Hearing about or reading about Profit First is a great place to start on your interior design business’ financial management journey, but it’s just the start.
We’ll be the first to acknowledge that the Profit First method is far from traditional, and it can feel overwhelming to consider taking the leap.
The “onboarding” process for Profit First does take some work. It’s important to be willing and able to put in the effort to open up your bank accounts and calculate your allocation percentages. But once you get your preliminary accounts in place, Profit First can be so beneficial to small businesses like yours!
Maybe you know other business owners who use different methods for their interior design bookkeeping, and they seem to be doing fine. Which leaves you asking yourself, “Why not just use a more familiar path?
Here’s why Profit First bookkeeping is so beneficial to interior designers like you:
Regulates your owner’s pay
Any small business owner will tell you that their work comes with sacrifices. Unfortunately, that sacrifice often comes from taking a personal pay cut. The first time doesn’t seem so bad, but it’s all too easy to look back and realize you haven’t been paying yourself for months. Profit First accounting and bookkeeping recognize that it’s hard to maintain motivation and high-quality work if we’re not getting some type of reward. And that’s not a bad thing – it’s just how humans are wired! When you predetermine, with the Profit First strategy, where your money will be spent, you remove the temptation to underpay yourself. You’ll always get paid for the contribution to your business – as you should.
Distinguish between costs
Your business has varying expenses for many different moving parts. When using a traditional financial management system for your interior design bookkeeping, it’s overwhelming to manage cash from one bank account for payroll, materials, subcontractors, and more. Profit First gives you the tools to say goodbye to using money that isn’t yours. Your operating account will never get confused with your account for material purchases, and so on!
No more tax stress
In the Profit First method, you’ll set up a separate account for your taxes. Through some simple math that we can help you with, you’ll determine roughly how much your business will owe in taxes at the end of the year. Throughout the course of your year, you’ll steadily deposit cash into your tax account. When January rolls around – surprise! The money you owe for taxes is already there. And if you’re lucky you may even have some extra left over!
Budget with ease
Profit First is like having a budget without all the annoying spreadsheets. Once your percentages are set, all you have to do is make your allocations monthly. Say goodbye to long days of budgeting and trying to figure out where to cut corners. You made those decisions a long time ago.
The biggest perk of Profit First bookkeeping is the clarity it will provide for your interior design business. While you won’t be confused between operating expenses and material costs, you will also have somewhere to put your payments from clients. *Then* you can allocate where that money should go, rather than accidentally spending money when you should have saved it. The Profit First method is a proactive financial management system rather than reactive.
We can’t wait for you to start the Profit First journey in your interior design bookkeeping! If you’re ready to learn how your business could benefit, we’d love to talk. Schedule a call with Account Solve today and our Profit First professionals walk you through what’s next.