Archive for Bookkeeping

If you’re not a bookkeeper before you buy QuickBooks, you won’t be after either.

Please – do NOT fall victim to the siren song of do-it-yourself bookkeeping that the marketing folks at QuickBooks are singing.

Concepts such as “if you can write a check, you can use QuickBooks” and “QuickBooks is built for butchers, bakers and candlestick makers” (both themes have been used in their advertising) will lull you into a very false sense of security.

To succeed with QuickBooks, you (or someone on your team) absolutely needs to have a solid grasp of bookkeeping. Otherwise, you may quickly offer up a comment such as this one – “QuickBooks is making me want to poke my eyes out!”

Like any other tool, when used correctly, QuickBooks provides an incredibly robust accounting system for many small businesses. There is a tremendous amount of functionality bundled inside the software. However, when used incorrectly, bad things can happen to good businesses, and boy, can they happen quickly!

Get professional guidance to set up QuickBooks out of the box and to review your work on a monthly or quarterly basis. Trust me – I’ve watched many businesses disintegrate due to poor or non-existent accounting information. Avoid becoming a fatality on the small business highway

25 QuickBooks & Bookkeeping Procedures You Need To Learn

25 QuickBooks & Bookkeeping Procedures You Need To Learn

If you are new to QuickBooks or bookkeeping in general, there are certain procedures you are going to want to know how to perform. These 25 tips for QuickBooks and bookkeeping will lay down the foundation for a very tight bookkeeping system.

1. Reconcile QuickBooks Accounts – This is number one on the list for a reason: it is the most important task. Reconciling your accounts is the only way to know that all of your transactions are recorded. Make sure to reconcile all of your accounts, not just bank accounts. Any account that you receive a statement for that has a beginning and ending balance can be reconciled. This includes bank accounts, credit cards, loans, and lines of credit.

2. Back Up QuickBooks – It seems simple but many users do not back up QuickBooks. A simple backup can save lots of stress and headaches down the road. You should also look into automatic backups of your QuickBooks file. If you use QuickBooks online, your data is always secure and backed up since it is a cloud-based program.

3. Print Checks From QuickBooks – Printing checks from QuickBooksincreases efficiency by reducing unnecessary data entry. It will also make your monthly reconciliations go much smoother.

4. Enter and Pay Bills In QuickBooks – Entering bills and paying bills directly through QuickBooks will help you manage your accounts payable. When you pay bills, you should either print your checks or use online bill payment linked to QuickBooks.

5. Customize Your QuickBooks Icon Bar – Customizing the QuickBooks icon bar boosts efficiency by keeping your favorite and most commonly used functions easily accessible.

6. Set up 1099 Vendors – It is important to understand how to set up 1099 independent contractors in QuickBooks. Having 1099 vendors set up correctly in QuickBooks from the beginning will save you a lot of time come year-end.

7. Use Ask My Accountant In QuickBooks – The QuickBooks Ask My Accountant feature is a great place to put questions as well as transactions that you want to research. You want to make sure to review and properly code all transactions in this account before filing your taxes.

8. Understand QuickBooks’ Undeposited Funds – The QuickBooks undeposited funds account gives many users trouble. You need to think of the undeposited funds account as those customer payments that are recorded in your QuickBooks file, but are not yet deposited in the bank.

9. Use QuickBooks Memorized Transactions – QuickBooks memorized transactions are another great tool. You can use memorized transactions to automatically enter any bill, check payment, invoice, or journal entry that regularly reoccurs. Using memorized transactions can really help you to get a handle on cash flow by posting future transactions before they occur.

10. Record A Journal Entry In QuickBooks – You’ll want to know how to record a journal entry in QuickBooks as the need will arise at some point.

11. Learn QuickBooks Online Banking – QuickBooks online banking allows you to easily download transactions from your financial institutions into QuickBooks.

12. Set Up Different QuickBooks Users – You want to set up different QuickBooks users if you have multiple users to whom you need to give varying levels of access. This is a good way to control which users have access to certain areas of QuickBooks.

13. Familiarize Yourself With The Chart Of Accounts – You should learn how to use the QuickBooks chart of accounts. Knowing how to add and organize new accounts in QuickBooks is important. You should know the differences between the account types and how to choose the correct type.

14. Set Up Invoices For Online Payment – You can set up the option to allow your customers to pay QuickBooks invoices online via ACH bank transfer. A small fee of $0.50 per transaction makes it very affordable.

15. Link email to QuickBooks – You can link Outlook to QuickBooks, which makes emailing invoices and reports both simple and efficient. You can also link Gmail to QuickBooks, as well as Yahoo and certain other email programs.

16. Merge Accounts In QuickBooks – You can merge accounts in QuickBooksthat are redundant or unnecessary. You can also merge vendors, items, employees, and customers.

17. Edit QuickBooks Preferences – Editing the QuickBooks preferences can make things much more efficient. Changing your preferences allows you to tailor QuickBooks more toward your needs.

18. Properly Record Outsourced Payroll – It is important to properly record your outsourced payroll in QuickBooks. If you don’t handle your payroll transactions correctly, you could over-state or under-state your expenses and net income.

19. Use The QuickBooks Find Feature – The QuickBooks find feature is one of my most used functions. It is a great way to quickly find transactions that you know only a little bit of information about.

20. Understand QuickBooks Class Tracking – QuickBooks class tracking is something many people don’t use because they don’t understand what classes are. QuickBooks classes allow you to organize your data into different segments that are meaningful to you and your business. Examples of classes are department, location, and source of income.

21. QuickBooks Job Costing – QuickBooks job costing is important for contractors or anyone else who needs to track income and expenses as they relate to a particular job.

22. Keep A Clean Accounts Receivable – You need to learn how to manage your QuickBooks accounts receivable. Keeping a clean AR will give your business a healthy cash flow position.

23. Inventory Tracking In QuickBooks – Tracking inventory in QuickBooks can be difficult. Make sure you understand how to track inventory or look into a different inventory tracking system.

24. Customizing QuickBooks Reports – You should learn how to customize QuickBooks reports to make them more meaningful to you. After you have a good customized report, have QuickBooks memorize it, and then save it on a list of memorized reports for yourself so you can use it regularly.

25. Learn The Basics Of QuickBooks – If nothing else, at least learn the basics of QuickBooks..

These are just some basic QuickBooks and bookkeeping procedures that I feel you should know. For specific questions on anything listed or not listed here, please feel free to reach out! We would love to answer your questions.

Cost-Benefit of Hiring a Bookkeeper

Jared Hecht
CEO and co-founder of Fundera, the most trusted marketplace for connecting small business owners with the best funding provider.

Ever caught a mistake while balancing your checkbook or reconciling your bank account statements? If so, you know how easy it is to make an error. “Is that a 1 or a 7? Is that decimal point in the right place?” You also know what a mess they can make of your finances.

Now take that easy-to-make error, which in your personal finances might be, at worst, a matter of $50 or $100. Multiply it by the hundreds of transactions and the thousands of dollars coming in and out of your small business, and that innocent, no-big-deal mistake starts to look pretty scary. Yes, hiring a bookkeeper costs money—but could doing so save you from a major financial mistake?

Here’s a cost-benefit breakdown of hiring a bookkeeper to help you decide if it’s the best financial move for your business.

Bookkeeping Costs

To start, let’s take a look at the costs associated with hiring a bookkeeper. What all does hiring a bookkeeper entail? Some of the costs you can expect are:

1. Time Needed to Interview and Hire Your Bookkeeper
Like any other staff member or contractor, you need your bookkeeper to be reputable, experienced, and a good match for your business. Finding that perfect fit will require time, research, and potentially multiple candidate interviews.

2. Time to Set Up Your Bookkeeping System and Meet with Your Bookkeeper
Your new bookkeeper likely will have a recordkeeping system and software he or she prefers, which will take a bit of time to implement. Getting accustomed to your company and your particular circumstances will also take some time. Once you and your bookkeeper are on the same page, so to speak, you’ll need to meet on a somewhat regular basis to stay that way and keep everything running smoothly.

3. Bookkeeper’s Fees
Fees will vary depending on whether your bookkeeper bills hourly or at a flat rate, how many hours you’ll need from them monthly, and the extent of the tasks they are performing.

4. Software
If you aren’t already working with a specific accounting software program, your bookkeeper will probably recommend an accounting program such as QuickBooks to keep (or maybe you’ve recently purchased bookkeeping software and specifically brought in a bookkeeper to help you set it up). In either case, keeping accurate books will require investment in an accounting program and someone who experience with that program.

Benefits of Hiring a Bookkeeper

Hiring a bookkeeper has significant benefits, including:

1. Minimizing and Catching Potentially Costly Errors
This is the biggie. From data entry mistakes to lost transactions to personal/ business expenses mix-ups, there are myriad ways books can go wrong. A bookkeeper’s expertise means, first of all, that he or she will make fewer errors in recordkeeping, and secondly, that he or she will spot problems.

2. Eliminating Late Fees by Paying Bills Promptly
It’s easy to get behind on paying bills and invoicing (more on that in a minute) when you’re juggling bookkeeping with running your business. A bookkeeper will help you get your bills in order—and make sure that they get paid on time. In “When to Hire a Bookkeeper or Accountant,” The Fresh Diet CEO Zalmi Duchman tells Entrepreneur’s Eileen P. Gunn that he estimates his company is “saving 500 to1,000 in late fees per quarter.” That’s a lot of dough.

3. Decreasing Your Accounts Receivable Turnover by Invoicing Effectively
Getting your books in pristine shape means you’ll be able to invoice more effectively and quickly. Whether your bookkeeper does invoicing manually or sets up an automated system for you, you’ll be cutting down on the length of your invoicing cycle—and getting paid faster.

4. Eliminating Your Own Time Spent Bookkeeping
Hiring someone to do your books (whether that’s full-time, part-time, or on a handful of occasions yearly) means you don’t have to. That means you get back the time you were spending on recordkeeping. Depending on how complex your finances and the number of transactions you typically do, this could amount to quite a bit of your own time invested back into your business.

5. Understanding Your Numbers
You should have a good sense of your P&L and other numbers (especially if you’re doing your own books!). But a bookkeeper can help to clarify anything that is confusing about your figures and identify the cause of irregularities.

Your cost-benefit analysis for hiring a bookkeeper will depend on the bookkeeper and on your situation. Even the most thorough analysis may have to include estimated or averaged costs, rather than absolutely accurate figures, so leave some wiggle room when budgeting for bookkeeping.

In the end, you may decide that your books are simple enough that the DIY approach will do for the time being. But you may feel that the peace of mind that comes with knowing you will avoid major mishaps in your books is worth the costs. Only you, the business owner, can make the judgment call as to whether bringing on a bookkeeper is the right move for your company at this time.

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10 Common Accounting Mistakes Business Owners Make

As a business owner, it is important to be involved in all aspects of your operation. That doesn’t mean, however, that you are an expert at everything. Business owners may wear those strategic and customer-relations hats well, but many have a much more difficult time when it comes to donning that accounting chapeau.

Even worse, financial mistakes can actually stunt growth or adversely impact your bottom line, clog cash flow, attract undue attention from the IRS or damage reputations with suppliers, customers and staff.

To avoid those scenarios, here are 10 accounting mistakes business owners commonly make and the reasons why these errors—both calculated and inadvertent—can be so detrimental.

1. Falling Behind in Entries and Reconciliation
Time is definitely not on the side of the small business owner, especially when there may be daily fires to put out. Suddenly, months have passed without making any entries in the books nor reconciling any business checking statements, credit card statements, sales tax accounts or other types of financial accounts. This means financial statements and reports are not current. Without up-to-date information, it is challenging to make sound business decisions.

For example, spending money may result in a negative balance or reduced profitability because unpaid invoices have gone unnoticed. Not entering financial data can also lead to problems with suppliers, where invoices to be paid may go unnoticed, leading to problems in getting materials or even a bad credit rating for the business.

2. Struggling to Be Accounting Software Savvy
In a rush to get the business set up, some business owners may not have spent time to properly learn theaccounting software they selected. Not knowing what the accounting software is capable of doing means you could easily make a mistake or miss out on some powerful functionality. Not setting up a software system correctly could also lead to unused reporting capability and incomplete information that results in bad business decisions.

3. Not Seeing the Reports for the Tools
Accounting is not just a tool for entering financial data in order to fulfill state and federal tax regulations or tell you how much money is in the bank. Instead, accounting is a powerful mechanism that provides answers to questions related to how a business owner’s strategic decisions are working or not working.

That’s why a big mistake is not using the plethora of business reports that can be made from the financial data, including accounts-payable aging, accounts-receivable aging and reports about company profitability. These reports can show where issues are, including determining where clients are not paying in order to maintain cash flow. If these aging reports are not produced, a business owner will not know who is behind on payments and may miss clients who are not happy with quality.

4. Mixing Business and Personal Finances
One of the most common accounting mistakes business owners make is to mix their business and personal finances. Keep these separate and distinct to provide a more accurate track record of what was really used for business and what specifically related to personal use only.

For example, while the IRS can understand that a certain number of meals throughout a month might be business-related, those tickets to a concert or video games on the business credit card clearly do not. The business can also be impacted because more money is being spent on the owner’s life rather than being reinvested to grow the company.

For these reasons, it is better to maintain separate accounts in order to mentally and physically look at the business as a separate entity rather than an ATM. In the long run, this will help the business to grow and still provide a business owner with significant income.

5. Trashing Receipts
Paper trails still count, but even those can become digitized. However receipts are kept, the point is that they need to be retained. Receipts provide answers to any mistakes or gaps in accounting records, and many offer additional deduction opportunities come tax time.

Even more importantly, if the IRS comes calling, those receipts deliver proof to validate the numbers on financial statements. Not having those receipts means the IRS can deem those entries as invalid deductions, changing tax amounts and potentially leading to penalties.

6. Making Math Mistakes
In the rush to get the books done after a long day, math mistakes can happen quite easily, even when using automated accounting solutions. Math mistakes can also result from posting entries to the wrong account or even just making typos.

Combine that with Accounting Mistake No. 1 on the list, and this can be a recipe for financial disaster because these math mistakes can then go unnoticed for months if not regularly checked for accuracy. Suddenly, one math mistake results in a tangled web of accounting errors, leading to bigger problems.

7. Focusing Only on the Short Term
With the day-to-day issues of running a business, it is easy to fixate on the short term and completely forget about the future. Accounting, however, is not just keeping track of today’s numbers. It’s also about forecasting future growth and identifying any financial risk from current financial decisions or results.

With the need to look to the future, there are many issues to consider, including long-term accounting issues and opportunities for company growth. Also pay attention to any related operational concerns, such as the need to add more accounting staff to handle the growing business. For example, a business owner may add a new subsidiary that makes different products or add locations in other countries.

8. Hiring the Wrong Person
Whether it is a family member, an inexperienced office temp or even the business owner who hires themselves to do the accounting, the wrong person can create financial problems that go beyond just making uninformed decisions. In fact, trying to save money or help a loved one out can actually lead to audits or penalties. Hiring the wrong person can create issues that haunt your business for many years to come.

This can occur if the person hired does not know how to classify expenses correctly or create accurate journal entries. He or she may not have knowledge of tax laws, including what can be included in the accounting for a business and what must be kept separate. He or she may also not be familiar with invoicing or currency exchange when accounting for business elsewhere in the world.

The right accounting professional can help a business owner to avoid errors that are detrimental to the business. These inadvertent errors could include the type of accounting method used, such as cash versus accrual, as well as mistakes related to interpretation of facts about assets, bad-faith estimates that involve unrealistic conclusions about specific assets and incorrect recognition related to accrual of expenses.

9. Thinking Technology Is Always the Solution
Throwing money at technology does not guarantee accounting mistakes will be avoided. After all, you still need to make the technology work correctly. Also, not all technology was created equally or is relevant to a specific businesses.

For example, a small business owner does not have to invest in expensive enterprise accounting systems, but can likely utilize a system that works well with simpler financial statements and be able to scale as the business grows. Therefore, it is important to select the technology that matches the individual need and application for a business. This is where good planning, strategic thinking and research become invaluable to ensure that technology does not add to the accounting mistakes.

10. Not Letting Go
As a business owner, it is tough to admit when the Superman or Wonder Woman cape doesn’t fit, but there are situations where not getting professional help is a major mistake. It is okay to admit that accounting may not be your area of expertise.

You likely started a company with a great idea or solution that had nothing to do with accounting, and that is where you should focus. There are accounting professionals out there that can handle invoicing or other accounting functions in order to let you concentrate on what you do best. As the business grows, there is a time to migrate from the DIY approach and to utilize other responsible parties, including an accounting professional.

The financial side of running a business can make or break your company. Learning when to use tools or professionals to help in areas you struggle with can be one of the biggest issues for business owners. For more tips on how to improve your accounting, see the article on the seven accounting formulas business owners need to know.

The Entrepreneurs Accounting Cheat Sheet

Accounting Cheat Sheet Infographic
Courtesy of: Bplans

If you need help, please contact me Christy Shepherd at (801) 808-3672 and I can get you on the road to good accounting practices.

Bookkeeping Basics

If you’re just starting out or have been in business a while, have no idea how to file your taxes, or don’t know how much money you’re making or where it is all going – find someone who does. That can mean hiring an accountant, using an accounting service around tax time, or buying a software to help you out, or consulting with somebody that can give you direction in each of these areas.
That being said, even if you’re only making a few dollars a month, you should still use this system to keep track of your money! It’ll help you see what you’re doing right and what you could improve on.
Keep in mind this is how to TRACK your money – aka keep a record – aka bookkeeping. Every business must cultivate the tools to do this to grow and be successful, or simply to do their taxes! For those that are completely new to all of this, here are some basic terms you will need to know:

This is keeping track of your money. Officially the definition is “the
activity or occupation of keeping records of the financial affairs of a
Accounting is similar to bookkeeping, it’s “the action or process of keeping financial accounts”. The major difference is how the records are kept. Don’t worry you don’t really need to know anything about accounting for this.
This is anything you own. Your computer, your money, money owed to you, your car. “A useful or valuable thing, person, or quality”, basically anything you can sell for money, or actual money.
The money you owe. This is bills, credit cards and money owed. “Something (such as the payment of money) for which a person or business is legally responsible”.
The money you paid in exchange for something. Expenses can be supplies purchased, paying someone for a service or the cost of goods. “An outflow of money to another person or group to pay for an item or service, or for a category of costs”.
The investments. This could be stock owned or money invested into thecompany. “The residual value or interest of the most junior class of investors in assets, after all liabilities are paid; if liability exceeds assets, negative equity exists”. Read more

QuickBooks Training Course


This is a half day training course in utilizing the QuickBooks Accounting Software to manage daily accounting activities and use financial reports to grow and set goals for your business.  Each course will be catered to your specific business needs.  Included with this half day course will be 2 additional follow up sessions over one month to review your work and answer additional questions.

Each training session may include any of the following:

  • Customization of Chart of Accounts
  • Methods of Data Entry
  • Invoice Creation (as well as creating Item Lists)
  • Purchase Orders
  • Inventory activities
  • A/P and A/R assistance/training
  • Reporting in QuickBooks – what is available and how to review
  • Job Costing and/or Class Tracking
  • Reconciliation of Accounts
  • Journal Entry assistance
  • Budget Creation

Prior to the Training Course please be prepared with the following:

  • Bank/Savings Statements needing to be entered/reconciled
  • Loan Statements/Lines of Credit
  • Credit card statements
  • Current Assets of company and values (and depreciation taken if any)
  • List of any items paid personally (not ran through business accounts) if applicable
  • Usernames and Passwords for all banking accounts or payroll accounts

This course will provide you with tools on how you can decrease your tax liability, increase your profits, and optimize your cash flow as you operate and grow your business.

Phone: 801-808-3672


Christy’s Bookkeeping Services

Focus on growing your business, trust the bookkeeping to us