Julia Nikishina - Financial Foundations: Navigating Studio Designer’s Accounting Features
Learn how Studio Designer’s accounting system actually works, why accrual accounting matters more than you think, and how understanding item-level financial flow can dramatically improve reporting accuracy, profitability clarity, and tax readiness.
If you’ve ever looked at your balance sheet and wondered why you have hundreds of thousands or even millions sitting in client deposits, felt unsure whether your income statement truly reflects your profitability, or been confused by why certain actions in Studio Designer “can’t be undone,” this conversation will fundamentally change how you understand your numbers.
This session breaks down the financial mechanics behind items, deposits, invoicing, and reporting in Studio Designer, showing how money really moves through the system and why those rules exist. Instead of reacting to confusing reports or scrambling at tax time, you’ll learn how to use Studio’s accounting structure intentionally and with confidence.
Hosted by Studio Designer and led by Julia, an accounting and CFO expert specializing in interior design firms, this is a candid, no-fluff walkthrough of the financial foundation behind Studio’s item workflow. There’s no sugarcoating, just clear explanations of where firms get tripped up, why the system behaves the way it does, and how to align daily workflows with accurate financial reporting.
Inside this discussion, you’ll learn the real-world financial principles high-performing studios rely on:
Why Accrual Accounting Changes Everything
Studio Designer operates on accrual accounting only, and this session explains exactly why. You’ll learn why revenue and cost of goods are recognized only when an item is invoiced, not when money is collected or paid. This distinction is critical for understanding profitability, taxes, and reporting accuracy. Misunderstanding accrual accounting often leads firms to believe they are earning more or less than they actually are, creating confusion and unnecessary stress at tax time.
The Financial Life Cycle of an Item
The conversation walks through the full accounting life cycle of an item, from creation to invoicing. You’ll see why creating an item, adding it to a proposal, or even sending it to a client has no financial impact. Nothing touches the general ledger until money moves. Once a client pays, those dollars become client deposits, not revenue. Once a vendor is paid, vendor deposits are created. Both represent work in progress, not profit.
Client Deposits Explained Clearly
One of the most misunderstood areas of studio accounting is client deposits. You’ll learn what these balances actually represent, why they live on the balance sheet as liabilities, and why large client deposit balances are not inherently a problem. The session explains how to use the client deposit subledger to understand what has been paid, what is tied to uninvoiced items, what has already been recognized, and what remains as true funds available.
Vendor Deposits and Why You Can’t Void Everything
The discussion explains why Studio Designer prevents certain actions, such as voiding purchase orders with payments attached. These safeguards exist because real accounting entries have already been created. You’ll learn how vendor deposits function, why they must be cleared before changes can be made, and how this mirrors the behavior of robust accounting systems designed to protect financial integrity.
Understanding Funds Available Versus Earned Income
You’ll gain clarity on the difference between funds available and revenue, and why confusing the two can lead to poor financial decisions. The session shows how funds can move in and out of items, how to track those movements using payment application reports, and how to audit activity when balances don’t make sense.
Invoicing Discipline and Financial Accuracy
A key theme throughout the session is timing. Invoicing is the moment when client deposits and vendor deposits are relieved and revenue and cost of goods are recognized simultaneously. You’ll learn why invoicing before costs are final can create distorted income statements, shift expenses between periods, and make it harder to understand true profitability.
How Changes After Invoicing Affect Your Books
The session highlights a subtle but critical detail: while selling prices cannot be changed after invoicing, purchase costs can. You’ll see how adjusting costs after invoicing creates new general ledger entries and can move expenses into different periods. This flexibility can be necessary, but it requires discipline and awareness to avoid muddying financial clarity.
Using Reports to Understand Profit, Not Guess
You’ll be introduced to key reports that help firms understand performance at both the item and client level. Income statements, general ledger views, and client profit reports allow you to analyze revenue, cost of sales, markup, and gross margin with precision. The session emphasizes that reports are only as accurate as the item data behind them, making clean workflows essential.
Why Clean Item Workflow Supports Better Tax Outcomes
Underlying the entire discussion is a simple truth: accurate tax reporting depends on accurate item workflow. Uninvoiced items, outdated client deposit balances, and inconsistent processes can all distort financials. Firms that maintain clean item lifecycles, reconcile deposits regularly, and invoice intentionally gain clarity not just for taxes, but for decision-making year-round.
Turning Studio Designer Into a Financial Asset
The ultimate takeaway is that Studio Designer’s accounting structure is not something to work around. It is something to understand and use strategically. When firms respect the accrual framework, follow item workflows in order, and review key reports consistently, Studio becomes a powerful financial tool rather than a source of confusion.
This is a must-watch for any studio owner, operations lead, or accounting partner who wants to truly understand how Studio Designer handles money and why it matters.
You’ll walk away with a clearer understanding of accrual accounting, client and vendor deposits, item-level financial flow, and how disciplined invoicing and reporting turn Studio Designer into a foundation for confident financial management instead of a year-end scramble.
-
Hi everyone, and welcome. Today we’re talking about something that tends to feel intimidating for a lot of studio owners, but really does not have to be. We’re talking about Studio Designer accounting and more specifically how money actually moves through the system, why things show up the way they do, and why understanding this can completely change how confident you feel about your numbers.
If you’ve ever opened your balance sheet and panicked because client deposits looked enormous, or wondered why you’re paying taxes when it doesn’t feel like the money is really yours yet, you’re not alone. Most of that confusion comes down to one thing, and that is accrual accounting.
Studio Designer is accrual based. That is not optional, and it is not a design choice that can be changed. Everything in the system flows from that one reality, so once you understand it, a lot of the mystery disappears.
Let’s start with the most important concept. Money moving does not automatically mean income or expense.
You can create an item, add it to a proposal, send it to a client, and even get it approved, and none of that touches your accounting. Nothing happens financially until money is applied. That is a really important mindset shift, especially if you are used to thinking in cash terms.
When a client pays you, that money does not become revenue. It becomes a client deposit. You are holding it. You have not earned it yet. That is why it lives on the balance sheet as a liability and not on your income statement. It is not yours until the work is completed and invoiced.
This is where people start to get uncomfortable, because they see large client deposit balances and assume something is wrong. In reality, it usually means you have a lot of active work in progress. That is not a problem. It is just information.
The same thing happens on the vendor side. When you pay a vendor, that payment becomes a vendor deposit. Again, not an expense yet. Just money that has been paid toward something that has not been invoiced.
Both client deposits and vendor deposits exist to track work in progress. They are holding accounts. They are not profit and they are not loss.
The moment everything changes is invoicing.
When you invoice an item, that is when revenue and cost of goods are recognized at the same time. The client deposit tied to that item is relieved. The vendor deposit tied to that item is relieved. The income statement is updated, and now you are seeing true profitability.
That timing matters a lot. It affects reporting, decision making, and taxes.
One of the most common issues we see is firms invoicing too early or too inconsistently. Maybe costs are not final yet. Maybe vendor bills are still coming in. Studio will allow you to adjust purchase costs after invoicing, but every time you do that, you are creating new accounting entries that can shift expenses into different periods. That does not make things wrong, but it does make them harder to interpret.
The cleaner the invoicing moment, the clearer your financials will be.
Another area that tends to trip people up is system behavior that feels restrictive. For example, you cannot void a purchase order if a payment is attached to it. That frustrates people, but there is a reason. Once a payment is made, accounting entries exist. Studio is protecting the integrity of your books. To undo the purchase order, you first have to reverse the financial activity. That is how real accounting systems work.
This is also why understanding where your money lives is so important.
The client deposit subledger is one of the most valuable tools in the system. It breaks down balances by client and shows you exactly what has been paid, what is tied to uninvoiced items, what has already been recognized as revenue, and what remains available. Reviewing this regularly helps you catch issues early, especially old balances tied to completed projects that were never fully invoiced.
Those situations matter, because under accrual accounting, income can be taxed even if you never collected it or properly cleared it. Old accounts receivable and uninvoiced items are not just messy. They are a tax risk.
That is why this conversation is not just about software. It is about financial discipline.
When item workflows are followed in order, when deposits are applied intentionally, when invoicing happens at the right time, Studio Designer becomes incredibly powerful. Your income statement starts to mean something. Your profit reports reflect reality. Tax prep becomes predictable instead of stressful.
You stop asking, “Why does this look wrong?” and start saying, “I understand exactly why this looks the way it does.”
That is the goal.
Studio Designer is not trying to make accounting complicated. It is trying to make it accurate. Once you understand the accrual framework and respect the item lifecycle, the system stops feeling confusing and starts feeling supportive.
And when that happens, your financials stop being a source of anxiety and start becoming a tool you can actually use to run your business with confidence.
