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Posts Tagged ‘bookkeeping’


Creating a Financial Workflow

March 25th, 2010 :: Thursday Bram

When you run a small business, bringing in someone to handle bookkeeping and similar tasks just isn’t always an option. The cost of hiring help can make it necessary to do that sort of work, although it doesn’t hurt that keeping your own books guarantees that you’re familiar with every aspect of your business.

The biggest problem for many business owner when it comes to updating financial records is actually getting around to it. It’s easy to put off tasks like tracking expenses — after all, you can always catch up at the end of the week. Then a week turns into a month, which turns into a quarter, which turns into a year before you even notice. It’s easy to focus on tasks that directly make you money, rather than figuring out where that money goes. Having a financial workflow in place, though, can help you manage your business’ money in such a way that it doesn’t get out of hand.

Your Financial Workflow

A workflow is a series of steps, each one following the next so that you can complete a larger task — usually a task that you must complete on a regular basis. It can make sense to write down the steps you need to keep up with your finances: from reconciling your bank statements with the receipts you have to entering information into your bookkeeping software, having a checklist makes the process smoother. It’s easy to say that you already know what you need to do, but it’s easy to miss a step or put things off entirely because you feel like there’s so much to do. Having it in writing lets you build a habit of handling your finances, making it easier to stay on track.

Determining just what steps you need to take can be a longer process. Before you try to create the perfect workflow, discover what you’re already doing that works. Follow the approach you normally take to get your books up to date and just write down the steps you take. If you’re not the best about doing so on a regular basis, you may have to actually spend some time on your books to start getting an idea.

Once you have a list of the steps you generally take in place, you can look for opportunities to tweak the process. You may find that you have to take information off the same piece of paper multiple times — that can be an opportunity to improve your system because if you can arrange things so that you only handle each piece of paper once, you can speed things up. There are also many tools that will help you speed up the process, such as receipt scanners.

You may find that you need to keep adjusting your routines as you go through them. The first couple of times, it’s possible to miss a step, especially if you haven’t practiced the habit. But having a list that you can work down on a daily or a weekly basis will help you to build the habit, as well as make things much easier when you are in a position to hand the bookkeeping off to someone else down the road.

Image by Flickr user ben_onthemove

Putting Your Books in the Cloud: Your Options

March 16th, 2010 :: Thursday Bram

Keeping your books may not be the funnest part of running your own business, but it is one of the most important. If you don’t have a good grasp on your money, you can wind up without a business very quickly. But bookkeeping is getting easier. There are now many web-based tools that make the process easier to manage: not only can many tools available import information quickly but they take care of details like backing up your files and even emailing out notifications about late payments. Here are just a few of the options that are now available online.

  • Freshbooks: More than a million users rely on Freshbooks to keep their books. The web-based application handles everything from time tracking to invoicing, providing easy-to-use tools for creating estimates and managing contractors.It automates many steps of the bookkeeping process. Freshbooks’ plans range in price from $19 to $149 per month.
  • Outright: Not only can you handle all your bookkeeping tasks in Outright, you can have the application generate your tax forms based on your books and create reports for your CPA or tax preparer. Even better, Outright is entirely free to use. The site even offers forums where you can ask questions about taxes and other financial issues.
  • Blinksale: Focused first and foremost on invoices, Blinksale makes tracking payments easy. If you’re already using tools such as Basecamp, you can automatically import client data. You can even automatically create follow up emails for such tasks as reminding clients of invoices or thanking them for their payments. Blinksale’s monthly plans start at $6 and reach up to $24.
  • Harvest: One of the key features of Harvest is its ability to track time. Even if you aren’t at your computer, you can use Harvest’s smartphone apps to keep track of the time that you’re spending on specific projects. The web application can translate that information into invoices, budgets and the rest of your books. It can even export all that data into Quickbooks if your tax preparer is one of those folks who requests everything in a Quickbooks file.Harvests’ plans range from $12 to $90 per month.

There are some drawbacks to keeping your books in the cloud. Before you choose any of these options, it’s important to make sure that the security measures meet your requirements. Depending on the type of business you run, you may want to take additional steps to ensure that your customers’ data is protected. It’s also important to make sure that the system you choose meshes well with the type of business you run. Some tools work perfectly for the way a consultant bills but may not be up to handling products. The opposite can be just as true, so take advantage of free trials to actually get in to a bookkeeping tool and see how it will work with your business.

Image by Flickr user edinburghcityofprint

Winding Up the 2009 Tax Year

January 21st, 2010 :: Thursday Bram

Income taxWe’ve all got big goals for 2010 — but before we can get to them, we have to get 2009 off our plates. That means not only closing the books on last year, but getting them ready for tax season. For some of us, it can take right up to April 15th to be done with 2009, but the sooner you can wind up the 2009 tax year, the better shape you’ll be in for 2010.

Get Your CPA on the Phone

If you can schedule a time to talk to your CPA or tax preparer before handing him your shoebox full of receipts from last year, he can make it worth your while. Most importantly — at least from your tax preparer’s point of view — he can go over exactly what documentation you need to bring in so that your tax return can be prepared. While you may have a good idea what to bring from doing your 2008 taxes, if anything changed in the last year (like you hired an employee, you started carrying more inventory or you changed your business’ structure), you may need to bring in some more documentation.

On top of that, though, your CPA may be able to give you some last minute advice on minimizing your business’ tax burden. While 2009 is over, you can still take a few steps: for instance, if you have a retirement account set up, you may still be able to contribute towards the 2009 limit. Since you’re there already, you should take to your CPA about planning for 2010 as well. Go beyond tax planning: your CPA can talk to you about ways to minimize payroll costs, improve cash flow for your business and generally meet your goals for the next year.

Get Your Books in Order

While we all have just made resolutions to keep up with the paperwork in 2010, there may still be some 2009 items sitting in your inbox. It’s time to get those dealt with so that you can close the books, back them up and send them off to the tax preparer — the sooner, the better if your CPA is one of the many whose prices go up on tax returns when March rolls around.

If you worked with contractors during 2009, you have only about a month left to get your Form 1099s prepared and sent off to both your contractors and the IRS. If you paid payroll taxes for employees, it’s also time to get your Form W-2s sent out. You have until the end of January to send them to employees and until the end of February to send them to the IRS. For both forms, you can face some penalties if you don’t get them mailed off in time. It’s worth talking to your CPA about these forms, as well — some will prepare these additional forms, as well as provide bookkeeping services to make sure that your books for 2009 are done correctly.

Photo — AlanCleaver_2000