Bookkeeping Success!

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 Receivable Sales Sales Tax Payable Cost of Goods Sold Inventory Asset • In a Sales Receipt: DebitCredit Undeposited Funds Sales/Sales Tax Payable Cost of Goods Sold Inventory Asset

Double Entry Accounting con’t…►QuickBooks does it for you behind the scenes: • In the Enter Bills: DebitCredit Inventory Asset Accounts Payable Expenses • In the Payroll: DebitCredit Payroll Expenses Checking 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

Bookkeeping Success!