Home Blog Page 2

Potential Payroll Tax Changes

0

Your ads will be inserted here by

Easy Plugin for AdSense.

Please go to the plugin admin page to
Paste your ad code OR
Suppress this ad slot.

This infographic from Intuit helps explain some of the payroll tax changes that may happen in 2013. Taxes are a major expense for your small business and they should be tracked and managed by your accountant just like material purchases or payroll.

Potential Payroll Tax Changes to be Aware of in 2013
via: Potential Payroll Tax Changes to be Aware of in 2013

 

 

 

 

[schema type=”person” name=”Steve Webster” jobtitle=”Accountant” city=”Jeffersonville” state=”Indiana” postalcode=”47130″ ]

Three Ways to Get More Local Customers

1

Your ads will be inserted here by

Easy Plugin for AdSense.

Please go to the plugin admin page to
Paste your ad code OR
Suppress this ad slot.

Most of the businesses I deal with are local to me and we all seem to have the same problem of getting more local customers. I created the following video on YouTube to give you three ideas on how to get more local customers.  The first two tips I have already implemented. The third tip is a little more difficult for an accounting and bookkeeping service like mine to do but it would definitely bring in more customers.

Get More Local Customers

 

 

 

 

[schema type=”person” name=”Steve Webster” city=”Sellersburg” state=”Indiana” postalcode=”47172″ country=”US” ]

New IRS Reporting Requirement for Payroll Departments

0
Steve Webster Small Business Bookkeeper

Your ads will be inserted here by

Easy Plugin for AdSense.

Please go to the plugin admin page to
Paste your ad code OR
Suppress this ad slot.

The Affordable Care Act, also known as ObamaCare, requires employers to report to their employees the cost to cover their employees in the employer-provided group health plan. The cost is reported in box 12 of the employees W-2 form.

Related: Donate your vacation time to Hurricane Sandy Victims

Here are the key points:

1. It is important to note that the W-2 reporting is only for employee information to let them know the cost of their health care coverage. It does not mean or cause employer-provided healthcare coverage to become taxable.

2. Your company is not subject to the reporting requirement for 2012 if you filed fewer than 250 W-2 Forms for the preceding calendar year however, reporting may be made on a voluntary basis. The IRS calls this transitional relief which makes me think that it most likely will be required by all employers in the future.

3. If your company does not provide coverage to your employees, you will have nothing to report.

4. Including the cost of your dental and vision plan is optional. Also optional is long-term care insurance, disability insurance and workers’ comp insurance.

This reporting requirement will add an extra burden to accounting departments and payroll departments for most companies. Many times health insurance costs are back dated on the invoice due to changes in the coverage dates and it can be difficult to get an exact annual cost. I don’t disagree that it is good information for the employees, but it will increase a company’s accounting and payroll cost. Based on the 2012 election results, this reporting requirement is probably not going to go away

Click here for more information from the IRS.

 

 

[schema type=”person” name=”Steve Webster” city=”Sellersburg” state=”Indiana” postalcode=”47172″ ]

 

Your Employees can Donate Their Vacation Time to Aid Victims of Hurricane Sandy

0
Taxes

The IRS has issued Notice 2012-69 that says employees can elect to forgo vacation, sick, or personal leave in exchange for cash payments that their employer makes to qualified relief organizations described in § 170(c) of the Internal Revenue Code. A similar notice was issued following Hurricane Katrina and the 9/11 terrorist attacks.

The donation will not be considered as taxable income to the employees as long as the employer makes the payment to a qualified charity before January 1, 2014. I am not sure why but the notice also states that the donation can not be claimed as a charitable contribution by the employee.

You can use this link to see if a charity qualifies.

 

 

 

[schema type=”person” name=”Steve Webster” city=”Sellersburg” state=”Indiana” postalcode=”47172″ ]

“A Trusted Friend” Steals $103,000 from Therapy Business

0
Steve Webster Small Business Bookkeeper

This news story is about a bookkeeper who stole $103,000 from her employer over a 4 year time period. Apparently she was processing the payroll and paid herself twice for a total of $76,000. The “trusted friend”  also wrote company checks to herself for $27,000. The fraud wasn’t detected until after the bookkeeper was fired.

The news story doesn’t explain if she wrote the checks out in her name or if she tried to hide the fraud by writing checks to a fictitious company she created. If the company checks were in her own name, this fraud should have been very easy to catch. Either way, she obviously did not have any oversight from the owners or outside accounting business. I assume she wrote the checks, signed the checks and reconciled the bank statement which is a very poor business practice.

Two simple steps to avoid this fraud would have been for the owners to review the bank statement monthly and review the payroll register every pay period. If they did not understand how to do a review or didn’t have the time, they could have paid an outside accountant a rate between $50-$100 a month to do simple audit checks for them that likely would have caught this fraud.  It would have saved the owners a lot of money and hurt feelings. At the very least, the bookkeeper would have thought twice about writing checks to herself if she knew someone else was reviewing her work. The only thing the owners look forward to now is some jail time for their former bookkeeper and based on her age jail time is not guaranteed.

Let me know if you have any insight into this type of bookkeeping fraud.

 

 

[schema type=”person” name=”Steve Webster” city=”Sellersburg” state=”Indiana” postalcode=”47172″ ]

 

Bookkeeper Embezzles from Building Supply Business

0
Bookkeeper fraud

 

A bookkeeper working for a small building supply store business, stole over $30,000 over four years according to this news report.

Having never worked in retail, I am not sure exactly how this fraud works. Based on the article, I assume the bookkeeper reported a fraudulent return of merchandise in the accounting system and then paid her credit cards for the amount of the return. Where I’ve worked, we used return authorization numbers assigned to every return of material. The return material report was reviewed at least monthly by upper management. Perhaps in retail there are too many returns to be reviewed but there must be some report to check for this type of fraud. The article doesn’t state how she was caught so I can only guess that the owner was suspicious or was tipped off.

$30,000 of returns over four years is $7,500 per year and $625 per month. Without knowing the revenue of the business, it is hard to say if the years with the fraudulent returns were higher than in previous years. The bookkeeper’s fraudulent returns would have been in excess of the normal customer returns and would have been a red flag to the owner. In the financial statements, returns are coded to a Return and Allowance account. One bookkeeping trick is to bury the returns in the Revenue account so they are not as noticeable as they are when they are reported on their own line.

Let me know if you have any insight into this type of bookkeeping fraud.

 

 

Free and Easy to Use Accounting Software

0

If you are a small business owner looking for a free and easy to use accounting software, WaveAccounting.com could be for you. Their goal seems to be to keep small business owners record keeping as simple as possible but still providing features found in expensive accounting software packages.

There are several features that make WaveAccounting.com great.

1. It is free. Totally free. They don’t have multiple pricing plans. They have no pricing plans. They appear to make their money by posting ads and money-saving offers from other companies that would interest small business owners like virtual phone systems and web hosting.

2. Wave is online so you can access your data anywhere and anytime. It is not available on the mobile phone yet but it is a planned feature.

3. You can give view or edit access to your bookkeeper or accountant as a Guest Collaborators.

4. Wave allows you to connect to your PayPal and Etsy accounts so you can import transactions.

5. You can create unlimited businesses and even keep track of your personal expenses separately.

The dashboard gives you an overview of the balances of your bank account and credit card, as long as they are linked. It also includes a financial snapshot, an aging of your accounts payable (bills you owe) and your accounts receivable (what’s owed to you) and it can alert you to overdue bills.

I was able to link one bank account and one credit card account in less than a minute. I have both accounts with the same bank and a high-speed internet connection. It will take longer if you have multiple accounts and slower internet access.

They have the standard financial reports that you can email or export to Excel. I also like that you can drill down in reports to see the source of the numbers.

As an accountant I like that they allow journal entries although I found the feature by accident and it took me some time to find it again.

I have used a lot of accounting systems in my career and I think Wave Accounting would be a very good choice for a lot of small businesses. As an accountant I like that they allow journal entries although I found the feature by accident and it took me some time to find it again. I think some novice accounting users will still need help setting up their chart of accounts for the first time and may need help reconciling from time to time but for the most part they will not need ongoing support from an accountant or bookkeeper.

 

[schema type=”person” name=”Steve Webster”]

Disclosure: I am an affiliate for WaveAccounting.com

Three Questions to Ask Yourself Before Hiring a Bookkeeper

0
Bookkeeper Silhouette

Managing a small business is no easy task and managing the finances can be a small headache. Bookkeeping is definitely not the favorite task of most small business owners, though it is an important factor in the success or failure of the business. Knowing where you stand at any instant gives you the information you need to make decisions that can help your business grow or prevent you from making a bad one that ends in failure.

 

1. How does a small business benefit from professional bookkeeping?

An educated professional bookkeeper understands how to properly log and categorize expenses. They have enough experience to quickly turn a pile of receipts, bills stubs, and sale sheets into a detailed financial statement that lets you see exactly where you have been and focus on where you are going. The most successful business owners learn how to delegate tasks to the most qualified person. This creates efficiency. Too often they spread themselves thin and try to be everyone and everywhere in their company. This does lead to mistakes or overlooking things at key moments. A professional bookkeeper can take this one thing off their hands and are trained to see little things a small business owner may overlook financially and alert them before it is too late.

Keeping the books up to date between tax time will enable you to know exactly where your business is going before tax time, and take necessary steps to prevent an audit or pay penalties. Hiring a professional bookkeeping service will help prevent the IRS from making a disaster of your life and small business IF they should decide to do an audit. The professional bookkeeping service has detailed records for the IRS which will help you look better during audit time.

 

2. Can you afford professional bookkeeping service?

The cost of a professional bookkeeper is probably the biggest obstacle for a lot of small businesses. If you are just starting out most likely you do not need and cannot afford a full-time bookkeeper. I recommend that you at least become familiar with a local bookkeeper that can help you if and when you need it. Rates vary greatly and a lot of times you get what you pay for.

 

3. Is financial software just as good as a professional service? 

It can be. There are hundreds of accounting software systems to choose from and choosing and learning a new accounting system can be daunting. However, a professional service has more experience and can do so more efficiently than small business owners who are already trying to fill many hats on the job. If you are determined to prepare your books in-house, one option is to pay an outside bookkeeping service to train you or your staff on how to use an accounting system and review your books regularly for accuracy.

Related: Best Online Small Business Accounting Software

Just like we would call a service to fix the plumbing, paint and decorate, and do electrical or carpentry, so too a professional bookkeeping service is the best financial assistant for the job. They can keep it under control, keep detailed records, and do so efficiently enough to keep IRS from giving you trouble. No more cluttered desks with paper work or long hours in the office after the shop closes just to know where the business has been and where it is going at a moment’s notice. As a small business owner, hiring a professional bookkeeper may be the best decision you could ever make.

Best Online Small Business Accounting Software

0
Steve Webster Small Business Bookkeeper

If you are a small business owner looking for an accounting or bookkeeping system to help you run your business, I recommend you read this post:  11 Best Online Accounting, Bookkeeping & Invoicing Software . It is a very detailed list of several popular online accounting systems but it is also easy to read. The author lists both the pros and cons of each system as well as the various pricing structures.

The bookkeeping system you choose depends on what you need it to do for you. An online system is a very good choice for a lot of small businesses. Especially for if you are just beginning. Typically they are limited in their features but they are easy to use and don’t cost a lot upfront. Before you decide on one, talk to a few bookkeepers or other small business owners for their recommendation.

Three Bookkeeping Mistakes Made by a Small Business Owner

0
Steve Webster Small Business Bookkeeper

I found a story with some very good information from a small business owner who does the bookkeeping for her family owned business. She admits to making three bookkeeping mistakes that she will never make again.

Her three mistakes were:

1. Lumping everything into the single categories. Not only did this cost her money by having the accountant break the transactions out for her later, she also couldn’t create meaningful financial statements during the year because expenses were not coded to the correct accounts.

2. Not tracking deductible expenses. The family paid for business expenses with their personal money and didn’t turn in expense reports. This would have made their business results look better than they actually were.

3. Not having paper backups. I wish we could eliminate more paper the bookkeeping process but it is a necessary evil. Unless you are going to take the time to scan everything into your accounting system, you need to keep the paper document on file.

Related: Best Online Small Business Accounting Software

As an accountant, these mistakes make me cringe but she realizes they are mistakes and won’t make them again. Her family owned business will be better because of it.  http://finance.yahoo.com/news/first-person-3-business-bookkeeping-mistakes-ill-never-195900385–finance.html