In order to have a good relationship with money, you must first pay attention to it!
Tracking your money with a good bookkeeping system is a proven way to attend to your money and grow your business.
Bookkeeping is likely the last thing in the world you want to do because creative people, including myself, are not inclined to spend hours reconciling a checkbook or sending out invoices.
The subject of bookkeeping sounds like it’d be all about the practical, but you’d 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 the Design Biz Toolbox. It’s all there and ready for you to use, except that this is probably not going to fix this issue with money for you since there’s more to it.
Secondly, there is an emotional side to your relationship with money.
It’s true that most designers are unprepared for being small business entrepreneurs.
Some bring along negative beliefs about money, like…
- not being good enough to make good money yet.
- feeling like they need to pay their “dues”.
- not believing that people will pay them that much.
- being uncomfortable with people from a socio-economic level higher than their own.
- believing that they shouldn’t have to be concerned about money… they just want to design and have somebody pay them.
Designers with these feelings need coaching to get rid of these negative beliefs, and that “stuck in place” energy that they’ve carried with them for years. Because once they let go of old negative and outdated beliefs, they become an empowered, money-creating designer.
And the ultimate goal is to replace those negative feelings and beliefs with positive emotions that are supported by understanding the real value they bring to their clients and jobs.
Thirdly, it’s about your energy and understanding 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, maybe to make a difference in other people’s lives or to set an example for your children?
Understanding the WHY is how you discover your energy, focus and stay connected to what’s important to you.
But I digress… let’s go back to bookkeeping.
I like to use really simple procedures to keep my books in order and to control my cash flow at all times, without trying to be the bookkeeper… because that would be awful!
So here are some of my favorite tips for managing your books no matter what stage your business is in.
Tip #1 – Set Up Two Folders for Your Bookkeeper
The first folder is for sales – signed and deposit-received Letters of Agreement and Proposals for product or materials.
The second folder is for receipts that you’ve spent money on – purchase orders for client jobs, receipts for merchandise, etc. Also be sure to include any miscellaneous receipts like parking or printing costs.
Use these folders to deposit your paperwork daily. Be sure to add the clients name to each and any important notes, so your bookkeeper knows exactly where to post your income and expenses.
HINT: If your bookkeeper isn’t 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 weekly appointment for your bookkeeper to visit your studio and complete their work onsite. Choose a time when you’re both able to review their work, mail out invoices, pay bills, and make banking and money decisions.
Stick to the schedule to stay on top of your money while 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 they’ll complete key tasks. This includes reconciling the checkbook and/or credit card, paying sales taxes, supplying you with a detailed report of your income and expenses, etc.
Keep an eye on the schedule and immediately ask them about anything that hasn’t been done on time.
What matters is that you set the tone of the relationship. After all, the bookkeeper works for you – they should know you’re paying attention to your money and expect to be respected.
Use these tips to stay on track and feel positive, empowered, and solidly connected to the mission and purpose of your business!