Fee income and resale income cannot share an account
Design fees and furnishings resale behave nothing alike, and blending them in one revenue account makes both unreadable. Fees are service revenue whose real cost is design time. Resale revenue is the full price the client pays for a sofa or a light fixture, and its cost is the landed cost: the trade-discount purchase price plus inbound freight, receiving and any storage the piece racks up before install. A studio showing one lump of income has no idea whether its markup actually survived the freight bill.
Our End-to-End Accounting engagement keeps a fee ledger and a procurement ledger inside the same set of books. Every purchase order is coded to its project the day it is placed, so committed cost is visible before the invoice arrives, and every resale invoice carries the piece back out at its selling price with 13% HST on top.
A client deposit is not income, and the books have to say so
Procurement runs on money collected up front, which means a busy studio can hold more of its clients' cash than its own. Booking those deposits as revenue on arrival inflates the year, distorts HST, and hides the fact that the studio owes either goods or a refund. We track each deposit through its whole life:
| Procurement stage | What clean books record |
|---|---|
| Deposit received | A liability owed to that client, not revenue; a true deposit generally carries no HST yet |
| Purchase order placed | Committed cost against the project, visible before any invoice lands |
| Goods received at the warehouse | Inventory at landed cost: piece, freight-in, receiving fees |
| Delivered and installed | Resale invoiced with 13% HST, deposit applied, margin finally real |
| Damaged or short-shipped | A claim against the supplier or carrier, tracked until credited, never quietly absorbed |
That last row matters more than it looks. A studio that eats one damaged credenza per project without chasing the credit is donating its procurement margin to the freight industry. The deposit ledger also gets reconciled to the bank every month, client by client, because the honest answer to how much of this account is actually ours is the difference between a healthy studio and one spending money it still owes as furniture.
Trade accounts, freight and the damage file
Supplier trade accounts are their own discipline. Pro-forma invoices, partial shipments, back-orders and freight bills arrive on different paper in different months, and the supplier's statement rarely agrees with the studio's memory. We reconcile trade statements monthly, capture every pro-forma and freight bill through Dext, and pay approved balances through Plooto so nothing gets paid twice or forgotten until the trade discount is at risk. Freight-in is coded into the landed cost of the piece it moved, not dumped into a shipping expense line where no project ever answers for it.
The fee side, tracked as it is earned
Whether the studio bills fixed fees on a draw schedule, hourly against a retainer, or a percentage of the build budget, fee is earned as drawings and site visits happen while invoices land in lumps. We post the gap between fee earned and fee billed each month so a heads-down documentation month does not read as a loss. Where the fee rides the construction budget, the books carry the current budget, and the economics of that model belong to our Fractional CFO work.
If procurement runs in Studio Designer, Houzz Pro or Mydoma Studio, that system stays the source for proposals and purchase orders, QuickBooks Online stays the ledger, and we reconcile the two monthly so a piece never exists in one system and not the other. Payroll runs inside the same engagement: salaried junior designers on T4s, and any contract drafter flagged for T4A reporting from their first invoice.
A month-end a principal can read between site visits
Each month you see fee margin and procurement margin by project, deposits held against inventory in transit, receivables with names attached, and an HST return built from reconciled numbers rather than estimates. That one page answers whether the markup policy is working, which supplier is bleeding you on freight, and whether the next junior designer is affordable. We run this for studios across Mississauga and the GTA; the first month usually rebuilds project-to-date deposits and landed costs so the numbers start true. Scope is quoted in writing after a free 15-minute discovery call.
