Category Archives for Tips and Tricks

simplify bookkeeping

How to Simplify Your Bookkeeping (for the non-accountant)

It is a well-known fact that most small businesses fail, many in the first year. The main reason they fail is they lose money. Unless you’re a billion dollar venture-funded corporation, you won’t survive long losing money.

If you own a small business and want to succeed, you owe it to yourself to pay attention to the numbers. Much can be gleaned from the financials. But if you didn’t major in accounting then your statements may as well have been written by an alien.

Steps to Simplifying Your Bookkeeping

  • Legal Structure - Start by having a lawyer setup your business for the legal structure that works best for you. Many of the steps below are more difficult if this is done later. Some of your bookkeeping entries will be dependent on your legal structure, so get this completed asap.
  • Separate Business From Personal - Now that you have your legal business name setup, you can open up your bank accounts in your business name and apply for a business credit card. This will keep your business transactions separate from your personal transactions. Keeping financial data separate will make it easier to see how your business is doing financially and is a major accounting principle. Many small business owners have difficulty with this step, but it is as easy as don’t use your business accounts for personal expenses. If you need help with this, consult with a CPA or bookkeeper.
  • Record all your business transactions - The easiest way to do this is by having your bank accounts and credit card accounts for your business connect with your accounting software for automatic uploads. This eliminates manual entries and virtually guarantees you’ll post everything to your financial statements, making them accurate.
  • Paying Your Bills - This covers many areas. You need to make sure you don’t overspend by comparing your expenses to a budget or industry standard. You also want to watch the timing of your payments, so that you maximize cash flow and not pay expenses too early or too late. It’s easy to charge everything thinking that eventually you’ll have enough revenue to pay off your credit card balance, but this can land you in trouble. The goal is to pay off your balance each month, but if you must carry a balance because of initial start up costs, set a goal to make more than the minimum payment, thus reducing your debt every month.
  • Collecting From Customers - If you’re lucky, your customers pay you up front for your products or services. But sometimes it’s necessary to allow your customers to pay later. This is great if it generates more revenue and your customers are great at paying on time. But if this isn’t the case, you need to set up a system to handle delinquent payments. It starts with giving your customers payment terms like net 30 (means they must pay the balance due 30 days after the invoice date). If you don’t, you’re telling them they can pay whenever they want, and they will. What if they still don’t pay? Then you need a collection process. Write out how you will handle these situations. For example, after 30 days past due call the customer. After 60 days past due, cut customer off for future purchases. After 90 days past due, send them to a collection agency. After 180 days, write off the account to bad debts expense.
  • When to add Employees - It’s tempting when you start a business to add employees so you don’t have to work 100 hours per week. But if you add people too soon and the revenue doesn’t increase or even drops, you can be in a world of hurt. So when should you add someone? A good rule of thumb is to add $250K of gross profit for every new hire, or take their total cost (wages plus benefits) x four. So, if you currently have a gross profit of $100K with just you, add a second person when you increase your gross profit to $350K.
  • Taxes - With the desire to run a profitable business comes the necessity to pay taxes on those profits. Like a paycheck, the government wants their money when you receive it. So for a business, this usually means paying taxes with estimated quarterly payments and then doing a final payment when the tax return is filed at year end. There are significant penalties and interest for not paying taxes on time and the government has sufficient power to grab that money. So it is important to pay your taxes on time and pay the correct amounts. Your CPA or tax professional can help determine the amount of taxes to pay and how to pay them (frequency and method). A good rule of thumb for most small businesses is to set aside 15% of every dollar of profit for taxes and transfer this money to a dedicated bank account so it can’t be touched. Then, when taxes are due the money is available for payment.

  • What is Good? - When you’re just starting your business and you look at your financials, how do you know whether they are good or not? You can start by comparing them to a budget, to a prior month or year, and to industry norms. Next, look at your largest variations. If you’re losing money is it due to lack of sales or too many expenses? Start there. When you’re just starting, look to allocate your profit as follows (this can be adjusted later): Draws 50%, Operating Expenses 30%, Taxes 15% and 5% Profit. Compare how you're doing to these totals.

  • Outsource Your Bookkeeping and Taxes - If this all seems way over your head or you simply don’t have the time, consider outsourcing these tasks to a CPA, tax professional or bookkeeper. For a few hundred dollars a month, you can outsource all of your bookkeeping and not have to hire anyone. If these tasks are taking you 80 hours a month to do and you can spend $400 for a bookkeeper, you’ve just opened up all of that time for yourself. If you value your time at say $100/hour, you’ve saved yourself $7600/month (80 hours x $100/hour less $400 bookkeeping fee).
  • Apps to Use - There are many apps (some free) that can simplify your bookkeeping. For bookkeeping the best is QuickBooks Online. This is the industry standard for bookkeeping for small businesses and is done online, so your data is backed up with high level security and available to both you and your CPA/bookkeeper. Cheaper alternatives are Excel (if you have it) or Google Sheets (free) or Wave Accounting (free). Have your CPA or bookkeeper help you set it up for your business with the categories specific to your industry. Much of the work after the financial software is setup is getting the supporting documents you’ll need to justify your numbers. The easiest way is to have an application like Hubdoc grab the documents for you and send them to QBO, or you can take a picture of them with your phone and send to your financial software. QBO and Wave have that ability. Mile IQ is a great free app for your phone to track your business mileage.

Hopefully this was helpful to you with some ideas to simplify your bookkeeping. For most small businesses, it is a good investment to delegate your taxes to a CPA that specializes in small businesses and outsource your bookkeeping to a professional bookkeeper.

If you would like to contact me about handling your bookkeeping for you, please click the button below to get in touch with me and I will schedule a call with you to discuss further.

small business

10 Tips to Easier Bookkeeping

There are numbers people and there are those that would rather step on glass than look at numbers.

Score.org listed bookkeeping as the #1 source of pain for small business owners.

Anyone who is in pain knows you just want to get rid of it and prevent it from ever happening again...if possible.

I've put together my top ten tips for making bookkeeping easier.  These are tips that the small business owner can do themselves or outsource to a bookkeeper or CPA.

  • 1

    Automate - What some people find boring and tedious, others find comfortable and calming. Much of tediousness is due to manual processes that can now be eliminated with modern technology.

    Manual entries can be replaced with bank feeds, automatic uploads of payroll entries, recurring entries, electronic payments...

    If you’re still doing your bookkeeping with a lot of manual entries, you owe it to yourself to investigate switching over to an application like QuickBooks Online or have a bookkeeper/CPA help you implement systems to save you time and headaches. Eliminating manual entries also cuts down on the chance for data entry errors.

  • 2

    Outsource Your Bookkeeping - Are you thinking that you just don’t have the time or interest to do your bookkeeping yourself?


    Then strongly consider outsourcing it to a bookkeeper or CPA. Usually, a CPA is going to charge you more, but you can certainly price shop.


    With technology the way it is today, you don’t even need to hire someone in your hometown.  You can hire a bookkeeper from anywhere in the world. By keeping your books in the cloud, you can access them from your computer at the same time your CPA or bookkeeper are working on them and they will be backed up.

  • 3

    Review Financials Monthly - You may dread having to set up a monthly appointment in your schedule to go over your books, but when you do so, you stay on top of the financial side of your business and you save yourself from the daunting task of having to look at your numbers only at tax time or yearend.


    By reviewing the financials monthly, you can become aware of a new trend (good or bad) and react quickly.

  • 4

    Keep Personal and Business Separated - Not only does commingling your finances make your bookkeeping more difficult, but it makes your business look amateur.


    If you’re ever audited by the IRS, having your bank accounts being used for both business and personal items will make it look like you’re not serious with your business. In some cases, the IRS can think your business is just a hobby. 


    Keep your business bank accounts and credit cards for business items only. Use things like salary or draws to take money out of your business and use that money for personal items in a separate account or credit card(s).

  • 5

    Put Aside Money for Taxes, Payroll, Profit - The last thing you want to do is have it come time to pay your taxes and you don’t have any money to pay for them.


    Set up a separate bank account for taxes and transfer money to this account every month for your estimated taxes. Do the same for payroll and set aside some for profit as well. This will force you to watch your spending.

  • 6

    Documentation - Business expenses are costs incurred in the ordinary course of business. These are deductible, but you need to be able to back those amounts up with supporting documentation, such as invoices, receipts, payroll documents...


    This can be tedious and it helps to automate this. If you use financial software like Quickbooks Online, you can attach these documents directly to your expenses electronically, where they are backed up in the cloud and always available.


    You can use applications, like Hubdoc, to pull these documents for you and match them up to your bank feeds.

  • 7

    Compare Actual Expenses to Budgeted Amounts - Budgets bring up bad feelings as they can be difficult to prepare and adhere to.


    But the main point of them is to change behavior. By doing a comparison of actual amounts to a budgeted amount, you can quickly see if you are overspending in an area.


    You don’t need to worry about the categories where you over a small amount. Just focus on those that are way over budget.


    It also helps to look at those that are way under budget. If your rent expense is under budget, you may have forgotten to pay this month’s rent. Or if office supplies are way under budget, are you going to have a huge bill coming up that you need to be aware of?

  • 8

    Money Tied Up in AR or Inventory - Answer this question. Where would you rather have your cash?  In a bank account? Or in a product on a shelf in the warehouse?  Or in your customer’s bank account?


    Accounts receivable and inventory are typical sink holes for a business’ cash. The faster you can turn these amounts into cash, the better for you. Review these amounts monthly and look for old items that need your effort or should be written off.

  • 9

    Deadlines - Being late to the dentist is one thing, but missing your tax filing or payroll can land you in serious trouble.


    Know your important deadlines and adhere to those schedules strictly. Need help in those areas?  Hire or outsource this to a competent bookkeeper or CPA.

  • 10

    Know Your Cash Flow - Cash is king, but one of the least used financial statements is the Statement of Cash Flows.


    If you knew your cash declined during the month of June, would you know off the top of your head where that decrease came from?  Probably not.


    There are usually too many transactions involving cash to weed through. Using the Statement of Cash Flows, you can quickly see where cash was generated and where it was used.


    If you’re not familiar with this statement, be sure to have you bookkeeper or CPA show it to you and how to use it.

By following these ten tips, it will make your bookkeeping less stressful and easier as time goes by. I know what you’re saying, “these are not easy to implement and I don’t have time to do them.” For most small business owners the answer is to delegate those tasks to someone who is competent, so they can focus on running their business, increasing sales, satisfying customers…

If you’re interested in having me handle these tasks for you, press the button below to contact me. We can talk about your business and determine if we are a good fit for each other. For as little as a few hundred dollars a month, you can have a professional bookkeeper process your finances for you and take all that worry and time away from you.

Bookkeeping Checklist

Bookkeeping Checklist for the Yearend

The end of the calendar year can be busy. There are the holidays, gift buying, parties, picking up people at the airport, dinners and just taking some time off. Who is thinking about bookkeeping checklists?

It’s easy to forget that the end of year means finalizing your finances, especially if you are a small business owner and your fiscal year-end is the same as the calendar year-end.

So in this post, I’m going to run through a checklist of items to cover or have someone perform for you, so you are set for the new year, closing out the old year and tax time.

  • 1

    Inventory Time - Do you carry inventory in your business?  If so, you will need an accurate tabulation of what you are physically carrying, even if you have electronic records.  It’s possible through errors or theft that the physical totals won’t agree to your accounting records.  Taking the time to physically count what is on hand gives you the ability to compare to your records and make the adjustments so everything is in agreement.  Do this now so you don’t have to do this on New Year’s Eve.

  • 2
    Account Reconciliations - Like your inventory, you want your account totals to agree to your supporting documentation.  For example, does your book balance for your bank account agree with the bank’s total?  If not, do you know what the difference(s) are?  All of your balance sheet line items should have account recs to support the totals. Another example is your accounts receivable. If your total on the balance sheet is $10,000 what unpaid invoices are out there that total to the $10,000?  How old are they?  Should they be written off?  Having trouble finding a receipt for that expense?  Consider getting yourself an app for your phone so you can snap a quick photo for later retrieval, or have your bookkeeper start using software like Receipt Bank to help with this documentation.
  • 3

    Financial Statements - are your monthly financial statements up to date?  If not, when was the last time they were prepared?  Were they reviewed by your CPA? Have you recognized all of your revenue and expenses?  Have you accrued for expenses that have occurred but not paid? You will need updated and reviewed financials for your taxes, so if you are way behind in preparing these consider hiring outside help.

  • 4
    Payroll - The end of the year brings a lot of extra work in the payroll area.  There are bonuses, profit sharing, raises, annual reviews, W-2’s, health insurance renewals for the upcoming year.
  • 5
    Quarterly Taxes - December is also the end of the fourth quarter for most businesses and you’ll like need to prepare and submit quarterly payroll taxes, and sales and use taxes.
  • 6
    Vendor 1099s - Did you pay a person or business more than $600 during the year?  If so, you many need to send them a 1099 by January 31.  It is not always easy to determine if a person or business needs to be sent a 1099. Consult with a bookkeeper or CPA if you are not sure.
  • 7
    Filing - If you will be having your CPA review your financials and prepare your taxes, are your papers organized in nice categories?  Do you have files for the new year to avoid confusion.
  • 8
    Budget - Once you know how you did during the current year, what do you want to do next year? Do you have plans for revenue growth, employee hires, asset purchases, where will the money come from?
  • 9
    Schedule a Meeting with Your Bookkeeper or CPA - Don’t wait too long for this, especially if you don’t have one in-house or on retainer.  Year-end is extremely busy for people in those professions. Scheduling an appointment or outsourcing your bookkeeping now will keep you from scrambling to find one who is available and competent.
  • 10

    Presentations - Does your business present the end of the year results to its employees? If so, what information do you want to present, who will prepare it, what format will you use? Do you have last year’s powerpoint slides that you can update with the current year results?

How do you feel after reviewing the list above?  

Calm and relaxed because you have everything covered?  Good for you.  You are a planner or likely have been through the pain before of not being ready and decided never to do that again.

Or are you even more stressed? Well, the good news is you still have some time, so don’t ruin your holidays. If you don’t think you will have enough time, resources or skill to do it all, consider hiring or outsourcing additional help.

Right now, I have openings for two additional clients and for a holiday bonus I am offering the first two months free if you sign up by December 31. I hope to hear from you.

Happy Holidays.

do i need a bookkeeper

Do I Need a Bookkeeper for My Small Business?

I know. Running your own business can eat up all of your time.


If you have a small business, you are probably doing everything from sales/marketing, customer service, and balancing the books.


At what point do you delegate some of those tasks?


For example, do you need a bookkeeper for your business?


Here are nine reasons for hiring a bookkeeper. At the end of this post, all nine reasons are summarized in one graphic.

1. How Much is Your Free Time Worth?

This is a worthwhile exercise for many tasks in your life.

Figure out what an hour of your time is worth. It could be as easy as taking your annual earnings divided by 2000 (40 hours x 50 weeks) or a subjective number like what is that hour worth to you? I’ve had weeks where I wouldn’t take $1000 to give up an hour with my daughters.

Now, if you have a choice of having someone mow your lawn, clean your house or doing it yourself, you can compare the cost of hiring someone to your hourly rate.

As a result, if an hour of your time is worth $300 per hour and you can hire a bookkeeper for a whole month for that same amount then why not turn it over to them?

2. Delegate When You Lack Knowledge

I once bought a drawing program and spent probably 40 hours learning how to use it for a graphic I needed. It looked horrible.

I contacted someone on Fiverr and received a beautiful graphic for a price cheaper than the software I bought, and that didn’t include all the other hours I spent using it or going online to look up how to use it.

Lesson learned: let someone else handle what you don’t (or want to) know.

3. Eliminate tasks you don’t enjoy

Hey, not everyone enjoys working with numbers like I do.

If you dread trying to balance your bank account balance to what the bank shows or trying to determine why the balance your top customer shows as outstanding against what they show, why not turn that pain over to someone who can do it for you?

4. Give Your Financials a Second Look

When it comes to financials, isn’t it nice to have someone else double-checking the accuracy so you don’t have to worry when you do your taxes, wonder if you have enough money to meet next week’s payroll or if you’re spending too much on office supplies?

What price would you put on that peace of mind? Compare that to the cost of hiring a bookkeeper.

5. Focus on Your Company Growth and Customers

Let me ask you a question.

If you had 20 hours to spend on your business, what do you think would bring you more to your bottom line over time?

Saving a few hundred dollars a month by doing your bookkeeping tasks yourself, or spending those 20 hours drumming up new business or talking with your current customers?

The latter right?

New business should by far bring in more money than the amount you’ll saving on bookkeeping.

6. Accurate Bill Payments

How do you make sure your bills are paid on time and not duplicated, or not paid too early? Who gets a 1099?

Many things can go wrong with your bill payments. You can forget to pay your vendors, pay them late, pay them too early or pay them too much or too little.

Any of these mistakes can jeopardize your credit, your vendor relationship, cut you off from future purchases or leave you without enough cash to manage the rest of your business.

A good bookkeeper can do all of this management for you.

7. Timely collections of the Money Owed By Your Customers

I remember having a paper route as a kid and dreading having to ring the doorbell to collect the customer’s payment.

Most people don’t like doing this. If you don’t like it, or if you don’t have time, let a bookkeeper do it for you so your business will have its cash in your bank and not in your customer’s bank.

8. Turn Over Payroll to an Expert

Payroll is one of those tasks you must delegate to someone who knows what they are doing.

Bookkeepers can either do the whole process for you or coordinate with a payroll service to have it done for the business.

There are too many rules, regulations, tax changes, and potential for errors to make this an area to skimp and save on.​

9. Scared of Doing Tax Returns?

Income tax filings are best left to a CPA, but bookkeepers can help by preparing supporting documentation needed by the CPA and by preparing and filing other tax returns like sales and use taxes.

These are returns that most states require to be filed monthly or quarterly and many bookkeepers can do them for you at a rate much lower than your CPA would charge.

SUMMARY - Do you need a bookkeeper?

From the time and money savings, to the focus on expertise and greater cash flow, a bookkeeper makes good sense for your business.

Would You Like to Work with Me?

For a limited time, I do have an opening for another client in my bookkeeping business. If you're interested in talking to me so you can enjoy some or all of the benefits listed above, please click the link to my contact form

List of reasons you need a bookkeeper