Many of the accounting entries are done behind the scenes in QuickBooks just by carrying out the day to day activities of your business. Over the next 2 weeks, we cover 20 great things about QuickBooks...

1. Control Cash Flow - QuickBooks can be a great tool to help you manage your cash flow.  Instead of using your online bank balance you should keep your QuickBooks file updated regularly and understand how to use it to manage your cash flow.  By entering your financial transactions often and doing daily reconciliations in QuickBooks you will get a great handle on your cash flow.  The key is sorting your QuickBooks bank accounts by cleared status. 

2. Invoice Customers - I always like to train clients to create and send their own invoices in QuickBooks.  When you have a customer that wants to give you money for products or services that last thing you want to do is wait on sending them an invoice.  Learning how to properly invoice customers will decrease your accounts receivable and increase your cash flow.

3. Manage Bills and Accounts Payable - Keeping your vendors and suppliers happy is important as well.  You don't want to fall behind on your outstanding bills with vendors.  Using the enter bills and pay bills functions in QuickBooks is simple.  Entering the bills to your vendors with the correct terms and due dates will help you stay on top of keeping your vendors paid and happy.  Paying your bills directly through QuickBooks via online bill pay or printing checks will reduce unnecessary data entry and increase productivity. 

4. Manage Employee Time - You can enter employee time from the employees section of the home screen.  You can enter a single time event or use a weekly timesheet.  Tracking time in QuickBooks can help measure employee productivity and can prove to be valuable for job costing purposes.  

5. Customized Chart of Accounts - Your QuickBooks chart of accounts is all about your needs and should be customized to those specific needs.  I often see clients make their chart of accounts so complicated that the reports become meaningless.  Make sure your chart of accounts speaks to you and provides you with valuable information that you can use.  Don't worry too much about tailoring your chart of accounts to your taxes; it should be more geared towards helping you run your business. 

6. Memorized Transactions - You should use QuickBooks memorized transactions to automatically enter transactions that occur on a regular and predictable basis.  This can include invoices, bills, journal entries and payments.  The idea is to boost efficiency and have certain items be entered automatically into QuickBooks.  One example of a good use of a memorized transaction is a bill that you have set up to be automatically deducted from your checking account like your mortgage payment.  By memorizing a check you can have the payment automatically post to your checking account a certain number of days in advance.   
 
7. Always Reconciled - The most important thing you can do for your small business bookkeeping system is to make sure to reconcile QuickBooks on a consistent basis.  You should reconcile all of your applicable accounts not just your bank accounts.  Make sure to reconcile bank accounts, credit cards, loans, lines of credit and payroll liabilities.   

8. Printing Checks - Printing checks from QuickBooks is a great way to keep cash flow updated and increase your efficiency.  Since the check will not clear your bank until the payee deposits it you want to make sure to include it in your cash flow analysis.  Printing checks from QuickBooks will eliminate unnecessary data entry. 

9. Online Banking - You should set up your QuickBooks accounts for online banking download.  Many major financial institutions offer data downloads into QuickBooks.  This will reduce a lot of unnecessary data entry.

10-20 coming net week...

QuickBooks can be a valuable tool to help you run your small business.  If you look at your bookkeeping as a hassle then you have not been shown how to properly use your bookkeeping system to aid you in making business decisions.  

Taxpayers should be sure to have all their info before going to a tax pro
Taxpayers using a professional tax preparer should make sure they have all their information readily available before their appointment. Collecting their information and getting copies of any missing documents before taxpayers sit down to prepare their return is critical to filing an accurate tax return. Having organized records and information in hand helps prevent filing errors and will likely create a smoother filing experience.

Here’s a list of information taxpayers may need. Not all information applies to all taxpayers.

• Social Security numbers of everyone listed on the tax return.
• Bank account and routing numbers for direct deposit or information to make a tax payment.
• Forms W-2 from employer(s).
• Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan.
• Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy.
• Form 1099-INT for interest received.
• Other income documents and records of virtual currency transactions.
• Form 1095-A, Health Insurance Marketplace Statement.
• Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments.
• Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit.
• Information to support claiming other credits or deductions, such as receipts for child or dependent care, college expenses or donations.

Taxpayers can get information about their Economic Impact Payments and advance child tax credit payments through their IRS online account.
Taxpayers who don’t have their letters about their Economic Impact Payment to claim missing stimulus payments and advance child tax credit payments to claim their full child tax credit have an online option. They can log in to their IRS online account and get the information from the Tax Records tab.
For taxpayers who are married filing jointly, each spouse will need to have their own Economic Impact Payment and advance child tax credit information.

What taxpayers should do if they’re missing other documents
Taxpayers who didn’t receive a W-2 or Form 1099 should contact the employer, payer or issuing agency and request the missing documents. This also applies for those who received an incorrect W-2 or Form 1099.
If they still can't get the forms, they can use Form 4852, Substitute for Form W-2, Wage and Tax Statement or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. If a taxpayer doesn't receive the missing or corrected form in time to file their tax return, they can estimate the wages or payments made to them, as well as any taxes withheld. They can use Form 4852 to report this information on their federal tax return.

Typical Situation: Our client is talking about their partnership and succession planning. Maybe another business owner they know died or became disabled and their company is floundering because of it. They are trying to figure out how to figure out how to disperse an estate equitably when not all the children are involved in the business. Their company has grown since they originally drafted their buy sell agreement and want a review.
 
When you hear a business owner say:

• “My taxes are too high.”
• “I would hate to have to deal with my business partner’s spouse.
• (What happens if my partner dies or becomes disabled?)”
• “What’s stopping my key employee from starting a business across the street?”

 
An Insurance Benefits Advisor protects business owners, their families and their businesses from the financial catastrophe that death or disability can cause. Whether it happens to a business partner, a key employee or themselves I make sure the financial impact is as minimal as possible.
 
How they Work First, they will do a deep dig to find out what the concerns are and other possible trouble points. Next, they educate on the possible solutions. Then once the client has the information needed to make a decision they implement the solution from one of our many carriers. They provide peace of mind and tax-savings ideas to business owners and successful individuals through qualified plans, life, annuities, disability, health, Medicare and long term care insurance.
 
Matching Ideas with Resources:

We have people that can help you. Please contact:
Tom Gosche, Business Strategist
​630-675-8971  tomg@goglm.com 

GLM has been working with business owners for many years. One of the biggest concerns most business have is: "Should I make them an employee or just in independent contractor?" This information is direct from the IRS:

A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or independent contractors.
Here’s some information to help business owners avoid problems that can result from misclassifying workers.

An employee is generally considered anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public.

Independent contractor vs. employee
Whether a worker is an independent contractor, or an employee depends on the relationship between the worker and the business. Generally, there are three categories to consider.

• Behavioral control − Does the company control or have the right to control what the worker does and how the worker does the job?
• Financial control − Does the business direct or control the financial and business aspects of the worker's job. Are the business aspects of the worker's job controlled by the payer? Things like how the worker is paid, are expenses reimbursed, who provides tools/supplies, etc.
• Relationship of the parties − Are there written contracts or employee type benefits such as pension plan, insurance, vacation pay? Will the relationship continue and is the work performed a key aspect of the business?

Misclassified worker
Misclassifying workers as independent contractors adversely affects employees because the employer's share of taxes is not paid, and the employee's share is not withheld. If a business misclassified an employee, the business can be held liable for employment taxes for that worker. Generally, an employer must withhold and pay income taxes, Social Security and Medicare taxes, as well as unemployment taxes. Workers who believe they have been improperly classified as independent contractors generally must receive a determination of worker status from the IRS. Then they can use Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report their share of uncollected social security and Medicare taxes due on their compensation.

Voluntary Classification Settlement Program
The Voluntary Classification Settlement Program is an optional program that provides businesses with an opportunity to reclassify their workers as employees for future employment tax purposes. This program offers partial relief from federal employment taxes for eligible businesses who agree to prospectively treat their workers as employees. Businesses must meet certain eligibility requirements and apply by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS

Who is self-employed?
Generally, someone is self-employed if any of the following apply to them.

• They carry on a trade or business as a sole proprietor or an independent contractor.
• They are a member of a partnership that carries on a trade or business.
• They are otherwise in business for themselves, including a part-time business.

Self-employed individuals, including those who earn money from gig economy work, are generally required to file an tax return and make estimated quarterly tax payments. They also generally must pay self-employment tax which is social security and Medicare tax as well as income tax. These taxpayers may qualify for the home office deduction if they use part of a home for business

Our partner Human Interest, a highly rated, cost-friendly 401(k) provider, can help you integrate or start a 401(k) with any Payroll Company. 

With Human Interest, you’ll be able to:

• Seamlessly manage employee contributions and deductions from payroll through our integration with Human Interest
• Receive ongoing support, transparent pricing and zero transaction fees
• Save even more with tax credits like the SECURE Act that can be up to $15,000, with $5,000 per year for the first 3 years

Human Interest has helped many of my clients provide their employees an option, to help better prepare them in the future! Nancy Gilliam will be happy to connect you with her Account Executive and to find a time that works best for you, or please let me know a time that would work best for you in the meantime.

You can learn more here: