TIPS60 - Accounting - Managerial vs. Tax methodologies

Here is another of our videos offering tips and inisights into the business of photography. a transcript of the video is included after the jump.

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TRANSCRIPT:Here are a few thoughts on managerial accounting versus tax accounting. I'm John Harrington. Managerial accounting is a system that tells you why you spend your money on what you spend it on as opposed to tax accounting which is a system that tells you what you spend your money on. Tax accounting is something that your accountant is going to use, but managerial accounting is something that you want to use in your business to understand why and where the costs are associated with different products and services that you offer. You want to work with your accountant on transitioning your accounting system from managerial to tax accounting when you're trying to deal with your tax return and that's why having a great accountant is important. But, I would strongly encourage you to check out this URL here down below. It's a great PPofA resource, Professional Photographers of America, on the differences between managerial and tax accounting. Why you should use managerial accounting and the benefits of doing so versus the importance of tax accounting. So check it out.

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TIPS60 - Staff2Freelance - having 3 - 6 months of savings

Here is another of our videos offering tips and inisights into the business of photography. a transcript of the video is included after the jump.

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TRANSCRIPT:Here are a few thoughts on the potential transition for you from staff to freelance and how much money you might want to have saved. I'm John Harrington. If you're a staff photographer you have a pretty good idea of what your monthly costs are for rent, your mortgage, gas, utilities, and so on and so forth. So you really need to understand that if you go from staff to freelance unexpectedly, you need to have a bare minimum of three months of savings and more likely six months of savings to really make it easy for you to make that transition. You can't always rely on the company providing you with some form of a separation package or some kind of package to let you go out and and leave the company comfortably and happily. You've need to have three to six months worth of savings based upon your current costs. You also need to understand that you can COBRA your insurance up to eighteen months according to the latest regulations. But you need to be prepared. Three to six months savings is really what you need to have so that you can be prepared for the staff to freelance transition.

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TIPS60 - The importance of paying yourself

Here is another of our videos offering tips and inisights into the business of photography. a transcript of the video is included after the jump.

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TRANSCRIPT:It's really important to pay yourself what you're worth and not only do so every month, but incur the costs of you the employee, even if you're a sole proprietor, if you're an S-Corp or an LLC that's different, but still very similar. You want to make sure that you pay yourself first. Look at what you should be earning, how many hours you are putting in in any given month and pay yourself. Don't sit around and not pay yourself and then just decide that you're going to use to pay your personal expenses all of the money that you have left over at the end of the month. You should be the first bill that you pay every month. Whether it's a token amount of $500 or maybe is a large amount of money maybe $2, $3, $4,000 dollars a month, $10,000 a month if you're doing really well. Ultimately though, you want to make sure you're paying yourself first and including that as a bill as a part of the business that you're running.

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TIPS60 - Determining A Client's Budget for the Project You're Going To Provide An Estimate for

Here is another of our videos offering tips and inisights into the business of photography. a transcript of the video is included after the jump.

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TRANSCRIPT:Here are a few thoughts on determining the client's budget when you're talking to them about the job. I'm John Harrington. When you're dealing with a client, you're trying to figure out what their budget is you need to ask a lot of questions. One of the reasons that you ask about the client's budget is you're trying to determine what production level is exactly they're hoping to have you bring to bear. Flash on camera, no assistants, an assistant, one light, a large production, big trailers, everything, you just never know. It really helps to understand what the client's expectations are. If the client says to you, ""Gosh, we don't have a budget, we don't know what our budget is"" you need to start asking some probing questions. ""Well, were you trying to get this done for $1,000, $5000, $10,000, $20,000?"" Once you start asking questions like that you really do start to get an understanding about what the clients per hour budget is or at least the parameters within which they're trying to work. If the client says $200 and your out the door is $750 then maybe this client just isn't for you. So always ask the question about what kind of budget you're trying to work within.

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TIPS60 - Staff2Freelance - buying your gear when you lose your job?

Here is another of our videos offering tips and inisights into the business of photography. a transcript of the video is included after the jump.

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TRANSCRIPT:Here are a few thoughts on the unexpected transition from staff to freelance. I'm John Harrington. One of the things that you might be finding as you're going from staff to freelance unexpectedly is, ""Gosh, I need a camera to continue doing my job. I need a laptop to continue doing my job."" You may have an old computer at home or may not even have a computer all. One of the things you want to do is, if your company has laid you off, if they've told you they no longer need your services, for whatever reason offer to the company to purchase the cameras, lenses, and the laptop that you had. The reason for doing this is the company probably doesn't need them anymore. They're looking to get rid of them. They've probably amortized them off to zero on their tax and accounting books. So the idea of having to sell them or get rid of it is not valuable to them. Make them on offer, look up what the gear is worth. You know how well it's been taken care o,f or hasn't. Make them an offs say, ""I will purchase them from you for fair market value. Fair market value is ""X"" dollars. Are you willing to part with equipment?"" It's a great opportunity for you to start with the gear that you're already familiar with.

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