Bookkeeping FAQs

Ideally, I will have accountant's read-only access to all bank accounts so I can pull statements on your behalf on the 3rd business day of the month. This allows data time to finalize on the first two business days.

I aim to have any questions or things I need clarification on to you as soon as possible by email.

Your timely response allows me to turn your books around by my promised date of the 15th of the month. Delayed responses result in delayed reports.

If for any reason I will not make the 15th deadline it will be communicated to you as early as possible. I don't foresee this happening but as you know, emergencies do come up.

If you prefer another form of communication, please let me know and I will note that in your profile.

Please let me know as soon as possible if any of the following situations arise:

• Open a New Credit Card
• Change Banks or Bank Accounts
• Begin selling physical products (as this is not something I currently offer services for)
• Hire Any New Staff
• Apply For or Receive New Loans
• Accidently Pay a Personal Expense from the Business
• Accidently Pay a Business Expense personally

My rates are based on the time it takes to complete your books, not your income.

Rates are subject to change with written notice and upon your acceptance. In the event of an increase, you will be notified of the amount and the date it goes into effect in advance.

To keep increases to a minimum, your flexibility and willingness to implement efficient systems with us goes a long way.

Other things that may trigger a price increase:

• Any manual processes
• Dramatic increases in transaction volume as it increases time to complete the books
• Requests for additional detail of the data not already provided in the monthly reports
• An increase in the amount of bank accounts or systems you use
• Inflation from the time we started working together

Right now these services are not provided but I am hoping to in the very near future. If you would be interested in one or both of these please let me know!

• Visual Reports Upgrade
  • monthly visuals to assist your monthly reports
  • like your monthly reports it would also show comparisons to prior periods
• CFO Services Upgrade
  • a monthly 30-60 min 1:1 Zoom call
  • unlimited access to me via WhatsApp
  • Custom templates as needed to help you meet your current goals

If this does happen, it is not the end of the world but it is important to build good habits around keeping business and personal funds separate.

There are several reasons for this:

• it makes bookkeeping much harder to do. It would require more questions, more guesswork, increased room for error and would significantly increase time spent on your books; increasing the price.
• keeping them separate would help tremendously if an audit would occur

If you accidently pay a personal expense from a business account:

• this will be coded as an owner's draw and will not count as a business deduction.

If you accidently pay a business expense from a personal account:

• this will be coded as an owner's contribution
• you can reimburse yourself by transferring from a business account to a personal account, letting me know it's a reimbursement
• if you don't let me know about it, you may miss the ability to deduct what you spent

*Please correct any autopay items.

NOTE: Estimated tax payments and payments on your personal tax return are actually personal expenses and are not deductible. If they are paid through a business account it will be treated as an owner's draw.

Receipts are your responsibility, not mine. You should always keep receipts in the event that you would ever be audited. You can keep emailed receipts in a safe folder and you can scan physical receipts and keep them in that same folder.

I recommend using a business credit card if you're not already. You should charge as many of expenses as you can to it and then pay it off at the end of each payment cycle. That way you can use the points towards the outstanding balance or other good rewards. 

*I personally use & recommend the Chase Ink Cards.

*It's smart to open a checking and savings account with Chase as well so that all of your accounts are in one place & able to link up to Xero

To determine if a new hire is an employee or contractor you need to know which one the IRS would determine them to be. Think of it as "who has control".

Please refer to the 20 point test published by the IRS (This Is Why IRS 20 Factor Test Is So Important (fiverr.com)

Please please please discuss with me if you're not sure!

Congrats! Your business is growing! You will need to register with your state and begin running payroll if you're not already. I recommend using ADP or Gusto.

Let's talk through it if you're not sure which one to use

If you've hired a contractor:

• obtain a W9 upfront. If the request a copy of one search the IRS website for the current year's form. Keep the completed form for your records.
• to pay them, do it through a payroll system that prepares the 1099s for you OR allows you to not need to file one
• payroll systems handle 1099s for you & allow you to send payment to your contractor
  • they do have monthly fees though
  • you might already be using this software if you're paying yourself a salary as an S Corp owner
• again, I recommend ADP or Gusto
• To avoid 1099s, pay through a third party processor like Stripe, Honeybook, Dubsado or Xero.
  • if you do so you don't need to file a 1099-NEC because the payment processor will issue a 1099-K if requirements are met

*This is not tax advice - please consult with your tax preparer for questions.

If you have a client who paid you by cash, check, bank transfer or personal app (Venmo, Zelle, personal PayPal etc.) then you need to provide your W9 to them. If you need help filling it out, let me know.

BUT like I said above, if you received payment through a third party processor (Stripe, Honeybook, Xero) then a 1099 is filed through them and you don't need to do anything.

Tax deductions reduce your taxable income - lowers the amount of money you're taxed on. These are expenses that are "ordinary and necessary" to run your business. I've listed a few, if you want a full list let me know:

• Advertising/Marketing
• Office Supplies
• Business Travel & Meals
  • Parking/Tolls
• Business Mileage
• Bank & Processing Fees
• Interest Expenses
• Legal & Professional Services
• Business Licenses & Permits
• Insurance
• Business Development
• Software & Subscriptions

Be careful if a business expense can double as a personal expense. Ultimately it is a question for your tax preparer but we can have a discussion first if you're not sure about it. If we can't come to a conclusion on our own it's good learning experience for both of us.

If you tell me something is for business I will take your word for it. Be aware though that if that is not correct it lies on you. Always ask questions if you're not sure!

A few examples:

• if you deduct business mileage you cannot deduct gas
• meals can be deducted if there was a business purpose. Your morning coffee from the local shop does not count.
• keep itemized receipts for Amazon, Target, travel for proof of business vs personal
• clothing for a branding photoshoot can be worn personally and therefore you are not able to deduct them

*NOTE: If you keep business & personal separate this shouldn't be an issue!! 

The risk for penalties if done incorrectly and audited is not worth the risk of the $$ you'll save.

There are two ways to deduct auto expenses:

1. The Standard Mileage Method (recommended) - allows you to deduct 67 cents per mile driven. Remember - they must be BUSINESS miles though, not personal.

2. The Actual Method - allows you to deduct the business use percentage of auto expenses including gas, maintenance, insurance and lease payments/depreciation. The percentage is found by tracking all miles and dividing business miles by total miles driven.

*NOTE: You need to log business miles no matter what method you use. Examples:

• Business Meetings
• Networking Events
• Shopping for Office Supplies
• Trips to the post office
• Traveling from client to client
• Does NOT include
  • miles for your typical commute

Ugh, taxes. As a general rule of thumb I recommend saving 25-30% of profits for taxes. Ultimately, you should discuss this with your CPA to determine what your estimated tax payments should be.

What they are:

• an estimate of taxes that allows you to avoid penalties and avoid paying in full at the end of the year when the money may have already been spent

Who needs to file:

• sole proprietors who have a profit in their business
  • they file using Schedule C of their 1040
  • they're sole proprietors doing business on their own with no business registered, with a DBA or sole proprietors that are a single-member LLC

How to file:

• I recommend paying them online. Your CPA can help with this & should be involved.

I'm open to discussing about anything. Let me know your thoughts!

 Refer a friend! If we're a good fit & they sign as a client then you get $50 off your next month and they get $50 off their first month. It's a win-win-win!