Contrary to popular belief, an interior designer’s job does not consist primarily of design time.  This is not the sexy vision that young men and women dream about when they enter design school but it’s the reality that any seasoned designer can confirm.  Project management and project administration are the largest part of being an interior designer; all the brilliant design in the world cannot make up for a poorly run project and an unhappy client.  Effective management and administration will continue to be of paramount importance when running a successful firm but can there be a better mousetrap?

The question that I encourage you to ask yourself and your staff is where that important project management and administration borders on inefficiency.  If you’re like most design firms that we work with, that greatest inefficiency is in the purchasing process.  You may have great technology (like Studio IT) and great systems in place to make this process a little less painful but the reality is that pricing, creating proposals, creating purchase orders, tracking and expediting takes time, often a lot of time.  In fact, I can imagine that much of your purchase order management time can be summed up with a few of these frustrating points:

• Calling multiple showrooms and vendors to get pricing…leaving messages…then calling them again because they didn’t get back to you.
• Calling multiple showrooms and vendors to get pricing…leaving messages…and then missing their next calls because you’re on the phone with another vendor.  Thus begins the illustrious PO management game of phone tag.
• Checking on orders weekly (if you know what’s good for you) because you’ve had too many times where a vendor has failed to notify you that the sofa, which was supposed to ship last week, will actually be another four weeks.  The vendor does not have to deal with your irate client who wanted the sofa before Thanksgiving.
• Creating client proposals that accurately describe the items but don’t give the client too much information so that they don’t “shop” you.
• Dealing with a delay in orders when you’re on vacation, in High Point, on another project install, or generally completely incapable of handling the crises as you’re nowhere near your computer and your office, and might not even have a pen in your purse/pocket that seems to work.

In our design firm, we utilize great technology and we institute effective systems.  Despite our finest efforts, this has not, however, eliminated the items above from rearing their ugly heads.  The reality is that on each project, a design firm may deal with 30+ vendors and showrooms which mean 30+ lines of communication.  When I look at our bottom line, I see this part of our business as the greatest drain, the greatest hindrance to our growth, and our greatest cost.

When we launched Gibson Design Management, we focused on purchase order management.  While we now have multiple services that we offer for the interior design industry, I still believe that our purchase order management service is the best way to make a design firm more profitable and healthy.

Instead of having those 30+ lines of communication open at all times and being the central hub with a plethora of spokes, our purchase order management services give you one “go to” person that handles every order that you place, every item that you want to price, and every piece that you need to track.  At the same time, your company can actually make more money with fewer paper-pushing efforts.

As I write this post I worry that this might be the first time in the history of this blog that I’ve written a sales-y post that is also an educational post.  I would not risk our readers with shameless self-promotion if I did not truly believe that this service can have the greatest impact on a single interior design firm.

We offer a lot of great services and our team is really, really good at what they do.  However, when we sit and talk about our different services, purchase order management is the one service that the team unanimously says “that’s a no-brainer; every design firm should use that.”  Once I explain and write down the numbers on the time and money lost on managing purchasing in-house and then I show that the design firm can actually make more money, it’s not surprising that they say that.

In 2010, if you are interested in growing your bottom line and getting back to the real reason you became a designer, please contact me and we can talk more.  Don’t continue to do things the old way as we all now see that the old way is slowly taking a choke hold on the livelihood of our industry.

The end of the year is fast approaching (we probably didn’t have to remind you!).  A few things to keep in mind so that you can turn over an organized file to your accountant in January:

1.      Make all of your charitable contributions before the end of the year in order to get the benefit of a tax deduction for 2009.  Itemize gifts of goods, while the information is still fresh in your mind.  Remember to also account for the professional time that you donated to that auction.

2.      Make the most of your retirement contributions.  Some contributions can be made until April 14 of 2010 for 2009.  So, now is the perfect time to plan that contribution and make the contributions over the next four months.

3.      Most of us like to defer our income, and increase our expenses in order to decrease our current year tax liability; however, you may need to rethink this strategy as tax rates are on the rise.  Tax cuts created during the Bush administration are set to expire in 2011, which may make it advantageous for you to recognize income now rather than later.  Ask your tax professional.

4.  Ensure that you are up to date on your bank reconciliations so that you have a true balance sheet and income statement on December 31st.

5.  If you do your own payroll, check with your accountant and/or the IRS to ensure that you are aware of the proper year-end forms to file.

6.  In many financial accounting software programs you can only have two fiscal years open at any one time.  That means that in 2010, you must have 2008 closed.  This is especially true if you use Studio Designer.  If 2008 is not closed, be sure to do this before December 31st or you will run into a big mess.

If you are feeling any pinch and worry about what to gather for the end-of-the-year financials, be sure to use your bookkeeper or accountant as a resource.  Feel free to contact our Accounting Services group and we will make sure to either help you or steer you in the right direction.