Better Bookkeeping for Interior Designers – Logistis for Designers (2022)

Our very own Marissa Jones explains how designers can practice better bookkeeping. You can find the full webinar below, but here is a quick guide if you are short on time.

Marissa started working with her first interior designer in 2013 and discovered almost immediately that interior designers encounter a unique struggle: to find an accounting professional who understood their industry. As a result, Marissa quickly learned the industry and has used her knowledge and expertise to help designers all over the country. One thing that she continuously stresses to designers is that successful accounting is all about the workflow process. She views this as the most important aspect of accounting for interior designers.

Getting Started

  • It is so important to work with a bookkeeper who knows the interior design industry.
  • Get your systems set up before you begin
  • Set up a test account!
  • Get paid before you order or at least signed approval.

It is no secret that finding the right bookkeeper can be a struggle for interior designers. Even the most experienced, highly-recommended bookkeepers can fall short if they are not familiar with interior design practices. It is imperative that you find the right bookkeeper who knows your industry and has experience with working specifically with interior designers. There will be a huge learning curve if they are not familiar with Ivy/Houzz Pro + Quickbooks integration. Working with experienced interior-design bookkeepers will save you stress, time, and minimize your company’s vulnerability to potential audits!

(Video) Better Bookkeeping For Interior Designers

Before you begin, make sure your systems are properly set up. If you are using Ivy/Houzz Pro before connecting to Quickbooks Online, hire an accounting professional experienced in your software to set up your mapping and categories that match accurately to your chart of accounts in Quickbooks. If the foundation is not set up correctly you could fall into issues with the accuracy of your financial statements. We have a proven formula for mapping that is best for interior designers for analyzing your numbers and for sales tax.

You should always set-up a test client and project in Ivy and run tests first! Run tests to check that the integration is functioning properly. Follow recommended steps for your industry and double-check that your mapping is translating to Quickbooks seamlessly. This makes your job and your bookkeeper’s job so much easier. With accurate data inputted, you can even auto-generate reports from Quickbooks to see where you stand financially.

What’s the point of the process?

Now, what’s the point of the better bookkeeping process? To make sure all invoices are sealed, accurate, completed in a timely manner, and to make sure everything is paid. This ensures that purchase orders, payments, project tracking can be properly documented. When this process is done correctly, you will be able to have constant access to see the accurate liability of your company at any given time. Pulling accurate tracking reports, seeing what is paid and what needs to be paid. For example, you receive a $100,000 check from a client, but you are required to pay out $80,000. Your account balance will show as the full $100,000, however, only $20,000 of that is your actual cash balance that you can spend.

TIP: Use the Ivy/Houzz Pro Integration for customized financial reporting.

(Video) Tracking Paid Sales Tax to a Vendor in Ivy ‐ Interior Designer Accounting Tips

The Steps for the Best Workflow Process

Before you begin, ensure that your system is properly set up. You should always set-up a test account first! Follow your steps, and input accurate info to Quickbooks. This makes your job and your bookkeeper’s job so much easier. With accurate data inputted, you can even auto-generate reports from Quickbooks to see where you stand financially.

Here are the steps:

  1. Designers create items and proposals which their clients approve or send payment.
  2. Once client payment has been received, payment should be applied to a proposal.
  3. Immediately after client payment is applied, the designer should create an invoice.
  4. Once the payment is received and the invoice is created, the designer should create purchase orders directly from the paid invoices.
  5. The purchase orders created in Ivy should be open for reference during the ordering process and matched to vendor invoice/receipt backup for accuracy while ordering.
  6. Purchase orders should match the vendor invoice EXACTLY. If the purchase order is less than the vendor originally quoted and you need to bill the client more, a new item should be created and added to a new proposal. Although possible, NEVER alter invoices once created. If everything is done in sequence, and correctly, all financial reports should be accurate in real-time.
  7. Immediately after an item is ordered, the designer should post vendor payment to purchase the order in Ivy.

If everything is done correctly and in sequence, all financial reports should be accurate in real-time.

Make sure you have authorization from clients to use Quickbooks Online. One of the most important things for better bookkeeping is to make sure you are getting paid before you order. All invoices and purchase orders need to be closed and completed before moving on. You also need to know what is yours to spend in your bank account and what is the client’s. This is account balance versus cash balance, which is important to know at any given time so that you aren’t accidentally spending more than you should be. Many designers think they are able to track this on their own, but things get tricky when you are working with multiple clients on multiple projects at one time! This is another reason why it is so important to have accurate financial data at all times and make sure you are effectively tracking and documenting everything.

(Video) Hot Topics in Interior Design Accounting and Financial Management

Integration

Note that there are things that might need closer attention to detail because not everything will automatically transfer to Quickbooks. However, if you have followed our recommendation and hired a bookkeeper who is familiar with the industry, they will likely know what they are doing. This is just another reason to stay in communication with your bookkeeper, to help you get a better idea of the process and of your numbers at the same time.

Accrual Based Accounting

Most reports in interior design are accrual reports – any time you create an invoice, it is counting it as though your payment has been received, whether or not it actually has been paid. If you always follow the steps, your cash-based reports and accrual reports are going to be almost exactly the same. This is great when working with sales and income tax. You want this information to be as accurate and consistent as possible.

Know Your Sales Tax Laws

What’s taxable and not taxable? When in doubt, give them a call! Your state’s tax office will guide you on how best to calculate taxes based on their specific tax laws. Do not assume every state is the same! When you aren’t fully aware of all the nuances of state tax laws, you might get yourself in situations that are far from ideal. For instance, if you don’t immediately collect sales tax on something that’s due, and you try to go back & bill a client on sales tax that should have been collected a year ago, it is highly unlikely that the client will pay that tax – and highly likely that you will be liable to pay it yourself.

Never pay tax to a vendor. If this is unavoidable, there are ways you can track this in Ivy. It is probably a good idea to keep a separate log or spreadsheet on vendor-paid taxes. You don’t want to pay tax to a vendor and then have to pay it back to the state because it was missed.

(Video) Hourly Vs. Flat Rate Billing: Is One Better than the Other?

Keep it Simple, Stay in Touch with your Bookkeeper

We recommend weekly calls with your bookkeeper. Work with them to generate the reports you need to keep your finances in check. Make sure you understand the reports! There are so many important aspects of your business that your bookkeeper can help you understand with correct reports. As your business grows, you want to be able to keep track of your numbers and know exactly where you’re at any given time. Communication and understanding are key to success!

About Ivy

Ivy is the fastest-growing community and business management tool for interior designers. If you’re an interior designer still looking for an intuitive tool to run your firm, check out ivy.co and schedule a personal demo with the Ivy Team here

About Logistis for Designers

Logistis is a cloud-based accounting firm specializing in interior design. Our team can help carry you through the entire accounting process, from start to finish. We can set up the financial portion of your office, integrate your systems, run your payroll, prepare your taxes and offer assistance with financial planning along the way.

(Video) Better Bookkeeping for Interior Designers Using Ivy and Quickbooks Online

FAQs

How do interior designers stay organized? ›

7 Tips for Interior Designers to Stay Organized
  1. Create a Schedule. Creating a schedule gives interior designers a clear visual of what's ahead. ...
  2. Set Deadlines. ...
  3. Communicate. ...
  4. Delegate. ...
  5. Create a Workspace. ...
  6. Use Software or Apps. ...
  7. Tackle Your Accounting Practices.
Feb 16, 2021

What type of interior design makes the most money? ›

It's thus safe to conclude that though the work environment and creativity may be restricted, a government interior decorator undoubtedly can pull the highest salary paid in this industry which is as high as $160,822, with adequate experience and talent.

What are three important qualities that interior designers need? ›

6 Essential Skills Every Interior Designer Needs
  • A creative eye and attention to detail. First and foremost, you'll need to be highly creative. ...
  • Trend identification. ...
  • Knowledge of sustainable practices. ...
  • Superior communication. ...
  • Sketching ability and computer knowledge. ...
  • Organization.

How can I improve my interior design business? ›

12 Expert Tips to Find New Clients for Your Interior Design Business
  1. Ask Your Network for Help. ...
  2. Develop a Basic Digital Marketing Strategy. ...
  3. Use Social Media to Reach Prospects and Gain Followers. ...
  4. Use Traditional and Digital Advertising. ...
  5. Establish a Brand for Your Interior Design Business. ...
  6. Practice Professionalism.

How do interior designers store samples? ›

You can group samples together as needed in binders or file holders and label your bookshelf in sections, much like you'd see a library. Organizing interior design client files is best done in binders or file folders that can be stored neatly in a filing cabinet and organized alphabetically by client.

How do you organize your design tasks? ›

How to organize your workflow better as a designer
  1. Adjust your workplace. ...
  2. Remove distractions. ...
  3. Use to-do checklists. ...
  4. Focus on the most important tasks. ...
  5. Minimize your task list. ...
  6. Use keyboard shortcuts. ...
  7. Create and put digital actions. ...
  8. Create a logical folder system.

Where do interior designers make the most money? ›

Interior Design Salary California

California has the highest pay per year for interior designers with an average of $57,500. The average range is between $40,000 and $78,000, which is the highest salary range in the country.

Where are the highest paid interior designers? ›

According to BLS, San Jose, California is the top-paying metropolitan area for interior designers, and there are approximately 170 active interior designers in the area. There are positions available across industries, including government agencies, healthcare, consulting firms and architecture.

How do interior designers make 6 figures? ›

Marketing your business plays an integral role in helping you put your business (and yourself) on the map and making more money as an interior designer.
  1. Be active on social media.
  2. Use paid advertising.
  3. Get a pro account on Houzz.
  4. Revamp your website.
  5. Start a blog.
Mar 28, 2022

What are the 5 principles of interior design? ›

Interior Decoration – 5 Principles (With Diagram)
  • Proportion:
  • Balance:
  • Emphasis:
  • Rhythm:
  • Harmony:

What personality traits do interior designers have? ›

Interior designers should also possess the following specific qualities:
  • Artistic ability. Interior designers use their sense of style, to develop designs that look great and are aesthetically pleasing.
  • Creativity. ...
  • Detail oriented. ...
  • Interpersonal skills. ...
  • Problem-solving skills. ...
  • Visualization.

How do interior designers make money? ›

The client pays the price tag cost (no discounts for the client!) and the certified interior designer makes their money from a commission given by the retailer. The combination method of billing is the best option for such projects incorporating the best methods appropriate for each aspect of the design project.

How do interior designers generate leads? ›

How to generate leads for interior design
  1. Create engaging, educational content. ...
  2. Optimize for search. ...
  3. Build a community on social media. ...
  4. Increase your visibility with pay-per-click (PPC) ads. ...
  5. Create profiles in online directories. ...
  6. Optimize your website for conversions.

Why is organization important in interior design? ›

Without an organization strategy, you risk the results of your interior design vision falling victim to clutter and disorder. Why? Because homeowners actually live in their homes, and using everyday items that aren't part of the design is a reality.

What are the challenges of being an interior designer? ›

10 Unexpected Challenges Interior Designers Face Today
  • Managing Time. For interior design firms, time management skills are a must. ...
  • Selling Your Big Ideas. ...
  • Handling the Books. ...
  • Maintaining Client Expectations. ...
  • Working Within Fast Turnarounds. ...
  • Introducing Trends and Timeless Style. ...
  • Managing Costs. ...
  • Handling Self-Promotion.
Jan 5, 2021

Can a interior designer do project management? ›

An interior design project manager makes sure the project flows as smoothly as possible from brief to final delivery. A skilled project manager is usually an experienced designer familiar with all aspects of a design project, including: Planning and organizing project schedules.

What is project schedule in interior design? ›

Your interior design work schedule template is your map and guide for each stage of the project journey, including what work will be required and knowing how long each step will take in the timeline.

The main reason a business should hire a bookkeeper is to produce accurate key figures needed to make better financial decisions and ultimately increase the design firm’s bottom line.

A few common reasons a design firm will hire a bookkeeper is to simply have someone categorize transactions, “fix mistakes”, or complete tedious data entry.. The main reason a business should hire a bookkeeper is to produce accurate key figures needed to make better financial decisions and ultimately increase the design firm’s bottom line.. One common misconception is that office work completely ends when you hire a bookkeeper when the reality is that more of management’s time is freed up.. It is important to remember that bookkeepers are not wizards that a company’s team needs to work together to make the bottom line increase.. A good accounting firm will offer advice on best practices for your industry.. Let’s face it, good bookkeepers are not cheap so firms should utilize a bookkeeper’s time effectively to save money and ultimately increase their bottom line.. Good bookkeepers can offer business coaching to better your firm’s bottom line.. Having an efficient SOP practice along with the right guidance of effective industry standards could be a game-changer for your bottom line.. It’s all in the financials!. It is virtually impossible for a firm to make sound financial decisions about its future without these reports.. They are not a monochrome compilation of digits, but in the mind and heart of a bookkeeper, they are a colorful tapestry of beautiful results brought to fruition.. As previously discussed, these reports are compiled from a great deal of work from both the business owners and accountants.. *Remember, bottom lines don’t increase overnight!

How interior designers can keep projects running smoothly with professional bookkeeping procedures.

We called upon two of our favorite experts on bookkeeping for interior design businesses, Denise Zollo and Priya Srinivasan , to share their professional insights on the best project management and accounting procedures to follow to ensure every project is a success.. “Proper project setup in Designer Manager, which is the project management and accounting support software I recommend for interior design businesses, is critical.. This is why starting each project with a plan for handling bookkeeping procedures helps keep you on track and identify potential problems before they arise.. Both Priya and Denise agree that purchase orders (POs) are the source of a lot of accounting mistakes, and they are usually the first thing they look at when their clients’ books aren't adding up.. In addition to staying on top of POs, Denise and Priya advise interior designers to hold off on purchasing anything for a project before collecting payment from the client.. Everything you are ordering at one time can go on one proposal.. In addition to the Open Purchase Orders report, Priya and Denise also recommend using the “Work in Process” and “Pre-Billing” reports to make sure nothing slips through the cracks.. “If a project is done, my purchase order reports should show zero open POs and my “Work in Process” and “Pre-Billing” reports should have nothing for that project.

Brad Shark highlights his four favorite features of Design Manager and discusses why Design Manager is the best accounting software for interior designers.

We sat down with Brad to learn more about his road to bookkeeping, why Design Manager is the best accounting software for interior designers, and his four favorite Design Manager features.. Brad first discovered Design Manager 20 years ago when he worked with Gunkelmans Interior Design .. And ever since, he continues to deem Design Manager as the best accounting software for interior designers.. And find out why Design Manager is the best accounting software for interior designers.. "Design Manager is perfect for interior designers because it allows them to see everything graphically," says Brad.

A conversation about the ins and outs of interior design bookkeeping with a dedicated bookkeeper and accountant who has helped clients tackle the difficult challenges and improve their financial health.

“The right accountant or accounting system is really important in this industry.. Anup says interior designers have to have “the right chart of accounts to begin with.. Anup and his team serve their clients across all bookkeeping and accounting needs.. Involved in this process is providing accurate, timely, and thorough financial statements.. - Anup. Bookkeeping services tend to be more affordable than the CPA services, which is why Anup points out that a comprehensive financial report from your bookkeeper can help with cost savings.. We conducted an interview to better understand her skills in terms of bookkeeping and how she did the process of bills, refunds, and payments and how she tracked it,” says Anup.. This interview uncovered critical mistakes that required Anup and his team to completely redo her bookkeeping for the entire year.. Do they understand the software you use?. We encourage our clients to make time and review the P&L – and we walk them through each line item of revenue and expenses on a monthly basis for them to understand the financial health of the company,” he explains.. Your bookkeeper should also be willing to work with the software you use for your business.. “We have been using Design Manager for almost four years and the system is robust and simple to use for interior designers,” says Anup.. The accounting controls are designed in such a manner, that even if a process was followed incorrectly, the reports can be used to identify the errors and correct them,” Anup says.

Whether you are renovating your home, buying a new one or simply redecorating a room, here is everything you need to know from the designers who set the trends.

While many of the styles we saw will continue to be popular in 2019, others are officially over.. Alexis stated, “I see a shift away from the omnipresent cool gray walls and dark stained hardwood floors of the past few years towards a warmer color palette and more vibrant accent colors.. “People want to be surrounded by things that make them happy,” explained Davidson.. She thinks people vibe with the style of her artwork because “These elements make people smile every time they see them.. They also suggest decorating with lots of live greenery throughout the home.. Another way to make walls look more interesting is to add paint.. The walls will make the room.”. Murals are another popular trend.. “It’s not as harsh as matte black or specific as brass or gold, but it gives fixtures some texture and depth.”. “Inspired by hotel and retail spaces, this adds to the overall bold statements that many people want to make in their homes, forgoing the minimalism that was popular in years past.”. Colors are big and bold this year, especially in the kitchen.. “Hyperrealism as a style of painting and drawing and boundaries of canvas meaning different shapes of the actual painting surface, such as in the work of Anna Roberts .. “I love how optimistic this color is for interiors.

Videos

1. I quit my job & found FULFILLMENT // 4 Careers at 30 - Interior Design, Software Developer, Youtube
(Caroline Winkler)
2. Getting Your Interior Design Business Through COVID -19 | Support for Designers Live Webinar #1
(Logistis for Designers)
3. Specsources FF&E Software - Explainer Video
(specsources)
4. TIPS TO START AN INTERIOR DESIGN COMPANY : FINDING YOUR NICHE
(Ladies in Biz)
5. Interior Design Pricing-Do You Know Your Pricing Jobs Sweet Spot?
(Nancy Ganzekaufer, Interior Design Business Coach)
6. Profit First for Interior Designers
(Designed by Wingnut Social)

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