Sales Tax Nexus and Your Firm
Are you growing your design or construction firm only to hand your profits back to the government?
In this session, we break down the essential strategies, workflows, and reporting practices that separate firms that thrive from those constantly struggling with compliance, cash flow, and project cleanup.
Julia Nikishina, Founder of New Age Financial Consulting, is a trusted financial expert in the design-build industry. She doesn’t sugarcoat the complexities of sales tax, invoicing, and client deposits. Instead, she walks you through exactly how high-performing firms structure their financial systems, manage client payments, and maintain accurate, audit-ready records across multiple states.
Inside this discussion, you’ll learn the real-world practices top-tier firms rely on:
Sales Tax Basics and Multi-State Compliance
Julia breaks down how to stay compliant across multiple states. You’ll learn why using resale certificates is essential to avoid paying sales tax upfront, how thresholds differ by state (e.g., California and New York at $500K, Florida at $100K, Texas at $500K), and why tracking revenue by destination is critical. She also explains which services are taxable, how freight and third-party costs are handled, and why understanding county-level rules can prevent mistakes in large, multi-state projects.
Accrual vs. Cash Accounting for Design Firms
Sales tax is only recognized upon invoicing in accrual accounting. Julia shows how un-invoiced deposits on proposals can create hidden tax liabilities if not properly tracked. You’ll see how to reconcile client deposits, recognize revenue accurately, and understand why turning a proposal into an invoice, even if not fully paid, ensures both compliance and clean financial reporting.
Client Deposits, Proposals, and Project Cleanup
Discover the importance of monitoring client deposits using Studio Designer reports. Julia walks through the Client Deposits Report, Sales Tax by GL, and Project Worksheet (2010) report to help you track un-invoiced funds, recognize revenue correctly, and identify old projects that may still have outstanding sales tax liabilities. Learn how color-coding items, tracking installation status, and reviewing historical proposals prevents overlooked revenue and ensures proper sales tax remittance.
Workflow Strategies for Accurate Invoicing and Tax Remittance
Julia shares practical methods to turn proposals into invoices efficiently, manage partial payments, and determine when ownership transfer triggers invoicing. She emphasizes consistency in office workflows, multi-state GL filtering, and using report filters to consolidate totals by state for accurate filing. By understanding how prepaid deposits, markups, and project changes affect invoicing, you’ll avoid surprises when it comes time to remit taxes or close out projects.
Tools, Resources, and Expert Guidance
Julia highlights how Studio Designer’s features, combined with Avalara and state-specific resources, make managing multi-state sales tax easier. She explains how to leverage AI-assisted support, chatbots, and professional tax advisors to ensure compliance and streamline reporting. By integrating these tools into your workflow, you can proactively manage client deposits, sales tax obligations, and project revenue, reducing administrative burden and risk.
Building a Scalable, Compliant Financial System
This session is a must-watch for designers and builders ready to take control of their finances. You’ll learn how to reconcile deposits, invoice strategically, and manage sales tax across multiple states without chaos. Julia provides actionable strategies that strengthen your operations, sharpen your financial processes, and ensure both your projects and client relationships are managed with confidence.
When you leave this discussion, you’ll have practical, immediately usable insights for managing sales tax, invoicing, and client deposits, helping you operate with clarity, compliance, and confidence, while building a scalable, resilient design or construction business.
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Let’s face it: managing the financial side of your design or construction business can sometimes feel like more of a puzzle than a creative process. Sales tax, invoicing, client deposits—these things can quickly become overwhelming if you're not set up for success. And the last thing you want is to let all these moving parts distract you from what you truly love doing. But here’s the good news: with the right strategies, workflows, and reporting tools, you can take control of the chaos and start running a business that’s financially sound and stress-free.
In this session, we’re diving deep into exactly how the best firms in the industry handle the business side of things, so you can do the same. We’ll talk through everything from sales tax and state compliance to cleaning up your project reports and getting a grip on client deposits. Ready to get started? Let’s go!
Sales Tax and Multi-State Compliance: Don't Get Caught Off Guard
If you’re working across state lines, there’s a good chance you’ve heard the term Sales Tax Nexus—but do you know how it impacts your business? Many interior designers make the mistake of thinking they only need to worry about sales tax where their studio is located. The reality is, if you’re sourcing furniture or taking on out-of-state projects, you could be creating a sales tax nexus in states you’ve never even visited. And that means you might need to collect and remit sales tax in those states. Yikes!
So, how do you stay on top of all of this? The answer is understanding your state’s sales tax rules. For instance, in states like California and New York, you’ll hit a $500K threshold before you need to collect sales tax. Meanwhile, in Florida and Texas, it’s only $100K and $500K, respectively. Knowing these limits helps you avoid surprises and ensures you’re collecting the right amount of tax at the right time.
And, here's the kicker: it’s not just the state you need to worry about. County-level tax rules can also differ, especially in large, multi-state projects. So, it’s crucial to track revenue by destination—meaning you need to know exactly where your project is based, not just where your business is located. Understanding these rules up front helps you avoid costly mistakes when you start dealing with tax remittance.
Accrual vs. Cash Accounting: Why It Matters for Sales Tax
Next up: how you account for your income. If you’re not using accrual accounting, you might be doing yourself a disservice, especially when it comes to sales tax. Here’s why: sales tax is only recognized upon invoicing under accrual accounting, not when you receive the payment. If you’re working under cash accounting, you may not recognize tax liabilities when you need to—leading to missed opportunities for tax compliance.
Let’s take a quick example: when you receive a deposit on a proposal, that money is usually considered taxable—even if the invoice hasn’t been issued yet. In accrual accounting, that’s when you recognize sales tax, which means no surprises down the line. If you’re not tracking those deposits properly, you could be facing unexpected tax bills. So, make sure you're reconciling client deposits and turning proposals into invoices as soon as ownership of goods or services has transferred to your client, even if they haven’t fully paid yet.
Client Deposits, Proposals, and Project Cleanup: Keeping Track of Everything
You’d be amazed at how many firms let client deposits slip through the cracks—especially when it comes to older projects. To prevent this from happening to you, Studio Designer’s reports are a game-changer. With reports like the Client Deposits Report and Sales Tax by GL, you can track un-invoiced funds and ensure you’re properly recognizing revenue as it’s earned. Not only that, but you can also identify old projects that may still have outstanding sales tax liabilities.
Here’s a great tip: color-code your items in your system! When you mark items as “installed” or “ready to invoice,” it keeps you on top of what’s been completed and what still needs attention. It’s a simple way to make sure you’re not overlooking any revenue, which, of course, means you’ll be properly remitting sales tax when it’s time.
It’s also super important to check in on your old proposals and make sure that anything that’s been paid for but not invoiced gets processed before you close out the project. Doing this regularly helps you stay in compliance and ensures your client deposit reports are up-to-date.
Efficient Workflow for Invoicing and Tax Remittance: Keeping It Smooth
Now, let’s talk about making your workflow as efficient as possible. Having a well-defined system for turning proposals into invoices is key to keeping things running smoothly. Even if you haven’t collected full payment from the client yet, once the goods are transferred or services are rendered, an invoice needs to go out. The reason? That’s when your sales tax liability kicks in.
Another important note: if you’re working in multiple states, you need to make sure you’re filtering your General Ledger (GL) by state. This will help you track exactly where your sales tax needs to be remitted, preventing any miscalculations at the end of the quarter or year.
It’s also crucial to understand how prepaid deposits, markups, and changes to a project affect your invoicing. When you have a good grasp of how these things fit together, you’ll be less likely to miss anything when it comes time to file taxes.
Leveraging Tools and Expert Resources: Don't Do It Alone
The good news is, you don’t have to figure all of this out on your own. Studio Designer integrates with powerful tools like Avalara to help you manage multi-state sales tax effortlessly. These tools can automate rate calculations, ensure you’re collecting the correct sales tax, and streamline your reporting process.
And when you need more guidance? You’ve got options! AI-assisted support and chatbots can help answer your questions, and if things get too complicated, you can always turn to a professional tax advisor. This support system helps you stay on top of things, so you don’t have to deal with the stress of managing it all by yourself.
Building a Scalable Financial System: Keeping Everything on Track
Finally, let’s talk about scalability. If you want to grow your design firm without losing your mind, it’s crucial to build a scalable financial system that works as you expand. This includes everything from reconciling client deposits to tracking your invoicing and ensuring your tax remittance is up-to-date.
The key here is consistency. You need to be consistent with your workflows, your tracking systems, and your reporting processes. When you have everything set up correctly from the start, you’ll have the confidence to grow your business without worrying about messy finances or audit nightmares.
Wrapping It Up: Confidence in Your Financial Systems
When you walk away from this session, you’ll have all the tools, resources, and strategies you need to take control of your firm’s finances. You’ll know how to handle sales tax with confidence, invoice strategically, and keep your client deposits in check. Most importantly, you’ll be able to scale your business knowing that your financial systems are solid, compliant, and ready for whatever comes next.
In the end, it all comes down to this: when you operate with clarity and confidence in your financial practices, everything else—your projects, your client relationships, and your firm’s growth—will fall into place. So let’s get to work on making that happen.
