Accounting - i know, fun topic.
In conversations about business, I find that most photographers look at accounting as a means for figuring how much they owe in taxes. While that is a purpose of accounting, it's not the only purpose. In fact, accounting done well is what makes the biggest difference in your knowledge of the health of your business.
Accounting for taxes and reporting is "Financial Accounting." But what if you want to look at your numbers to guide you in the decisions you make? This is an introduction to "Managerial Accounting." The best part is that it's accomplished with the same set of numbers as those you use for taxes. So, if you're already doing that, just do it slightly better and you get so much more out of it!
The obvious things we know from accounting include how much clients have paid and have remaining to pay, what bills we've paid, profit margins, operating budgets, account balances, etc.
But with more advanced (but not impossible to understand) accounting practices, we can track so much more. How good is your payment collection system? A quick look at "aged receivables" will answer that for you and perhaps prompt you to improve how you handle that.
What is your most profitable activity? Profit margin on a package alone won't answer that, but in conjunction with sales volume and activity based costing, you'll find if a certain activity is worth continuing or not.
Have you ever missed your budget goals and just shrugged your shoulders not knowing why? Find out with budget analysis tools so you don't get caught by surprise again.
Okay, some heads may already be spinning. Some of us don't have the time to take on this level of involvement with accounting. Whatever reason there is for avoiding it, find someone who will do it for you! I've found Peachtree Complete Accounting. It's the only thing I've found that allows for such complete knowledge, yet takes so little to learn. It also works on a "double entry" accounting system...remember that a payment from a client effects more than just your checking account balance. Peachtree will keep you accurate by reflecting a payment in the client's balance, accounts receivable, the appropriate sales category, etc.
So if you're struggling in this area, check it out!.
PS - This is just one solution for better accounting. I just happen to love it. :) The main purpose of this post is just to get you all thinking about how important this not-so-fun topic can be.