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Accounting tips for designers and decorators - small business

Whether you’re doing your books or submitting information to your bookkeeper, accounting is an integral part of a running a design/decor business. This said, the industry has its quirks, and the associated accounting can be a bit different from other industries as a result. Accounting doesn’t need to be a daunting task. With these tips in hand, accounting can be a breeze for decorators and designers. 

Track Recoverable Expenses
When you went to a client’s space, did you travel by car? Did you have to pay for parking when you went to pick up supplies? All of these things are “recoverable” costs. You may pay out of pocket, but you can recoup them. Good bookkeeping practice is to track these kinds of expenses and optionally bill them back to your clients. If you are paying for parking and incidentals every time you visit a project space, and for other little expenses here and there, these costs can really add up. Now multiply that by the number of projects you have and you’ll see that these incidental costs can take a large chunk out of your bottom line.  Tracking them keeps them visible, and you can then make informed decisions about what to recover and what to absorb. 

Use Purchase Orders
Accounting for designers should always involve the use of purchase orders. Your firm likely engages in projects that have long lead times and that play out over the course of months. POs make your life easier. When you submit a PO, the supplier has all the information at their fingertips; there’s no need for them to go searching through emails or voicemail. There are a couple of benefits for you too. POs allow supplier errors to be caught sooner rather than later. Since the cost of invoices can be validated against your order, there’s no confusion, making the process easier and more accurate. And with a PO in hand, costs are easily matched and invoiced to the appropriate client.

Keep Track of Time
If you bill your clients for the amount of time you spend on their projects, you need meticulous records about how many hours you’re really logging for a client. It can be easy to simply skip tallying your time or even to lose track of time when you’re in deep on a project. But that could be costing your firm money. Like many designers, if you skip this step, you probably underestimate how much time you spent when you total your time after the fact. Projects can be sneaky too—fifteen minutes here, ten minutes there somehow all add up to a lot of lost time if they’re not recorded. This is true for flat fees as well – track time against your planned fee to see how profitable you really are.  If you have staff, be sure to create a company policy about logging time, designate someone to monitor and correct any problems. 

Be Consistent
Invoicing can be time-consuming, and when you’re busy, it can be tempting to simply put off this task. But good accounting for interior designers requires that you set an invoicing schedule and stick to it, even when you get busy. Whether you’re invoicing bi-weekly or monthly, it’s important to be consistent so that clients remain informed. If your billing is inconsistent, clients can easily be surprised by the costs they have racked up—and refuse to pay, especially if costs have exceeded their budget. If you invoice consistently, clients will be aware of the current costs and be able to address any concerns they have more promptly. That means fewer concessions from you—discounts, rebates, or even just swallowing a write-off. By invoicing consistently, you can minimize the risk of accounts receivable write-offs and decreased income for your firm.

Hire Good Help
Everyone can use a little help and interior designers are no exception. Rather than struggling along on your own, make accounting easier by hiring a bookkeeper or investing in design business management software. These tools can help you track your expenses, generate invoices more quickly and easily and help you implement good accounting practices for your firm.

Karen GastleKaren Gastle

Account Manager, DesignDocs Software Inc.

Karen has experience working with design firms of all sizes to integrate DesignDocs software to streamline business processes, increase administrative efficiencies, and deliver higher profits.  If you have any questions about accounting for your design or decorating business, DesignDocs can help!  Contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. anytime with questions.

This article originally appeared in the annual DDA IDEAS Newsletter on business. For member access to IDEAS and more click here to find our about our membership benefits.

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