Posted by Matt Roberge on Tue, Jan 31, 2012 @ 11:54 AM
Does your current bookkeeper act like a business partner and not just an employee? Do they care about the success of your business? They should. Here is a list of how to get your bookkeeper to start acting like a business partner.
Give them a piece of the action
An obvious way to get your bookkeeper to care and to act in your best interest is to give them a piece of the business. This could come in the form of a bonus or percent of ownership. Also, consider giving them a bonus for helping you monitor certain expense and sales goals and give them something in return based on if you hit your goals or not.
Set clear expectations from the beginning
Try explaining to your bookkeeper the aspects of your business you are currently focusing on. Do you have certain sales goals? Are you watching and trying to decrease certain expenses? Are there specific reports you need to see on a daily, weekly, monthly or quarterly basis? By communicating your expectations with your bookkeeper you will get them to provide you with the information you need to run your business more effectively.
Make your bookkeeper feel like an important part of your business
People start to care more when they feel that they are an important part of the team. If you can't afford to reward your bookkeeper monetarily there are other options. One thought would be to show everyday appreciation of their hard work and dedication. Another idea is to give them additional key business tasks to handle. Lastly, have your bookkeeper give financial reports in meetings to other key business members. This will make them feel more like a key team member and they will perform better.
By making a few minor changes on the way you treat your bookkeeper you may get a whole different type of bookkeeper. You can not only have a bookkeeper that is good at general bookkeeping tasks, but also one that genuinely cares about the well-being and profitability of your business.
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Posted by Matt Roberge on Thu, Jan 26, 2012 @ 12:42 PM
If you haven't done any bookkeeping for last year is it time to panic? Not necessarily, but you do have to act now. You have an entire year of bookkeeping to do in order to file taxes on time, which is no easy task. Here is a guide on getting your bookkeeping done in an efficient manner.
Determine if you are handling the bookkeeping or outsourcing it
This is a crucial step. Do you have the time, desire and skill set to take on the task of an entire year of bookkeeping? Would it benefit you and your business to outsource your bookkeeping to a professional? If you are going to hire a bookkeeping service or individual tap your business network to find a competent individual or service.
Find a great CPA and hire them
Having a good CPA on your side will be advantageous. A good CPA will professionally prepare your taxes and give you ongoing tax advice. They are worth every penny they charge you. Your trusted business colleagues or bookkeeper should be able to make a few good CPA referrals for you.
Prioritize
There is a lot to do right now so you are going to have to prioritize. Work with your CPA and bookkeeper to figure out what the most important tasks are and create a timeline of what order you need to do things in. There may be incredibly important tasks such as overdue tax filings that need to be done now before anything else
Come up with a bookkeeping game plan and act
Talk with your CPA, bookkeeper or other business owners to find out how to get going with your bookkeeping task. Here is a guide I wrote to help you through the process of "do it yourself bookkeeping." Long story short you need to enter all banking transactions, credit card transactions, loans etc and reconcile them to your year end balances. Useful tip: if you are not sure of what account to code a transaction to don't let it stop you from completing your bookkeeping. Set up an account called "To Review" or "Ask My Accountant" and code any questionable transactions to it. Then you can get all your transactions entered, reconcile all your account and just review all your questions at once with your CPA or bookkeeping consultant.
Just because you have not done any bookkeeping does not mean you can't get it done. You need to come up with a plan and act on it. The tax deadline this year is Tuesday April 17, 2012...best of luck.
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Posted by Matt Roberge on Tue, Jan 24, 2012 @ 11:32 AM
There are a lot of great bookkeepers out there, but there are also a lot of really bad bookkeepers. We have a lot of different sources of obtaining new bookkeeping clients. One of them is through bad bookkeepers. More often than not when a new prospect contacts us it is because they are not happy with their current bookkeeper or bookkeeping service. Is your bookkeeper good at what they do? Here is how to find out.
Can your bookkeeper answer your questions and provide you with the information you need to make key business decisions?
When you ask your bookkeeper a question do they stare at you blankly? If they don't know the information off the top of their head can they extract it quickly from QuickBooks or your accounting software? If you are constantly waiting on reports or answers to your financial questions then you may have a bad bookkeeper.
Is your bookkeeping system getting updated in a timely manner?
How often is your bookkeeping being updated? Can you see your cash flow situation? Not only your cash on hand but where your cash flow situation will be a week from now. Your bank account should be being reconciled on a weekly or monthly basis at minimum. It is really the only way to know you are looking at accurate financials.
Are you constantly finding mistakes in your bookkeeping?
If you ask questions of your bookkeeper that lead to changes due to mistakes on their end then you might need to change things up. Another way to find out if your bookkeeping has a lot of mistakes is to ask your CPA. If your CPA is not getting the bookkeeping in an organized manner or has to make a lot of changes then that is probably due to bookkeeping mistakes.
Then again is it your fault?
You are pinning all the blame on your bookkeeper but are you at fault for some of the bookkeeping issues? Does your bookkeeper constantly have to ask you for information? Do they have to ask more than once? Have you set your bookkeeping expectations from the beginning? Are you communicating effectively with your bookkeeper?
It's true there are both good and bad bookkeepers out there. Some may be wonderful bookkeepers but just not a good fit for you or your business. Some people just don't work well together. In general if you are not happy with your bookkeeper or the results they are delivering maybe its time to change things up.
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Posted by Matt Roberge on Wed, Jan 11, 2012 @ 12:04 PM
Recently we have had several clients that have been audited with the focus being the validity of independent contractors. Many businesses pay a vendor as an independent contractor. Here is a quick guide for you to determine if a vendor is an independent contractor and how to document each contractor to ensure you have the proper proof.
Independent contractor rules:
If the following four conditions are met, you must generally report a payment as nonemployee compensation.
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You made the payment to someone who is not your employee;
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You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
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You made the payment to an individual, partnership, estate, or, in some cases, a corporation; and
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You made payments to the payee of at least $600 during the year.
You can find a more in depth explanation of the independent contractor rules on the IRS website or in this blog post I wrote last year.
The Proper documentation for an independent contractor:
1. A W-9 form filled out by the contractor. You can find a blank W-9 form on the IRS website.
2. A copy of the contractor's business license.
3. A copy of the contractor's general liability and workers compensation insurance policies. While many independent contractors will argue that they do not need workers comp insurance because they don't have any employees they are incorrect. If they do not have any employees they are still required to have a workers comp exemption certificate.
4. Proof that the contractor is pursuing other clients or business. Now here is where I disagree with the auditors. I am not quite sure why this burden should fall on the business owner. Now the state and federal government want us to take the time to make sure that the contractor is pursuing other business? We have to make sure they are good business people and have an advertising plan? Really the whole thing is just getting to ridiculous for me. A copy of a business card would be more than sufficient evidence that your contractor has the intentions of pursing additional business and clients outside of your business.
If you take the time to make sure all the contractors you pay are set up as a business and not an individual it will only help you. If you follow the rules and document the contractor appropriately you should have no issues in an audit. Also, don't every pay an independent contractor until you have all the proper documentation. You will be surprised how cooperative people can be when they have not been paid and how uncooperative they can be when they have already been paid.
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Posted by Matt Roberge on Tue, Jan 03, 2012 @ 11:15 AM
No? Why not? Why is it that you wait every year until the calendar turns to deal with your taxes? Don't you realize that what you can do to help your 2011 tax situation is much more limited now that it is 2012?
Quite honestly if you were organized the last thing on your mind would be your taxes. You would be more worried about how you are going to make 2012 the best year of business you have ever had. I'm done with both my personal and business taxes. I'm just waiting on various agencies to send me paperwork so I can pass it on to my CPA so he can verify the information I have already provided him.
Make 2012 the year you stop worrying about your taxes. Stay on top of your bookkeeping and do your tax planning before the calendar turns to 2013.
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Posted by Matt Roberge on Thu, Dec 29, 2011 @ 09:40 AM
It's year end and time to focus on taxes right? I disagree; I'm focused on our business 2012 financial forecast and sales plan. Why? My taxes are basically done. I turned in my business and personal financials to our CPA back in late November. He reviewed them, we chatted about my tax obligations and I moved on. I have a really good feel for my tax obligations come April 2012. There will be no surprises; no stress and I can focus on more important things.
What is more important than taxes? For me lots of things: our 2012 sales plan, where I will be fishing this summer, my wedding plans etc. So many people and businesses wait until the end of the year to pass and then think "oh no its tax time." Then they spend the next three and a half months figuring out, stressing over and filing their taxes. What a waste of time and effort. Then once taxes are filed in April at the last minute they go back to focusing on more important things. Maybe they focus on growing their business or planning a summer vacation, but they certainly don't focus on taxes. Oh by the way while you were working on your taxes you missed the first quarter of 2012. How did it go for you? Are you on track with your sales goals? Do you even have sales goals? Are you ahead of the first quarter of last year? How do you know? Are your books up to date? Are you running your business blind?
Do a few things differently in 2012:
Keep your bookkeeping updated at least once per month if not once per week
Use your bookkeeping system as a tool to run your business
Use your updated bookkeeping system to review your taxes with your CPA in late November/early December
Use your bookkeeping system to develop next year's sales goals in November and December so you hit the ground running in January with a plan
READY? BREAK!
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Posted by Matt Roberge on Fri, Dec 02, 2011 @ 11:37 AM
Just 30 days left before we start a new year.
Are you meeting with your CPA in the next 30 days to review your personal and business tax situation?
Is your bookkeeping system up to date so that you can review your financial situation with your CPA?
Is there anything you can do right now too avoid paying to much in taxes?
Will this be the year that you don't have to file for an extension on your taxes?
If you answered no to any of these questions I would be worried.
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Posted by Matt Roberge on Tue, Nov 29, 2011 @ 02:24 PM
It's that time of year again...year end. Or are you too late? If your bookkeeping is not organized and ready for your CPA to review now, then yes you may be too late. Year end accounting does not start until after 12/31 right? Wrong. Here is why:
Tax planning and tax moves need to happen in the current tax year
To many people and business owners find out they have a huge tax liability sometime after January 1st each year. The problem is that you are much more limited in regards to advantageous tax moves that you can make once the calendar changes over to a new year. Having a CPA review your bookkeeping and tax situation is crucial late in the tax year right around December. Your CPA can't give you advice if your bookkeeping system is not accurate and up to date.
Unorganized bookkeeping = unorganized business
If you bookkeeping is not updated and analyzed often then how can you evaluate how you are doing? Keeping up to date and organized books can provide you with valuable information that can help to run your business and make smart business decisions.
Is your bookkeeping system up to date?
Are you using your bookkeeping system to aid you in business decisions?
Are you ready for a year end tax review now before the calendar year changes?
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Posted by Matt Roberge on Fri, Oct 28, 2011 @ 12:18 PM
I had a tough day this week; so I went fishing to clear my head. It got me thinking about how much fishing helps my business sales. So here is my top ten list of the similarities between fishing and sales:
1. Presentation is one of the most important factors that will lead to success.
2. Don't rush it; observing and asking questions is the best approach.
3. Offering up something slightly different and better than your competitors will increase your success.
4. Negativity never leads to anything good.
5. You should never stop asking questions of your prospects, clients and colleagues.
6. Education and experience are the keys to a successful career.
7. Everyone has bad days. True professionals never give up and continue to put themselves out there every day.
8. There is as much to be learned from failures as there is from successes.
9. Knowing where your prospects hang out is very important.
10. If you are not having fun it may be time to quit for the day. If this is a long-term recurring problem it may be time to switch professions or retire.
As a salesman or a fisherman do any of those items ring true with you?
Any additional similarities you can draw?
It's a Friday and I've got the itching to work on my trout conversions. Have a good weekend.
Posted by Matt Roberge on Thu, Oct 20, 2011 @ 10:12 AM
This is a valid question; is your bookkeeping a waste of time and money? Why do you maintain a bookkeeping system? Is it because Uncle Sam says you need to? Is it because you want to? Is it because your bookkeeping system helps you run your business more efficiently? Here are some good questions to ask yourself and your current bookkeeper to see if your bookkeeping system needs an overhaul.
Does your bookkeeping system provide you with valuable information that helps you run your business?
If your bookkeeping system is not helping you run a more profitable business you may have a problem. Your bookkeeping system should be a valuable tool, not a hassle. If you are unable to extract any meaningful data from your bookkeeping system then you have a problem. You need to explain to your bookkeeper what type of information you want to be able to get from your bookkeeping and hold them accountable for providing you with that information.
Is your CPA happy with your current bookkeeping system?
Call your CPA and ask them about your bookkeeping system. Does the current bookkeeping system provide them with organized information that makes for an accurate and efficient tax return filing? If not find out how the bookkeeping could be done differently to make things easier on them, which should drive your CPA bills down.
Have you ever filed for a tax extension?
I typically upload my QuickBooks file to our CPA on January 1st each year. Why? Because I can, because I am anal, and because I am proud that I can do so. I can just see my accountant chuckling as he gets my email telling him that I am ready to go for taxes. If you are constantly filing for a tax extension then you are not on top of your bookkeeping. Also, a tax extension only extends the filing date not the due date. Therefore, if you file for an extension and end up owing taxes then you will owe late penalties and interest as well. If you are filing for tax extensions then you don't even know how your business is performing. Your business is running you, not the other way around.
Do you really need a full time bookkeeper?
Have you ever wondered if you need a bookkeeper for 40 hours per week? If you are a small business then chances are you do not need a full time bookkeeper and you may benefit from outsourced bookkeeping services. You will save money and lots of it.
Is your bookkeeper stealing from you?
Internal bookkeeping theft is on the rise and is becoming a real problem. If your bookkeeper is disgruntled, desperate, dishonest or all of the above then they may try and steal from you. Follow our guide to audit your bookkeeper to make sure they are not stealing from you.
Take a look at your bookkeeping system to make sure it is working for your business. Make sure you are not wasting time or money on your bookkeeping. If you find that your bookkeeping system is not living up to your needs then it may be time to figure out how to fix that problem.
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