As the title suggests, we can help your small business tackle the tough stuff, and no we are not selling laundry detergent now. By the tough stuff, we mean all the transactions in your QuickBooks file that you haven’t cleaned up because you either don’t have time or don’t know how. Luckily for you, we do this every day (and actually like it).
The Typical Tackle List
Duplicate Transactions/Uncleared Transactions: Having duplicate transactions is an issue we see often. Generally, a transaction is added from the bank feed as well as hand entered. When this innocent mistake goes unnoticed and continues for months, you have inaccurate financial statements. Your income or expense (usually both) is inflated.
Not Reconciling: This is so important! Many small businesses put this off and end up with missing and duplicate transactions (as discussed above).
Sales Tax: Not recording and paying your sales tax in a timely fashion will cost you financially, as well as waste a lot of your time getting it straightened out.
1099 Tracking: It’s very important to classify an independent contractor you’ve hired and gather all of the data needed for 1099s prior to paying them. Of course, actually preparing and filing 1099s should be a priority as well.
Personal Expenses: Often, small business owners mix personal and business expenses. We recommend not doing this as it can be difficult to discern what expenses are business related for tax purposes. Best practice dictates separate accounts for business use. But if your expenses are mixed, no worries! We know how to account for it. PLUS, sometimes you pay for business expenses from your personal accounts and are not sure how to account for it. We do!
Transfers: The bank feed in QuickBooks can be tricky, particularly when it comes to the ”Transfer” feature. Ideally, a transfer would only be used for interbank transfers and not the receipt of deposits or payments made to vendors. We recommend you categorize transactions instead of using the transfer feature that QuickBooks sometimes mistakenly assigns.
Chart of Accounts: At some point, you may need to revisit your chart of accounts. As your small business grows, you may want more detailed reporting which is achieved by reworking your chart of accounts. Think of your COA as the outline for your financial statements.
Accounts Receivable: A common mistake people make when receiving a payment from a customer is to make a deposit. Seems like a reasonable thing to do. The problem is that the invoice remains unpaid and is inflating your accounts receivable. The proper method when receiving a customer payment is to “Receive Payment,” then deposit the funds.
What Should You Tackle First?
This is a sampling of items we see routinely performed incorrectly. Reach out to us at www.budgetease.biz to see how we can help you handle the tough bookkeeping stuff you’ve been avoiding.