Category Archives: Blog

IRS form W-9

IRS form W-9 is a tool not a weapon

The purpose of IRS form W-9 is to gather information from independent contractors (and others) in order to prepare IRS form 1099. That’s it. Completing form W9 does not guarantee you will receive a 1099 because there are other considerations outside the scope of this article.

I’ve always been puzzled why so many view the W-9 form as something to be feared. Some even get angry when they are asked to complete this form because now the income has to be reported. (Note the IRS does expect you to report all your income. Your argument with that is not the point of this article.) IRS forms can be intimidating but the W-9 form isn’t so bad.

As a matter of routine, you should prepare a W-9 form and have it ready when someone you are doing work for requests it. The form itself looks harmless enough, but if it is not completed correctly, can lead to letters from the IRS.

Let’s walk through completing a form. Continue reading

why you should reconcile your bank account

Reconciling your bank account: what the point?

Why should you reconcile your bank accounts?

In the accounting world, one of the main activities each month is reconciling bank accounts. The point of reconciling your bank accounts is to verify you’ve entered all the transactions listed on your bank statement correctly. It’s how you discover mistakes – yours or the bank. Continue reading

business owner, outsourcing

The funny thing about owning a business.

The funny thing about running a business today is that you can feel pretty invincible. After all, you can ask Google any question you have on any topic. If you don’t feel like consulting Google, you can pop into your favorite Facebook group and post your question and sit back and wait for the answers to appear. Perhaps you thought you knew the answer to your question but wanted confirmation.

The problem is that it’s easy to pick the answer from Google that you want. The Facebook group that chimes in to answer your question is a group of like-minded people just like you. Continue reading

economic nexus

Economic Nexus: How It Affects Your Business

On Thursday, June 21, 2018, the U.S. Supreme Court overturned the 1992 Quill physical nexus decision and made economic nexus the new norm.

What is economic nexus?

The Supreme Court ruling redefines nexus as having a business presence based on the dollar amount or number of transactions you deliver to a particular state. For example, South Dakota who challenged the Quill ruling and won, states that you have economic nexus if you have 200 transactions or have products or services of $100,000 or more delivered to South Dakota. Currently, 20 states have economic nexus laws in effect. Some of those 20 states have laws written very similar to South Dakota. That is significant because the Supreme Court specifically referenced the way South Dakota defined their economic nexus.

By the way, this doesn’t just apply to physical goods. Many states tax digital goods.

Continue reading

How to Hire An Accountant that Won’t Wreck Your Business

This post has been a long time in the writing. It is controversial but I believe this must be said.  I’m not writing this to put down every accounting professional out there because I think you should only hire me. While I likely have the expertise to help your business, I may not be the best accountant to work with you for various reasons. I’m okay with that. There are some great accountants out there and I’d like to help you find the right one for you.


Change is inevitable, but that doesn’t mean all change is good. I confess that I am angry with my chosen profession over some of the changes I’m seeing because I believe the changes don’t benefit you, the business owner. In fact, I think some of the changes are hurting you and that’s why I wrote this.

Technology has brought automation to bookkeeping tasks, especially data entry. Automation can help with consistency. Does that mean all bookkeeping tasks can be automated? Absolutely not. Running a business is complicated. Yet there are those perpetuating the myth of the effortless, automated (via technology, not outsourcing) business. If your business could be fully automated, how would you stand out to customers? What would make your business special? But I digress. Continue reading

hubdoc

Hubdoc: The 24/7 Assistant

Hubdoc is an assistant who works 24/7.

Have you ever counted how many online accounts you have? Do you enjoy that scramble to find your logins to download a full year of statements?

Face it. Logging into 30+ online accounts to download statements, receipts, invoices, and more is not fun. Especially when you forgot your password to many of the sites. More importantly, logging into all those online accounts is not a good use of anyone’s time. Continue reading

Photo: Pixabay

Which accounting software?

The truth is that your bookkeeping is a nightmare because you ignore it until the last possible moment.

The fact is that your accounting software should be chosen, set-up, and used on a daily basis to provide awesome service to your clients. Done correctly, your bookkeeping will show you the results of every business decision in the form of net income on your income statement, not to mention avoiding that surprise tax bill.

When it comes to choosing accounting software, many businesses do little, if any, homework before jumping in and buying software. After all, you only need accounting software so you can crunch numbers for a tax return, right? Absolutely not. Accounting software is the foundation of your business. It helps you serve your customers better and shows you the results of every business decision you make.

Is there a perfect accounting software that I recommend every business use? No. I don’t believe in one size fits all solutions for any part of a business.

The primary accounting software companies in the small business sandbox are Xero and Quickbooks. (Full disclosure: I’m a partner with both.) If you bought Quickbooks without a second thought, you can thank Quickbooks’ marketing efforts for that. Quickbooks has something like 80% of the small business accounting software market in the United States. Does that mean it’s the best solution for your business? Not necessarily.

Choosing and set-up your accounting software for your ideal client is how you simplify your bookkeeping.

What you are selling, to whom, and how you sell determines whether you just created a bookkeeping nightmare.

Products

If you have physical inventory to keep track of, Quickbooks Online has those features. However, if you are selling inventory on multiple channels, Quickbooks can’t handle that and you could find yourself overselling products. Xero has very basic inventory management.

If you are selling physical products on multiple channels (Amazon, E-bay, Etsy, etc.), you’ll need a third-party add-on to accurately keep track of your inventory. If you sell your product in person and online, you need a third-party add-on app with point-of-sale and multi-channel inventory features.Both Quickbooks Online and Xero integrate with numerous inventory add-on apps. The software you use must integrate with your accounting solution otherwise you just created a time-consuming bookkeeping nightmare.

Businesses that sell physical products tend to have more complicated bookkeeping because of the inventory management and sales tax requirements. However, there’s plenty you can do to keep your bookkeeping from looking like something from a horror novel.

If you are selling physical products, especially on multiple channels, I strongly recommend taking a look at TaxJar to help manage your sales tax.

Services

If you are selling services and digital products, how you sell is determined by your ideal client. If your ideal client is large corporations, you need flexible invoicing to accommodate their requirements or payment will be delayed.

Quickbooks Online only offers their merchant service for online payments. Personally, I wouldn’t use it because of the horror stories. When they still owned Intuit Payment Network, Intuit mysteriously held a payment for almost two weeks and refused to provide any explanation. I stopped using Intuit payment services that very day and haven’t looked back.

Xero connects to various payment services such as PayPal, Stripe, and Authorize.net. While automatic recurring payments are not possible in Xero, your invoices can be set-up as recurring and all are sent with a “pay now” button. Invoices in Xero are very customizable and you can have several templates for different needs. Quickbooks Online allows only one invoice template.

Quickbooks Online and Xero both have the ability to create a simple estimate. Both allow you to set up numerous invoice items to use as standard text. If you need more complex, professional-looking proposals with cover pages, images, etc., you’ll want to look at add-on proposal apps such as Quotient. Be sure to choose an app that integrates with your accounting software of choice. Why? Because when the client accepts the proposal the app can automatically push that proposal to your accounting software and create an invoice.

This is just the start to comparing Xero and Quickbooks. The bottom line is that you should choose the accounting software that will do the best job of supporting how you will do business with your ideal client.

Would you like help with your software? Get in touch.

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

Can you afford to grow your business with Amazon?

Amazon: Is it the right way to grow your business?

I don’t believe there is one sure-fire method to growing your business. What worked for one person to grow a business may not work for you or me. A system to grow your business to XX dollars in XX time is a system that worked for that person with certain education, experiences, and personality. Will you see the same results? Perhaps. That said, I am concerned about the number of businesses jumping on the Amazon bandwagon. Continue reading

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.