Monthly Archives: December 2016

Backing up your backups: Hemingway’s suitcase and cloud accounting

Record keeping is the key to any successful business. But it’s not just about crossing your t’s and dotting your i’s. It’s not just about making sure all your columns add up. With tax season coming, we will all be soon inundated with images of people trying to compile paper work dig through files and battle computer viruses that suspiciously only attack business and tax records.

But like any other business activity, record keeping is all about planning, which is why, if you haven’t looked into backing your data up in the cloud, now is as good a time as ever.

If you’re unfamiliar with cloud storage, it’s actually pretty simple. It’s a service that enables you to store records on remote servers. Unlike archival storage, having your data in the cloud means not only is it safe – because most cloud services use basic file encryption – but you can have access to it anywhere you are. This is especially helpful if your business requires you to travel. Rather than having to carry copies of client paperwork – which no one really does anymore anyway, I know – or having to rely solely on your laptop — you can streamline your business packing even further by saving copies of your files in the cloud.

Why should I store my important files in some cloud?

Let me answer this with a little anecdote. This story is primarily apocryphal… it gets told and retold, though no one ever seems to have a basis for it. It gets retold because the point of the story is sound regardless of whether it’s factually true.

Before Ernest Hemingway was a famous writer, he was a news stringer in Paris for American newspapers. Once he decided to leave Paris, he packed up all of his creative writing – years’ worth, including all of his carbon copies – in one suitcase. He packed up his wife and infant son, along with some clothes, a few possessions, and that one suitcase. They went down to the street to wait on a cab, but Hemingway ran back up because he forgot something – his favorite pen maybe.

When he made it back to the street, his wife greeted him with the news that one of their suitcases had been stolen. Which suitcase? Just the one that had all of his writing in it – years of work. All the drafts. All the carbon copies.  Gone.

Lucky for Hemingway, he embraced the setback and immediately after wrote The Sun Also Rises, the book that made his career.

My point is this: it’s unwise to keep all of your files and all of your copied, digital or otherwise, in a single place.  Computers, like anything else, can break and wear down. If you are a large business and can maintain your own servers, maybe you don’t think you need cloud storage. But if you are a small business or a sole proprietor, it’s important that you stay as lean and flexible as possible.

No-cost or low cost cloud storage could save you time, money. It can also help you communicate with clients and employees. As the account owner, you can allow or revoke access to partners, employees, and freelancers to suit your needs. There is no more effective way to transfer files too large for most email systems than a cloud service.

The cloud is great for accounting, too!

Stay connected to your business… from anywhere!

Many people who use cloud storage use it as a safe and affordable way to archive large files they don’t want to keep on local hard drives to improve computer performance. But did you know that as a small business owner you can also use cloud accounting to make your life a little easier?

Like with cloud based storage and file-sharing, you have several options. With Zoho, for example, not only can you maintain your books, but you can collaborate with clients directly via the client portal, pay out and get paid faster, track inventory and cash flow in real time, and be able to create the detailed kinds of reports any smart business owner needs.

Ok! So how do I go about getting started?

 There are many ways to go about doing it, and depending on your needs, cloud storage doesn’t have to add to your business’s bottom line. Zoho offers several plans starting at $9 per month. QuickBooks Accounting Software has cloud-based capabilities, but it comes at QuickBooks prices. Oracle’s NetSuite also gets good reviews, but you need to contact them through their website to get a tour and cost break down.

If you’re looking for something you can start using with low-cost and high value, though, something like Zoho is your best bet. You will thank yourself for making your business life go that much smoother.

Most cloud storage services – such as Google Docs, OneDrive (for Microsoft Office users), ICloud (predominately Apple users), and Dropbox, just to name a few – offer up to 5GB of storage for free. There are larger accounts for monthly or annual fees.

Signing up for an account is easy. Your User ID is your email address; your password can be as simple or as complex as you like it, within the parameters set by each site.

Please have a safe and happy New Year!

GrinchtoGlee

From Grinch to Glee – Make year end easier with these bookkeeping tips

It’s not that your heart is two-sizes too small like the Grinch, but rather that your head might explode from all the year-end bookkeeping tasks on your list. While these to-dos could certainly put your holiday spirit in short supply, we know how and Who can help.

It’s essential that your data is accurate, complete and organized for tax time and the year ahead. But where do you begin?

Like the Whos in Whoville helped Grinch, we offer tips to keep you and your books on the nice list.

  • Evaluate your financial standing

Review profit and loss, your balance sheet and general ledger. Make sure they aren’t mangled up in tangled up knots by checking that all transactions have been recorded and posted to the proper income, expense, asset or liabiity accounts. Also check the accuracy of your accounts receivable and accounts payable, and write off uncollectible debt so as not to overstate your income (especially if accrual based), and overpay the You-Know-Whos.

  • Complete bank reconciliations

Make sure your checking, savings and credit card accounts have been reconciled. Loan interest should be separated from the principal and accurately logged. And a decidedly, non-grinchy trick: reconciling monthly makes it easier to catch errors.

  • Review Personal Expenses

You shouldn’t, wouldn’t, oughtn’t, mustn’t mix your personal and business expenses (although for the Sole Proprietor it’s often a necessity), so look at your expenses closely and if that’s the case find receipts and/or cancelled checks and log the expenses in your books. Then watch your heart grow because you avoided paying extra taxes.

  • Review Subcontractor Services

If you’ve hired any Whos who are Sole Proprietor’s or LLC’s, for contract services totaling more than $600 during the year, you’ll be required to send them a 1099 Misc form. It’s a best practice to send each new subcontractor or vendor a W9 at the time of hire to ensure you have complete address information and either their Social Security Number or Federal ID Number information on file.

  • Take Inventory

Review your inventory during the last month of the tax year and make necessary adjustments to align the inventory account of floofloovers and whowonkas to match the items in stock.  Your inventory value should show the cost price or price paid rather that the selling price for your items.

  • Create a Filing System

It may sound overly simple and antiquated, but we know an organized system for easily accessing the documents you need, when you need them come tax time will make you happy as a Who.

As you celebrate the close of 2016, it’s also time to look to the year ahead. If one of your goals is to have more flexibility and time to achieve your personal and business goals, consider the advantages of having a Bookkeeper. Not only an excellent resource to simplify your financials and ensure accuracy, a Bookkeeper can also be a personal advocate, a partner as loyal as Max, and someone to help you make your Holidays mean a little bit more for years to come.

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