Missed Opportunities for Interior Designers
Embedding Bookkeeping Fees into your Design Time:
Recover your bookkeeping costs by adding administration fees to your design time. We noticed that many of our designers are missing the opportunity to embed our fees in their hourly services. With Ivy’s Time Billing simply add time to account for our services as “Administration Fees” on invoices generated for designer fees. We added “Administration Fees” to all Ivy accounts as a service and it is our recommendation that the fee range from $75-$100 depending on your designer fee amount. If you charge a fixed rate, consider a fair percentage to charge your client for these extra fees.
Below is a list of the common methods of billing designer time. Since every interior design business is unique finding the best method to suit your business is imperative. Don’t be afraid to change your method if one way no longer works for your business. Ivy’s time billing feature, now included on the mobile app is an excellent way to track your time on the go. Not only can time be tracked with the click of a button, but time entries will also automatically upload to your Ivy Desktop and generating a time billing invoice is simple.
Common Methods of Billing Designer Time:
- Hourly rate
- Fixed rate
- Percentage of total costs
- Costs determined by square feet
Paying Yourself a Salary:
With the changes to the tax code, it may be in your best financial interest, to pay yourself a consistent salary thru payroll to reduce taxes due. If you are an S-Corp and you estimate that your yearly net profit after all expenses and cost of goods sold is over $40,000 we advise enrolling in payroll.
If you are uncertain where to start, here is our recommended steps of action:
- If you are an S-Corp, work with your bookkeeper to make an educated guess based on your current financials of what your yearly net income will most likely be. If over $40,000 work with Logistis to set-up payroll ASAP.
- If you are not an S-Corp, reach out to your CPA to determine if your business will benefit from switching to an S-Corp and paying yourself through payroll.
****Ask your CPA, to request the update to be retroactive for the year. Keep in mind, this is not always possible.