Secrets of Profitable Design Business Ops: Know What $ Is Yours

Managing the creative side of your interior design business is just one piece of the puzzle. To truly understand your firm’s profitability, you need a solid grasp of your finances—knowing how much money is actually yours after all expenses are accounted for. That’s where Design Manager comes in, providing essential tools and reports to keep your business on track. Here are some insights from our recent webinar host, Staci Davidson from Everything But Design, on how to utilize Design Manager for financial clarity and success.

Key Reports to Run in Design Manager

Running the right reports regularly is essential for a clear picture of your financial standing. Here are four key reports every design firm should use:

Work in Process Report
This report shows items purchased from vendors but not yet invoiced to clients, helping you track ongoing project costs and avoid underbilling.
Unordered Components Report
It highlights items for which you’ve received client deposits but haven’t yet placed orders, ensuring timely project execution and client satisfaction.
Open Purchase Order Report
This tracks all outstanding vendor orders, helping you manage cash flow by forecasting future liabilities.
AR Deposit and Summary Report
It ensures all client deposits are properly invoiced, keeping your accounts receivable in check and maintaining steady cash flow.

Importance of a Structured Design Process

A structured process in Design Manager not only helps you avoid mistakes but also improves financial tracking. Accurate project management allows for better cost forecasting, client expectation management, and proper billing for all work done.

Regular Invoicing for Financial Health

Invoicing regularly, such as monthly, helps balance income and expenses over time, preventing cash flow fluctuations and keeping clients updated on project costs.

Understanding Proposals vs. Invoices

Don’t confuse proposals, which are estimates of potential costs, with invoices, which represent actual revenue. Properly distinguishing between the two ensures accurate financial reporting and avoids overstating revenue or underestimating liabilities.

Integrate and Succeed

By consistently using these reports and best practices, you can better manage your projects, understand your finances, and improve overall efficiency. Remember, financial success isn’t just about making more money—it’s about managing what you have effectively. Start using these tools today to gain control over your financial health and confidently grow your business.

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Introduction

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Man pinning images on wall — New design composition

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Conclusion

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Greg Palmer

11 Jan 2022

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5 min read

Margot LaScale

Margot is a writer and interior designer based in the NYC area. She is passionate about keeping up with the latest architecture and design news to not only stay informed, but inspired.