A good bookkeeper is a key part of every successful interior design business. When designers are ready to start building their team, they often begin looking for a design assistant. If that is you, STOP! First evaluate your situation and your business. If you are busy enough to make your first hire, congratulations. Then make a list of the parts of your business that you don’t like, aren’t that good at or are not an effective use of your time. At least some of the items on that list probably include spreadsheets and numbers. Most likely you don’t have an accounting background, and you didn’t start building your interior design business to become a bookkeeper or accountant. Yet the success of your business depends on financial success.
What can a bookkeeper do for your business?
You may want to hire a bookkeeper for daily business transactions such as maintaining charts of accounts, handling accounts receivable and payable, reconciling bank statements each month, etc. An accountant or CPA can provide financial advice and tax guidance and file your tax returns. They will analyze the financial information provided by the bookkeeper.
An important consideration when hiring a bookkeeper and an accountant is their understanding of and familiarity with the interior design business or other creative businesses. With an understanding of the interior design business, they will more likely spot problems early and help you solve them. They will also understand the language of the business to more easily and effectively communicate. This understanding extends to your project management systems, expense reporting systems, estimating and billing systems and payment processing systems.
Let’s take a deeper look into five definite advantages of hiring a bookkeeper and/or accountant.
1. More time for creativity
They will allow you to spend more time on the creative aspects of your business and do what you enjoy most. One big reason you probably feel the need to hire an assistant designer is that you don’t have enough hours in the day. But how many of those hours are spent on numbers and spreadsheets? Even if you happen to enjoy them, follow your own advice to prospective clients. Hire a professional rather than do it yourself. It will save you time and money.
2. Your own personal advisor
They can advise you and explain what is involved in being a sole proprietor, partnership, LLC and S-Corp. What are the advantages and disadvantages of each?
3. Stay up to date on taxes
They are educated in Federal and State tax laws – and so are able to guide you. Do you want to have to worry about keeping up to date on all the tax law details? They can determine what you’ll pay in estimated taxes.
4. Manage your cash flow
Bookkeepers understand project accounting. They can help you manage your cash flow, making sure you collect money before paying vendors. A financial expert can also keep you aware of your operating costs and in some cases they can advise you on how best to bill for certain projects to be financially successful. They can help you improve your estimates of projects in the future.
5. Look at the numbers that matter
A bookkeeper who understands interior design businesses will understand the metrics that are important to you but will also guide you as to which metrics to monitor and why. They will help to assure your numbers are accurate.
Bookkeepers pay for themselves
Making a bookkeeper the first person you add to your team can easily pay for itself. You will be paying someone less than your hourly rate to take items off your plate that you should not be doing. They will be able to more effectively diagnose your financial health and you will get an honest perspective from a professional.
Just be sure that you spend the time necessary when looking for the right bookkeeper for your business. As we advise in all areas of hiring, hire slowly and fire quickly. The importance of communication is important in all areas of business, and definitely clear communication between you and your bookkeeper. So don’t be afraid to interview a number of people and ask plenty of questions. Remember that they will be the first member of your team. So be sure they are a good fit. They will be one of the key pillars of your business.
Once you have found the bookkeeper who has the experience and knowledge relevant to your interior design business, and a personality that fits, get a strong start. Be sure each of you has a clear set of expectations and discuss those. Remember that your bookkeeper can help guide you financially so be willing to listen and learn from this expert who will be part of your team.
Just imagine the additional time you will have to spend on the creative side of the business which equals an increase in your billable hours. In addition, you will have more time to spend marketing your business and finding those ideal clients and great referral partners.