Contracts,
cash, close.

Money discipline is what separates a freelance practice from a Studio. Three small habits — tax reserve at the moment of deposit, tagged expenses at the moment of swipe, and a one-hour monthly close — eliminate roughly 95% of small-business financial pain.

Build the stack once at Day 0 (~5 hours). After that, the daily cost is <5 minutes; the weekly cost is ~15 minutes; the monthly close is ~60 minutes. Anything more means a tool is fighting the operator.

The order matters — Mercury before Wave (so Wave can pull transactions), Wave before Dropbox Sign (so contract-signature events can post to a known revenue account), Templates before first send (so you don't ship a v0 contract you'll regret).

One bank, one bookkeeper, one signature service. Free or low-cost across the board until the Studio scales past one engagement at a time.

Total fixed cost: ~$25/mo. Variable cost is pure transaction fees on the rare card payment. Wire/ACH from US clients clears to Mercury for free.

Mercury is chosen for two reasons: zero fees on the operating tier, and native support for sub-accounts (called Vaults) that make the 25% tax rule mechanically enforceable.

Every dollar that lands in Operating gets sliced: 25¢ moves to Tax Reserve that day. This is the single highest-leverage finance habit in the Studio. April never feels surgical because the cash was never available to spend.

Why 25% (and not the actual tax rate)

The federal+state+self-employment marginal rate for a profitable single-member LLC in most US states lands somewhere in the 22-30% range depending on income and deductions. 25% is the round-number midpoint that's almost certainly > what you actually owe. Over-reserving means a refund or a rolled-forward credit, which is a cheaper failure mode than under-reserving and scrambling.

Re-tune annually after the first full year of operation when you have actual numbers. Until then, default to 25%.

When the rule does NOT apply

• Deposits that are loan proceeds, capital contributions, or refunds — not income.
• Pass-through deposits (rare for a Studio) — e.g. a client wires you funds you immediately wire to a vendor.
• Inter-account transfers between Studio accounts.

If the auto-rule mis-categorized a deposit, manually reverse the 25% sweep within 24 hours. Wave will reconcile.

Wave is the bookkeeping layer. Free, web-based, sufficient for a Studio. The job is twofold: (1) categorize every transaction within 7 days, (2) produce a P&L and balance sheet on demand.

Four templates cover essentially every contract event the Studio sends. Build them once; reuse forever. All four live as templates inside Dropbox Sign with merge fields, not as static PDFs that get hand-edited every send.

Contract sends are predictable enough to be a checklist. The flow below is the same regardless of size.

First-send checklist

1. Re-read the SOW as if you're the buyer. Anything ambiguous is a future dispute.
2. Confirm the fee number matches what was verbally agreed. Currency stated in USD.
3. Confirm the milestone schedule (typically 33% kick-off, 33% mid-sprint, 34% handoff).
4. Confirm the outcome metric language matches what's measurable from baseline.
5. Send. Note the send time in Airtable Notes.

If the client redlines

• Read every change. Don't accept en-bloc.
• Anything in Limitation of Liability, IP Assignment, or Indemnification that goes beyond template defaults → legal review before counter-signing.
• Anything in fee terms or scope → respond in the SOW thread, not Sign comments. Re-issue the SOW with a new version number, never amend in place.

Predictable invoicing is what turns a six-figure contract into a six-figure cash position. Three rules: (1) invoice on milestone, not on calendar; (2) always NET-15 unless the client's procurement requires otherwise; (3) follow up the day after due, every time.

Default schedule (Lighthouse Sprint)

For Retainer engagements: invoice on the 1st of each month, NET-15. For Workshop: 100% upfront before scheduling.

How to issue

1. In Wave: Sales → Invoices → Create against the Engagement Code customer.
2. Line item: {Engagement Code} — {Milestone}. Reference the SOW.
3. Attach a one-paragraph status summary covering what's been delivered.
4. Send to Client AP contact with billing@umbra.group CC'd.
5. Log the invoice ID in the Airtable Engagement row and increment Fee Recognized only after payment lands.

Dunning — the polite escalation

Receipt capture and tagging is a 30-second habit that prevents a 6-hour annual reckoning.

At swipe time

• ▢ Photograph the receipt. Mercury's mobile app captures and attaches automatically — one tap.
• ▢ If the receipt is digital (email confirmation), forward to receipts@umbra.group — auto-files to a Drive folder by month.
• ▢ Apply the tag in Mercury immediately. Wave will inherit the tag on sync.

Categories that get audited first

If the IRS ever asks, these are the categories that get scrutinized hardest. Document substance, not just price.

Personal vs business cards

One inviolable rule: never charge personal on a business card or vice versa. The 30 seconds saved is purchased with hours of disentanglement at year-end. If a personal swipe lands on a business card by accident, reimburse the business that day.

The monthly close is the single most important finance ritual. One disciplined hour per month means quarterly taxes and annual returns are routine, not panic.

1. Reconcile Mercury ↔ Wave. In Wave, run Reconciliation for each Mercury account. Every transaction matched. Outliers explained.
2. Categorize & tag every transaction from the past 30 days. No transaction left as Uncategorized.
3. Issue any due invoices for retainer engagements. Confirm Sprint milestone invoices are on track per §08.
4. Run dunning on anything past due per the table in §08.
5. Pull the P&L for the month. Compare to last month and the same month last year. Anything >30% drift gets a one-line annotation in the close packet.
6. Pull the Balance Sheet. Confirm Tax Reserve = 25% of trailing 12-month revenue (or trending toward it).
7. Snapshot & archive. Save P&L + BS PDFs to studio-shared/Finance/Close/{YYYY-MM}/.
8. Email the close packet to billing@umbra.group (so it's archived in Gmail) and copy yourself a one-line summary: revenue, expenses, net, cash position.

Daily · 5 min

1. Glance at Mercury overnight. Anything unexpected = investigate same day.
2. Tag any Mercury transactions from yesterday.
3. Forward any digital receipts that landed in inbox to receipts@umbra.group.

Weekly · 15 min · Friday afternoon

1. Confirm Wave bank-feed sync ran clean.
2. Check Buffer auto-sweep ran on the Friday rule.
3. Open invoice list: any due Monday? Pre-stage the +3 dunning email as a draft.
4. Confirm any contracts in flight have moved a state this week.

Monthly · 60 min · last business day

1. Run the full close per §10.
2. Review the five-tag distribution. Any tag >50% of total = re-tagging error or genuine concentration to investigate.
3. Snapshot Mercury balances; archive screenshot.

Quarterly · 2 hours

1. File estimated quarterly tax payment from Tax Reserve.
2. Review contract templates: anything redlined more than once this quarter? Update the canonical template.
3. Re-export Sign templates & Wave chart of accounts to studio-shared.
4. Open the dunning aging report. Anything >60d gets escalated to legal review.

Annual · half-day

1. File 1099s by Jan 31 for any contractor >$600/yr.
2. Engage CPA for federal & state filings. Hand over the 12 monthly close packets.
3. Re-tune the 25% rule based on actual effective rate from the prior year.
4. Review and re-version contract templates with a lawyer.