Unless you have the training, or hire a bookkeeper, the only realistic way to go about it is to use dedicated accounting or bookkeeping software. This has lots of benefits;
• You can see your records easily at any time
• Changes can be made easily, and mistakes rectified
• You keep your records in a standard format
• All the calculations are done for you
• There is a record of all your transactions that you can refer to easily
• Reports can be created instantly
The problem is, most of this software was designed for the accountant. It generally comes loaded with jargon which makes it hard to use. It also suffers from the disadvantages that all 'traditional' software has, such needing lengthy installation and becoming obsolete quickly. Recently there has been move to online accounting software, where the program is accessed over the internet removing the need to install the software or download updates.
It makes sense for businesses if bookkeeping is done on computers as most photographers will be using them for at least part of their business anyway. And, given the simplicity and lower cost of online software, I'd recommend all businesses at least have a look at them - there are many available.
At TWD we offer all our clients our own online software because of the flexibility and value. However, we actually tell all our clients to use the method that suits them.
We know this gets the best results. We act for many photographers, and there is a trend towards online accounting software from the more traditional spreadsheets, although the latter is still by far the most popular.
By Mike Parkes, TWD Accountants. August 19th, 2011.
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