Tag Archives: personal bookkeeping

Classifying transactions

Pinpointing Your Niche: Classes…QuickBooks Style

September has arrived and many are sharpening pencils as well as skills. If you are managing multiple revenue streams and looking for a good way to assess what is working  and what is not, grab your favorite note taking device and explore the ABC’s of “Classes”, and how it might provide you a clearer economic path.

Maybe you need to track product and service lines in detail. QuickBooks Classes differentiate transactions by departments, locations, product line, service type or other defining category relevant to your business or personal finance preference. QuickBooks keeps it easy and clean using the same chart of accounts across all Classes. Run a report and you will quickly see the line of business metrics.

When setting up Class Tracking think about

  • How do you want to see your business segmented on your financial reports? Classes will capture not only income and expense, but also assets, liabilities, and equity transactions.
  • Be consistent in how you enter class information on registers to be sure that your financial reports are accurate.
  • Need additional specifics? Set up “Sub-Classes” under the main Class.

Once you have mapped out your system you will have the ability to analyze your business finances from different perspectives…using built in reports “by class”.

When you might use Classes

  • A business with two or more locations – like a grocery store – could use to analyze the profitability of each location.
  • A contracting business with both maintenance and installation services may want to track the return on investment of each service separately. Or, perhaps need to track by a single family, commercial, or renovate and sell investment property.
  • A Non-Profit will track income and expenses by grant, event or project.
  • A Property Management Company might track by tenant within a single location, or for each property location.
  • A service business may be interested in tracking the location of current clients, in order to increase marketing in an untapped area.

You want to know if you are getting paid for your hard work – where, how much and when your money is coming and going, and most importantly what’s left for you.  Class tracking is a great tool to do this.

If you have questions about classes or other accounting questions, please contact me or make an appointment now, to ensure that you are focusing your hard work, passion and commitment for creating value in the right direction.

Looking for an organized way to manage your personal or business finances, and save time preparing various tax returns like Payroll, Sales Tax, and State and Federal Tax Returns?

Anyone, business or individual, can use QuickBooks for this purpose, and get organized with less paper and shoebox clutter.  We will customize the learning to You, whether a beginner or beyond. For the beginner we start with a few items like:

  • Easy Installation (The Wizard)
  • Homepage (The Roadmap)
  • Customize for your individual or business with preferences and settings
  • Create Invoices for Customers & Bills from Vendors
  • Basic Financial Reports

For those beyond, sessions will tailored to your specific questions.

Call  or Email Today for more information, or to get started with Your organized financial future. You work hard and deserve more freedom to choos how You use your time.

The Vitals, Heart of a Personal or Business Operation

Have you ever considered that accounting is the health sustaining organ of an operation, and that its health has an impact on success or failure? An operation will survive when there is sufficient cash flow, however, what about when expenses are exceeding the income for a prolonged period? Perhaps an analogy will help clarify this concept.

The human heart is divided into two flow systems, which continuously pump oxygen and nutrient rich blood to sustain life. The Income flow from the organs and tissues of your body enters the right side of your heart, pumps to the lungs to remove waste and recharge with oxygen, and returns into the left side of your heart. The flow then Expenses to all parts and organs, ensuring oxygen and nourishment for your body to work efficiently.

Finances also have two flow systems, Revenue (income) and Expense (outgo). To gain a better understanding of financial health, a tool is also used that helps identify where the transactions are going and that’s the Chart of Accounts (COA). Arteries and capillaries organize and direct your blood on a path to where it’s needed, the COA organizes your finances in a way so that you see how your cash flows, and determine if the income/outgo flow is healthy.

Independent of the operation type, size, industry, or structure all use a chart of accounts, generally organized the same with bank accounts, assets, liabilities, equity, income, and expenses. From there, the unique personal or business aspects will determine the necessary customization of the COA.

  • Bank: where cash is deposited (petty cash, checking, savings, mma)
  • Asset: bank accounts, accounts receivable, or other current assets (prepaid expenses or loaning money to someone for example), and fixed assets (major purchase like furniture and equipment).
  • Liability: accounts payable, loans or lines of credit, credit cards, security deposits from customer, sales or payroll tax.
  • Equity Account: track money invested in or money taken out by owners or shareholders.
  • Income: money earned from sales of product or service, residual income, commission.
  • Expense: categorizes money spent immediately during normal operations, not purchased as accounts payable (office supplies, rent, advertising, utilities, etc.).

Company finances can be very complicated, however, with the proper tools it is very possible to keep track of your operation’s health. Whether you are using the old-fashioned paper and pencil or using accounting software, it is vital to know where the money is coming from, and where it is going. Categorizing expenses properly gives insight into ways to adjust and improve health, and assists in getting every tax deduction entitled to.

As you would seek out professional advice to ensure that your body’s heart is functioning properly, consider the professional advice of a professional bookkeeper or accountant to safeguard the heart of your business.

To Your Health

Who’s Managing Who? Lassoing The Runaways

Sooo, how do you keep your finances organized? Shall I expect your reply to include a sour look and an attempt to change the subject real fast? Many would rather be stuck in a huge traffic jam or go sit in the dentist’s chair rather than think about organizing their finances. But the truth is, if your costs, both business and personal, are running amok… then perhaps you might be throwing money to the wild, or down the drain.

Have you ever been surprised by that pesky late fee, then again, and again in rapid succession? Have you ever complained to the credit card companies that you never received the bill, only to find months later it had fallen behind the desk?

The cost of disorganization is not only financial, it can waste time and take a toll on our mood (and the unknowing around us). Consider how much replacing lost tools, recreating lost files, or time putting out fires costs your business. And there’s more… consider the losses involved with forgetting to send invoices to customers, paying for overtime labor and dealing with employee turnover. Disorganization costs money and could lead to measurable losses in profitability. It is time to stop the stampede, break in and bridle!

The good news is that it only takes 5 simple steps to help lasso in your business costs. You probably already have heard of that nasty “B” word, budgeting?

  1. Figure out your monthly net income (if it fluctuates, take the previous 12 months divided by 12 for the estimated monthly)
  2. Figure your monthly fixed expenses (rent, utilities, lease, insurance etc.)
  3. Figure variable expenses – commodities that don’t have a fixed price tag each month (office supplies, groceries, repairs and maintenance, meals and entertainment etc.)
  4. Figure a monthly contingency or reserve expense for the unexpected (trust me the unexpected is inevitable)
  5. Review the budget versus actuals monthly and fine tune your numbers

Your budget is a very useful tool to help plan for near and far range, and be able to go the distance. You might think you lack the time to organize your expenses, however, a few hours of organization with a professional accountant/bookkeeper, could spur you on towards being knee deep in clover sooner than later.

Make today be the day for changing horses. Decide to run free and keep up with the finances monthly yourself, contract a professional to saddle up on a regular basis, and/or occassionally opt for a bookkeeping/accounting audit to know that you are on the right track. The important thing is to corral the dark days.

Run for the roses.  Unwrap your Daily Double by Contacting Us Here and sending a message.

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.

Make The Holidays Count!

My favorite time of the year is upon us… the season of thanksgiving and bestowing gifts upon others. It all starts with reflecting how grateful we are for our many blessings and successes over the past year. Whether these accomplishments were made through businesses endeavors or simply through our personal sweat-equity, we are grateful for those opportunities. We can profit from the many benefits that come from having a grateful heart such as improving our physical and psychological health. Gratitude also enhances empathy and reduces aggression and it can help people sleep better too. These are just a few good reasons how feeling grateful can improve our bottom line which allows for the next step.

Being grateful is only half of what stands out during the holiday season. As soon as the dishes have been cleared from the Thanksgiving feast, we are reminded that, “Hey, “Black Friday” is only a few hours away!!” In an instant, our thoughts go from being “grateful” to thinking about gifting and sharing with others. We can all understand how giving to others is good for our community and the world, but giving can also reap huge benefits in our own lives as well. Did you know that giving to others lowers our blood pressure and stress levels? This, alone, will help each one of us live longer and happier lives.

So, in honor of the season, I have put together a few examples where you can reach out to the community and show your gratitude by giving back.

For Businesses:

  • Choose a local Charity Event that is relevant to you and your business and donate money, be a sponsor or volunteer your time.
  • Encourage your business team to get involved in a fundraising event such as Toys-For-Tots.
  • If your company has a budget for donations, provide a Turkey Give Away program for families in need.

For Individuals:

  • Have a garage sale in your neighborhood and donate the profits to charity.
  • The local homeless shelter or soup kitchen could always use a helping hand.
  • Provide care-packages for people in need; For example… the troops, seniors, kids and teens in group homes, the homeless
  • Let us help our planet by recycling! The proceeds can once again go to a charity.

With all of the wonderful benefits that go along with being thankful and giving back, let’s make a difference in our communities through our valued time and efforts this holiday season.

Budgetary Moves That Will Move You Cross-Country

Planning a cross-country move can become your worst nightmare! For starters, organizing a move like this will feel impossible… I mean, where do you even start? It can also take a toll on your well-being (i.e. your mood and your health) and it can drain your bank account too!

The good news is, there are some simple steps you can take to alleviate the pain and put you back on the road to success… and it’s called having a strategy. Once you sit down to map out your move then it’s almost guaranteed to minimize your stress and maximize your financial savings.

To help you get started, here are a few steps:

  • Start an “Action Plan” – Be sure to write down your plan… better yet, find an app that will enable you to create a checklist of your moving to-dos. By staying organized and “on task” you will save money because you’re not having to buy things at the last minute.
  • Seek Relocation Assistance – Are you relocating due to your job? Many companies offer relocation assistance, to cover some of the costs for the move, so you may want to check with your new supervisor to see if this is available.
  • Collect Packing Materials – Companies like U-Haul charge premium costs like boxes, tape and rope so once you know that a move is going to happen, visit your local grocery or convenience stores and ask for any boxes they still have after restocking their shelves. Ask friends and neighbors to save their newspapers and any other packing materials such as old blankets.
  • Organize your Packing Priorities –
    • Have a “GO TO” Box: Priority 1
      Have one large box to the side where you will keep all of your must-have items such as packing tape, pens, markers, scissors, paper, important documents, medicines, toiletries, and anything you’ll need until you leave home. This will prevent having to buy new stuff every time you pack away or lose things you need. Keep this box with you at all times so you can get access to these important items when you reach your destination.
    • Have an “FIRST THINGS FIRST” Box: Priority 2
      This is like the “GO TO” box, but  will be the box of your priority items you may need when you arrive to the new location. In this box will hold what should be considered your 2nd on the list priority items.  Give some thought to what items you’ll need (or want) to have right when you get to your new home. Maybe you’ll want to include things like the coffee maker, coffee cups, toilet paper, towels, and toys to keep the kids busy.
  • Label Your Boxes – It can be really easy to skip this step or to just do it sloppily. Some people would actually rather go out and buy new items instead of searching through yet another box for something they need. Nip unnecessary spending in the bud by marking each box with a permanent marker noting what room it belongs in with a brief list of what’s inside. Try to avoid my technique that usually comes out at the end of the packing experience where I throw stuff into the boxes and just label them all MISCELLANEOUS…;)
  • Clean as You Go – When you pack up an area, give it a good cleaning immediately after the space has been cleared. This will keep things efficient and prevent you from having to hire cleaners to do your entire residence when you are sick of the moving process. Cleaning will also be beneficial if you rent and are counting on a security deposit refund.
  • Ditch the Junk – Keep a JUNK and GARAGE SALE box close by. While you’re boxing up your keepers, you’ll easily be able to toss your junk and garage sale items into their proper boxes. Moving is a great chance to clear out the stuff that finds a way to accumulate over the years. Plus, you’ll spend more money if you have to move boxes of stuff you don’t even want anymore. Sell anything that is still in good shape by having a moving sale when you near the end of your packing process. When you make your donation to the thrift store be sure to get a donation receipt because that will come in handy when tax time rolls around.
  • Check out Storage Options – For any family heirlooms or pieces you may want back at some point, consider renting a low-cost storage unit to house your items until you can have them set to your new place of residence and cheaper option is to consider asking trusted friends or family to house your treasures in their homes until you can arrange for transportation. If you do decide to go with the storage unit be sure that you don’t forget about it and continue to rack up $50 + a month in fees.
  • Get Moving Company Quotes – If you decide to have a moving company move your stuff be sure you get multiple estimates and quotes before making a decision. You want affordability, of course, but you also want reliability. Some will even store your belongings for FREE, up to 3 months!
  • DIY Packing – You may choose to have a moving company pack you up… but it will cost you! Use a company that will provide you with a truck and a driver. All you have to do is pack up the truck yourself and they’ll drive it across the country.
  • Be Truck Smart – If you plan to rent your own moving truck and haul your stuff across country on your own, make sure to only reserve the truck size you need. It will cost you a lot of extra money (in gas and truck rental fees) if you book a truck that is too large.
  • Overnight Stays – If you have friends and family along the travel route, ask them if you can borrow their couch for a night rather than spending your money on hotel lodging. If that’s not an option, you’ll need to consider where you will be stopping to rest. You can find valuable coupons in the books available for free at state welcome centers. Look for coupons for hotel deals and restaurants along the way and online before you leave. If you have fur kids, there are options that accept your pets… do your homework!
  • Utilize a Cooler – Depending on the room available in your vehicle you can save a good amount of cash if you pack your own snacks and drinks for the morning and afternoon. Then, only stop for dinner.
  • Finally… Don’t Buy until You’re Settled – Don’t rush out to the store to buy what you think you need… Give yourself time to sort through your stuff and get set up, keeping a list of ideas along the way. If you rush off to the store the 1st week you’re in town it will most likely lead to overspending, especially on things that you don’t really need. The only store you need to hit in the first few weeks is the grocery store.

By using some or all of these steps, your worst nightmare can be transformed into some wonderful memories that will allow you to embrace the next chapter in your life with some extra cash to boot.  See you on the road!

 

Spring Cleaning For Your Finances

OK, now breathe! That’s it, take a deep breath in and slowly release it… tax day is over, spring is in the air and summer is just around the corner. LIFE IS GOOD!

That is until you take a good look at the mess around your computer… the strewn trash piles along with the old financial records and leftover coffee cups and who knows how long that box of chow mein noodles has been siting there… right?!

But remember, it’s SPRING and what better time than to get started on a bit of spring cleaning? I’m not just talking about cleaning up from your deadline with the IRS or cleaning out the closets and under your bed, I’m talking about your financial spring cleaning.

Listed below are suggestions for cleaning up your finances:

  • Check Your Credit Score – Is there any incorrect or misleading information about you that could hurt your score? What can you do to improve your score?
  • Organize and/or Shred Old Financial Documents – Clean up your files and shred any old or no longer needed information.
  • Re-balance and Diversify Your Investment and Retirement Accounts – How are your investments doing? Are you on tract with your retirement goals?
  • Review Your Insurance Coverage – has there been any life event changes? Do you need any additional coverage or is any coverage obsolete?
  • Review Your Expenses and shop for better rates – Can you pay less if you switching to a different company? Are you using what you paid for like that gym membership?
  • Set up Automatic Bill Pay – Late fees undermine your financial goals, therefore put regular payments on automatic bill pay so this doesn’t happen.
  • Save without Thinking – How is your emergency fund? Are you saving enough each month?
  • Revisit Your Budget – Once you have reviewed your finances ensure that the new numbers are worked into your budget.
  • Record Your Financial Passwords and Store Records in a Safe Place – Or better yet, use a trusted online password storage system and be sure to use a different password for each of your financial sites changing the password on a quarterly bases.

Knowing where you stand with your finances will better enable you to make wise and prudent money choices.  If you need some help getting started, Contact MJB’s Bookkeeping Solutions, or Make an Appointment for a 1-Hour no Obligation Consultation.