Best Business Practices for Photographers [94]
Each category also has a file folder that is not specific by name—it just says Misc Vendors. That is where the receipt goes for, say, a purchase of a few CF cards for the camera that I made at Joe's Photo Supplies in a small town when I was on assignment and needed a replacement.
At the end of each year, I remove all the file folders and store them in boxes, re-print the file folder labels document we had from the previous year, and start anew. One thing I do as a housekeeping effort is to look for vendors that have no receipts and determine whether I will do business with them again in the coming year. If not, I don't reprint their label. Also, as I choose new vendors, I look through the Misc Vendors folder to see whether there are multiple receipts from one vendor, which would be a signal to me that I will likely be buying from them in the future. Thus, they will get their own folder for the coming year.
Longitudinal Accounting: Its Impact on Your Business
When you get a check from a client for $2,000, you don't immediately say to yourself, "Wow, I just profited $2,000." You recognize that you'll have to pay taxes and cover your overhead with a portion of that money. In other words, you realize that the gross income does not equal net profit. If you don't look at things this way, you would wrongly take the approach that your Accounts Receivable department is the most profitable department in the company. No one looks at things that way.
What if, as the result of an $85 Photoshop workshop, you learned to edit your images faster and more efficiently? How long would it take for that expense to be a long-term cost savings to the business?
Suppose you know that the shutter life of a prosumer camera (say, a Nikon D80, D300, Canon 5D, 40D, and so on) is 50,000 frames, and the cost to replace a shutter is $1,100. The cost of a Nikon D3/EOS 1D Mark III is $5,000, but that camera has a 200,000-frame mean time until the failure of shutter life. Is it possible that it is more cost effective to buy the professional-grade equipment? Moreover, consider not just the loss of the income from the assignment you were working when that shutter failed, but also the lost revenue over time from the dissatisfied client who won't hire you again, coupled with the cost to you to earn a new client (proportioned marketing/advertising costs and so forth). Given this information, would you first opt for the professional-grade equipment?
If you knew that choosing an off-brand/third-party flash unit with your camera would yield a higher number of images that require exposure corrections after the fact, as compared to a strobe manufactured by the same maker as your camera, at what point would you make the greater upfront investment in the same-manufacturer strobe, instead of paying the initial reduced price for the flash in the first place?
And let's look for a moment at the next wave of photography—multimedia. Doing the math, a photojournalist earning $45,000 a year is paid about $22 an hour. Many of these photojournalists are now migrating to video. Since footage captured on tape ingests in real time, this means that for every hour of tape shot, that's an hour ingesting footage. By contrast, since footage captured to devices such as memory cards or hard drives can be saved at data-transfer speeds, a more expensive camera using those devices can make a huge difference. After just 54 hours of tape, a $1,200 camera-cost-increase or a $1,200 FireStor becomes a quantifiable savings if a photojournalist shoots two hours of tape in a day, at $22 an hour. This does not even begin to take into account the value of getting the finished video project out faster, meeting deadlines, and so forth.
The cost of your education is usually amortized over your career. It's easy to see this when