Business Accounting: A Deeper Dive

The Spiro Podcast: Managing your Real Estate Photography & Videography Business

Derek Mayer, CFO for WOW Video Tours joins us to take a deeper look at accounting for our real estate media businesses. Learn some best practices to make sure your business is financially healthy, and able to make the business decisions you need to with accurate, reliable financial information.

Show Summary:

0:00-0:54 Sneak Peek

0:55-4:32 Intro

4:33-27:59 What costs are important to track? - Brian from CT

• All costs are important to track; “every dollar you spend is a dollar less in profit”
• Revenue: Everything you take in
• Two cost categories: Costs of goods sold (how much it costs to do each job) and Overhead (everything else)
• Put every accounting task on a calendar; set a rhythm for accounting and do it each month
• Calendar item #1: Make sure every job is invoiced
• Spiro can have clients pay when they order, pay before downloading media, or pay weekly or monthly
• Give them a call after a few weeks of not being paid
• Automatic invoicing means you don’t have to do it
• Calendar item #2: Reconcile your bank account
• It’s important to make sure all your items are accounted for; it’s important for taxes and planning
• If you don’t want to do it, hire someone
• Make sure your transactions are allocated correctly
• QuickBooks and Xero are built to help with this (QuickBooks is more user-friendly)
• Calendar item #3: Look at your profit/loss or income statement and make decisions
• “An income statement won’t give you answers; it will just allow you to ask questions”
• It helps you identify unnecessary costs and see changes year to year
• Look at how you can answer and fix those questions
• Calendar item #4: Cash
• Look at your cash flow statement (can find it within your accounting software)- this tells you where the money went
• Shows what you actually brought in, expenses, and other cash (withdrawing money, paying)
• Cash flow statement includes investments and owner draws (income statement only shows if you pay yourself a salary)
• Derek’s challenge: Systemize your monthly accounting
• Bonus tip: start tracking monthly average sale price (total revenue divided by number of jobs shot) and challenge yourself to increase it
• Increased ASP means you are doing more at each job, which saves you time and money
• This means you don’t have to worry as much about raising prices each year
• Also, track your monthly cost of goods sold (any expense related to shooting a job, such as shooting and editing) by dividing costs by how many jobs you shot
• Track operation costs
• Tracking these metrics can help you determine why costs may be rising or revenue may be decreasing and help you make strategic decisions

28:00- Contact Derek at [e-mail] with questions

• Find a trustworthy professional for more advanced questions

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You can find out more about Spiro at spiro.media.