Monthly Archives: October 2015

When To Hire A Bookkeeper

When we started our businesses we had a very specific idea about what we would do, how we would do it and what our days would look like. Then reality sets in and we find that there are tasks that need to be done that aren’t fun, weren’t in the initial picture, and don’t seem to help bring in the business. Bookkeeping is one of those tasks for many business owners. But we also need to weigh costs vs. comfort. Is it worth the cost just because I don’t like it or are there other factors to consider? So here are the three main times in a business’ lifespan, when I think hiring a bookkeeper makes sense. I’ve also included a couple of honorable mentions at the end.

  1. Initial Set Up of the Books – Most bookkeeping/accounting software providers for small business would like you think that their programmers created a product that is 100% plug and play. They aren’t, especially if you have no background in accounting or bookkeeping. So, save yourself & your tax preparer a TON of work and hire a professional, experienced bookkeeper, who is certified in your software to set up your bookkeeping system and to TRAIN you how to use it. I know we all look for ways to save money when we are first starting out, but investing in having your books set up properly and learning how to use the software can save you money in the long run…on tax preparation, you CPA won’t need to spend hours and hours figuring out what’s what; on taxes themselves, you can be sure to take advantage of all appropriate deductions and not pay taxes on money that isn’t income; on expenses, you’ll know what you’ve paid, or when something is due; and you won’t be spending potential income producing time on trying to figure out how to record a transaction or reconcile your accounts.
  2. When it Gets Delayed and Delayed and Delayed – You’re paying your bills & making your deposits on a timely basis, but nothing else is getting done. Your transactions aren’t getting recorded in your books; you haven’t reconciled in months; you know there is money in the bank account, but it doesn’t seem like as much as there should be; or you are spending precious family/down time trying to get caught up. Or maybe your bills aren’t getting paid on time, and you’re not collecting on your outstanding invoices. Or, you just HATE doing the books, I mean really HATE doing them. These are all reasons to start looking at the possibility of outsourcing your books to a professional bookkeeper or bookkeeping firm. You should be spending your time on helping your clients and growing your business…not on your bookkeeping. That isn’t what you wanted to do with your life (or you’d have a business like mine), so why not let an expert handle this part, and you do what you enjoy doing.
  3. When You Are Getting Ready to Ask the Bank for Money – When you go to get a line of credit or a small business loan you will need to present financial statements to the banking institution. If you’ve been doing your books on your own, then hiring a bookkeeper to look over the books can be money well spent. A professional, experienced bookkeeper will be able to check your Profit & Loss statements and your Balance Sheet for errors or inconsistencies. They can suggest adjustments or corrections (or do them for you) based on accounting principles so that your financial statements are as clean and accurate as possible, giving you a better chance of not only getting the loan or financing, but of getting the best interest rate possible on that loan, saving you money in the long run.

Honorable Mentions: There are few other times when bringing in a bookkeeper can be helpful.

  1. Hiring One Part-Time Employee – If you plan on hiring a part-time employee (only a few hours a week) as office help, having your bookkeeper set up and do the payroll can save you time & money. Going with a payroll company for one employee can be costly, and so can not understanding the rules, regulations, reporting and laws surrounding payroll. Many professional bookkeepers offer add-on payroll services. Just make sure the one you are hiring has the experience & knowledge to assist you.
  2. When You Hire A New Full Time Bookkeeper – What?? Why would you hire an independent bookkeeper if you have one already on staff?? Well, bringing in an independent, professional, certified bookkeeper to train your new bookkeeper on your software can, again, save you some headaches. The independent bookkeeper will not bring bad habits or past baggage into the training, only the proper procedures and current knowledge of the software. Time will be spent on training, not on the history of who does what and why and to whom.

Hiring a bookkeeper or bookkeeping firm is a big step and one that can have an extremely positive or negative effect on your business. As with everything else in business, make sure you take this step carefully and with a lot of research. You want to vet your bookkeeper, what is their background, are they insured, do they have experience with your industry? Do they seem like your “kind of people”?

Where do you find this bookkeeper? Through your network, ideally. Ask your business associates, your clients, your vendors, who they use. Would they recommend someone to you? There are also places like for QuickBooks ProAdvisors, or for a FreshBooks Accountant.

Online Bookkeeping – Cons

So, last week I explained some of the benefits and positive aspects of online bookkeeping, and specifically QuickBooks Online (QBO). This week I will look at some of the disadvantages of QBO and online bookkeeping in general.

  1. Cost. I know I listed cost as a positive last week, and it can be. But if you need to add payroll or need the Plus subscription, then QBO may be cost prohibitive. Let’s just look at the Essentials package with Payroll. That is $27.00 per month for Essentials and an additional $31.20 for Payroll (plus $2.00 per month per employee). That totals $662 for one year of QBO (assuming one employee and the first month free). QuickBooks Pro with Enhanced Payroll (one employee, there is a $2.00 per month per additional employee) is currently $299.99 from Staples.
  2. Limited Functions. Although QBO has come a long way, there is still a ways to go. It doesn’t function the same ways as QuickBooks Desktop (QBD). It doesn’t integrate with QB POS currently. There are fewer reports to choose from and the customization options are restricted. QBO can not do complete job costing, but will track expenses by job. Freshbooks, although easy to use, also has some significant limitations. It is an invoicing & expense tracking software only. No reconciliation option, nor the ability to separate your expenses into checking vs credit card accounts, nor. To accomplish these functions you need to export your data into QuickBooks or another bookkeeping software.
  3. Dependent on the Internet. Anytime/anywhere access is only a benefit if you have reliable, strong internet. There are still many places where internet access is not reliable. This can restrict your ability to do your books on your schedule.
  4. One Company per Subscription. Unlike with QBD where you can track all your businesses with one software purchase, if you use QBO, you will need to pay for a separate subscription for each business.
  5. No More BackUps. This could be viewed as a pro (and I explored that view last week), and usually is. Until the business closes, for whatever reason…maybe the owner is retiring, or they’ve decided to open a new business. With QBD when a business closes or changes hands, and the books need to be closed, finalized and archived, a back-up is made and filed away. There are no back-ups with QBO. So, the file needs to be exported from QBO into QBD. Then the data will need to be verified that it matches the final financial reports. Then a back-up can be done and the books closed.
  6. As I said last week, nothing is perfect. And there are downsides to using QuickBooks Desktop as well. The key is making sure you explore all aspects of the software or online option you are considering so that you choose the one that best fits your needs and your business.

Do you use QuickBooks Online, Desktop, or another program for your bookkeeping? What do you like most about your choice?

Online Bookkeeping – Pros

Although this post focuses on QuickBooks Online, because that is the program I am most familiar with, the majority of these pros (and in the next post, cons) also apply to the other online bookkeeping options.

Now, I’m going to be completely honest, up until this year, 2015, I was hesitant to recommend online bookkeeping when asked. As a QuickBooks Certified ProAdvisor, and bookkeeper who works exclusively with QuickBooks and other Intuit products, I felt the online option wasn’t worth the money, or more importantly, the frustration of using it.

This year that changed. In my opinion QuickBooks Online (QBO) has advanced enough to be a viable option for small businesses. I wouldn’t, and don’t, recommend it for every client, but when appropriate, have very few reservations about it now. Although it still doesn’t offer all the functions and capabilities of the QuickBooks Desktop (QBD) versions, it has improved its functions and workflow to make a lot more sense than it used to.

So, what are the positive aspects of QuickBooks Online?

  1. Easy Access from Anywhere. Ok, the one hitch in this is you do need internet access, and confidence in the security of both your technology and the wifi/internet service being provided. Otherwise, if you travel quite a bit, have partners or business associates in different locations, states, even countries, being able to log in and stay on top of your bookkeeping is a great advantage.
  2. Lower Costs or Better Cash Flow. Instead of shelling out a couple of hundred dollars (or more depending on the version you choose), a monthly fee is deducted from your checking account or charged to your credit card. If you choose the QBO Essentials or Plus subscription you have the ability to set up 3 or more users, which means there is no need to purchase additional software licenses (or have everyone use the same login, and violating your user agreement). All the QBO subscription plans also have 2 accountant users, which means you can set up both your bookkeeper & accountant to have unique user access. You don’t need to give out your login or password information to anyone. Nor, do you need to send backups or schedule time to do something else while your bookkeeper is on your computer.
  3. No More Upgrades. Upgrades will be a thing of the past. You will always have the latest version.
  4. No More Backups. Because your data is housed on the Intuit Servers, you do not need to back up your QuickBooks file anymore. These servers have bank-level security, a higher level of security than most small businesses. Also, if your computer, laptop, or server dies, there won’t be that moment of unease, or let’s be honest…panic, wondering when you backed up last and whether or not the backup will even restore.
  5. Reduced Data Entry. Ok, Intuit will tell you there is no more data entry, but in the real world, there is still some data entry. I don’t truly believe that we will ever get to a point where data entry is completed eliminated. It is greatly reduced with the automatic DAILY downloads from your bank and credit card companies. You will still need to look at each transaction, and tell the program what to do with it (hence still some data entry). And yes, QBD also has the bank feeds options, but with QBD it isn’t automatic, you need to initiate the download.

However, it isn’t all sunshine and roses. There are downsides to doing your bookkeeping online. Next week’s post will explore those aspects.

Do you use QuickBooks Online, Desktop, or another program for your bookkeeping? What do you like most about your choice?

EMV and You

If you haven’t started to already, you are going to be hearing a lot about the shift to EMV or “Chipped” credit & debit cards. This is because the liability shift took place on October 1st. So what is EMV, what does it mean to you as a consumer, and what does it mean to you as a merchant? Let’s take a look.

What is EMV? EMV is short for “Europay, MasterCard and Visa”, and what it means is that banks are going to be imbedding computer chips into our credit and debit cards. These will make the cards more difficult to copy & counterfeit and should reduce credit card fraud.

What does this mean to me as a consumer? Well, initially maybe not much. You will be receiving over the next few weeks, (or in the case of debit cards, potentially months), replacement cards from your bank & credit card companies. These will be going out even if you’re not due for a replacement card. Once you’ve received your new card, the change will be a little more apparent. If you go to a merchant and they have an EMV terminal or reader, instead of swiping your card, you will insert it into a slot (similar to how you use an ATM). By “dipping” (yes that seems to be the new terminology), your transactions will be more secure and you will be less likely to be the victim of fraud. Online shopping will not change, you will continue to type in your information as always. So the need to be careful and do your research before shopping online will continue.

What does this mean to me as a merchant? This is where there are some bigger changes. First, you will need to upgrade your terminals or mobile readers. Why, you may ask? Because, if you are presented with an EMV card and swipe it on a non-EMV terminal, the liability for certain types of fraud shifts to YOU the merchant. The bank & card issuers will no longer be responsible for those fraudulent charges. That could be potentially HUGE dollars. And with this change, I would not be surprised if we see the counterfeiters and identity thieves starting to target the smaller businesses, who may not be as quick to spend the money on new technology as the bigger merchants.

Yes, upgrading to the new technology, for many merchants will cost them money. The cost for the terminals will depend on your processor. Doing a quick Google search for EMV terminals, I saw pricing from $129 to as high as $788. The cost will also be dependent on the programs and contracts you have with your processor. For the mobile readers, PayPal Here EMV is $149.00 (if you do $3000 or more in charges in the first 3 months you will get a $100 rebate). Square is $49.00 according to their site. And, Intuit/QuickBooks doesn’t have theirs ready for market as yet, but you can pre-order it for $30.00. Plus, if you are a QuickBooks Payment customer then good news, Intuit is taking on the liability for the next six months, until March 31, 2016, giving their customers time to transition.

If you have more questions about EMV, if your terminals are compliant or if you don’t like what your current processor is telling you, we can help. We have trusted partners who can help you with this transition.