Owners of creative businesses work in unique situations with parameters and expectations that other industries don’t have to worry about. Shifting deadlines, unpredictable client changes to deliverables, and an unsteady cash flow are realities for web designers. So, when it comes to finding shortcuts and other ways to keep the contracts coming in, accounting systems for web designers can help keep your workflow on track and ensure you get paid when you need to.
Importance of Accounting Systems for Web Designers
Working in a creative industry means that web designers need to be able to focus on their workflow and design process while also being flexible when it comes to things like project scope, deadlines, and client services. It can be a balancing act to make sure you’re providing quality work at the agreed-upon timeline, and clerical issues like tax preparation, invoicing, cash flow, etc., can take valuable time and resources.
Bookkeeping is a crucial element for any business, especially an independent or freelance-based model. Clients may come to you for your design sensibilities and impressive portfolio, but accounting provides the metrics to effectively grow your business. Properly detailed accounting records allow a business to monitor cash flow and make timely payments on overhead costs like design software, client lunches, business trips, or studio space.
Bookkeeping for designers also allows small business owners and creative individuals to justify business decisions at the micro and macro levels. Maybe you’re happy with a certain type of client because their contract is worth a decent amount of revenue, but after you break down the hours and materials you put into their work, you find that two smaller clients can provide the same amount in billings with less time-intensive work. Cost/benefit analyses like this are only possible with intimate knowledge of your financial realities and depend on practices like timely invoicing, budget reconciliation, and accurate tax reporting. Essentially, without an accounting system for web designers, business owners can find themselves working hard but not achieving their higher goals.
Types of Accounting Systems for Web Designers
As important as accounting is for a small business or independent creator, there’s more than just one way to do it correctly. Different accounting methods may be preferable for your business depending on your goals, financial knowledge, and the time you have to commit to bookkeeping.
The first and most basic is a simple ledger or notebook where you record all of your business purchases and expenses as well as income from your clients. This basic bookkeeping is the bare necessity for understanding your business’s cash flow and requires you to keep receipts, stay on top of payments, and reconcile that your accounts are accurate frequently. Running a business like this is doable but far from ideal.
For most companies, technology offers valuable tools that can free up time and keep your accounting systems in check with minimal human error. With accounting software for web designers, independent business owners can do things like create professional-looking invoices, automate payment reminders, keep accounts payable and receivable organized, and give accurate breakdowns of financial information when needed.
However, these programs still come with drawbacks. The dependability of the program still depends on you inputting data manually and correctly, which means using it can still be a time commitment for busy creators. Deciding on the right program in itself can also be a hassle. With different products offering different levels of accountability, customer support, and capabilities, you may have to try several different programs before you find the one that works best for your business.
Finally, if you lack the time and insight required to handle your bookkeeping—as well as the kinds of financial and legal pitfalls that come from accounting errors—the best accounting system for web designers might be a professional accounting service. Hiring a professional bookkeeper can seem like an unjustifiable business expense, especially to independent contractors or other small businesses, but having the freedom to focus on client satisfaction, project completion, and business growth can actually return better ROI than the money you would save performing your own accounting.
Professional accounting firms can maximize your tax refunds and ensure timely and correct payments, while some even offer business consulting packages to help guide your growth with advice from knowledgeable business professionals.
Key Features to Consider When Choosing an Accounting System
Since we’ve established how important it is for creative businesses like web designers to find an accounting system that works for them, let’s take a look at how to choose the right accounting software for your business. Here are a few key features to consider before deciding on the right system for you.
Invoicing and Billing
Timely and accurate invoicing and billing are the lifeblood of your business. Since cash flow issues can interfere with making timely payments on things like studio rent, paying subcontractors, or otherwise inhibiting productivity, look for an accounting system that provides simple, direct invoicing. Certain systems will even automate invoicing and billing reminders to your clients, leaving you with less legwork.
Businesses’ expenses can be tricky to detail and justify—especially when projects are behind schedule, and costs mount. However, without reliable expense tracking, even big businesses can soon find themselves with tanking bottom lines and wasted revenue. Good accounting systems should keep accurate and timely expense reports for quick reference when necessary. The best type of expense tracking also breaks down expenses by type, date, and other identifying information to help you spot trends and understand where your money is going.
Time tracking is an essential part of understanding your hourly wage and how much you’re making for your effort—something that creative contractors like web designers can struggle with. As opposed to just clocking in and out times, better time tracking breaks down hours worked for individual projects, identifies billable hours, and helps you better identify which jobs are worth it based on how long you’ll spend completing them.
Integration With Other Tools and Software
If you depend on a different app or software to track your hours, communicate with clients, or develop your invoices, the best accounting systems should be able to adapt and work with your pre-existing systems. This can be difficult to find with certain proprietary software systems, but professional accounting firms are more than capable of adapting to your workflow and leaning on their years of experience to offer recommendations on programs that might serve you better.
Ease of Use and User Interface
The main priority for any accounting system you’re considering is: how easy is this program to use? Unfortunately, this is also a highly personal assessment to make that depends on your skill with the software, how much time you can commit to learning/using it, and the quality of the results the program returns for you. That’s why many individuals choose to outsource their accounting and bookkeeping to professionals and skip the learning curve altogether.
While web designers make a living from their creative instincts and services, accounting and bookkeeping are the systems that can help them grow, attract new clients, and reach their business goals. While there are plenty of programs designed to help web designers take charge of their accounting, only professional bookkeeping firms like Appletree Business Services can provide accurate, timely, actionable insights into the cash flow and growth opportunities for your business. If you have questions about what Appletree can do for you, feel free to contact us anytime to set up an initial meeting with one of our qualified CPAs or professional business consultants.