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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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
Characteristics of a good Bookkeeper
Finding the right Bookkeeper doesn’t have to be a tedious task. If you put forward the proper effort and research, you will find that a minimal amount of time would be spent in this process. I thoroughly believe in doing my homework up front when it comes to making key business decisions. So, to make your process easier, I am supplying you with these necessary tools. Let’s take a look at some important characteristics of a good Bookkeeper.
Detail oriented
Attention to detail is a must! Imagine having a person who doesn’t read the fine print or always looks for shortcuts. Or even worse, imagine trying to make a deposit not knowing who paid you the money or for what service. Believe it or not, this does happen. Being thorough in your documentation is critical to accurately reporting your financial information. A good Bookkeeper will know this. They should be able to determine what information is necessary and what’s not.
Must love numbers
We always hear about how important it is to have a passion for what you do. Whether it’s a hobby, your profession, or your business, it makes good sense to enjoy it. Hence, it makes perfect sense that you not only like, but love dealing with numbers. Working with numbers requires that you have a clear understanding of math, and that you are not intimidated by its concepts. Math is such an exact science. There are no maybes in summing up totals or calculating balances. Either its right or wrong! It takes great courage to deal on this level with a very small margin of error. I’m not trying to scare you here; just trying to stress the importance of taking responsibility for numerical accuracy.
Analytical
A good Bookkeeper will have the necessary skills to be able to review and decipher information for varied purposes. They must be able to understand what to look for and how it impacts the entire picture. The ability to create what-if scenarios will also come into play. For planning purposes, analysis of financial documents is crucial to making important decisions such as, how much financing could be needed for expansion, the affordability of benefits, or the necessity of working capital.
Time Management
My favorite acronym applies here. PPP-Planning promotes progress! A good Bookkeeper knows how to organize their time for optimum results. This involves creating an audit of how your time is spent. The right Bookkeeper will:
1. Determine which tasks have priority over others.
2. Always allow time to focus on problems and their solutions.
3. Schedule for weekly reviews and updates.
4. Not multi-task. This one is tricky because the common practice is to multi-task. Although this is a desirable quality, I’ve found it best to focus on one task to its completion before moving to another. In my opinion this approach yields better results when given the time to focus solely on that task.
Technology guru (or somewhat)
Without a doubt, this proves to be one of the most important characteristics. Everything today is automated, and it doesn’t make sense to partner with someone who is not technologically inclined. Software is used in all aspects of business today. I can’t think of anyone today who uses a manual system. And if they do, believe me, in their search they will be looking for someone who can bring them into the twentieth century. Being wise as to selecting the right software and knowing how to integrate it into the business will improve productivity and performance. The right Bookkeeper will have the skills to accomplish this. They will also know how to troubleshoot for problems, provide installation, configuration, and conversion.
Knowing what to look for in a Bookkeeper is half the battle of finding one. Take your time and make a careful assessment and you’ll be on your way to better bookkeeping.
Partnering for your success
Jacqueline 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