Optimizing Your Interior Design Business Finances: A Guide to Budgeting for Bookkeeping and Accounting Fees
When budgeting for industry-specific bookkeeping and accounting fees with an outside service company for an interior design business, it's important to understand that the percentage of sales allocated for these services often decreases as sales increase. This is due to the scalability of accounting and bookkeeping services. Here's a general guide for different sales levels:
- $500,000 in Sales: For smaller sales volumes like this, the percentage allocated might be higher due to the minimum thresholds for accounting services. A business might allocate approximately 2% to 4% of its sales for these services. This would mean an annual budget of $10,000 to $20,000.
- $1 Million in Sales: At this level, the percentage might slightly decrease due to economies of scale. The business might allocate around 1.5% to 3% of its sales for bookkeeping and accounting. This translates to $15,000 to $30,000 annually.
- $2 Million in Sales: As sales increase, the proportional cost for accounting services often decreases further. A business with $2 million in sales might allocate around 1% to 2.5% for these services. This would be $20,000 to $50,000 per year.
- $3 Million in Sales: At this higher level of sales, the business might allocate between 0.75% and 2% of its sales for bookkeeping and accounting. This means an annual budget of $22,500 to $60,000.
The key is that as the business grows and develops its in-house accounting capabilities, it can reduce its reliance on external services, leading to potential cost savings. However, it's important to strike the right balance between in-house and external services to ensure accuracy, compliance, and efficiency in financial management. Businesses should continuously assess their needs and adjust their budgets accordingly.
This flexibility allows interior design businesses to adapt their financial management strategies as they scale, optimizing costs while maintaining the quality and accuracy of their financial processes.
Angela Roork, Studio Designer Financial Consultant
