10 Questions to ask when interviewing a Bookkeeper
You don’t need to be a manager to hire the right professional. What you need is to know what you’re looking for. Once that’s determined the next step is knowing what questions to ask based on your defined parameters. In searching for the right Bookkeeper for your business, the answers given should be clear, precise, and these answers should reveal the truth of what they have to offer. Let’s take a closer look at the 10 of the most important questions to ask.
1. What services do you provide? Determine if the company can accommodate you by way of their list of services. If not, decide if you’re willing to compromise or barter.
2. What industries do you have experience in? Best practice is to hire a company that knows your industry. To do otherwise will cost you time and money.
3. What Software or applications are used? A good company will have experience using a menu of different software. And they can determine what best suits your needs.
4. Who will be working on my company files? Know who the primary contact person is. You should also know who will be working on your daily files. Generally they will not be the same person. Make sure you have their contact information and specified methods of communication.
5. What is your method of delivery and turnaround? Determine the best method to deliver your files. Examples are; by fax, by email, by courier, or ftp (online).
Verifying the amount of time it takes to complete certain tasks depends on the task itself. Have them give you a schedule of when work is to be completed.
6. How are services delivered? See if your Bookkeeper can perform the services at your office or remotely. The latter is more preferable these days because it saves on overhead expenses such as travel and workplace accommodations.
7. What is your review process? You need to know that the work your Bookkeeper performs is accurate. Check the level of experience of the staff person who will be handling your files. Also, verify that your work does go through a review process at the company before it is delivered to you.
8. Do you work closely with CPAs? Most Bookkeepers have a relationship with an accounting/CPA firm. Especially for tax purposes. Go over with them the process by which they report your information to your accountant or CPA.
9. Do you have any guarantees? In today’s market, to stay competitive, most companies will offer a money back guarantee or trial period. Take full advantage of these offers. If you’re not happy, make sure you regain ownership of your information.
10. What security systems do you have in place? Privacy of your company files builds trust. Make sure the Bookkeeper has systems in place to ensure that your information is secured and not released unless authorized to.
Your journey to finding the right Bookkeeper is not as difficult as it may seem. With good preparation and a little patience, you can be on your way to making the best choice for your needs.
Partnering for your success
Jacqueline E. Williams
Financial Strategist
Business Coaching: A Winning Resource
Today I just wanted to step back and smell the roses. With all that it takes to manage a business, there comes a time when reaching out for help is necessary. As good as we would like to think we are, everyone can use a little help to polish their professional profile or get the needed guidance to guarantee success for their business.
As a business owner who provides bookkeeping services to others, I continually find myself needing the very services that I offer, for myself. Strange huh? Not really. Particularly with small business, we tend to take the most cost effective method when it comes to managing our resources. Need I say, this can lead us down a road of destruction and fast. Having been in business for almost 7 years now, I realized that in order to operate at the level I so desired, I needed some help. So, I enlisted the services of a business coach, who by the way is phenomenal. With this new partnership my business has re-invented itself in a way that operates smarter, which keeps me from having to work as hard. I fee like she’s part of my team, which gives me ease of mind in knowing that I have a skilled professional looking out for the success of not only my business, but my life as well. What a partnership!
So the next time you pull out your “Jack of all trades” hat, think twice and get the help you and your business needs.
Partnering for your success!
Jacqueline Williams
Financial Strategist
Bookkeeping is not only for Business
The term bookkeeping is enough to send people running for cover. Why is it that, of all the business tasks to perform, this one is the most popular when it comes to procrastination? We all know the importance of having a clear financial picture of our business activities. But what about our personal lives? In terms of bookkeeping from a personal perspective, many consider this to be simply “budgeting”. Actually this is not the case. Budgeting involves determining how much money you have, and where to spend it. Bookkeeping in a sense involves the same, however it’s more complex because it’s also about creating a system or process for managing the flow of your financial data. For instance, a simple household budget would not typically go any further than a spreadsheet consisting of “income in and income out”. Bookkeeping on the other hand shows the details behind what’s coming in, from where, so that you’ll be able to create trends and make decisions based on the cumulative data. Bookkeeping involves the process of not only the input of data but the manipulation and placement of that data. So, the next question is how would you set up an effective bookkeeping system for your household? Well, I’ll show you.
First, let’s start with the beginning, which is the source of this data. For instance, our major source of household income is from salaries or business revenue. A good bookkeeping system would have separate bank accounts to receive the income. Any expenses associated with the earnings would also flow through this account. It may seem a bit redundant, however, it makes for a cleaner process when it comes to tracking your sources.
Next, any information from these sources should be kept in their own files or folders. Items received in the mail should be immediately sorted and filed according to their categories. Thus far, you can already see the importance of an efficient filing system.
Once the data has been received, next you must enter this information into a spreadsheet. Today, most people use financial software to accomplish this task. I often refer to Quick Books, because it’s my software choice for both business and personal. Quick Books has a line of software products geared towards your specific need. Even on the most basic of levels, the software is easy to maneuver. For personal financial software, there is no need to understand debits and credits. This is where most folks get confused. You will work directly from your bank account. The software even has features to track other items such as investments, property, and retirement accounts. The biggest task here is making sure than you keep your files updated. Rule of thumb is to update based on the number of transactions you produce on a monthly basis. 0-100 transactions, you can update your files monthly. 100-250, you should update your files more often, probably weekly. After you have organized all your information, from receipt to recording, now is the time to analyze your data to make some key decisions.
Streamlining your household finances is an important process and must be handled with the same focus and energy as if you were conducting business. After all, your financial picture is the framework of your family.
Partnering for your success
Jacqueline Williams
Financial Strategist
We’re Almost There!
The time has come. April 15th is just around the corner and a lot of us are scrambling to get our taxes in on time. Many of us will take that plunge into the “unknown abyss” and become our own tax specialists. Others will seek the help of qualified professionals. Whichever your choice is, know that you can acquire help directly from the IRS. I know, when we hear those words, we generally want to run in the other direction. But think of it from this standpoint, your taxes pay the salaries of these government entities; therefore they should be at your disposal. The IRS has tons of information available to help educate you on how taxes work. If needed, you can even find information on locations that provide free tax services, as long as you qualify. In addition, their automated responses to the most common tax questions can be very useful. Just remember that since the time is near for the deadline these systems can experience overload with thousands of daily requests. I’d suggest that you try to find what you can via the website www.irg.gov. If you’re still confused, then contact a tax professional for assistance.
We must all remember, the IRS is here to assist us. Don’t take a defensive posture; stand tall and confident that you will get the answers that you deserve.
Partnering for your Success!
Jacqueline E. Williams
Financial Strategist.
The Owner’s Paycheck: How to Get Paid from Your Company
The form of ownership that you choose to operate your business under will determine the method in which you pay yourself a salary. Making this decision in the start up phase requires much research and should be handled with care. We choose our form of ownership, mainly based on the potential tax consequence that we expect. Of course, our goal is to pay as little taxes as possible into the system, so the form of ownership chosen helps to achieve this goal. There are clear advantages and disadvantages based on each method available.
As a small business, many people survive from the earnings from operations. But the key here is to remember to keep your business and personal expenses separate. So the questions is, “How do I pay myself, and what impact does it have on my taxes?” Let’s look at some of the ways a business owner can pay themselves a salary from the earnings of their business.
Sole Proprietors and LLCs
Taking money out your business or paying yourself under these forms of ownership, the owner will be responsible for self-employment taxes on any profits that remain in the business whether withdrawn or not. Because this income is not subject to withholding, the owner could also become responsible for making estimated quarterly tax payments. The estimated tax payments will account for both the self-employment tax along with income tax. The self-employment tax is the equivalent of what an employer’s payroll tax would be for FICA and Medicare. The disadvantage here would be that the owner is fully responsible for the entire tax, whereas corporations are not. The corporation is only responsible for half of the FICA taxes; Social Security (12.4%) and Medicare (2.9%) tax; with the employee paying the other half.
Many owners become confused because they believe that since they are paying the self employment tax, that they are not subject to any further taxation. This is not true. The money you withdraw from your business is still subject to income taxes and you must report this income on your form 1040. The key point to remember here is that, although you are not subject to payroll taxes, you are still required to pay into the system by way of self employment and income taxes. The advantage here is the owner gets a deduction on its taxes for paying self employment taxes, where the owner of a corporation doesn’t. For tax purposes you can elect to have your LLC taxed as a corporation, but be aware that making this choice involves very complex rules and regulations. It’s best to stick with what makes sense for you.
Corporations
If you are established as this form of business, the payment to yourself would be made in the form of a salary through payroll. Under this method, you are subject to payroll taxes, which include income (federal and state), and FICA (Social Security and Medicare). One of the key advantages of corporations is that the owners are not liable for self-employment taxes for profits retained in the business. As with Sole Proprietorships and LLCs, you saw that profits are taxed whether paid out or retained in the business. However, a corporation will be subject to unemployment taxes for both federal and state. The employee does not share in this expense. So, the difference here comes in the classification of a corporation being an entity separate from its owners. Because of this, it has an entire different tax profile than the Sole Proprietor or the LLC. The corporation and its owners are taxed separately. Each must file its own tax form.
Deciding on your method of payment simply comes down to how it must be reported for tax purposes. Take the time to do the research so that you can choose the best method based on your company’s profile.
Partnering for your success!
Jacqueline E. Williams
Financial Strategist