Bookkeeping success
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Bookkeeping Success!. “We need a certain delight in tending the books, like in tending a garden.” ~ Connie Harvey. Organization and Filing *. Divide your paperwork into 4 sections : Action needed to be taken (folder - bills to pay, etc) Action taken but not yet recorded in the system

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Bookkeeping Success!

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Bookkeeping Success!

“We need a certain delight in tending the books, like in tending a garden.”

~ Connie Harvey


Organization and Filing *

  • Divide your paperwork into 4 sections:

    • Action needed to be taken (folder - bills to pay, etc)

    • Action taken but not yet recorded in the system

    • Completed paperwork ready to be filed (tray)

    • Completed paperwork filed away (big filing cabinet)

  • Set up and label file folders:

    • By Date – All items inDaily, Weekly or Monthly

    • By Function – Bank Statements, receipts, etc.

    • Alphabetically – Customers and Vendors

* Credit to: Bookkeeping is not a four-letter word by Janet L. Redick


It’s all about balance

Credits

Debits

Assets – Liabilities = Owner’s Equity


Assets

Bank Accounts

Accounts Receivable

Buildings/Land

Equipment, Vehicles, etc

Inventory

Pre-paid Expenses

Debits and Credits

  • Liabilities

    • Loans

    • Credit Cards

    • Accounts Payable

    • Sales Tax Payable

    • Payroll Liabilities

    • Gift Certificates Sold

    • Rent Deposits Held

  • Equity (Shareholders)


Something to Remember:

  • Assets, Liabilities and Equity are part of the Balance Sheet and are normally on the top of the list in the Chart of Accounts and have a register when you double-click.

  • Income, COGS, and Expensesare a part of the Profit & Loss Statement and are normally on the bottom of the list in the Chart of Accounts and have a quick reportwhen you double-click.

Note: Before electronic bookkeeping, there were many journals to post to.


Double Entry Accounting

  • Q: What does that mean?

  • A: Posting Debits and Credits to the Balance Sheet and/or the Profit & Loss Statement.

    • Note: The Balance Sheet is for Reality,

      and the Profit & Loss is for Reporting


Double Entry Accounting►QuickBooks does it for you behind the scenes:

  • In an Invoice:

    DebitCredit

    Accounts ReceivableSales

    Sales Tax Payable

    Cost of Goods SoldInventory Asset

  • In a Sales Receipt:

    DebitCredit

    Undeposited FundsSales/Sales Tax Payable

    Cost of Goods SoldInventory Asset


Double Entry Accounting con’t…►QuickBooks does it for you behind the scenes:

  • In the Enter Bills:

    DebitCredit

    Inventory AssetAccounts Payable

    Expenses

  • In the Payroll:

    DebitCredit

    Payroll ExpensesChecking

    Payroll Liabilities


Some Pitfalls to Avoid:

  • Accounts Receivable

    • Recording payments without using “Receive Payment”

  • Accounts Payable

    • Recording Checks without using “Pay Bills”

  • Sales Tax Payable

    • Recording Checks without using “Pay Sales Tax”

  • Payroll Taxes Payable

    • Recording Payments without using “Pay Payroll Liabilities”

No more “widows and orphans”!


The General Ledger

“The Catch All”

  • Your best tool for entering transactions

    you don’t know what to do with, such as:

    • Daily Sales from a cash register tape with deposits going to several accounts due to merchant card service, cash payouts, etc.

    • Owner Investments and Draws

    • Adjustments


The Financial Statements

The Big Picture

  • Balance Sheet

    • Snapshot at the moment of all accounts

  • Statement of Cash Flows

    • Cash movements during a given time period derived from operating, investing and financing activities

  • Profit and Loss

    • Income and expenses during a given time period


“Best Practices” or Good Habits

Think of it like watering your plants, or brushing your teeth… you do it as often as is needed to stay healthy.

  • Enter transactions at least once a week

    • Cash transactions

    • Checkbook transactions

    • Credit Card transactions, etc.

  • Reconcile all statements once a month

    • Checking and Saving Statements

    • Credit Card Statements

    • Loan Statements, etc.

Back up often


Another Good Thing To Do:

Map your

Chart of Accounts

to your Tax Form

(Schedule C, 1065, 1120 or 1120S)

Tax-Line Mapping is in the “Edit Account” window.

*Opening Balance Equity should come to $0.00


Employees and Payroll

Basic Forms:

  • 941 – Federal Withholding Taxes (quarterly)

  • 941N – Nebraska Withholding Tax (quarterly)

  • UI Connect – State Unemployment Tax (quarterly)

    • Note: The above three taxes may need to be deposited more frequently.

  • 940 – Federal Unemployment Tax (annually)

  • W-2’s and 1099’s

  • W-3 – Federal Withholding Reconciliation

  • W3-N – Nebraska Withholding Reconciliation

  • W-4’s


Other Taxes

  • Sales and Use Tax – Form 10

    • Monthly, Quarterly, or Annually

  • Property Tax

    • Semi-Annually or Annually

  • Income Tax

    • Schedule SE

    • Schedule C or F

    • Schedule A

    • Form 1040 (or appropriate form)


Prompts and Automation

  • Laminated Charts and Reminders

    • Visual color coded instructions

      • See examples…

    • Pop-ups from your computer calendar,

      • QuickBooks, Outlook, Hotmail, etc.

  • Templates, Programs and Calculators

    • Data input forms and reports using computer programs such as QuickBooks, Excel and Access

      • See examples…


Know where to get help

Or, call your CPA or your REAP Business Specialist

  • Federal Taxes: www.irs.gov

    • Click Business,

      • then Small Business/Self-Employed

  • State Taxes: www.revenue.ne.gov

    • Click Business, then choose topic.

  • Business Knowledge Center: www.netmba.com

    • General Information on Management and Business

  • “Help” on your computer program menu bar.

    • QuickBooks has an excellent Help tool


Tend theBooks

Give the Books to another to tend

But don’t neglect the Books….

Or your business can’t succeed


“Where you tend a rose,

~ a thistle cannot grow.”

Frances Hodgson Burnett


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