3 Mistakes to Avoid When Setting Up Your Interior Design Business Finances, with Ashley Mobley of Business by the Book

SYSTEMS & OPS

Jun 16

What are the top three mistakes to avoid when setting up the finances for your business? On the blog Ashley Mobley from Business by the Book is sharing her advice for what to avoid when you’re setting up your business finances.

Welcome back to another edition of Dakota Design Company’s Guest Expert Interview series here on the blog. We’re so thrilled to share expertise from female business owners and leaders that run the gamut of the interior design industry – from interior photographers, to social media moguls, financial advisors, and branding experts.

Each of our expert guest bloggers were selected because they can share their unique insights and perspective on a range of topics that will help any interior designer take their trade and business to the next level. These experts are Dakota Design Company insiders, and many of them have worked directly with us and our clients in the past. We hope you enjoy this series and that it brings you new insights, tips, and tricks to add to your interior design toolbox!

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This week, we’re welcoming Ashley Mobley of Business by the Book to the blog to take a deep dive into your business finances and the top three things to avoid when you’re just getting started.

Ashley Mobley is the Director of Client Services at Business by the Book, a bookkeeping firm that specializes in interior designers, installers, warehousing personnel, and other creative entrepreneurs. Ashley has been with Business by the Book for two years, helping with onboarding new clients, handling retroactive bookkeeping, and managing all client-service-related tasks. Ashley has 14 years of bookkeeping experience and a wealth of knowledge to help owners of creative businesses of all scales. (And BBTB is my top recommended bookkeeping firm and Ashley and I share many similar business philosophies. It’s always great to catch up with her to learn what she’s seeing in the industry so I can share those insights with my designers.)

Here’s Ashley’s advice for what to avoid when you’re setting up your business finances and how to set yourself up for financial and organizational success.

What are the top three mistakes to avoid when setting up the finances for your business?

01 | AVOID DISORGANIZED FINANCES

The best way to avoid disorganized finances, lost payments, or missed deadlines is by using a project management system to help keep you organized. Update your project management system on a regular basis, creating invoices and entering payments. Track your purchase orders and payments by keeping them up-to-date with shipping updates or notices received from your vendors.

02 | AVOID FALLING BEHIND IN YOUR TAXES

Mastering the art and science of taxes for a business is no small feat, but to avoid falling behind and missing tax deadlines, file your sales tax returns even if you are not 100% sure on the accuracy of the amount. You can always file an amended return once you have a bookkeeper in place, but it’s best to set yourself up for success to avoid delinquency and associated fees.

03 | AVOID MISSING PROPER DOCUMENTATION

There are a number of documents required to submit when you’re doing your business taxes, so make sure to collect the proper forms from all of your business partners. Always collect completed W-9s from your contractor and from your subcontractors before you remit payment. The IRS also requires businesses to obtain the taxpayer identification number (TIN) for any vendor that may require the issuance of a Form-1099. Keep track of what documents you need to collect from which partners, and have an organized filing system to keep the proper forms in order.

If a designer isn't quite ready to hire you or invest in your services, what are two things they should do to start on the right foot with their business finances?

01 | USE A BUSINESS FINANCE PLATFORM

Many business owners choose to use QuickBooks Online or a similar alternative for their business finances. If you are using QBO or another business finance platform, make sure all of your transactions are categorized correctly. Payments should be applied to bills accordingly and deposits should be applied to the correct invoice. Once the transactions are accounted for, your bank accounts and credit cards need to be reconciled.

02 | LEARN THE SALES TAX LAWS IN YOUR AREA

Whether you’re working with a bookkeeping service or not, it is your responsibility to know your state sales tax laws before you start selling products or services. If you decide to take on a project in a state other than your home state, make sure to become familiar with that state’s sales tax laws and implications before sending a proposal.

And one thing to avoid…

Avoid using peer-to-peer apps for your business transactions. Apps like Venmo, PayPal, and CashApp are great for personal transactions, but they have no place in your business. They’ll overcomplicate your bookkeeping as well as pierce the corporate veil, putting your personal assets at risk.

When in doubt, don’t hesitate to bring in professional bookkeepers to help you out. They’re experts in their field, and a good business owner knows when to personally take on responsibility versus when to delegate to experts. If you do plan to hire a bookkeeper, Ashley says to not wait until the last minute (such as right before you need to file your business tax returns). Business by the Book and many other bookkeeping services do not take on new clients in December or January. Once bookkeepers start interviewing potential new clients, they are typically booked out for at least 4-6 months. If you’re interested in hiring Business by the Book for support with your annual taxes, the ideal time to do that would be in August of the previous year. For example, if you need help with filing your 2023 taxes, you would want to reach out to BBTB in August of 2023.

To learn more or sign up to work with Business by the Book, visit https://www.businessbythebook.money/ or reach out here.