In order to have a good relationship with money, you must first pay attention to it. Tracking your money and having a good bookkeeping system is a proven way to attend your money and grow your business.
Unfortunately, bookkeeping is very likely the last thing in the world that you’ll want to do. Creative people, myself included, are not inclined to spend hours reconciling a checkbook or sending out invoices.
The subject of bookkeeping sounds like it would be all about the practical, but you will be surprised to know that it brings up emotional and energetic challenges as well.
First, there is the practical aspect, the “how to do it” part. There is a ton of information located in the Forms and Facts and Purchasing for Profit in my Design Biz Toolbox. Every form you could possibly need, plus explanations on how and why to use them, job flow and paper flow charts… all included. Everything you need.
It is all there and ready for you to use, except that this is probably not going to fix this issue for you, as there is more to it.
The second part has to do with the emotional side of your relationship with money. Consider the fact that often, designers are unprepared for being small business entrepreneurs.
They may bring along negative beliefs about money, such as not good enough yet, needing to pay my dues, people who won’t pay me that much, being uncomfortable working with people from a socio-economic level higher than your own, or even believing that they shouldn’t have to be concerned about money, they just want to design and have somebody pay them.
These designers need coaching to get rid of the negative beliefs, and that “stuck in place” energy that they have been carrying for years. When you let go of old negative and outdated beliefs, you can then become an empowered, money-creating designer. Your goal here is to replace those negative feelings and beliefs with positive emotions supported by standing in the truth of the real value that you bring to your clients and jobs.
The third part has to do with energy. It is about your money DNA… why you work, why you design, why you create. Why do you want to design? Could it be to contribute to your family’s well being? To help make a difference in other people’s lives? To set an example for your children? This is where you discover your energy, focus and stay connected to why being amazingly successful is so important to you.
But I digress… lets go back to bookkeeping.
I like to use really simple procedures to keep my books in order and be in control of my cash flow at all times, without me trying to be the bookkeeper (That would be awful.)
So here are some of my favorite tips on how to manage your books no matter what stage your business is in. Use these tips to stay on track, feel positive and empowered, and feel solidly connected to the mission and purpose of your business.
Tip #1 – Set up two folders for your bookkeeper. One to put sales in – meaning signed and deposit-received Letters of Agreement and Proposals for product or materials.
The second folder is for receipts that you have spent money on. This could be purchase orders for client jobs or the receipts from paying for the merchandise for a job. Any miscellaneous receipts, parking or printing, etc. will go in this folder as well.
Use these folders daily to deposit your paperwork. Be sure to add the clients name to each and any important notes, so that when your bookkeeper comes in she knows exactly where to post your income and expenses.
If your bookkeeper is not local, this can be done on a cloud, or by mailing your folders each week.
Tip #2 – Stay current with your books. Set up a standard day for your bookkeeper to come to your studio and complete her work onsite. Set up an appointment time when you both will be there to go over her work, mail out invoices, pay bills and make banking and money decisions.
Stick to the schedule and you will ensure that you are on top of your money and strengthening your money skills.
Tip #3 – Delegate but don’t give away your power. Ask your bookkeeper to type up a monthly or weekly schedule of when her key tasks will be completed. This could include reconciling the checkbook, reconciling the credit card, paying sales taxes, and supplying you with a detailed report of your income and expenses.
Watch this schedule and if anything is not done on time ask about it immediately. What matters here is that you set the tone. After all, the bookkeeper works for you and should know that you are paying attention to your money and you expect to be respected.