learned skill.

Designers only have to run a single sales tax report to identify the amount of Sales Tax due for the month. There are no complicated calculations required,” he says. “Her proposals, invoices, purchase orders, and time billing were mis-allocated, and also had her sales tax grossed in the wrong line item. She had double charged by error and categorized operational expenses incorrectly,” he says.

Bookkeeping Tips for Interior Designers and Firms

By implementing a structured approach to issuing payments, you can optimize your cash flow and strengthen your business partnerships. To establish a solid bookkeeping system, you need to address several key components. These components include choosing the right bookkeeping software. And you must decide whether to hire a bookkeeper or outsource bookkeeping services. Tracking and recording payments from clients is an important step in the bookkeeping process.

Here’s why interior designers like you trust Bench with their bookkeeping and accounting

Keeping separate accounts ensures clean bookkeeping free from personal transactions. Tracking sales tax and income tax, and submitting filings in a timely manner keeps your company compliant and avoids defaults. Complying with government regulations, including payroll taxes, is critical. Tracking recoverable expenses is essential to save the company money. Expenses like travel during a project or site visit can be billed to the client and reimbursed.

Managing Client Invoices and Payments