A creative mind and a business mind don’t have to be mutually exclusive.
Being a photographer, and creating images every day, somehow has to align with also fulfilling our business requirements. If we can’t manage our finances, and make accurate reports for tax, then the business will struggle, and there is no creative way out of that predicament.
Every photographer, be they sole traders or part of a larger studio, will require some method of financial record keeping. In its simplest form, that could be a spreadsheet, recording invoices sent out to clients and bills paid out to suppliers, but at the end of the year, the tax man will usually require much more information that that available on a spreadsheet.
For our business, which involves a small team working with clients and other photographers around the globe, we needed a particularly robust software solution, that not only recorded sales made and supplies purchased, but also provided us with the following services:
- Invoicing clients, in the form of emailed PDF invoices (not a link to a PDF they could download, but an actual PDF)
- Calculate our VAT tax and submit the documents to the Government
- Tracking earnings by, and payments to, individual photographers
- Automatically ‘chasing payments’ from clients who hadn’t paid
- Foreign currency invoicing - most of our clients are abroad
- Compiling an EC Sales List (basically a listing of all sales to companies in the EU).
- Monitoring our bank accounts and reconciling all our transactions
- Creation of our end of year accounting documents (the Profit & Loss and Balance Sheet)
Although a few of these requirements are based on trading abroad, most are requirements of every photographic business, whatever their size. Virtually every photographer will deal with either sales or purchases from abroad, such as Google ads, Gmail, Facebook ads, and they all need to be recorded correctly.
After 15 years of using a Sage desktop software package, and regularly paying the upgrade fees whenever taxation rules changed, we decided to move to a cloud based accounting software service. Initially, and without conducting an in-depth review of accounting software, we moved from Sage to the Kashflow accounts service. Unfortunately, within six months we felt that the way it calculated VAT for sales to Europe (for those on the flat rate VAT scheme and selling services, if you want to be specific) didn't appear correct for our business. Further, the support we experienced made us realise that we needed to look again at an accounting service that could automate our finance systems as much as possible, whilst giving us the confidence that qualified accountants were supporting the product.
So, we complied a shortlist of potential accounts software companies, and contacted them all with our list of requirements - in itself, a good test of their response times. On the list were FreeAgent, Sage One, Xero, and Quickbooks. All came back with answers (apart from Sage). We then started a trial account of each service, which is the only real way to ensure you can achieve what you set out to do, and soon realised that, for us, Sage wasn’t a viable option. FreeAgent was good, and had support, but it couldn’t offer all of the requirements on our list. Quickbooks did many of the things we required (but didn’t allow client invoices to be sent with attached PDF’s - and we didn't feel it appropriate to force a client to download their own invoice). However, it didn’t have the feel, or user interface, we were happy with - and support times we incredibly long. So, our last hope was Xero. The interface was clean, the 'behind the scenes bookkeeping' was accurate (we tested it a lot on our VAT returns as we have bookkeeping qualifications), support were also quick to respond to queries (usually a couple of hours via email). Not only that, Xero did everything on our hit list of requirements (see their feature list).
After a year of use, Xero is now our main tool we use in the automation and running of the business (as well as Slack, which we also love). It ensures all of our photographers around the world get paid every month, and more importantly, we can see our financial position - from how much we are owed, to what is in the bank - on a daily basis. For all photographers, based on our review of accounts software, I would recommend Xero, or at least a trial of their service.