Tag Archives: quickbooks

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.

Declare your Independence – From being the “Everything to All” for Your Business

Consider an outside bookkeeper/accountant in the same way as you would a longtime friend, as a source of reliable information and advice, but in relation to your business finances, they have specialized experience and focus.

The business scope of an accountant does not end with tax preparation; they can and should be a business partner throughout the year bringing their knowledge and perspective into your industry to help improve your bottom line and navigate through an uncertain economy.

Here are many reasons why all entrepreneurs should work with an outside bookkeeper/accountant:

  1.  Focus on the reason why you started your business. Entrepreneurs are very passionate, so why get bogged down with tasks that do not help to achieve their passions? On the other hand, a bookkeeper/accountant is inspired to take on the heavy lifting of the tedious money details of your business.
  2. Achieve work/life balance. You might be asking “What is that?” Many business owners might ask. In spite of how new or well established a business is, owners across the board are struggling to find the right balance between work and life. And this goes back to point 1; performing functions that you are less enthusiastic about handling, which allows you to sell, market and grow during the day and take your child to soccer practice at night.
  3. Represent your business professionally. Your bookkeeper/accountant and you represent your company in the best possible way. Companies that use such an external resource report that the service is vital to their success. In a recent study conducted by accounting experts among U.S. business owners, 89% of respondents stated that this is an essential element of their success.
  4. An Outside Accountant can introduce a new perspective. Most times entrepreneurs are so buried in the daily operations of their business that they might not be able to see the complete picture. Relying on your bookkeeper/accountant in this way allows you to take a step back, look at the wider picture and thus a fresh perspective. Who knows, you may come up with the next big idea the world has been waiting to hear.

Continuing the Pursuit of Independence
Today, July 4th, many entrepreneurs will be going to the celebrations of fireworks and barbecue with their families to celebrate Independence Day. Others might sneak some pieces of work between the parties, but mostly three-quarters of them (72 percent) agree on one thing: having their own business gives them greater freedom and independence than to work for someone else, which makes each day independence for them.

Being a business owner is not an easy role. Once a challenge is successfully resolved another takes its place. In working with small independent business owners, I have learned that would not give it up. The desire for continued independence is as strong in them as in the early settlers who declared their intent by the Declaration of Independence.

Could your business survive without the assistance of an external professional? Perhaps, but the insight, guidance, and expertise shared could be just the catalyst for making your business thrive.  Pursue Your Independence with MJB’s Bookkeeping Solutions and receive the gifts of time, business accountability, perspective, with less stress.  Contact Us.

Wishing all my readers a Safe, and Happy 4th of July Independence Day Celebration.

Timely Tax Tips for Freelance Workers

There is a cost to the freedom you get being a freelance worker. While you can probably fudge on office-appropriate attire and set your own start time (Sleeping late can be a viable option!), there is one thing you can’t avoid if you hope to be successful.

Taxes.

When able to, a lot of freelancers prefer to hire an accountant. There are a lot of things to keep track of; and while tax law for freelancers really is a lot of common sense if you think about it, the problem is that there is really a lot to keep in mind. As a freelancer, you are your own employer. In addition to the usual responsibilities of a working adult — the electric bill, the water bill, the gas bill, and your rent or mortgage – you are also responsible for your obligations as your own employer. This means paying into Social Security and Medicare, and perhaps setting up a retirement account.

We’ve already talked about the self-employment tax . It’s important to keep in mind that because you are both and employer and an employee, that you are responsible for the Employer and Employee portions of Social Security and Medicare, 15.3% of earnings. It’s true that you can offset earnings with deductions; but you need to be as careful about what you pay as you are about what you don’t pay.

Here are a few things to keep in mind that will help you stay organized.

  1. Don’t trust your 1099.

If you earn $600 or more from a client, that client should send you a 1099-MISC. It’s very important that you compare. Look at Box 7 on your 1099-MISC and compare that number to the number you have in your records. If your client claims they paid you more than your records state, go through the steps to verify and get a new 1099.  Remember: the tax burden is on you, not your clients. The IRS won’t annoy them with phone calls and letters. They will annoy you.

  1. Get a separate bank account.

Yes, you work for yourself. It’s your money and if you’re making less than $600 total, you may not need a separate business account. If freelancing is your primary source of income, however, you really should consider getting a separate account. This will save you headaches when looking up transactions. If you use accounting software like QuickBooks, having a separate account will make it easier to download information to plug into your books. It also makes it easier to track business expenses for deductions.

  1. Pay attention to Estimated Tax.

As a freelancer, you will probably have to pay taxes quarterly instead of just once a year. You’re also an employer, remember?

If you’ve been freelancing for more than a year, you can get a good idea of what you should plan on paying by using one of several easy to use calculators on line such as:

http://www.bankrate.com/calculators/tax-planning/self-employed-business-tax-calculator.aspx

or

http://quickbooks.intuit.com/r/free-self-employment-tax-calculator-quickbooks/

It’s not always easy being your own boss. But it’s not impossible. And if you are the kind of person who enjoys the autonomy, then the additional responsibility is part and parcel. The trick is to be as careful with your books as you are with the work you do, and to be smart about it.

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.

Need A Raise? Then Read This…

What would you do with an extra $500 – $1500 of free money each year? Take a family vacation, put it in savings, add it to your college/retirement fund, pay down debt etc… In other words, there would be many uses for that money, right? OK, so now you are probably wondering, where do I go to find this “free” money?
Well let me start by telling you a story that I’m sure we can all relate too. Last January, my friend received a flyer in the mail from her cable company stating that because she was such a “loyal” customer, she was going to get 3 months of HBO for free! Well she thought, “How cool is that? I’m definitely going to take advantage of this and then I will call back and cancel it before my “free service” is up”. So for the next 3 months, she totally enjoyed “free HBO” and by the time came to cancel, she kept saying, “I’ll do it tomorrow”… even after she was sitting there watching the 110th viewing of “Grease” with John Travolta and Olivia Newton John! Then, life stayed busy and she just never got around to canceling, so over the last eight months she ended up adding $80 to her account… and they said it was free HBO!?
Almost every company that we have an account with, entices us with these low cost items throughout the year and we honestly think that we will try it “only once” and then we ultimately forget about cancelling, so much so that by the end of the year we are spending hundreds of dollars that we had no intention of spending in the first place! Plus, trying to remember everything that we signed up for gets so complicated that we just throw our hands up in the air and go on paying and paying…
Instead of giving up, there are two things you can do right now to stop putting money into their pockets and start putting it back into your own pocket:

  • Call your service providers and simply ask them to review your account to determine if there is any way you can reduce your bill. Most representatives tend to be very helpful with finding ways to reduce the money that you are spending because they want to keep your business.
  • Do a little research on how much you may be able to save by switching to another company. By knowing the competition’s rates you can either switch and save or you can let your company know that you want to stay with them but you may have to switch if they cannot offer you the same rates or find some incentive (less money) to keep your business.

By doing these two simple things with all of your accounts (phone, internet, auto insurance… etc.) you will be able to save some money. It took my friend about an hour to call both her cable and cellular company and when finished, she was able to get her bills reduced and will now be able to save a total of $250 over the next 12 months! By tightening up your budget, you will be able to put that extra money to better use… maybe even get out of debt that much quicker.

Make it a great day!
Marla J. Blanchard
MJB’s Bookkeeping Solutions

Don’t keep me a secret, if you know someone who could use a bit of Bookkeeping TLC let them know that they are not alone and have them call me 805-764-1MJB (1652).

Healthy Finances = Living Debt Free

A few months ago, we discussed how maintaining a “healthy budget” can keep everyone on course in reaching the lifestyle dreams of their future. It is also a great tool to help you get out of debt too, since debt is the primary reason that prevents most people from reaching their financial goals. So today we are going to discuss 2 types of debt and then go over 3 strategies that will help you stay on track towards eliminating that debt for good.

All debt is not the same and understanding the difference between secured and unsecured debt will help you prioritize your payoff strategy.

  • Secured Debt: Any money that is borrowed is attached to an asset that is considered collateral, meaning that if you don’t pay back the loan – the asset/collateral will be taken away and sold off to pay your debt. In addition, if the asset/collateral is sold for less than what you originally borrowed, then you may still owe the difference. Your home and car are examples of secured debt.
  • Unsecured Debt: Any money that is borrowed is not attached to an asset therefore you will not lose any tangible items – However, you are still held accountable for what you owe and creditors have a number of tools at their disposal to get their money paid back such as, reporting to the credit agencies which will lower your credit rating, garnishing your wages or by hiring a debt collector. Credit cards and medical bills are examples of unsecured debt.

Now that you understand the difference in each type of debt let’s look at a few strategies for paying down your debt.  But first, a must do before you add any new strategy…

            PAY YOUR MINIMUM BALANCE ON EACH OF YOUR BILLS EVERY MONTH!                                        

By paying your creditors the minimum balance each month, let’s them know that you are staying on track and it keeps your accounts from receiving any negative feedback with the credit bureaus. Once you have paid your minimums you can then take the extra cash to pay down your debt in one of the following ways.

  • Snowball System: In this plan, you will organize your debt from smallest to largest then pay any extra money toward the smallest debt each month. Then once you have paid of that bill then start paying down the next largest and so on. The benefits here are that you will see one of your debts being paid of sooner which is a great boost to your financial goal.
  • Avalanche System: This plan is much like the ‘Snowball” method instead you arrange your debts according to the interest rates from highest to lowest then pay the highest rate bill first until it has been paid off then move on to the next highest, and so on. By taking the interest rates into account, you are putting more money toward your higher interest rate debt first. Not only does this approach save you money, “it gets you completely debt-free faster.
  • Financial Fast/Debt Detox: Since we have been discussing how to get financially fit, why not take it a step further by doing an actual spending fast? With this method you will be required to honestly ask yourself, “What do I really need?” – vs – “What do I really want?” Then make a list for each question. Once you have your two lists… then for the life of your fast (1 yr.?, 18 mos.?, you decide), spend your money on only what you really need each month and then use the rest of the money to pay down your debt until it has all been paid off. Once you have accomplished paying off your debt, but your spending fast isn’t over yet, then start putting the monthly income into a savings account and continue this habit until your fast has been completed. At the end of your financial fast, I am sure that you will be super impressed on what you have accomplished!

As with any goal that you are trying to achieve, be it financial goals or health and fitness goals, you’re more likely to succeed if you have a good plan in place, a fair amount of willpower and a desire to change your habits.

Make it a great day!
Marla J. Blanchard
MJB’s Bookkeeping Solutions

Don’t keep me a secret, if you know someone who could use a bit of Bookkeeping TLC let them know that they are not alone and have them call me 805-764-1MJB (1652).

Forewarned Is Forearmed

One of the best ways to measure your overall fiscal fitness is to run an actual credit check on yourself, by requesting a copy of your credit report from the three main credit bureaus, Equifax, Experian and TransUnion.  Maintaining your finances takes a lot of time and energy and even more… the quality of your life depends on understanding what is being said about your spending habits. So here are three reasons that you need to think about in order to care for the health of your money.

Checking For Inaccurate Information: Our lives are always in a state of movement, new home, new job, new car, new banks, new schools and new stores. With each new purchase, we confidently give out more and more of our personal information to store merchants, who then track our credit habits and even how quickly we make our payments. All of this information gets reported to the credit bureaus and then these agencies decide how credit worthy we are. But what happens if some of this information is mistakenly written down wrong or Jane Doe’s information is mixed up with Jean Doe’s?  Inaccurate information can prevent us from getting the best interest rates on new purchases, costing a lot of money in high interest payments or even preventing us from getting that brand new SUV that we’ve had our eye on.

First indicator in Identity Theft: CNN Money reported that identity fraud hits a new victim every 2 seconds which is understandable especially with all of our information being handled by so many different people as we illustrated in the section on ‘Inaccurate Information’. The sad part is, many people don’t even realize they have become a victim until it’s too late or “Uncle Sam” informs them that they filed 2 tax returns last year. Once this happens, it takes months, even years to unfreeze bank accounts and countless amount of time getting lawyers to untangle the messy trap of scrupulous financial deals. By getting an annual credit report, we may be able to stop fraudulent accounts from doing major damage to our financial reputations.

Maintaining and Rebuilding Good Credit: By knowing what information is in our credit report, we can set up a strategy to improve our status with creditors. First, we can educate ourselves in knowing the factors that can hurt or improve our credit score. Then by taking deliberate actions, we can measure our improvements and actually see how our actions affect our score. Finally, wouldn’t it be great, going to the car dealership knowing what our credit score is and actually negotiating the best deal rather than simply hoping you can get a decent deal on that new car?

Now that you have a better understanding of why it’s so important to get your annual credit report I have some good news for you… it’s FREE!! So do it today by using the information below from usgov.com

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Free Credit Reports

You are entitled to a FREE credit report from each of the three credit reporting agencies (Equifax, Experian, and TransUnion) once every 12 months. You can request all three reports at once, or space them out throughout the year. Learn about other situations in which you can request a free credit report.

Request your free credit report: 

Online: Visit AnnualCreditReport.com

By Phone: Call 1-877-322-8228. Deaf and hard of hearing consumers can access the TTY service by calling 711 and referring the Relay Operator to 1-800-821-7232.

By Mail: Complete the Annual Credit Report Request Form (PDF, Download Adobe Reader) and mail it to:

Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281

Make it a great day!
Marla J. Blanchard
MJB’s Bookkeeping Solutions

Don’t keep me a secret, if you know someone who could use a bit of Bookkeeping TLC let them know that they are not alone and have them call me 805-764-1MJB (1652).