Understanding your interior design firm’s accounting isn’t just about balancing the books—it’s about driving profitability and making informed decisions. The right software can serve to ensure the success of your financial management and provide the necessary organizational structure and insightful analytics crucial for success. We’ll compare two popular accounting platforms – Studio Designer and QuickBooks for interior designers – to equip you with the knowledge needed to make informed decisions and empower your business’s financial health and strategic growth.
Studio Designer vs. QuickBooks for Interior Designers: A Comparison
1. Proposals and Work-in-Progress Stages to Accept Funds from Clients Without Incurring Liabilities
Why it matters:
Accounting software equipped with proposals and Work-In-Progress stages works seamlessly for interior designers’ businesses. This offers the flexibility to accommodate changes like returns, price adjustments, or damaged items, all without expenses hitting your income statement, which can result in sales tax liabilities and other challenges.
After items are approved, many designers request a deposit from their clients — these deposits may be 50% or may be the full cost of the item. It is best practice that this money remains in client deposits on the balance sheet, rather than immediately hitting your income statement.
When money hits your income statement right away, in most localities, you’re obligated to remit sales tax in that same period, even though changes may still occur during this early stage. It’s best to wait until you have the item in your possession or have transferred the possession to the client to recognize the income and expense.
ALSO READ: Accounting Software for Interior Designers: 5 Reasons Designers Need a Purpose-Built Solution
Studio Designer vs QuickBooks for interior designers:
Studio Designer enables designers to send proposals, allowing the designer to receive client funds without immediately incurring income and expenses on their income statement. After items are approved on the proposal and deposits are collected, funds are posted to the Client Deposit Account on your balance sheet, while payments for orders are posted to Vendor Deposits. These transactions remain in progress, allowing for changes to items and projects. Studio Designer invoices can also collect any outstanding balances (e.g., the 2nd 50% or any freight/shipping charges). Amounts only move to your income statement once final invoices are paid by your client.
In contrast, QuickBooks lacks a proposal option. Many designers immediately invoice their orders, meaning income hits their balance sheets directly. Sales tax is paid immediately, which makes it challenging to handle common changes like additional shipping costs, damaged goods, or returns. When changes are required, designers who have already paid the sales tax liability must navigate frustrating adjustments.
Overall:
Studio Designer stands out as the best choice for interior design business accounting, offering proposal options and payment handling that ensures correct revenue recognition and allows for changes to projects and items, without the hassle of upfront sales tax payments.
2. Client Profit Reports to Understand Where and How You Generate Income on Each Project
Why it matters:
Designers should be able to see accurate profits and losses per project to fully understand where money was made, where money was lost, and what changes are needed to increase profitability. While core reports such as balance sheets and income statements offer a broad view of your business, those reports alone may not delve deeply enough to reveal how each individual project is performing.
Studio Designer vs. QuickBooks for interior designers:
Both platforms offer core reporting functionality:
- Balance Sheet
- Income Statement (P&L)
- Trial balances
- Journal Entries
- General Ledger
- Client Deposits
- Vendor Deposits
- Accounts Receivable
- Accounts Payable
- Full Reconciliation
However, an important report immediately accessible in Studio Designer is the Client Profit report, which allows you to see your profit and loss one project at a time. On the Studio Designer platform, simply select a client and a date to view all your income (broken out by furniture, accessories, time billing), your expenses (broken out by cost of goods, administrative expenses), and your net profit and loss. This provides designers with an in-depth look at the profitability of their projects.
For example, if a designer completes a project and, upon viewing her Client Profit report, realizes she has lost money on fabric, she can increase her markup on future projects to try to boost profitability. From this same report, she can also identify that she is making more money in furniture than accessories and can decide to investigate which brands of furniture were most profitable so that she can source them for her next project.
Studio Designer makes Client Profit reports possible with an easy-to-use way of classifying goods as designers add them to the system. Income is recorded on the project level and broken down into specific types (e.g., furniture, fabric, wall coverings, accessories, labor, freight). When it’s time to generate reports, there is no need to retroactively assign a classification to your items or worry that funds have been applied to the wrong client – all this information already exists in your Studio Designer software.
ALSO READ: Tips and Tricks to Streamline Your Workflow with Custom Reports
Most QuickBooks users do not record these crucial details. Designers often overlook the breakdown of expenses and costs of goods, resulting in funds arriving as an unspecified lump sum. This means designers may know the total amount of money their businesses made, but they can’t discern how and where they made money on each project. If you want to view the equivalent of a Client Profit report in QuickBooks, there are labor-intensive, manual workarounds, making it difficult for designers to access this important information easily. Studio Designer automates this process of classifying funds, making this report instantly accessible from the platform.
Overall:
Studio Designer offers comprehensive financial reporting, including the exclusive Client Profit report, which provides designers with invaluable insights into project profitability by breaking down income and expenses by client, facilitating informed decision-making and boosting overall business performance.
3. Project Worksheets to Examine Your Profitability by Room, Item, Vendor, and More
Why it matters:
Understanding your accounting means understanding how to run a profitable business. Advanced project-based reports can give you instant access to your performance with each client, with each item, with each vendor. With this type of advanced reporting, you gain insights that make a big impact on your business.
Studio Designer vs. QuickBooks for interior designers:
Studio Designer sets itself apart – not just from QuickBooks, but from all other accounting software – by the platform’s ability to quickly generate detailed, customizable reports for every project. Studio Designer assesses finances on an item level to get the most detailed reporting possible, including reports that break down your profit and loss by:
- Room
- Item Type
- Project
- Vendor
- Across projects
- Across date ranges
- Between products and labor.
These custom reports can get designers fast answers to crucial questions like:
- What vendors am I spending the most money with? How does my profit margin look for these vendors?
- What pieces are the most profitable?
- How did I do this year versus last year?
For example, you need to order a sectional for a client project. You’re choosing between two options, both are equal in terms of pricing for the client, design, and quality, but after looking at a Project Worksheet report that breaks down your finances by Vendor and by Item, you can see that you’ve been able to achieve better pricing from one vendor, because of your experience and relationship. You choose to go with this less expensive vendor and earn a larger fee on the product.
Designers can use insights gained from these specialized reports to develop impactful business strategies: source profitable pieces for your next project, identify smaller vendors that make a positive impact on your projects, and make smart decisions about what projects to take on in the future.
Studio Designer client Emily Johnson of Park 21 Design was able to use Studio Designer reporting to increase profits:
“This year, we used Studio Designer to reveal areas of opportunity within our income and cost of sales/expenses which allowed us to increase income year over year 33% and net profits by 265% even while adding a full-time employee.”
Emily Johnson of Park 21 Design
Overall:
While both systems offer basic reporting options, Studio Designer is the easy choice for designers looking to get real insights into their finances. This platform offers easily accessible, detailed, highly-flexible reporting that is not available on generic accounting software like QuickBooks.
4. Integrated Project Management and Accounting System to Simplify Your Workflow
Why it matters:
A streamlined and organized workflow saves you valuable time and keeps your business on track. Designers need plenty of digital tools and support for their work – from generating project ideas, to client interactions, to tools for sourcing standout products. Moving between three or four different platforms (and paying multiple subscription fees!) means wasted time and an uncomfortable, error-prone process for teammates who must navigate many systems.
Studio Designer vs. QuickBooks for interior designers:
QuickBooks is designed to facilitate basic transaction processing rather than support every aspect of a business’ operations. As a result, the platform has limited project management capabilities and, with a wide customer base that spans many industries, QuickBooks doesn’t offer features created exclusively for the interior design industry.
Studio Designer was created for designers and boasts design-specific tools for every step of the process including tools to:
- Curate and share inspirations with clients using Design Tools
- Procure items with Studio Capture
- Facilitate seamless client communication through the Client Portal
- Track and bill your time accurately using Time Billing. Set different rates for each employee or use flat fees
- Ensure cash flow stays steady with easy, one-click client payments from Studio Pay
- Record and stock items using the platform’s robust Inventory Management
The platform’s suite of crucial project management tools makes Studio Designer the leading platform for the business of interior design.
Over 15,000 designers trust Studio Designer to power their design processes, and customers love how much time they save by using an integrated system.
Traci Connell of Traci Connell Interiors increases efficiency with Studio Designer: “We save a huge amount of time that was wasted in past systems and were able to improve how we work, take on new clients, launch projects instantly, and do everything 75% faster.”
Overall:
To meet the needs of interior designers, QuickBooks must be combined with two or three other platforms. With Studio Designer, you can manage your design projects from start to finish without wasting time piecing together different platforms. Its integrated accounting and project management software make your workflow seamless and organized. Studio Designer also provides implementation packages and robust customer support, ensuring that your account is set up in a way that meets the needs of your firm.
5. Custom Client-Facing Documents to Represent Your Brand and Grow Your Business
Why they matter:
In the interior design industry, your brand’s appearance and professionalism can be a major reason you win or lose clients. When done right, accurate and visually impactful client-facing documentation facilitates seamless communication and enhances client engagement.
Studio Designer vs. QuickBooks for interior designers:
QuickBooks and Studio Designer allow users to add logos and consistently custom-brand documents.
Studio Designer also allows images to be integrated into each type of document, so clients can visualize proposed designs and products when approving purchases and understanding proposals. In Studio Designer, it’s easy to filter information from invoices and proposals so clients don’t have access to your markup, or any other piece of information not necessary for client communication.
Overall:
Both platforms offer some customization options. However, with specialized filters and options to include images in each type of document, Studio Designer makes it easy to communicate with clients while you build your brand.
Studio Designer vs QuickBooks for Interior Designers: Which Should I Choose?
Overall, Studio Designer is the best choice of accounting software for interior designers.
QuickBooks is not purpose-built for interior designers and caters to businesses across many industries – its generalized software means designers risk inaccurate accounting and must spend time creating system workarounds to ensure QuickBooks can accommodate a designer-specific workflow.
Studio Designer addresses interior designer’s unique needs with an accounting system purpose-built for the interior design industry. The powerful and intuitive platform keeps your finances organized and helps you use your accounting to understand your business and develop impactful strategies.
Studio Designer offers comprehensive features, intuitive functionality, and seamless integration explicitly tailored for interior design firms. By leveraging Studio Designer’s advanced capabilities, designers can optimize their financial management practices, gain actionable insights, and drive business growth.
Studio Designer is the leading digital platform for interior designers managing and growing their design businesses, featuring fully integrated project management, time billing, product sourcing, and accounting solutions.
Want to learn how Studio Designer can work for your design firm? Schedule a call with our team: https://www.studiodesigner.com/get-a-demo/
We can’t wait to connect.