Wednesday, February 27, 2019

The Top Reasons Your Business Will Benefit From Outsourcing Bookkeeping Services

When you are operating a business, you already have a lot of responsibilities on your shoulders. Your main focus is to keep things running smoothly and to make a profit. Maintaining the record books is something that you may not always have time to do. There are plenty of bookkeeping service companies out there that can help make sure you get all of your paperwork done properly so it doesn't pile up.

Even if you have the time to take care of your records, doing so is probably your least favorite task. It is time-consuming, it requires you to sort through piles of paper, and you cannot focus on where you are needed when you are stuck behind the desk. By hiring out bookkeeping services, you can take advantage of all the benefits that go along with having someone else take care of this daunting job.

You may have avoided hiring bookkeeping services because you did not want to load up all of your documents and take them to a provider every week. You also could not afford the cost that goes along with having an accountant or professional come to your office. Now, with technology and the Internet, one option is to get all of your bookkeeping done online.

By having someone else take care of your records, you are going to have more time to focus on the rest of your company's operations. This may be the number one benefit to outsourcing this job. You know that time is money and you never seem to have enough of it. The small fee associated with hiring a professional bookkeeping agent is going to be nothing compared to the free time you get out of it.

When you hire a full-time or even a part-time accountant to have on the payroll, you are going to acquire costs that are associated with having an employee. When you outsource your bookkeeping services to one of these online outlets, you are only paying for the services you use when you use them. In the end, you are saving your business a lot of money.

Another reason to outsource your bookkeeping services is so that you have the experience of record keeping working for you. The knowledge that you need involving record keeping will always be available to you without you having to pay the full cost of hiring a professional accountant. This makes you more available to spend the time necessary to properly staff your employees and take care of your work.

An outsourced bookkeeper is going to be able to concentrate more on their job when they are located in their own working environment. Instead of an office staff member getting caught up in the busy day-to-day operations of your company, they will be able to spend the time necessary to complete the record keeping work that needs to be done so you get the best results.

You can have an HR manager, secretary, or other employee take care of your records for you. However, this puts more pressure on them and also gives them access to funds and other information you may rather keep private. You can avoid possible fraudulent activity by having a third-party professional keep track of all your paperwork.

The outsourcing businesses that are out there specialize in keeping records. With this being their main focus, they are going to spend the time and resources to get the best software available to do their job. In turn, you are going to receive the benefits that go along with the most updated systems.

There are plenty of benefits to outsourcing your bookkeeping. By becoming aware of what they are you can make a more educated decision on whether it is the best option for your business.

Article Source:

Article Source:

Saturday, February 23, 2019

Introducing Projects in QuickBooks Online

This video walks you through how to set up Projects in QuickBooks Online. QuickBooks Projects intuitively tracks income, expenses and labor costs. Get a clear picture of your projects and project profitability all in one place.

Wednesday, February 20, 2019

3 Keys to Managing Cashflow to Grow a Business

The co-founder of a creative agency called Narrative shares her best tips for keeping tabs on money coming in and going out of her company.

Sunday, February 17, 2019

Thursday, February 14, 2019

Morning Habits to Jump Start Your Brain

The first hour after you wake up in the morning is the most impactful of your day. So how can you spend the first 60 minutes of your morning in a way that sets you up for success throughout the day?

Here are some morning habits and strategies from Jack Canfield, based on his forty-year career of learning from and working with the world’s leading entrepreneurs, executives, and creative geniuses.

Monday, February 11, 2019

The Worst Cashflow Mistakes Small Business Owners Make

The worst cash flow mistakes a small business owner can make can be counted on one hand. They have one thing in common, and that's about failing to follow the money. They're about keeping your eye on the prize, and we go through them here, ending with advice about how to track your own company money using expense management software for small businesses...

Failing to think before you splurge. Great! You've started a business. You're on the road to fame and fortune, and now's the time to invest in an expensive suit and a new car, isn't it? No, in short, it isn't. This is exactly the time NOT to commit money - yours of the company's - to anything you don't need. So there's the first lesson. Understand the difference between 'want' and 'need'. To succeed in business you need a phone, but the Armani suit can wait...

Expecting the best. This is about your financial planning. Understand that you're not going to be a millionaire in the first year. On the contrary, you'll be doing well if you can afford to pay yourself anything like a salary in Year One. If you overestimate the number of units you can sell or the clients you can get to come on board, then revenue will be lower than you predict, and you may find yourself overstretched with any finance package you've put in place.

Offering credit. Poor paying suppliers can cripple small businesses. If you're made to wait for payment, that's like offering them an interest-free loan, and you shouldn't do it. It's perfectly reasonable to ask for payment up front, so long as you're ready to honor your commitment. After all, you wouldn't expect the local supermarket to give you a month or more's credit on your grocery shop (though if you're a supplier to them, the boot would be on the other foot). In general, large organizations are slower payers, and also have complex internal procedures in place about how and when payments can be made. Better to work with smaller companies, where you have direct access to the person with the power to pay.

Being cash poor. If you've made careful and conservative cash flow forecasts in the early days of your business, everything's fine, so long as cash moves as you'd predicted. But what happens if it doesn't? If you have no cash cushion you could be in trouble. Try to have a couple of months-worth of cash in the bank so you could carry on if you had no income at all. It'll help you sleep easier, too.

Not making an unpaid finance assistant work for them. Bet that caught your attention didn't it? This is not about the kind of modern slavery that has people working for nothing, but it's about technology. It's about arming yourself with good quality business expense management software for small businesses and being disciplined in its use. In the early days of your business, you need to be especially careful with money, because having little of it generally sharpens the focus in the need to be a good money manager. In later years, when you've earned a wedge, there's no reason to take your foot off the control pedal. Keep a tight rein on finance, and you'll be rewarded with better dividends in the future. Selection of the right small business expense management software will enable you to keep track of expenses very easily, but more importantly, it will allow you to interrogate the data, and show you how effectively you're managing spending and cashflow - and show where improvements can be made. And picking the right package means it'll offer excellent value for money because the savings you make by using it are probably going to be more than the cost of investing in it in the first place.

Article Source:

Article Source:

Friday, February 8, 2019

How to Work w/ Your Accountant: Documents, Information & More | QuickBooks Online Tutorial

In this QuickBooks Online tutorial, you'll learn how to work with your accountant in QuickBooks including:

- Invite your accountant into your company so that they can access your information at any time
- Understand features that accountants can use to work with clients, such as requesting documents

Tuesday, February 5, 2019

Understanding S-Corp Medical

For Owners, Bookkeepers or Tax Preparers

What is it?

IRS Notice 2008-1, titled “Special Rules for Health Insurance Costs of 2-Percent Shareholder-Employees” regulates exactly how accident and health insurance premiums should be handed for flow-through tax entities. In summary, accident and health insurance expenses paid by an S-corporation on behalf of shareholders who hold more than 2% ownership in the entity, are subject to income tax for the owners. But this is actually a good thing, even though it seems like a penalty. Even if the corporate owner pays out of pocket, it is usually advantageous to have the company reimburse the owner and report the amounts as income on the paystub.

What taxes does it affect?

Reporting S-corp medical income on the owner’s W2 affects only Box 1 and 16, taxable federal and state wages. It does NOT increase FICA (Medicare or Social Security) tax expense for either the employee or the company. FUTA and SUTA (federal and state unemployment) are also usually not affected because these are capped at a relatively small wage base.

Why is it better to have the company pay the medical expenses on behalf of the shareholder than for the owner to claim medical expenses on the itemized deductions?

Some research would help you realize it’s all the same income. Because the business reimburses the shareholder, their K1 income is reduced by the same amount in which the shareholder W2 is increased. Both are ordinary income and taxed the same. However, shareholders will utilize box 29 on Schedule 1 of the 1040 on their personal return to take a “self-employed health insurance deduction.” This amount reduces the total amount (line 7) of Adjusted Gross Income (AGI). It is always better to take allowable deductions “above AGI” than “below AGI” because AGI sets limits on the amount of deduction the taxpayer can take on most other itemized deductions. If the shareholder takes the medical deduction on Schedule A instead, the amount will most likely be limited or not allowed at all.

How to handle booking S-corp medical?

To be booked properly, health care “expenses” paid for on behalf of a business owner (or reimbursed to a business owner) are reported on the shareholder’s W2.

A journal entry should be made to recognize the expense from S-corp medical, and to reconcile the book wage expense to the W3. The journal entry should debit (increase) wage expense and credit (reduce) whatever account was used to pay the medical premiums for the shareholder throughout the year. The company should NOT double-count health insurance expense and wage expense for these premiums. In fact, instructions for claiming health care expenses on the company’s 1120S return specifically exclude health expenses of this type, because they are assumed to be counted in wage expense.

In the case of the shareholder paying “out of pocket” using personal funds, the account to credit could be cash – as in a reimbursement check - or to reduce distributions. Just be sure to follow the golden rule of keeping distributions balanced pro-rata for all shareholders.

Special thought must be given if the shareholder chooses to have premiums, or some portion of premiums, deducted from their paycheck. In the certain health care plans, the owner may need to pay the same percentage of premiums that all employees pay. These deductions must be done post-tax for the owner, even if they are done as Section 125 pre-tax deductions for employees.

These amounts are then already included in taxable income (and wage expense) so they WILL NOT need to be recorded as S-corp medical income and require no additional journal entry. For the owner to get tax credit for the amounts paid out of pocket in this case, they need to claim the out of pocket expenses which are not reimbursed by the company on their personal return, Schedule A, Itemized Deductions.

If there is no requirement imposed on the shareholder to contribute to the cost of the premiums, Turn Key Office recommends having the entity fully pay the cost, recording it as wage expense, and report the total paid on the shareholder’s W2. This provides maximum tax benefits and minimal bookkeeping.

How do I reconcile book wage expense to federally-filed W2/W3s?

Assuming S-corp medical was reported on the owner’s W2 and journaled properly as instructed above, book total wage expense minus all pre-tax deductions will equal Box 1 of the W3. Note, the W3 will not include all totals from all employees’ W2s including S-corp medical, health care pre-tax deductions etc., so you will have to obtain the pre-tax deduction totals from the payroll report register. If it doesn’t tie, you’ll have some troubleshooting to do. The following notes may help.

S-corp medical would properly be noted in Box 14 of each affected W2 and should already be included in Box 1 and 16. This amount is what probably needs to be journaled to wage expense on the books. Note that S-corp medical amounts are not included in Box 3 (taxable Social Security Wages) or Box 5 (taxable Medicare Wages) totals. Pretax deductions, such as 401(k), HSA, pre-tax medical and FSA, reduce box 1 and 16, but do not generally reduce box 3 or 5. Pay close attention to the expense accounts used to report imputed income on fringe benefits, such as taxable group term life insurance and disability insurance or car allowance. Taxable fringe should be wage expense to match the W3. It is also a good practice to ensure any accrued payroll entries are using ledgers distinct from actual payroll.

Saturday, February 2, 2019

How to Categorize Transactions From Your Bank & Credit Card | QuickBooks Online 2019 Tutorial

In this QuickBooks Online tutorial you'll learn how to navigate the software along with:

- Add transactions QuickBooks downloads from my bank and credit card
- Categorize downloaded transactions correctly
- Teach QuickBooks to automatically categorize transactions for me
- Add important details like payee, description and more