Find out where your money goes by calculating business expenses
Expense tracking simplified
You'll never know exactly where you money goes unless you track it. Although you already collect financial data for tax purposes, tax accounting records are not in a form that can provide you with info on how to manage your photography business successfully. You need easy-to-understand numbers that will help you shape your business on an ongoing basis. For that, you need managerial accounting.
Managerial accounting can be broken into four steps:
1. List your sales by product line and category.
2. Track your cost of sales.
3. Track your general expenses.
4. Calculate your owner's compensation plus net profit. This is the number that really measures a studio's bottom-line performance: The salary paid to the owner or owners plus the profit (or loss) remaining in the business after all bills have been paid.