Accounting, Bookkeeping, and QuickBooks Tips for Small Businesses

Posts in category Bookkeeping

FreshBooks Review

It’s tax time. Which means it’s time to turn your shoebox full of receipts and bank statements into meaningful information your accountant can use to prepare your tax return. Let’s face it, most small business owners do not go into business because they enjoy bookkeeping. I’ve done some research and played around with a handful of cloud based bookkeeping services. Some of these online bookkeeping software solutions are too good to keep secret! Keep an eye on my blog for the next few weeks while I explore and review these cloud based accounting services. Today’s topic is FreshBooks.

Cloud Based Small Business Bookkeeping

FreshBooks

Cost: Free – $39.95/month

FreshBooks is a great online bookkeeping solution for small business owners. They started as an invoicing/billing service so those features are top notch. Small business owners can send professional looking invoices, set up recurring invoices and payments, receive online payments, track employees & contractors time, and have FreshBooks automatically send reminders to your slow paying customers. They can even help small business owners manage sales taxes.

FreshBooks doesn’t stop at the invoicing and billing side. They also have an expense tracking feature to help you manage small business’ expenses. To save on data entry time, FreshBooks also offers the ability to import your expenses from your bank or credit card company via a .CSV or .QBO file.

Best of all, it’s an online service meaning you have access to your financial information at anytime and from anywhere. Read on to get specific details on what I loved about FreshBooks and my wishlist.

What I LOVE:

    Invoicing and Billing Features:

    • Easy to use layout.
    • Customize your account with your logo and business colors.
    • Professional looking invoices that can be emailed, snail mailed, printed, or downloaded as a PDF.
    • Set up recurring invoices. All you do is enter the invoice once and then FreshBooks will automatically send your recurring when you specify.
    • Customers can click on your emailed invoice and pay your bill online!
    • Set up recurring credit card payments to be charged automatically.
    • Save time with your collections and have FreshBooks automatically send out reminder emails to your slow paying customers. Your automated emails are customizable, so they sound like they’re coming from you rather than being a computer generated email.
    • Ability to invoice in any currency
    • Ability to calculate and track sales tax.
    • Send estimates to prospective customers. Your customer can approve it online and then you can easily convert the estimate into an invoice.

    Time Tracking:

    • Provide contractors & employees with access to log their hours (they won’t have access to your financial data).
    • Time tracking also includes a start/stop timer to accurately track time spent on projects and jobs.
    • Easily convert time sheets into invoices.

    Expenses:

    • Expense tracker to enter and record your expenses.
    • Save time on date entry by automating your recurring expenses.
    • Ability to attach copies of your receipts and bills. No more messy shoeboxes or filing cabinets filled with receipts. Just snap a picture with your phone & you’re done!
    • Import your expenses from your bank and/or credit card company via a .csv or .qbo file.
    • Comes setup with a handful of most commonly used expense categories. You can also add your own categories for your specific business.
    • Ability to record an expense and then link it to an invoice, if the expense should be passed along to your customer.

    Financial Reports:

    • Financial reports that let you take a look at your small business profit/loss, see who owes you money, where you are spending your money, track revenue by client, track revenue by employee, time sheet reports, etc.

    Bonus Features:

    • Online service, meaning your financial records are stored in the cloud. Providing small business owners with access to their accounting data from anytime and from anywhere!
    • Access your business financial information from desktops, laptops, smart phones, tablets, and Macs.
    • Long list of add-on’s to customize your accounting needs. Some examples are Shoeboxed, PayPal, Google Apps, MailChimp, SalesForce, etc.
    • Plays nice with QuickBooks – you can imports your sales figures into QuickBooks.

Wish List:

  • I would love to see the ability to track bills, when bills are due, and accounts payable.
  • I’m surprised they are not set up to automatically download transactions from your bank, credit card companies, and PayPal. It does have the import feature, but automatic downloads are a great benefit for small businesses.
  • I would also love the ability to automatically categorize your imported expenses.
  • The ability to import into QuickBooks is an added bonus. I really wish the data could be imported via an .iif file, providing me with more sales data usability in QuickBooks.

Overall, FreshBooks is a great bookkeeping program. As small business owners know, cash is king! FreshBooks shines in the invoicing/billing customer area, which is key to helping generate cash flow. Their expense tracking features are lacking, but the expense tracking features are adequate for a small business to be able to use FreshBooks as their stand alone bookkeeping software. I love the fact that FreshBooks sales data can be imported into QuickBooks via an Excel file, making it an incredible billing/invoicing tool for small and mid-sized businesses.

Disclaimer:
The links above are affliate links and I get paid if you click on them and sign up for FreshBooks. However, the statements above are my own opinion and I did not receive compensation for writing this review. All content is provided for informational purposes only.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle Edwards, CPA is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Top 3 Benefits to Correctly Recording Credit Card Charges into QuickBooks

How to Posting Credit Card Charges into QuickBooks

The other day I wrote a guest blog about “Entering Credit Card Charges into QuickBooks, the Right Way!”. One of my main goals working with clients is to teach them the correct way to use QuickBooks. QuickBooks is a great tool for small business owners, but you must know how to use it. In my guest blog post, I taught you the best way to record your credit card payments in QuickBooks. Today I’d like to talk about the top 3 benefits to using this method to record your credit card receipts into QuickBooks.

  1. Always Know How Much You Owe!
    If you are good about keeping up with your bookkeeping tasks and recording your credit card charges as they occur, you will always know the balance on your credit card. This avoids surprises when your monthly credit card statement arrives and helps you plan for your upcoming cash outflows.
  2. Accurate Financial Statements!
    Let’s face it, quite a few small businesses do not have the luxury of paying their credit card bill in full every month. This method for posting credit card charges into QuickBooks, allows the small business owner to choose the credit card transactions to pay this month and which ones will have to wait until next month to pay. QuickBooks will keep track of the amount still owed and the transactions still owed to your credit card company. Thus providing you an accurate accounts payable figure on your balance sheet.
  3. Save Time!
    The third benefit for posting credit card charges correctly to QuickBooks allows the small business owner the opportunity to quickly look up transactions. Let’s say you’re trying to figure out how much you typically spend at the big box retailer for office supplies. By recording the credit card charge to the correct vendor, you can quickly pull up that big box retailer and figure out how much you spent. This saves a ton of time over scrolling through every single credit card payment looking for those office supply charges. Some bills have them, some do not, and now you’ve just wasted a ton of time searching for these charges. Let’s face it, which small business owner does not love to save time!

There you have it. The top 3 benefits to using the correct way to post credit card charges to QuickBooks. Not only does it allow you to plan for your upcoming cash outflows, it provides business owners with accurate financial statements, and best of all it saves time! Give it a try and let me know how you like using this QuickBooks tip!



Check out my QuickBooks Tutorial about “Entering Credit Card Charges into QuickBooks, the Right Way!”..



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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


QuickBooks 2012 – Loaded with New Features!

QuickBooks

QuickBooks is headed to stores near you! Intuit just announced the release of QuickBooks 2012 and will be available for purchase at the end of the month. QuickBooks 2012 is loaded with new features! These tools will not only save you time, but will help keep your small business organized, and will provide your small business with better financial reporting options. Read on to see if QuickBooks 2012 is right for your small business.

  1. Organizational Tools

    • New Calendar Functions
      New and improved calendar features allow small business owners to view appointments, set payroll tax reminders, estimated quarterly estimated tax payment reminders, bill due dates, invoicing reminders, and to-do lists. An easy way to keep your calendar all in one place!
    • A Lead Center
      An entire center dedicated to tracking, following up, and keeping track of your potential customers! Great new tool incorporating CRM features into QuickBooks.
    • An Improved Document Center
      This new QuickBooks feature is my favorite! QuickBooks 2012 allows users to attach supporting documentation to your QuickBook transactions and save them directly to your local computer! No more Intuit external storage limits or data storage fees. The document center is an easy way to organize and create a paperless accounting system. Keep your bills, deposits, W-9’s, business cards, bank statements, contracts, agreements, etc. all in one place – in QuickBooks!
  2. Financial Reporting Made Easier

    • User Generated Reports
      Custom financial reports just got easier! QuickBooks 2012 includes a feature allowing small business owners to search a library or more than 1,000 custom, user-generated reports. This is a great way to see what numbers your competition is looking at and what reports accountants are preparing for their clients.
    • Improved Excel Integration
      Don’t you hate it when you spend your precious time formatting QuickBooks exported reports in Excel, only to have to reformat the report again next month? Intuit heard your calls for help and offered small business owners a solution in QuickBooks 2012. Now you can format your reports in Excel, save the report, and next month you can import new data to the report while keeping your personalized formatting options in place.
  3. Save Time

    • One-Click Transactions
      Save time by entering customer data once. Your customer’s information will now be available in various QuickBooks transaction forms.
    • Batch Invoicing for Time & Expenses
      Provides small business owners with the ability to invoice multiple customers for time and expenses all at once, using the improved QuickBooks batch invoicing feature. Please note, this is not available with QuickBooks Pro 2012.
    • Batch Timesheets
      Everyone can benefit from payroll time saving features! The Batch Timesheets feature will allow entreprenerus the ability to process multiple employee and vendor timesheets in a batch. A great time saving tool for those employees and vendors who work the same hours.
  4. Improved Inventory Center
    Intuit has added some much desired inventory improvements. QuickBooks 2012 includes an inventory center, centralizing all inventory functions to one center. If your small business is interested in accounting for your inventory on the FIFO (first-in first-out) method or you need the ability to track inventory based on serial numbers, check out QuickBooks Enterprise Solutions. Keep in mind you will also need to subscribe to Intuit’s Advanced Inventory Feature for these inventory tools to work with QuickBooks Enterprise Solutions.

As you can see, QuickBooks 2012 is loaded with new features! Small business owners, entrepreneurs, homepreneurs, and mompreneurs can all benefit from the time saving, improved organizational tools, better financial reporting options, and updated inventory center options included with QuickBooks 2012. Please note, this blog post only relates to the US version of QuickBooks 2012 and may not include all the new features. Please contact Intuit for more information about QuickBooks 2012.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Top 8 Things You Need to Do When Starting A Business

Starting A Business

Entrepreneurship is reaching record highs these days. A combination of people wanting to create their own destiny, people desiring a flexible schedule, and the unemployed that need to start working again fuels this entrepreneurship growth. If you are thinking about becoming an entrepreneur, here are the top 10 things you need to do when starting a business.

  1. Create a Business Plan
    Business plans are a great way to organize your ideas and put your dreams on paper. Business plans force you to evaluate every angle of your business, helping you decide whether or not your business ideas might work. Business plans help you research your competition, price your product, create a marketing strategy, generate a budget, and think about an exit strategy. They are also required if your business is going to need outside funding. Don’t get me wrong, a business plan will not guarantee success, but it will lead you in the right direction and will alert you to potential troubles once your business is up and running.

    Tip: a good business plan grows and changes with your business. Once your business is up and running, make a habit of reviewing your business plan on a monthly, quarterly, or annual basis. See if you are on track to reach your initial goals and update areas where you business took a different direction.

  2. Decide on a Business Structure
    You will need to decide the type of business entity you would like to create. Your business structure choices are: Sole Proprietorship, Limited Liability Company (LLC), Partnership, Corporation, or an S Corporation. Choosing a business structure is not a task to be taken lightly. It is important that you understand the pros and cons to each structure. Some structures offer better tax benefits, while others are much more simpler to operate. Some structures are better for individuals while other structures offer better benefits for business partners. The IRS has lots of information on their website about the various business structures. Individual states also have their own requirements and conditions for business structures. I advise you to contact your CPA to assist in helping you decide on a business structure that best fits your specific and unique needs.
  3. Employer Identification Number (EIN)
    Contact the IRS to obtain your EIN (Employer Identification Number). You will need to fill out Form SS-4, Application for Employer Identification Number, which can easily be done at IRS.gov. Even if you plan to operate as a sole proprietor, I recommend obtaining an EIN so you don’t have to use your Social Security Number on your business transactions.

    If you plan to hire employees, you will need to register with your state(s) to obtain an Employer Unemployment Insurance Tax ID and a state wage withholding ID. Check with your state’s Department of Labor and Department of Revenue for information about your state’s employer identification number requirements.

  4. Register Your Business with the State
    Corporations, s corps, limited liability companies (LLC), partnerships, sole proprietors, and non-profits need to be registered with the state(s) you plan to operate in. You can register your Trade Name and Doing Business As (DBA) with your State’s Secretary of State’s office as well.
  5. Sales and Use Tax License
    Businesses that sell products, goods, food, etc. need to apply for a sales tax license from the state(s) in which you plan to operate. Some states even tax services. You can check with the state’s Department of Revenue for specific information pertaining your individual business. Contrary to popular belief, internet businesses are required to collect and submit sales tax as well. With the state governments strapped for cash, many states are starting to enforce collection of sales tax on internet transactions. Sales tax can be a tricky subject and gets complicated quickly when nexus comes into place. I recommend you contact your CPA to help figuring out what state(s) your business is required to collect and submit sales tax.

    Use Tax – Depending on the state(s) and county(s) in which you live and/or operate a business, consumer use tax can be required to be paid by businesses and residents on purchases that were not taxed when purchased. Some examples include Internet, mail, and/or phone orders. Check with your CPA or your state to determine whether you owe use tax.

  6. Local Business License and Permits
    Many cities, towns, and counties require businesses to register and obtain general business licenses. In addition, building permits, liquor licenses, contractor licenses, professional licenses, home occupational licenses, special event permits, etc. may be required by your state, city, town, and/or county as well. Don’t forget to look into these additional licenses and permits to ensure your business is operating legally.
  7. Insurance
    Business insurance is a necessity to help protect you and your assets. In general, you will want to carry a general business liability insurance policy. If you have employees or hire subcontractors, you will also be required to carry a Workman’s Compensation Insurance policy. An insurance broker is a great resource and can help you get your business insurance set up.
  8. Set Up a Bookkeeping System
    As your business starts making and spending money, you will want to have a system in place to track your income, expenses, bills to be paid, receivables, loan payments, cash, etc. With today’s technology, there are several great and inexpensive bookkeeping software options available. Check out QuickBooks, Sage Peachtree, Outright, FreshBooks, and Wave Accounting.

Keep in mind this list of the top 8 things you need to do when starting a business is a general list. Every business is unique and has individual needs. Please consult with professional advisors regarding your individual business. Most importantly, have fun and enjoy your entrepreneurial adventure!

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


How to Convert a QuickBooks Mac file To QuickBooks Windows File

QuickBooks Mac vs. QuickBooks Windows
Mac’s are gaining in popularity. The only problem, what happens when your CPA continues to work on a Windows computer? Don’t let the difference in operating systems scare you away from your favorite QuickBooks bookkeeper. Intuit has made it easy to convert your QuickBooks Mac file to a QuickBooks for Windows file, and then back again.

The process of sharing your QuickBooks file with your accountant is called “round-tripping.” In a nutshell, round-tripping means your QuickBooks file will go from your Mac, to your CPA’s Windows PC, and then back to your Mac again. Let’s learn how round-tripping works in the Mac vs. PC world.

QuickBoks Mac

  • File –> Backup to a QuickBooks for Windows.
  • In the Save As field, enter a name for the QuickBooks file. Make sure the company file name does not include any special characters, such as !@#$%^&*().
  • Save the backup file. Saving it to your desktop makes it easy to find later.
  • When the password window appears, enter a password to password protect your QuickBooks file. You may leave the fields blank if you do not wish to have a password protected file.
  • A .qbb file will be created and saved to your Mac. An instructional PDF file will also be created to help with the Windows conversion.
  • Send the .QBB file and instructional PDF file to your Windows user via the CPA’s portal, USB stick, flash drive, CD-Rom, etc.

QuickBooks Windows

  • In QuickBooks for Windows, click File –> Restore.
  • A Restore Window will appear. Select the .QBB file and choose a location to save the restored file.
  • Click Restore.
  • To convert the file, you will need to type the word “yes” to continue with the conversion.
  • Once the file is converted, the file will open in the Windows Version of QuickBooks. QuickBooks is now ready to use on the Windows PC. Your accountant may review the file and make any necessary changes.
  • When the file is ready to be sent back to the QuickBooks Mac user, click File –> Utilities –> Copy Company file for QuickBooks for Mac.
  • The converted QuickBooks file will be saved as a .QBB file with the word “MAC” in the file name.
  • Save the backup file. Saving it to your desktop makes it easy to find later.
  • Once the backup process is complete, you are ready to send the .qbb file back to you the QuickBooks for Mac user via the CPA’s portal, USB drive, flash drive, CD-Rom, etc.

QuickBooks Mac

  • In QuickBooks for Mac, click File –> Open Company.
  • Choose the .QBB file you would like to restore.
  • Click Open.
  • When asked if you want to restore a QuickBooks for Windows file, click OK.
  • Name the restored file.
  • Click Save.
  • Now you are ready to work in your QuickBooks file again on your Mac.

Tips:

  • Keep in mind, most information is supported and can be converted between Mac and Windows. However, there are a handful of reports and data that is not supported. Please compare your restored converted file against your original file to ensure your new file is not missing any reports and/or data.
  • The Mac and Windows users must use the same version of QuickBooks. For example, QuickBooks for Mac 2011 can be converted and opened in QuickBooks for Windows 2011. Intuit also recommends both Mac and Windows be operating on the most current QuickBooks release.
  • As you can see, “round-tripping” a QuickBooks file is not complicated and makes for a simple solution when working between Mac and Windows users.

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    Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
    Certified QuickBooks ProAdvisor

    Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


QuickBooks 2008 Scheduled to Sunset on May 31, 2011

QuickBooks Upgrade

QuickBooks 2008, QuickBooks for Mac 2007, and the 2008 QB Support and QB Products are scheduled to sunset on May 31, 2011. This means the software will no longer be supported and the services will stop working. If you are using 2008 QuickBooks Software, Support, or Products you might want to consider upgrading to QuickBooks 2011.

Who Will This Sunset Affect?

The following QuickBooks services will be discontinued as of May 31, 2011:

  • Online Banking – QuickBooks 2008 will no longer connect with your financial institution.
  • Bill Pay and Billing Solution – Both services will be discontinued.
  • QuickBooks Email – Your company will no longer be able to email reports, invoices, forms, etc. through Intuit’s server. You will still be able to email through Outlook.
  • QuickBooks Payroll – Assisted, Basic, Standard and Enhanced Payroll will no longer calculate payroll taxes and provide payroll tax forms, resulting in inaccurate payrolls. In most cases, your payroll subscriptions will be deactivated. The Employee Organizer will also no longer be available.
  • Credit Card Processing – Credit Card Processing, Automatic Credit Card Billing, and Terminal Downloads will be discontinued and will no longer work.
  • Online Backup – Will no longer be an available option for your QuickBooks 2008 company file.
  • Live Technical Support – Will be discontinued.
  • Check with Intuit for a full list of discontinued products and services.

What Should My Small Business Do?

If your business uses QuickBooks 2008 or QuickBooks for Mac 2007, and you only use the products contained on your computer, than you can continue to use your older version of QuickBooks software. The disadvantages to continuing to use your older version of QB software includes:

  • Intuit will no longer be sending out updates and fixing software bugs.
  • Intuit will also be discontinuing their live customer support for QB 2008 and QB for Mac 2007.
  • Potential errors and troubles if you try to install QuickBooks 2008 on another computer using your original software disk. The version of QuickBooks 2008 or QuickBooks for Mac 2007 you are currently working in will most likely contain software updates released by Intuit over the past few years. When you attempt to open your current QuickBooks company file using your original software, you might receive errors and may not be able to access your data. There are potential ways around this problem, but no guaranteed solutions. Please contact your Certified QuickBooks ProAdvisor for assistance.
  • QuickBooks Products and Services will be discontinued, meaning they will no longer work.

If your small business uses QuickBooks support, products, and services you will need to upgrade. QuickBooks 2011 has added a handful of new features making it easier to track your business’ financial operations. Keep your eyes out for deals on QuickBooks 2011. Often times Amazon, Costco, major office supply stores, and QuickBooks ProAdvisors will offer discounts on QB software. If you are tired of dealing with software update hassles, you might want to consider QuickBooks Online. Don’t forget to Back Up your QuickBooks company file before upgrading.

As always, please contact your bookkeeper, accountant, Certified QuickBooks ProAdvisor, or CPA for assistance with your QuickBooks questions and concerns.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.

Senate Repeals the 1099 Expanded Reporting Requirements!

Senate Repeals the 1099 Expanded Reporting Requirements

Great news for small businesses and rental property owners, the senate voted today to repeal the 1099 expanded reporting requirements. The 1099 repeal passed with a landslide vote of 87-12. The 1099 repeal (H.R. Bill 4 ) is expected to be signed by President Obama.

Under the previous expanded reporting requirements, small businesses and owners of rental real estate would have been required to file a 1099 with the IRS for any services, contractors, or vendors paid more than $600. This would have included payments to Office Max, Costco, Target, etc. Even though the 1099 expanded reporting requirements were supposed to bring in billions of dollars to help cover the cost of Obama’s Health Insurance laws passed in 2010, the reporting requirements put too much paperwork burdon on small busiensses and owners of rental real estate.

Congress has been working hard this year to come up with new legislation to repeal the expanded 1099 reporting requirements. However, neither side could agree on terms as to where spending should be cut or ways to generate additional income to help fund the Small Business Jobs and Credit Act of 2010 AND the H.R. 3590 Patient Protection and Affordable Care Act.

What does this mean for you and your business? The old 1099 reporting requirements go back into affect. Therefore, if you’re a business owner and have issued 1099’s in the past, you can probably keep doing what you are doing. If your business has never filed a 1099 and you are wondering what the hype is about, please contact your CPA to learn more about the 1099 reporting requirements.

Check out my 1099 Update on CafeTax.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Yes, CPA’s Can Do More than File Taxes

CPAs Can Do More Than Taxes Tax season is in full swing and small business owners have taxes on the brain. Don’t get me wrong, tax professionals are an important advisor to your business. Good tax CPA’s can help you save tax money, plan for future tax costs, and create a plan to reduce future taxes. However, did you know that CPA’s can do more than just taxes?

Let’s stop and think about your business. If you run a small business, bookkeeping is a huge part of your daily, weekly, and monthly routine. Bookkeeping is the backbone to your small business. It provides you with a trail map detailing where your business has been, where your business is today, and where your business is headed in the future. Good bookkeeping can mean the difference between a successful business and a failing business. In addition to your tax CPA, why not choose a CPA that specializes in helping small businesses with their day-to-day accounting and bookkeeping needs?

In addition to taxes and audits, here are a few other ways CPA’s can help your small business.

  • Management Consulting
    • Analyze business operations and suggest changes.
    • Help businesses make better use of their resources, thus increasing efficiency and improving profitability.
    • Pricing strategies for new products and services.
    • Develop marketing strategies and track marketing plans for profitability.
    • Create a business plan for entrepreneurs or for existing businesses wanting to roll out a new department, product, or service.
    • Setting up a business – consult on business structure and registering the business with the correct government agencies.
  • Financial Consulting
    • Create forecasts and budgets.
    • Produce financial statements – Balance Sheet, Income Statement (Profit & Loss), and Statement of Cash Flows.
    • Perform ratio analysis – watch for business financial trends, problems, and growth.
    • Teach business owners how to read and understand financial statements, budgets, forecasts, and ratio analyses.
  • Financial Analysis
    • How much revenue does my company need to generate to be able to hire an employee?
    • Would my business save money if we purchased parts from a vendor instead of manufacturing them in house?
    • Create and calculate compensation plans – commission plans for sales staff, salary and bonuses for management, salary plans for staff, etc.
    • Why does one department continually loose money every month? What can the business do differently or change to start generating a profit?
    • Tracking cash flows – how much does my business need to make payroll? How much cash does my business need to pay next month’s bills? How much cash will be left over to pay the owner?
  • Bookkeeping
    • Accounts Receivable – record payments, assist with collections, generate invoices and statements.
    • Accounts Payable – record and pay bills and track expenses.
    • Bank Reconciliations.
    • Credit card statement reconciliations.
    • Reconcile PayPal accounts.
    • General ledger clean up and review.
    • QuickBooks Consulting – QuickBooks set up, QuickBooks training, QuickBooks clean up.
    • Cloud based and/or SAAS (software as a service) bookkeeping solutions.
    • Create, set up, and organize an accounting system.
  • Payroll
    • Online payroll processing for your small business.
    • File your quarterly and annual payroll returns – 940, 941, W-2’s, W-3, and 1099’s
    • New hire reporting.
    • Post payroll figures into the accounting software.
  • Human Resources
    • Generate an employee handbook.
    • Draft and create job descriptions.
    • Calculate compensation plans.
    • Consult on employee benefit plans – retirement savings plans, health insurance, and paid time off.
    • COBRA administration.
    • Workman’s Compensation.
    • Employee management consulting.
    • Unemployment Insurance.

This by no means is a comprehensive list of things your CPA can help you and your business with. As your business grows, changes, and enters new areas contact your CPA. You might be surprised at the additional services and resources they can provide for your small business!

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


QuickBooks Tutorial: How to Prepare 1099 and 1096

Tax Return_Form 1099Jan 31st is just around the corner. That means you only have a few days left to prepare and send your 1099’s. Last week we discussed 1099’s – what is a 1099, who gets a 1099, and when 1099’s are send/received. This week I want to walk you through how to prepare 1099’s using QuickBooks. Don’t forget your 1099’s must be mailed to your vendors no later than January 31, 2011.

The quickest and easiest way to prepare your 1099’s is by using QuickBooks’ 1099 and 1096 Wizard. The QuickBooks 1099 and 1096 Wizard provides you with 4 steps to easily verify your information, review your data, and double check that your numbers are correct before printing your 1099’s.

To access the QuickBooks 1099 and 1096 Wizard, click on the Vendors menu and choose the Print/E-file 1099s… option. The wizard will open and will suggest you take the following steps:

  1. Review Your 1099 Vendors – The Vendor 1099 Review report is helpful so you can verify that the vendors who should be receiving a 1099 are marked “yes” and to double check that the vendors marked “yes” have a Tax ID number and a complete mailing address.
  2. Map Your Accounts to Boxes on 1099 – This window allows you to select the account (general ledger account aka chart of accounts) you want to be reported on the 1099’s. You can assign multiple accounts to each 1099 box category, but you can not assign the same account to multiple 1099 categories. You will also want to verify the threshold (minimum) amount you must report to the IRS matches the current IRS rules.
  3. Review Your 1099 Data – The 1099 Summary Report opens, providing you with the opportunity to see each vendor that is eligible for a 1099 and the amount paid to that vendor. Please note the report is sorted by Box Number (which box the amount will be reported in on the 1099). You can double click any vendor to see the details behind the total amount showing on the report. If you notice a check or bill was originally posted to the wrong account (i.e. it’s not showing up on the 1099 or it’s being reporting in the wrong box), you are able to go back and change the account on the the check or bill. I recommend printing a copy of the report. It is a good tool to double-check all 1099 vendors are included.
    Additional Steps to Ensure 1099 Reporting Accuracy

    1. First, open Quickbooks’ 1099 Details report. To access the 1099 Details report, go to the Reports menu and select Vendors & Payables. Then click on the 1099 Detail option to open the report. Make sure the report dates are correct, choose the “All Vendors” option, and the “Only 1099 Accounts” option. Refresh your report. Look into any vendors that show up on your QuickBooks 1099 Details report that do not show up on your QuickBooks 1099 Summary report. If you find vendors who are supposed to receive a 1099 – open their vendor record and click the Form 1099 button on the Additional Information tab and verify you have their Tax ID Number and mailing address.
    2. Secondly, in the QuickBooks 1099 Details Report change the 1099 Options to: “Only 1099 Vendors” and “All Allowed Accounts.” This new version of the 1099 Details Report allows you to verify the amount you are reporting on the 1099. If you find any vendor payments that were accidentally posted to the wrong account, you can double click the listing to open the transaction to change the account. After making the change, refresh your report to make sure the amounts match.
    3. Once the vendors and amounts have been verified for accuracy, you are ready to print your 1099’s.

  4. E-file and Print on Plain Paper OR Print on Preprinted Forms
    1. QuickBooks 2011 is the first version that gives you the option to file your 1099’s electronically through QuickBooks. Click the Use Intuit 1099 E-File Service button to proceed to file your 1099’s electronically. Note: if you file your 1099’s electronically, you do not need to file a 1096. Another nice feature is that you are able to print your vendor’s copies on plain paper, so you do not have to worry about buying and printing on the preprinted forms.
    2. To print your 1099’s and 1096 on preprinted forms, click the Print 1099’s button. This will walk you through printing your 1099’s and 1096 on preprinted forms. Preprinted forms can be purchased at most major office supply stores (i.e. Office Max) or ordered for free from the IRS. Printed Form 1099’s and Form 1096 will be filed with the IRS by mail.

Keep in mind most 1099’s need to be mailed to your vendors by January 31st and then filed with the IRS by February 28th, 2011.

Additional Resources
Instructions for Form 1099-MISC (2010).

Form 1099-MISC (2010)

Instructions and Form 1096 (2010)

A Guide to Information Returns

Information about the FIRE System (electronic filing)

Form W-9

Who Can Help You File 1099’s
If you get stuck or have questions, contact the IRS, your lawyer, or your CPA.

____________________________________________________________

Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.

Form 1099-Misc, What You Need to Know

Tax Time Blocks_Form 1099It’s January and that means 1099’s must be sent to your subcontractors and vendors by the end of the month. If you operate a business, chances are you owe at least a few people a 1099. If you’re a sole-proprietor, partnership, or LLC you will probably receive a few 1099’s from your customers as well. Read on to learn more about 1099’s.

What is a 1099
1099’s are informational returns required by the IRS. There are several different types of 1099’s that are used to report a variety of payments – interest, dividends, trade or business payments, credit card merchant reporting, etc. Today we are focusing on the 1099-MISC, which is used to report payments made in the course of your trade or business.

Who Prepares 1099’s
If you own a business, you will be responsible for sending a 1099-MISC to anyone you paid $600 or more in the course of your trade or business. Some examples include rent, services, payments to subcontractors, parts, materials, prizes and awards, medical and health care payments, service contracts, etc. These payments must have been made to an individual, a partnership, an estate, or to an LLC. In general, corporations are exempt (at least for payments made during 2010 – the 1099 laws are changing in 2011 & 2012).

If your business paid at least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest; any fishing boat proceeds; and gross proceeds to an attorney are a few other times when your business is required to send a 1099-MISC.

Who Receives a 1099
In general, if you or your business provided $600 or more in goods or services to another company, you should receive a 1099-MISC from your customer. If you do not receive a 1099-MISC, no need to worry. You are still responsible and required to report that income on your tax return.

When to File Your 1099-MISC
Form 1099-MISC must be sent to the recipient(s) of the income (i.e. your subcontractors and vendors) by January 31st. For example, if your business paid $2,000 in rent during 2010, you owe your landlord a 1099-MISC by January 31, 2011.

You are also required to submit a copy of the 1099-MISC’s you generated to the IRS by February 28th. When submitting to the IRS, you need to include Form 1096, where you provide the total number of 1099’s you are submitting and the total amount being reported. If you are filing electronically through the FIRE System (Filing Information Returns Electronically System), the due date is March 31st.

Where to File Your 1099-MISC
Mail a copy of the 1099-misc to anyone you paid $600 or more in the course of your trade or business to the address they provided on the W-9 you collected earlier in the year. The W-9 is a form you send to any vendor requesting their TIN (taxpayer identification number), address, and legal name of their business. It’s a good idea to collect a W-9 from all new vendors and wait to send their first check until you receive the completed W-9. W-9’s are available at IRS.gov.

You are also required to file a copies of all the 1099’s you sent to vendors and subcontractors to the IRS. When filing with the IRS, you will need to include Form 1096. The IRS’ mailing address is included in the Form 1099-MISC Instructions provided by the IRS. Please visit IRS.gov for information about filing electronically using the FIRE System.

Why Do We have to File 1099’s
Since there are millions of sole proprietors and small businesses in the US, 1099’s help the IRS keep track of how much these individuals, subcontractors, and small businesses are actually making. The process helps keep individuals and businesses honest on their income tax filings.

How to Complete a 1099
1099-MISC forms are available for purchase at most office supply stores (i.e. Staples & Office Max). They can also be ordered for free from the IRS. Once you have the forms, you can print the information directly on the form using your accounting software (QuickBooks, Peachtree, etc). If you only have a few 1099’s or you do not use accounting software, you can fill them in by hand.

Important to Note
1099’s are for reporting payments made to your subcontractors and are not for reporting wages paid to your employees. Employees wages and tax withholdings are reported on a W-2.

Resources
Instructions for Form 1099-MISC (2010).

Form 1099-MISC (2010)

Instructions and Form 1096 (2010)

A Guide to Information Returns

Information about the FIRE System (electronic filing)

Form W-9

Who Can Help You File 1099’s
If you get stuck or have questions, contact the IRS, your lawyer, or your CPA.

____________________________________________________________

Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


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