Category Archives: Accounting

bookkeeping nightmare

3 Mistakes Business Make With Their Finances

1. Waiting too long to set-up accounting software

Many businesses wait until the second or third year of operations to set up a bookkeeping system. One reason is the realization your business has a good chance of making it. Another reason is that it’s time to apply for a business loan and the bank asked for financial statements. Sometimes books are set-up because it’s stressful not knowing the financial health of your business. Or maybe multiple years of tax returns must be filed. Continue reading

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Is your business ready for a disaster?

The historic storm on the east coast brought this question back to me. Think about it. If everything in your office were lost to fire or flood, how would you continue your business? By everything, I mean all computer, files, and papers.

How would you pay your employees or vendors?

How would you know which customers you owed orders to? Or how would you communicate to your customers that you are still in business at all? How would you get replacement inventory?

How would your employees know whether they still had a job?

If your business is leveraging cloud technology, these questions are easy to answer if you take the time to do some preparation. Paperless timesheets and online payroll processing make paying employees on time a breeze.

Whether using your online banking on the “pay now” button on vendor invoices, paying vendors on time is a breeze. If you have a higher volume of transactions, there are a number of other options to pay vendors electronically.

Using cloud-based accounting, project management, and CRM solutions will ensure you and your team can work from anywhere. Cloud-based email such as Office 365 or Gmail means you stay in touch with employees and customers.

They key to seamlessly keeping your business operating during a disaster is planning. Now is the time to get the right tools in place and prepare a disaster recovery plan that is communicated with your employees. Don’t let a disaster be the end of your business.

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Goodbye 2015, Hello 2016

Where did the year go? 2015 is over and all that’s left is to close out the financial year and get your taxes done. Opportunity for 2015 tax planning is gone (except for a last minute retirement account contribution, or estimated tax payments). So if you haven’t already done so, it’s time to tally up how you did last year.
First things first. If you hired any independent contractors (web/graphic design, attorney, accountant, virtual assistant, etc.) or paid rent to a landlord and you paid them $600 or more, there’s an excellent chance you need to issue them a 1099. The 1099 forms must be postmarked to recipients no later than January 31. So stop procrastinating and get your 2015 bookkeeping done. Need help getting those 1099s done? Click here.
Need some help pulling together those 2015 numbers? I can help you set up an Excel spreadsheet or an online accounting system in Quickbooks or Xero. Or perhaps your Quickbooks or Xero needs some cleaning up. Ready? Click here.
Have you resolved to really learn how to use Quickbooks or Xero better for your bookkeeping this year? Perhaps learn to do things more efficiently? I’ll teach you. Ready?Click here.
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Do You Have a Backup Plan?

I was hanging out in a coffee shop working the other morning, and the internet connection went down. As was my habit, I was working from the hotspot on my iPhone, so it wasn’t an issue for me. I overheard the staff tell customers they couldn’t take credit card payments because the internet was down. Could the customer pay cash? Then I overheard the internet provider wouldn’t have the problem fixed until about four p.m. that day. Considering how many people don’t carry cash, I would imagine a lot of sales were lost that day.

As a society, we depend on technology each day. What’s your backup plan if the technology you use fails you? What happens if the hard drive on your computer fails? What happens if the internet goes down? Your web host gets hacked? Power goes out? Fire? Flood? How will your business continue?

If that coffee shop had a backup plan, the staff wasn’t aware of it which is the same as not having a backup plan at all. What could this coffee shop have done? They could have installed a second internet connection from a different provider. Or they could have switched over to the mobile app on their phones from their credit card processor or point of sale company. There are options available, but planning is required. Hopefully before something happens. Can you afford to lose a day (or more) of sales?

Using cloud-based backup services to backup your hard drive, multiple internet connections, generators, a full-scale disaster plan, or many other options could mean survival of your business. Need some help getting a backup plan in place? Get in touch.

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Leverage Technology to Grow Your Business

I meet many business owners whose businesses are growing but are stuck because there’s not enough time in their schedule to work with clients and take care of the administrative side of things. There are a couple ways to get beyond this challenge.

One way to serve more clients is to outsource. What do you outsource? Your weaknesses. You know, those tasks you dread doing. Phone calls, cleaning, marketing, accounting, copywriting, etc. Outsourcing tasks to an expert not only frees up your time to work with more clients, that expert will get the job done faster and better than you because they are the expert. How to find those experts? Ask at networking events. Ask in your online groups. Look at Upwork.com. Post something on Craig’s List. Look at Fiverr.com.

Streamline and automate to grow your businessAnother way to free up time in your schedule is to streamline your business processes with technology. In the not too distant past, technology was something only affordable to big corporations with big budgets. Those days are gone. A great example of technology you can put to use right now is scheduling and booking software. How many sales have you lost because you didn’t follow up fast enough (or not at all) with a client to get an appointment scheduled? Online scheduling software such as TimeTrade, Acuity, and Booking Bug allow you to set appointment times for your clients to choose. Some of this software even allows your client to pay when they book the appointment. This type of software costs between $10 and $30 per month. If you make even one sale of at least $30 during the month, the software will pay for itself. Think of it. No more phone tag. No more lost opportunity. And since you are spending less time on the phone, you have more time to work with clients and grow your business. And that’s what you want, right? If you’d like some help putting technology to work for your business, please get in touch.

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It’s Too Expensive

I don’t usually write about books I read. However, reading This Book is About Travel by Andrew Hyde got me thinking.

In spite of the title, the book is about much more than travel. It’s about getting out of your comfort zone. The author gave away everything he owned and traveled the world for 16 months. He traveled with one backpack and purposely didn’t plan every detail to take advantage of random adventures whether those adventures were conversations with locals, tours, or just experiencing a new community. While I’m not sure I could live out of a backpack and either couch surf or stay in hostels for an undetermined about of time, I appreciated reading his insights. Hyde traveled for the experiences, not just to check locations off his bucket list. He found creative ways to get to know the locals and refused to buy guidebooks.

Rather than a historical accounting of his trip, Hyde shares his experience about a different place he visited in each chapter of the book. The chapter about New York City struck a cord with me. He was visiting a friend, and they had the opportunity to see a Broadway play at over 60% off the regular price that would have cost them $40 each. The response of his friend? It’s too expensive. (The issue wasn’t a lack of money.) Notice the response of his friend wasn’t that he didn’t want to see the play. That got me to thinking about how many experiences I missed out on because I thought something was too expensive. Yes, the value is in the eye of the beholder, and there is the economic reality of simply not having $40. After reading this chapter of the book, missing out on something I wanted to do because I wasn’t willing to spend $40 seems foolish. And I’m determined to stop and think before declaring something is too expensive.

34HBeing a business owner, I also related Hyde’s New York City experience to running my business. We business owners work too many hours, think we can accomplish more than is realistic, and miss out on too many other experiences. Is it too expensive to invest $30 per month in software to streamline and automate a business process that will also give back two hours of your time each month? What could you do with that two hours? Go for a walk? Spend time with family or friends? Accept a new client?

What about the cost of outsourcing areas of our business where we have little experience, dread doing, get stressed out over, and mostly avoid? Is it too expensive to outsource those things that keep us awake at night and freak us out? What’s that worth to you? Think about the result of that investment. Who among us doesn’t complain about not having enough time to accomplish all we want? We all get 24 hours in a day and the only way to get more done in a day is to eliminate things from our to-do list or outsource. Outsourcing could mean automating with software or hiring someone to help us get more done. In the future, before I say something is too expensive, I’m going to stop and ask myself what it’s worth in the way of enjoying a new experience or giving me more time to accomplish more on my to-do list. How are you going to open yourself to new experiences?

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Don’t Delay Your EMV Credit Card Compliance

The United States is the world leader in credit card fraud. EMV or Europay, Mastercard, and Visa is the new credit card standard going into effect October 2015. The new credit cards will have an embedded microchip that will make payments more secure than the traditional magnetic stripe. You’ve probably already received your replacement card from your credit card company.

ChipCard_Blog-newI’ve written a prior blog post about this and hopefully your merchant service company has been in touch with you about the changes you need to make. In spite of all the attention, I see many small businesses still using the old card readers.

Using the new cards means inserting the credit card into a new type of card reader instead of swiping the magnetic stripe. That means if you accept credit card payments in person, you need a new card reader by October 2015. What happens if you don’t get a new card reader by then? If you continue swiping cards via the magnetic stripe or do not purchase a new card reader, you could be liable for fraudulent charges on any cards compromised after being swiped on your machine. Considering the United States lost over $5 billion to credit card fraud in 2013, spending up to a few hundred dollars on a new credit card machine is a small investment.

Oddly enough, PayPal has yet to announce the availability of an EMV compliant card reader. Square has had a new mobile reader available for months, but their register hardware hasn’t been updated. You can learn more here as well as purchase your new reader.

If you use a traditional merchant service company such as Authorize.net or Paymentech contact them to learn about your options to upgrade your equipment. Another option you may want to consider is Apple Pay and other contactless payment systems. Either way, please don’t delay. Waiting until the last minute to upgrade your equipment could mean the readers go on back order due to the last minute demand, not having as many equipment choices, and paying more for a new card reader.

Square has a website dedicated to the new EMV standard. Learn more here.
Authorize.net has an EMV FAQ here.

The option you choose depends on how you accept payments from customers and how your customers prefer to pay you. If you need some help navigating this process, please get in touch.

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Get Out and Expand Your Mind

About a month ago I attended the Xerocon conference in Denver, Colorado. It’s the annual conference for Xero, beautiful accounting software. And I am so glad I invested in me and my business to attend this conference. It’s easy to get lost in the day to day rush of running our businesses. However, it’s important that we never stop learning because investing in our continuing education as a business owner will help us to be better business owners and provide more value to our clients. At Xerocon, I spent three days with other accounting professionals, attending presentations, meeting add-on partners to Xero, and, of course, networking. A month later, I’m still trying to digest and apply all of the information and following up with people I met. One of the biggest benefits of traveling to attend a conference is sharing and learning from others in your industry. None of us is an island, but running a business can feel isolating at times. One of the things I learned at the conference is how others found solutions to challenges I also face.

Never Stop LearningThe biggest takeaway was spending three days with other modern accountants and seeing how the accounting profession is evolving. The accounting profession has changed over the last five years, and I’ve been embracing that change since starting my business in 2010. How has the accounting profession changed? Accounting is no longer just about data entry, managing piles of paper and crunching numbers. With automated bank feeds, invoicing and bill pay, paper handling can be virtually eliminated from the daily operation of many businesses.

Accounting is no longer about retroactively reporting the financial results of a business. You can know right now which quotes for services have not been accepted. Are your expenses are under control? What are your best selling (and most profitable) products and services? And most importantly, are you making a profit? Business decisions happen faster, possibly saving your business from a financial loss.

In the past, customized business software was cost prohibitive to many small businesses. Those days are gone. There are numerous cost-effective add-ons to accounting software that allow you to streamline and simplify the day-to-day operation of your business. Collaborating with clients, employees, and independent contractors is a breeze. You really can grow your business from anywhere. And that’s what I want to help my clients accomplish. If you want to grow your business from anywhere, please get in touch.

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The Hidden Cost of Free

As business owners, we try to control costs as much as possible. As an accountant, I’m all for controlling costs. However, there is a fine line between running your business lean versus cheap. In the long run, cheap can cost you more. This is true when selecting software tools to support back office operations. I see many businesses fall into the trap of limiting themselves to only using free software to run their business. Don’t get me wrong. Free software can be a great place to start and solve an immediate problem. However, when your business starts to grow that free software usually can’t grow with you. And when that happens, daily operations can be impacted in sudden and painful ways.

When it comes to accounting software, there are a couple products out there I don’t recommend. And it’s not because they are free, and I want you to spend a lot of money on software I like. It’s because I believe they are inferior products and, in the long run, will cause more problems than they solve as has been my experience with Wave Accounting. When the software first came out, I joined their accountant network. And then I started seeing problems with the software that had a negative impact on the accuracy of the numbers. When Wave chose not to correct the issues, I requested to be removed from their accountant network. At best, Wave does only the most basic of bookkeeping akin to keeping a spreadsheet; at worst, the accruacy of your financial information is in question. And forget about exporting any data from Wave. It’s difficult at best which means changing to another accounting software is time consuming and expensive. GoDaddy Accounting (formerly Outright) is another software I don’t recommend.

So what accounting software do I recommend? My first choice is Xero. It is fully functional accounting software with several subscription levels to grow your business. The clean interface makes navigation and understanding your numbers much easier. Also, the dozens of add-ons allow you to customize the software to streamline and automate the back office operation of your business. Your valuable time should be spent on your clients and growing your business, not on the back office operations.

My second choice of accounting software is Quickbooks Online. While Intuit has been dumping significant money into developing the online software, it can be buggy. The interface is very cluttered causing frustration for business owners who just want to create an invoice or write a check. Quickbooks Online is also known to go down at inconvenient times. Xero has a much better record for uptime. The subscription levels are different from Xero. Quickbooks Online subscriptions are priced based on functionality. That means the basic subscription does not allow you to customize reports, create 1099s, or even create a budget among other things. In a nutshell, the Quickbooks Online subscription model is all about the upsell. Personally, I find that annoying. The Xero subscription model relates to transaction volume and grows with your business accordingly.

Notice that Quickbooks for Windows does not rank among my top accounting software choices. Gaining access to the company file makes it difficult to collaborate with clients. There are cloud hosting options, but they are not cost effective. The risk of data loss with the Quickbooks desktop editions is high. Few businesses have reliable data backup and recovery plans in place. If your file should become corrupt (and it eventually will in my experience), data loss could severely impact your business.

Are you using the right accounting software for your business? Is it time to make a change? Please get in touch.

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Another Way to Protect your Data

There’s no end of articles out there telling you how to protect your data. Having strong passwords is obvious. But think about employees and independent contractors that have access to your online data.

When is the last time you reviewed who has access to your online accounts? People move on, and task assignments change. People who work for you should only have access to the data they need in order to do their job. No more, no less.

Invest the time to review and update who has access to your online accounts on a regular basis. While you’re at it, change those passwords too. Doing so could reduce your risk of damage to your finances and reputation.

Here’s a list of places to start:

*Accounting Software
*Online Banking
*Employee Benefits
*Credit cards (online access and physical cards)
*Sites you purchase from online
*Twitter
*Facebook
*LinkedIn
*HootSuite
*SproutSocial
*WordPress
*Newsletter software (MailChimp, Constant Contact)
*Online document sharing (Dropbox, GoogleDocs)

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