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5 Reasons Why Your Bookkeeper Should Be Your ...
5 Reasons Why Your Bookkeeper Should Be Your Most Trusted Partner in 2024 (Here’s What Medical Practices Gain)
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Why Would A Small Law Firm Need a Bookkeeper?

“With a staffing footprint of only a few attorneys why do I need a bookkeeper?” It’s a question I’ve heard a lot over the course of my career. Many lawyers who work in small firms don’t see the benefit of relying on external expertise to keep their books organized. Unfortunately, many of those same lawyers eventually come around to a different way of thinking only after something bad, or even catastrophic, happens with their accounts.

Why Would A Small Law Firm Need a Bookkeeper?

QuickBooks® Online New Features and Improvements – December 2016

December has seen a number of big changes for QuickBooks® Online (QBO), including a number of new features and functions to help users get paid faster, work more closely with accounting professionals, and use QuickBooks more efficiently. Here is a rundown of the most recent improvements.

QBO Smart Invoice

Cash is the lifeblood of small businesses If we can help you save money, or even better, help you receive the money you’re owed faster, you have a better chance at succeeding. We recently announced three innovations to help you get paid fast and save as much of the money you’ve earned as quickly as possible:

  1. An integration with Apple Pay that enables merchants to get paid quickly and easily on outstanding invoices via the newly launched Apple Pay on the Web;

  2. An integration with American Express Working Capital Terms, which provides short-term loans directly within QuickBooks Online; and

  3. Mileage Tracker, which finds users $7,000 in tax deductions by auto-categorizing trips as personal or business.

Now, with SmartInvoice, you will be notified immediately about the status of your invoices every step of the way. You’ll know when invoices have been sent, viewed, and most importantly, paid. Spend less time chasing invoices, or wondering if your customers received or read their invoice, and more time running your business and working with customers or spending time with family. Previously this was only available on the QBO Mobile App, but now it’s available in QBO as well.  Smart Invoice for the Web helps you get paid faster. Plus, we have eliminated the 50 cents-per-transaction ACH fee, so you can now have your invoices paid with free ACH bank transfers.

 

New Faster Invoicing Setup Helps You Get Paid Faster

There is a new simplified setup experience for new customers when you start using QBO that will help you cruise through the process and get paid more quickly. The new experience has fewer setup screens, so you can start using QuickBooks and create an invoice in just a few clicks! And, if you select that invoicing is important, QuickBooks will put you directly into the new invoicing setup flow where you can customize an invoice for your business, select how you want to accept payments and send your first invoice just a few minutes!

 

Looking for a QuickBooks Accountant? Try Find-a-ProAdvisor.com

Multiple studies show that small businesses that work with an accounting professional are more successful than those that try to go it alone. At Intuit®, we’ve known that for years, and have successfully brought hundreds of thousands of small businesses and accountants together over the last three decades. Seamless data integration between QuickBooks and our accounting products such as QuickBooks Online Accountant and Intuit ProConnect™ Tax Online make it easy to view and share data accurately and securely, but how do you go about finding a great accountant in the first place?

Well, we’ve improved the Find-a-ProAdvisor website, a resource designed to help you find qualified local accountants to work with you on QuickBooks and help advise you on your business strategy and key decisions. Improvements include a more prominent “Advanced ProAdvisor” designations and certifications that more clearly demonstrate product expertise to the 700,000+ small businesses that search the directory each year.

A New Streamlined, More Consistent Look Across QuickBooks Products

QuickBooks Online also received a makeover, and we’re thrilled to share that through input from customers and real world testing with users, it’s proven helpful in making it easier to find and use the features and functionality you use most in QBO, QuickBooks Self-Employed, Payroll, Payments and other products. Click here to see more about the changes.

 

We continually update QBO based on customer feedback and suggestions in an effort to make it better, faster and fuel your success. To review our previous November changes, click here. Visit the QuickBooks Online blog often for continuous updates, thought-leader articles designed to help you improve your business and much more.

IRS Tax Limits going into effect for 2017

The IRS released 2017 adjustments to more than 50 tax provisions as well as providing updated tax rate tables for individuals, estates and trusts (Rev. Proc. 2016-55).  These revisions will be used for both tax preparation for 2017 and tax year reporting due in 2018.  The bullets below are highlights from the list that would be of interest to a majority of taxpayers.

For the standard deduction for married taxpayers filing joint returns increased slightly to $12000, a $100 increase over 2015 and 2016. Single and married taxpayers filing separately will also see a slight increase to $6,350.  Heads of household will also see a bump from $9.300 to $9350.

The highest tax bracket of 39.6% saw a moderate increase from $466,950 to $470,700 per year. Single taxpayers are subject to the 39.6% tax rate on income over $418,400, an increase of $3,350 over 2016.

The maximum earned income tax credit amount for 2017 is $6318 for taxpayers filing jointly who have three or more qualifying children, up from a total of $6,268 of 2016.

The Alternate Minimum Tax exemption amount for tax year for 2017 is $54,300 and begins to phase out at $120,700 ($84,500 for married couples filing jointly for whom the exemption begins to phase out at $160,900).

FSA Contribution increases from $2550 to $2600, Carryover rates remain the same at $500.

 Transportation accounts which apply to transportation in a commuter highway vehicle and any transit pass continues to be limited to $255 per month. Parking remains at $255 per month.

Health Savings Accounts will see a $50 increase to a maximum of $3,400 annually. Family contribution limits remain the same for 2017 at $6,750.

‘High Deductible Health Plans (HDHP) as defined under 223©(2)(A) as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (including deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage and $13,100 for family coverage.”

The penalty for not having essential health insurance remains at $695.

There are of course, more changes than what’s posted here, so please talk with us for a more in-depth conversation about your specific tax situation.

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10 Common Accounting Mistakes Business Owners Make

10 Common Accounting Mistakes Business Owners Make

10 Common Accounting Mistakes Business Owners Make

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 the accounting 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.