Years ago when I moved to Arizona, I contacted the only local resource that worked with Studio Designer. I was restarting my business in Arizona and wanted someone to help setting up Studio and do my monthly bookkeeping. Luckily, that resource was my business accountant and bookkeeper Denise Maxwell. What is great about Denise is that she works almost exclusively with interior designers, she understands our business, she works in the program that works best for interior designers, and she is a great bridge between being a designer and accounting. If you aren't as lucky as I am to have found a great accountant on your first try, read on for my interview with Denise about finding a great accountant for your interior design business.
What should interior design businesses look for in an accountant?
First, a designer should realize that they do not need to have the same person handling their yearly taxes and their monthly business accounting. Just as a building project needs both an architect and a professional designer, so to a designer might better be served by having an accountant handling the monthly accounting who specializes in the design industry and then a tax professional handling that piece come April.
Can't you just have your tax accountant do your monthly financial accounting?
I would say that this is typically not the wisest route to go. The tax code is an exhaustingly large and complex animal and it is important to have someone who focuses on learning all those nuances to minimize your taxes. It is just as important to have someone on your team every month who is focused on helping you manage your business and keep your records accurate.
Are there different types of accountants that are better for interior design business accounting?
Absolutely! My accounting career starting in the corporate world and I worked in 5 major industries before setting out with my own business and discovering the wonderful world of design. I very quickly realized that the designers accounting is a unique blend of project management and accounting and was unlike any other accounting I had experienced. This was the right fit for me personally, yet in my 13+ years of working exclusively with designers, I have found most accountants do not “get” the designers business.
What if your accountant has never worked with an interior design business?
I believe it is important for a designer to be aware that while many accountants or CPAs may be very competent professionals, the design industry is very unique and most accountants do not understand it properly. I have found that far too many accountants want to put the designer in the box that the accountant is comfortable with; such as recommending using QuickBooks rather than taking time to learn the industry and best software options. One experience I had was to begin working with a designer who was smart enough to pick StudioDesigner as her software, however, she also originally hired a CPA who knew nothing about the industry and it took me 8 months to unravel the mess he made in the 6 months of working with the designer. Just as you wouldn’t visit your OB/GYN for a heart condition, be sure you find an accountant who has
taken the time to learn your industry and is looking out for your best interest rather than trying to make your business conform to their comfort level.
Do you need to work with an accountant in your area?
I believe expertise is far more important than locale. The great thing about using the right software, which I believe Studio Designer is the best option for designers, is the ability to take advantage of the cloud platform. Also, almost all banks now have a “view-only” option to allow an accountant access to look at banking transactions without the ability to perform financial transactions. This has truly opened up a pathway for me to work with designers from coast to coast.
What are the financial accounting tasks that a business needs to do monthly?
I have found that many designers might find a good software to use for their project management but then not realize the importance of the backend or accounting side of the equation. The basic tasks that need to be done each month are ensuring all financial transactions are recorded and that the bank and credit card statements are reconciled, also sales tax filing is usually done monthly. It is also good to have an accountant who will be reviewing your business and helping guide you to manage the business wisely.
What business tasks should your bookkeeper/financial accountant perform?
It is best to have someone who truly understands accounting and is trained as a professional. A good analogy is that some of your clients might think they can hire a decorator to do their home yet a good designer understands the difference between a decorator and a designer and this applies for accounting too as many business owners think someone who can pay the bills is competent to do their bookkeeping or accounting and that is hardly ever the right choice.
Can you DIY financial business accounting?
Sure, there are no legal or licensing requirements that you hire a licensed professional. However, ask yourself if your career goal is to be an accountant or a designer? Where is your time best spent each day…shuffling through accounting transactions or designing a beautiful project?
What are the reasonable rates for hiring bookkeeper/accountant?
Just as there is a wide range of fees that designers charge, so too with accountants. Average hourly fees for many CPAs range from $75 to $300/hour. Most bookkeepers without a degree charge an average of $45/hour. I personally have set my fees at a blend of what a CPA would charge and a bookkeeper since I do the bookkeeping/accounting tasks and at the same time am reviewing them with the eye of a trained CPA. I also typically set a flat fee for my clients who have me do their monthly accounting so there are no surprises with the invoice and they can focus on design and know that the accounting is being done behind the scenes.
What are the benefits of having a business accountant that understands the interior design business?
My experience is that having someone who focuses on the design industry creates a sounding board for my design clients as they know that I not only know the tools such as the software but also I am alert to industry trends, have developed relationships with the vendors and showrooms also.
What is a designer already has someone handling the basic bookkeeping but needs more help at time?
I find that most designers work solo or their assistant is a design assistant and not trained to handle the backend bookkeeping/accounting. However, sometimes a designer does have a competent assistant who can handle the basics but not the “quirky” things that come up at times so I am happy to help on an as-needed basis (see below). While Studio does have a fee-based support team, I find many designers like someone like myself to work with and it can be less expensive too.
What are some questions to ask when interviewing a bookkeeper/accountant for your interior design business?
How many other designers do you work with? What experience do you have specifically working with the industry? What software do you recommend and why? (This is a critical point because most accountants do not know design industry specific software so if they say QuickBooks and you do custom furniture then this is a red flag).
Why do you not recommend using QuickBooks for interior design business?
Because you cannot obtain accurate financial information. QuickBooks is not programmed to handle the work-in-process aspect of design ordering so the fact many custom orders take 6-8 weeks to complete means that you cannot easily obtain an accurate profit/loss statement and that is critical. I was a QB Certified Advisor for many years and gave it up when Studio Designer became cloud-based and affordable for even the designer just starting their business.
Are there any qualifications/licenses that a design firm should check before hiring an accountant/bookkeeper?
Accountants are not required to become licensed CPAs so many accounting professionals have a degree without a CPA license and this is fine. The big question is about training and expertise in the design industry, that is the focus when looking for the right person for your team.
Where do you recommend starting the search for the right accountant?
Ask other designers who they work with, if they are happy with the person and if that accountant really understands your industry. Remember, with the technology resources available, you can look outside your direct vicinity. The few interior design software companies have consultants that are registered with them so this is another place to look for resources.
Denise has generously offered readers a free assessment which includes a review of your current software and recommendations to either start a new software, convert to a better choice of software, or clean-up existing software; and a 15 minute telephone consultation to discuss your specific business’ accounting needs. To request your assessment, email Denise at Denise@MyStudioDesk.com and let her know that Capella sent you. For more information about services, visit www.MyStudioDesk.com.