Business Efficiency & Process Optimization Consultant 
Common Accounting Request

An Ask The Accountant Q&A Session

Providing solutions for improvements and increasing profits so you can enjoy business without constantly living in worry of closing motivates me in business ownership.  I have been blessed with the opportunity to see and create solutions that will help business owners create more sustainable and long-lasting businesses that can support them income-wise.  I know there is a trend that business ownership is just a side job, but it is a lively hood for many of us.  No, we are not irresponsible because we want to risk business ownership.  If you are an employee your employer is a business owner and had and is taking these risks.  My business helps you to solve many issues along the way or create more functional processes that are rewarding and profitable.  All processes take time and work so nothing happens overnight and with a reasonable expectation, we can control and prepare for ups and downs in business instead of feeling like we are at the mercy of barely making it work.

Request: I email word document invoices, excel documents, pdfs, or online invoicing applications but I am ready to offer online payments.

Solutions: Use accounting software to send out the invoices and integrate the accounting software into your merchant account.  The client can click pay invoice online and pay with a bank account if you use stripe, or pay with a debit or credit card using an eligible merchant account.  An eligible merchant account is a vendor that connects to the software.  

Request:  I want to accept payments on my website and have them drop into my accounting software.  

Solutions:  Depending on the software it is possible to create pay now buttons, and client portals so the client can see all their invoices or checkout with integration to the accounting software.

Request: I invoice using PayPal and that is all I want to use.  

Solution:  I certainly can understand as learning new software can be challenging and time-consuming.  You would have to decide how much automation you would like to have.  Merchant accounts and especially PayPal will not pull in an invoice.  PayPal requires you to create and send the invoice and receive payment in PayPal and then go to the accounting software and add the invoice again.  Most people stop this after about the 3 sales, and it creates a backup of work costing you more when you hire someone to clean up the books.  Or learn how to send invoices from your accounting software with a PayPal integration and the client can pay your invoices through PayPal and it will update in the accounting software without additional data entry.  PayPal also has poor reporting features causing you more work down the road.     

What is the benefit of creating an invoice in your accounting software?

  1. Sales and Use taxes are set up and tracked more accurately even down to the county details for better reporting.
  2. Cost and expenses related to sales are easily added to the invoice for requesting payment.  You do not have to enter on a spreadsheet and then add to the invoice.  The expense is added into your software when you enter, and you pull into the invoice.  See my course on Estimate to Invoice.
  3. No extra data entry.  
  4. Better accounts receivable management and sales monitoring.
  5. Better reporting
  6. Faster money management processes.

Request:  I do not want to think about spending.

Solution:  I cannot help you.

Request:  Will all my transactions drop into my software, right?

Solutions:  No, with all things come work and organization.  There are procedures related to each process.  Transactions will download but it will not auto classify and those that do auto classify only work only after setup and will need to be monitored before acceptance to avoid errors in your software.  Automation is great but it is not a set it and forget it process but more of a process to help make things easier.

Request:  I am a business owner and I need tax planning; can you help me.

Solution:  Yes, I can but you have to complete bookkeeping first or set up bookkeeping for a new business owner.  Transactional history and planning out spending are essential to tax planning.

Request:  How do I track my receipts or can my accountant enter and track receipts.  

Solution: Yes, but you would pay more to have an accountant enter transactions.  You need a bookkeeper or better yet a data entry operator for after-the-fact recording. Your bookkeeper would not normally provide accounting advice.  If we cannot get past the initial recording (just the tip of bookkeeping), we can never get the benefits of all the other accounting services.  I suggest using your accounting software as your checkbook.  If you would normally write down a check payment in a ledger you do that on the expense screen in the accounting software as you buy.  Record bill payments using the bills inside of the software.  Your accounting day should be the day to record and enter.  Do not skip weeks or the backup will be overwhelming.  You can hire someone, but you still need to send them your receipts because there is no other way for us to access the information.  If you make a purchase, it will not auto-populate into the software and the bank downloads do not give us the detail we need for proper bookkeeping.   Bookkeeping involves breaking down your transactions by accounts.  When you spend and we add the expense we must know the purpose of the purchase so we can properly classify it.  For example, you order from amazon so the bank statement will reflect amazon's purchase.  What did you buy?  Normally people get upset thinking I am trying to control their spending but let us the reason.  How do I know what you bought without a receipt?  During taxes you cannot just enter “business expense” you must complete the tax form with categories and that is how we set up your books as well.  So, your bookkeeping is directly related to taxes but more importantly, it is a wonderful tool for managing and improving business.  Having a central hub to center all activities that are all over the place is a wonderful solution to cut down on chaos.

Request:  I do not want to track receipts bank downloads are enough?

Solution: No, again I can not help you with this because receipts are essential for accurate bookkeeping and are needed as support in case you are audited by the IRS.  Here is an example of a download.

Normally this is what we get from the bank so I would need more information if I did not know recognize Zoom.  Normally, the client thinks we should know all of their purchases, but this places the bookkeeper at high risk as it is easier for dishonest clients to say a personal expense is a business expense and blame it on the accountant for not verifying.  Also, it takes more time to research 200 transactions without details. Here is an example of classified entries with the attached receipt.  I can now pull a Profit and Loss Statement.

Perhaps you can see your software is more than an automatic catcher for your bank downloads.  

Request: I have loan payments, but can’t you just add it in as an expense.  

Solution:  No, loans need to be added in and tracked appropriately.  How you pay a loan down and how you make a purchase or pay bills are different from making loan payments and require their own process.

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