Bookkeeping has historically been completed as an after the fact necessity that is required by your CPA. Small business owners are busy and overwhelmed with the day to day operations and bookkeeping becomes an afterthought. By completing your books quarterly or even worse, annually, you are not able to use the information to help you run your business. Do you want to make more money? Do you want to work less and sleep more? Do you want to think about selling your business for a profit? Do you want to provide an excellent environment for your employees?
The power of Real Time bookkeeping means that businesses owners sleep at night. You will have the tools to increase cash flow. You will be able to focus time and energy where it counts: on your business, your clients, and in harmonizing your business and personal life.
What is Real Time Bookkeeping? Real Time Bookkeeping is the act of completing the books within 36-72 business hours of actual events. Real Time Bookkeeping means that ALL financial transactions and data are recorded including accounts receivable, accounts payable, all banking and credit card transactions, payroll, tax payments, etc.
Do you need to increase sales? Do you need to increase your inventory? Is now a good time to purchase a new piece of equipment? Do you need to cut costs? Should you hire a new employee? Is now a good time to add benefits to your payroll packages? Real time books will provide you with the power to make effective decisions about all arenas of your business.
When these transactions are up to date, you can:
See your true Profit and Loss
Determine cash flow projections
Create meaningful budgets
Make real time corrections to pricing
Lower bookkeeping costs by catching nuances fast
Stay current and relevant with market trends
All of these items will increase your cash flow and help you feel empowered. Real Time bookkeeping puts your business in a better resale position. Real Time bookkeeping will save you time and money and will allow you to effectively scale your business. Financial security is only available if you understand the information gleaned from Real Time Bookkeeping.
Afraid of the cost? We understand. It’s scary to invest. But the return will outweigh the cost. Your bottom line will improve and you will have peace of mind. Consider the value. Consider moving to Real Time bookkeeping.
Do you need to hire an employee? Here are the absolute basics.
First, you must be set up for payroll. Your company must have an EIN, a Wage Withholding Account and a Unemployment Account at the very least. This will vary from state to state.
When you have these pieces set up and are ready to hire, you must collect: W-4, I-9, Acceptable Identification. Depending on your state/local requirements, you may also need to collect emergency contacts and report the new hire to your state.
What is the difference between a bookkeeper and a CPA? What does a bookkeeper do? What does a CPA do? Does my business need both? Are you confused about these roles? You’re not the only one! Let me help you clarify.
First off, you need both. Your bookkeeper is the pitcher. The player with her hands on every play. The CPA is the coach, guiding you based on the information provided by the pitcher. It is best for you and your business if you find a bookkeeper and CPA who are able to work together to be sure everything is covered!
A bookkeeper records the numbers: actual financial activity happening within your business. A bookkeeper is responsible for your day to day business transactions:
Tracking your business expenses and income
Reconciling your bank accounts, credit card accounts and loans
Tracking your payables/bills
Tracking your receivables and sending out regular statements to your customers
Prepare regular business reporting to business owner(s)
These are the basics. The above tasks should be completed on a regular basis (weekly or monthly depending on your business nature and volume).
Some business may need additional services. We will call these the “fuzzy” tasks. This is where most businesses experience confusion because these services can be completed by the bookkeeper OR the CPA. As a business owner, it is important that you identify who will be completing these tasks on your behalf. The CPA may assume the bookkeeper is completing these tasks. Conversely, the bookkeeper may assume that the CPA is completing these tasks. Ultimately, you are responsible.
Manage payroll including
Running regular payroll to pay business owner and/or employees
Complete required payroll deposits as dictated by IRS, State, and local jurisdictions.
Complete required Quarterly reports including 941, State Quarterly, Quarterly UI Reports, and any local reporting
Enter payroll into the bookkeeping system
This may also include tracking benefits if applicable
File sales tax reports and arrange for payment: Quarterly or Monthly as dictated by jurisdiction
File periodic report (annually in Colorado)
While a bookkeeper is responsible for recording the actual numbers, the CPA makes decisions about these numbers based on tax law. The CPA should advise you about estimated quarterly taxes. The CPA will create your tax return and file your income taxes. Some CPAs will help with the “fuzzy” tasks, some will not. Your CPA should be licensed and certified. Your CPA will provide additional, in depth analysis of your business.
Your business will operate most effectively if all the players and coaches have open communication. When the bookkeeper and the CPA can work together and are in touch with one another, you and your business will reap the rewards.