Bookkeeping Challenge Questions
Ever been faced with a bookkeeping challenge and didn’t know where to turn to have your questions answered? Well here’s your chance. Ask your questions about bookkeeping and managing your company’s books and we’ll respond to you within 36 hours. Just leave your questions in the comments below.
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THE INS AND OUTS OF MAKING PAYROLL EASIER
I’ve decided to dedicate the month of June’s posts to payroll. Typically whenever you mention payroll to a small business owner, immediately they cringe at the idea of having to pay payroll taxes. And of course, the complexities of taxes don’t make the situation easier to bare. Then what’s the solution? Well, the solution to make this whole process easier can be three fold.
First, you can be proactive by educating yourself on payroll processing and handling it yourself (and by the way it’s more than just cutting a check to an employee).
Second you can outsource the entire function.
Or third, you can keep the easier components in house, and outsource the difficult parts, such as the payment of payroll taxes and filing of reports.
Whatever method you decide to use, it’s best to prepare yourself up front by making sure that you have all pertinent information in each employee’s file. Information such as; name, address, hire date, employee status, birth date, social security or tax id number, means of contact, form I-9, age certificates and state exemption certificates. Your best course of action is to have a completed employee information sheet with all this data in the front of their file. In addition, make sure that you also have a completed W-4 form. The average employee doesn’t understand how to accurately complete one of these, that’s why it’s not only necessary to include the instruction sheet, but to also review the form carefully before including the data in the employee records. Remember, it’s the employee’s responsibility to determine the amount of withholding s to report on form W-4, not the employer. The employer only provides assistance in the completion of the form.
One of the most important components of payroll processing is making sure that your worker is properly classified. Time and time again, I’ve counseled business owners on the difference between employee and independent contractors. Many are determined to take the Independent contractor route because of the benefit of not having to pay payroll taxes. However, the IRS has very stringent rules concerning this classification. Independent contractors are workers who are in control of how and when their work is performed. They are also responsible for the payment of any related federal and local taxes on their earning. On the other hand, employees are under the control of the employer, and the employer is responsible for the submission and payment of any related payroll taxes. The consequences of mis-classification can be costly. Therefore, it’s to your benefit to make sure that you determine this relationship before making any payments to the party involved. Create a questionnaire. This should help to make the process a lot easier.
So as you see, the ease of the process comes with the collection of data. It’s all in the initial set up that determines your success in having a decent payroll experience.
Partnering for your success!
Jacqueline Williams
Financial Strategist
Monthly Bookkeeping For Success Tele seminar
Each month Bookkeeping For Success hosts a tele-seminar with successful, innovative, motivated small businesses who are focused on creating an effective system for their bookkeeping.
March’s topic is
“Time Management Techniques using Quick Books”
This tele-seminar will introduce the concepts of time management and its techniques to help you manage your bookkeeping process better while using Quick Books.
You are welcome to email questions in advance to: eworkshop at jefinancialservices.com. In addition, we will provide an opportunity for you to ask questions during the tele-seminar.
Here are the details….
Date: Wednesday, March 25, 2009
Time: 4:00pm EST, 3:00pm CST, 2:00pm MST, 1:00pm PST
Reserve your seat at: Bookkeeping Success Tele Seminar Line
All you have to do to attend the tele-seminar series is find a comfortable spot for about an hour, sit back and connect with the Bookkeeping Success Tele Seminar Line. You’ll get to ask as many questions as you want during the seminar and even after. Plus, if you miss a session or the available times are not good for you there’s no need to fret because the entire event is recorded and you’ll have the ability to listen to it at your convenience.
I hope you’ll take advantage of this invitation and I’m looking forward to “seeing” you on the call.
Quick Boooks Quickie
Ever wonder how easy it is to post your transactions in Quick Books? Start your business the right way by setting up your books correctly in the beginning. Listen to our Bookkeeping 4 Success Radio Show, and hear how to set up your books in Quick Books effortlessly.
Family financial season of change
Life’s cycles are wonderful & mysterious. Throughout each season we experience the changes that the earth brings us in all its wonderment & splendor. With great expectation we prepare our households. Gathering and storing throughout the fall to prepare for the winter. Clearing and planting in preparation for the spring & summer. The understanding of these events will determine our mode of preparation for them.
Spring is a time of renewal. As we clear the clutter in our home we should also clear the clutter in our financial lives. With tax season fast approaching, this is the opportune time to review & organize all records. Set up categories for all your expenditures & file your receipts based on these categories in a tickler file. The best approach is to automate your process. There are various programs, such as Quicken, Peachtree, & Microsoft Accounting, which are very user friendly and require minimum to no accounting knowledge. To manage the input of your receipts even further, utilize software for expense management such as Neat Receipts. This product will streamline the entire process and is easily integrated with other programs.
Another important financial area to review would be insurance policies & retirement accounts. For your homeowner’s /renter’s policy, spring is a good time to take inventory, especially after the Christmas holiday purchases. If your policy does not provide a manual inventory spreadsheet, create one in Excel. It’s a good idea to update your inventory sheet quarterly, to cover purchases made throughout the year. Let’s not forget auto insurance. With summer fast approaching, this is the time to consider major repairs, in preparation for summer travel. Check your policy to make sure you have adequate coverage. If your vehicle is financed and will be paid off this year, you may consider changing from full coverage to only liability coverage. Consider factors such as the overall condition of your vehicle, listed drivers, & total mileage. A change in your premium could have a significant impact on your monthly budget. As for your retirement investments, the best practice is to review your investments monthly for performance, but try not to make changes to your portfolio more than on a quarterly basis. However, expect an annual review from your insurance agent or financial advisor. As experts in their fields, your Advisor will determine the best possible balance of securities in their corresponding industries. Your investment style & history, which is generally gathered prior to you initiating the account, is the basis of all decisions made by your Investment Advisor. A good Advisor will operate under your discretion and comfort level.
What about your taxes? Because this subject can be very expansive, I will only mention briefly some important points to help you manage the “mayhem” during this period. Most people operate under the mindset to file their taxes in a manner to produce the largest refund. This is not necessarily a good idea. Don’t depend on your tax refund to cover living expenses. That’s what a savings account is for. The IRS does not pay you interest for the money it refunds to you. Technically, you are giving the IRS an interest free loan throughout the year. Wouldn’t you rather have those funds available to use at your discretion? Maintaining an effective budget will help to alleviate the stress of unwelcomed financial disasters. So, here are some simple guidelines to follow that can minimize your refund. Monitor your exemptions claimed on your W-4. The more exemptions you claim, the less taxes your pay into the system, and vise versa. If you decide to claim more than required exemptions for your situation, only do it for 6 months. Therefore, every six months you should be reviewing your W-4 exemptions. This may help to level the playing field a little. Also, be sure to maximize your deductions & tax credits. Most people miss out on common items such as educational deductions, capital losses on investments, retirement contributions, etc. The best way to gain a little knowledge and insight into taxes is to purchase a tax manual from your local book store, such as the “Dummies” series. These guides are an easy read, and clearly break down all categories of deductions & tax credits possibly available.
Well, now that we’ve cleaned out the ember s of our attics, let’s get to work on our financial success!
Partnering for your success
Jacqueline E. Williams
Financial Strategist