How to Survive without a Full-Time Bookkeeper

Tuesday, April 19th, 2011 at 5:37 PM | Category: Business, Meryl's Notes Blog 1 comment

For most small-business owners, keeping the books isn’t a highlight. They prefer to focus on improving and expanding their core business. Bookkeeping? That’s a chore. Yet, running a successful business requires effective bookkeeping.

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Photo from sxc.hu user Morrhigan

As a small-business owner, you might not have the budget to outsource your bookkeeping responsibilities. Instead, you have to learn how to survive without a full-time bookkeeper, balancing your time between nurturing your business’ core values and recording, monitoring and tracking your business’ finances.

Here are five tips for small business bookkeeping.

Understand the purpose of bookkeeping. Before getting started on a good bookkeeping system, it helps to understand how these financial records fit into your business. With a clear picture of how much money your business makes and expenses on a daily, weekly, monthly, yearly basis, you can better evaluate what’s works and what doesn’t.

You may discover one products using more resources than it’s bringing in profits, it may be time to cut that product. If another product or service produces high profits one month and remains consistent the next few months, you can look at what you did differently and expand your opportunities from there.

An effective bookkeeping system can also help you meet budget goals and evidence of a stable, well-managed business if you ever need support from banks or other sources of capital.

Make bookkeeping a part of day-to-day business. Accurately keeping track of your business requires recording your finances on a daily basis. Find a bookkeeping system that works for you, and then set aside time each day to record your cash and credit sales, accounts receivable and accounts payable, and detailed summaries of transactions.

When bookkeeping becomes a routine part of your business, it gets easier with time. Once tax season arrives, you’ll want those records to prepare an accurate income tax return. The more organized and up-to-date your bookkeeping system, the less you’ll have to spend on accounting fees, and the less frustration you’ll have to endure come tax season.

Use the right bookkeeping programs. Accounting software programs makes it easy to automate the bookkeeping process. These do everything from tracking purchases to analyzing purchasing trends. FreshBooks, QuickBooks and Sage Peachtree are accounting programs that offer products catering to various business types. If you’re a small startup, you probably want to choose the most basic package, and upgrade as your business needs grow.

Be aware that accounting software programs still require a great deal of training and education to use properly. Attending a workshop can really help you better understand how to get the most out of the program for your specific business needs.

Once you’re set up and ready to start automating bookkeeping procedures, you can integrate the program with your payment process to further streamline business. If you have a merchant account provider, find out if it can synchronize your merchant account with your accounting software to avoid double data entry and receive reports that are more accurate.

Manage your paperwork. You need to keep those receipts and documents for your records. The key is to stay organized. Maintain a clearly labeled filing system sorted by product lines, expenses, clients, date – whatever works best for you. Protect important, confidential files in a fireproof safe. You can even scan your paperwork to import directly into accounting software, so you can keep all your files in one place and find them quickly.

You may not have to worry about piles of paperwork as much anymore since more businesses have gone paperless. Sign up for automatic withdrawals and deposits with your bank and electronic invoicing with suppliers or utility companies. Provide your customers with paperless options to minimize billing costs and better organize invoicing details.

Also, consolidate your vendors whenever you can. For example, with a credit card processor that offers all the services you need, you’ll receive just one statement for services like payment processing, recurring billing and terminal rentals – rather than three different statements from three different companies.

Don’t mix business with pleasure. Keep your personal accounts separate from your business accounts. Using business funds to pay for personal purchases complicates the bookkeeping process and filing taxes. If you’ve given an employee access to credit cards and account numbers for office spending, monitor those purchases to limit inappropriate purchases and maintain control over your finances.

With the right software, a bit of organization, and daily maintenance of your finances and paperwork, bookkeeping can turn into a simple routine. You can do it on your own, and use the money saved from not hiring a full-time bookkeeper toward something to grow your business. Just remember to record it in the books.

About the Author: Jacqui MacKenzie is a writer for Straight North, a premier Chicago Internet marketing agency that works with BluePay, a leader in small business credit card processing solutions. To start a discussion on effective interactive marketing strategies, visit the Straight North Facebook page.

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5 Steps to Start Using QuickBooks in Your Small Business

Tuesday, February 15th, 2011 at 12:45 PM | Category: Business, Meryl's Notes Blog, Tech 2 comments

QuickBooksMany entrepreneurs and small business owners are natural born sales people whose excitement knows no bounds when it comes to closing deals, building strategies and devising marketing campaigns. But what about … accounting? It may feel like drudgery, but managing the business side of a business is absolutely crucial if that business is going to blossom.

Technology allows us to dispense with pencil and paper, dispose of double data entry, empty overstuffed file cabinets and do away with long nights chained to the office desk checking and double-checking rows and columns of figures. One of the more popular tools is QuickBooks from Intuit, an accounting software program. The program streamlines the accounting process.

Here, we’ll explore five ways to make the most out of QuickBooks.

1. Choose the Right QuickBooks Product

Venturing into QuickBooks requires reviewing your unique needs and studying the program’s offerings so you don’t pay for more than you need. You’ve probably noticed QuickBooks offers several options:

  • QuickBooks Online provides basic invoice creation, sales tracking, data backup and support. It comes with a 30-day free trial.
  • QuickBooks Premier contains industry-specific reports and tools tailored to a specific business type for more fine-grain control, in addition to forecasting and planning tools.
  • QuickBooks Pro targets businesses that are up and running that don’t need as much tailoring or features as those in Premier.
  • QuickBooks Enterprise Solutions is the most advanced plan. This includes expanded user controls, enhanced customized reporting and customer snapshot features that lets you view customers’ purchase history and outstanding balances.

So, which plan do you need? Here are a few important factors to consider before you buy:

  • How much is feasible for your current budget?
  • Are you working on a PC or a Mac?
  • Will there be multiple users or one user?
  • Do you need to track multiple locations?
  • Do you need a better way to track employee time?
  • Will you be using the software for payroll purposes?
  • Are you interested in detailed analysis of sales and profits?

2. Customize QuickBooks

After narrowing down your QuickBooks selection, you’ll discover a wide range of customization options. The latest version of QuickBooks Premier, for example, has features designed for specific types of organizations, including general business, contractors, retail, manufacturing and wholesale, and even nonprofit.

You must also consider who will be using the software on a daily basis. Other employees may not need access to certain information or controls, so you can customize your settings to give other users more or less power. Keep in mind that you might need to train people to use the software.

Other custom options include interface layout, designs and colors, which not only affect the basic look and presentation, but also provide better organization and visual reminders. Setting up favorites, to-do notes and alerts can keep you on-task every day.

3. Integrate Your Accounting Software and Payment Processes

One of the major benefits of QuickBooks software is the ability to connect the program with other business processes, allowing for a one-source solution that can save you time, money and hair-pulling. Synchronizing your payment and accounting processes can eliminates double data entry and provides accurate, immediate reports.

With today’s customers using the Internet to shop, pay bills and place orders, online payment processing capabilities from companies like BluePay help expand sales and improve profits. With QuickBooks, you can integrate your accounting processes with major online shopping carts, so that you have the data you need to track online purchases, invoices and other customer details without having to manually enter the information.

4. Protect Your Business Assets

No business is 100 percent safe from fraud. However, taking the proper precautions and securing your assets as much as possible can cut your risk. Fraud occurs in many different ways, from electronic credit card theft to payroll theft. Unfortunately, small businesses are often susceptible to fraudulent activity, lacking the extra funds required for advanced security plans, or not having enough money to hire more qualified, trustworthy employees.

Security is crucial when using accounting programs that give access to business information to multiple users. As covered in Customization, it’s important to edit your privacy and admin settings to limit user control. Don’t give your employees more access than they need, no matter how nice they are.

Use QuickBooks’ ability to track employee hours and ensure your workers are making the most of their time. You can also use QuickBooks to track employee discounts, minimizing the risk of abused privileges.

Set up separate logins and passwords for each QuickBooks user, and make sure the admin password remains safe. While having all of your information in one place is useful, it also requires extra security precautions. Don’t let fraud be as easy as clicking a button.

5. Take Advantage of Educational Tools and Support

With all the different features, options, tools, reports, passwords –- it looks like QuickBooks complicates accounting rather than simplifies it. It feels overwhelming, but just take it one step at a time and it’ll pay off. Although you won’t learn everything at once, just one new discovery of a function can change the way you do business. Continue to grow from there, and take advantage of the tools and support systems that you can find on the Internet and Intuit’s website.

QuickBooks tutorials can walk you through the entire process so that you can go at it on your own. QuickBooks has training sessions that connect you with experts for consulting services and instructor-led classes. Certification programs are available if you’re already a QuickBooks pro and you want to deepen your knowledge while demonstrating your expertise to clients and employers. Online support or advanced support plans give you access to the resources you need if an issue ever arises, so that you can reduce downtime and keep your business up and running.

With the right QuickBooks product, customization and training, you can gain a tighter grip on all of your financial and accounting processes and greater control over your business, no matter your needs. With your finances in order, you can focus your efforts on the core of your business for growth and success.

About the Author: Jacqui MacKenzie is a writer for Straight North, a Chicago Internet marketing agency that works with BluePay, a company offering credit card processing products. To learn more about payment processing industry, follow BluePay on Twitter.

  Copyright secured by Digiprove © 2011 Meryl Evans

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How Writers Can Manage Federal Income Taxes

Monday, November 9th, 2009 at 9:04 AM | Category: Business, Meryl's Notes Blog, Writing 7 comments
Photo credit: Jasper Greek Golangco

Photo credit: Jasper Greek Golangco

Disclaimer: I am not an accountant. The closest I can come to be considering one is from taking one graduate college course on accounting and using QuickBooks. This advice comes from my own experience.

Some writers start a freelance writing business with little thought to the business part. That’s a small part of why I thought I’d never go into business myself. I didn’t know if I could figure out the admin part of the career beyond invoicing and getting paid. Then there’s taxes (shudder).

Some of the companies I’ve freelanced for took care of the taxes. Most didn’t. So it was my responsibility as a US citizen with her own business to take care of my contribution to a teeny part of the government’s budget. If nothing else, follow the golden rule and you’ll be … well … golden. For the most part.

Golden rule: Have extra money in your business account so you can pay your taxes.

I pay quarterly taxes. In IRS speak: 1040ES (1040 estimated income form). Every quarter, I wince my way to EFTPS.gov and take care of the payment. Better to do it quarterly than to write a big check at the end of the year. Here is how I manage my taxes:

  1. Obtain an Employer ID number (EIN): See this EIN chart to see if you need one.
  2. Save income for taxes: I make sure I always have cash on hand to pay those taxes.
  3. Figure out tax rate: IRS.gov states: “The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).”
  4. Pay quarterly taxes by April 15 (1st quarter), June 15 (2nd quarter), September 15 (3rd quarter) and January 15 (4th quarter). I pay mine on EFTPS.gov. I look at my reports in QuickBooks to see how much I made for X quarter. I subtract expenses from that. And then apply the tax rate to the total and pay that amount.
  5. Record all expenses and keep the receipts: Do you subscribe to Writer’s Digest or buy 2009 Writer’s Market? Save those receipts. They contribute to your writing business. Your home office, supplies, computer, phone and all that also count as expenses. Accounting treats some items differently, so check with your finance pro.
  6. Track payments to subcontractors: This typically doesn’t apply to me — I prefer to keep it a one-person business — but I some of you may subcontract work to others. If you pay them over $600 in a year, give them Form 1099-Misc.
  7. Check state income tax requirements: Thank you, Texas, for making this easy. We don’t have state income taxes in Texas, but I had to pay income taxes to New York. So not only do you need to know your resident state, but also the income tax requirements of states where you have clients. Your finance pro can help with this.

Many user-friendly applications have come out that are easier to figure out than QuickBooks. The key is to find one that lets you create invoices, record payment and enter expenses. The rest are just extras and it’s up to you whether you want them or not. I also use reconcile and reporting features.

Track everything. What you pay. What you buy. Your invoices. Your received payments. Better to record everything and let the accountant determine what qualifies than to miss a deduction or other opportunity.

What other tax management tips do you have?

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Business Basics: Company Financials

Thursday, August 2nd, 2007 at 9:39 AM | Category: Business, Links, Meryl's Notes Blog No comments

Saw these resources in Selling Power magazine. They give you the basics for understanding financial statements, balance sheets and income statements. These resources help you “translate” the statements so you understand the company’s current financial situation and problems so you can get the juicy details.

Reading Business Financial Statements

Reading Financial Statements at JM Rose

Dummies: Reading Consolidated Financial Statements

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