Author: Alita Hall

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Small Business & Bookkeeping – Economic Injury Disaster Loan

The Coronavirus has really changed things in a DRASTIC way. Small businesses are forced to close as they are deemed nonessential and because of this, they are losing money, forced to lay off or fire loyal employees and are having difficulty paying their bills. This lack of control over their businesses causes high levels of uncertainty, stress, and that is just on the owner. Their employees are in fear of losing their homes, health insurance, and a host of other liberties that NO ONE should be in fear of losing.

The Small Business Administration has several solutions to help small business owners protect their assets including their employees. The one I am going to talk about in this blog post is the Economic Injury Disaster Loan, referred to as the EIDL for the remainder of this post. The EIDL was put in place as a means for small businesses to offset the financial damages caused by disasters. Think Hurricane Katrina. This particular loan is only for those injuries of a financial nature.

I recently reviewed a presentation on the EIDL; its requirements, what it can and cannot be used for, and who is and isn't eligible to apply. The requirements I am going to specifically mention are those that deal with your financial information.

The EIDL allows borrowers to receive up to $2 million to sustain their businesses. Loans in excess of $25,000 require collateral, this collateral can be real estate, and the loan will not be denied for lack collateral but, a pledge of what is available IS required. Interest rates for small businesses is 3.75%; for most private and non-profits it is 2.75%. Terms up to 30 years based on type of business, size, and financial resources.

To apply, you will need COMPLETE copies of your most recent tax return, schedule of liabilities, and a personal financial statement. If you do not have your tax return, a year end P & L Statement and Balance Sheet will suffice.

When it comes to your year-end Income Statement and Balance Sheet, a bookkeeper is worth their weight in gold. Stop spinning the wheels of your minds trying to come up with accurate financial statements. Schedule a consultation with AMH today and let me help you!

For more on the requirements for the EIDL click HERE. To schedule an appointment with AMH, click HERE.

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Small Business & Bookkeeping – Time Tracking

Let me start with an apology. I am sorry I didn't post last week.

I want to jump right into it because with all the talk about COVID-19 and employers moving to a virtual working environment, this post is NECESSARY.

By now employees are being clocked via badges issued so that when they scan it to enter the building, they are officially "on the clock". With the move to remote offices and virtual working environments, this is not happening. I DO have a solution.

Tsheets by Intuit is your time tracking solution both remotely and in-house. It handles it all! With its geo-location tagging, you, business owner or HR Director, can see where an employee is when they clock on.
From the admin screen you can get a quick glimpse of who is currently working, who is on break, track their paid and unpaid leave hours, approve shift changes and time off requests.

Employees can clock in from their phones via the smartphone app, the website, or using a tablet set up as a kiosk. This is great for in house because that kiosk can be set to snap a photo at clock in so there will be no more clocking in for friends who are late!

Employees can choose from a list of their job duties what they were working on and give a summary in the notes section. I use Tsheets as I work on my clients and I send those reports directly to them so they know exactly what their money is getting them in terms of service AND value.

Tsheets by Intuit is this bookkeeper's COVID-19 approved time tracking software.

Sign up with me and receive great discounts.

Schedule a call now. Let's talk!

tsheets
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Small Business and Bookkeeping – Expenses

Tracking your expenses sounds easy, right? We all know that isn't the case. It can be quite time consuming especially if using spreadsheets. If you are a high volume transaction business, finding the time to input that data can prove to be quite difficult and let's face it, that task can simply get put off for MONTHS is there is too much to be done.

I want to talk about a couple of automated methods of tracking your expenses that, once setup, require nothing more than uploading a receipt.

First up:

Receipt Bank
Optimized for web-based accounting platforms, Receipt Bank allows you to take a picture of, store, and sort your receipts for ease of use for you and your accountant or bookkeeper. There is also a mobile app, making it much easier to snap a photo of the paper receipt and upload it to you Receipt Bank folder before it gets lost or damaged so bad it can’t be read. For a demo of Receipt Bank, you can click the name above this paragraph.

Next:

Expensify
Another optimized for web-based accounting platforms, Expensify boasts itself as a simple method of tracking expenses across multiple accounts; automating the entire process from capturing the receipt to payment to creating the expense report in real time. Expensify integrates with many credit card and banks to further create the ease of use. For more about Expensify, I found a great article that discusses the software HERE.

Lastly:

Direct to Accounting Software
This method is simply taking your receipts and inputting the data directly into your accounting software, whatever that software may be. You can still get expense reports and store the receipt as an attachment should you choose to do so. This method is a bit more time consuming and requires high level input from you, business owners.

Side note: Not every application is going to handle your 100% of your needs. Some of them mention the handling of other financial documents and although having one software that CAN handle more than one piece of your financial information is wonderful, this is not always IDEAL. There is absolutely NOTHING wrong with employing multiple applications for the handling of financial documents like bank and credit card statements, expenses, and bills and invoices in addition to your accounting software.

If you are looking to get a system set up that can automate your finances, schedule a consultation with AMH. I can help you choose those applications that are best for your business.

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Small Business & Bookkeeping – HubDoc

HubDocLogo

For small businesses, automation is a MAJOR key to succeeding. When you have to do everything on your own, having some powerful tools in your tech stack (software and apps used to run your business) to alleviate a lot of the data entry can be LIFE CHANGING.

One of the tools that should be in EVERY small business' tech stack is HubDoc.

The power of HubDoc comes from the over 700 suppliers (banks, credit card, and utility companies) you can import documents from and the way you can upload documents like receipts. You can scan them, take a photo with your smartphone, or email them.

In addition to where you can get your info from and how you can upload that info to HubDoc, are the ways your HubDoc account can be maintained.

Self-Managed is just as is it sounds. You, business owner, will manage your account including adding your own bank and utility accounts that will fetch statements and invoices. You must invite your accountant/bookkeeper to your HubDoc account in order for them to have access to the documents and be able to sync information between your cloud accounting software and your HubDoc account. The self-managed option is best if you do not want your accountant/bookkeeper to have access to your financial institutions' login information.

Next is Firm-Managed. In this instance the accounting/bookkeeping firm manages the HubDoc account for you with the login information to your banks, credit card companies, and utility company. This is the best choice in the opinion of THIS bookkeeper because it eliminates a constant barrage of emails, texts, or calls in an effort for the firm to get information or updated information especially if you have your accountant or bookkeeper pay bills for your company.

One more awesome feature of HubDoc is how it can simplify your bookkeeping. Here is what HubDoc has to say about that:

" How Will Hubdoc Simplify my Bookkeeping?
Audit-Proof Your Business: Have a source document for every business transaction, and a bank statement for every month of business activity. Hubdoc goes to each website and fetches your documents.
One Secure Hub: Store unlimited documents in a single, auto-organized hub. Never lost sight of a statement or invoice again.
Easy Collaboration with Your Advisors: Your accountant and bookkeeper will instantly have access to everything they need. No more time spent on monthly hand-offs, and no hassle over lost documents. "

HubDoc is cloud storage for your financial documents 10x'd to do MORE than just store your paperwork. When set up and used properly, HubDoc can sync with your QuickBooks Online, Bill.com, and QuickBooks Desktop and carry over bills and invoices to be paid; making both you AND your accountant/bookkeeper more efficient and effective with how the time is spent.

For more information about HubDoc, click HERE.

Already using HubDoc or want to get started, schedule your consultation TODAY!!!

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Small Business & Bookkeeping – Choosing Software

Switching from spreadsheets to accounting software is a big deal and you want to first and foremost ensure you are getting the software that fits your BUSINESS needs. With cloud accounting software becoming increasingly more popular, it gives you another option to consider when switching to a computerized accounting software.

Let's discuss the options available.

Intuit Products - QuickBooks Desktop and QuickBooks Online

Here at AMH, we are AVID fans of QuickBooks Desktop. It is, by far, the most robust accounting software available to small business owners. It handles payroll, inventory, cost accounting, property management, and much more. To make this more of a better option, your desktop file can be hosted online, giving you anywhere access to your accounting information as long as you have secure internet connection (recommended).

QuickBooks Online is a good option for those just starting out and want to keep good records. With its "scalable" options it is a good fit for many. Like its desktop counterpart, QuickBooks Online can handle payroll, inventory, and cost accounting. It can handle all of this for a business with multiple locations. This is especially good for construction business or contractors who have jobs in multiple locations. For more information on the QuickBooks Online options, click HERE.

AMH does not work with any QuickBooks Online products.

The remaining accounting software that I'm going to mention are all online only and I am not as well versed in those as I am Intuit products.

Other popular choices for accounting software:

Xero
Accounting Suite
Oracle
FreshBooks
Wave
Sage50 Cloud
Zoho
NetSuite

Clicking on any of the above will take you their websites where you can learn more about them.

If you have already chosen QuickBooks Desktop as your accounting software, have it hosted in the cloud, and are ready to get started, schedule a consultation and a setup appointment with AMH today!

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Bank Accounts – How Many Should I have and Why?

One of my favorite things about helping business owners, particularly landlords, is discussing systems and processes. There is just something about providing solutions for a client and seeing that look on their faces that makes me happy.

One of the items on my list of implementable systems is Bank Accounts. For a rental property business, the setup of your banking information, as it pertains to your business, is crucial to creating and maintaining an efficient operation.

Let's get right into it.

The number of bank accounts I recommend any rental property business have is 3. An Operating account, a Security & Key Deposit account, and a Repairs account. The reason why I recommend having these accounts is because it helps keeps monies separate and helps ensure there is a reserve in case of large repairs.

The Operating account is where the rent goes. It is also the account that expenditures for business will come out of. Expenditures like office supplies, business credit card payments, and payments made to contractors. Owner's Draws can be taken from this account, too. You want to make sure to keep things simple with this account. Try to avoid paying for personal expenses out of this account. Simply do an owner's draw instead and transfer the funds to your personal account.

Next up, Security & Key Deposit account. This account is strictly for REFUNDABLE deposit payments, i.e. Tenant Security and Key Deposits. Some states even REQUIRE that these funds are separate from rental income. In the opinion of this bookkeeper, these funds should be separate no matter what the law says. If there is damage to the unit, the funds should first come from this account, out of the individuals security deposit and then from the repair account. Once the repairs are finished, you want to send the receipts to AMH so that I can properly invoice the tenant.

Lastly, your Repairs account. This account is so important. As you well know, the city can impose new ordinance requiring a new garbage enclosure on pavement for multifamily or that all driveways must be paved for single family and these updates to be compliant can cost THOUSANDS. Having this account set up will put you in a better position to handle those things, whenever they come up. The 2 sole purposes for this account is to offset the cost of getting a unit back in shape after a tenant WHEN the funds from their security deposit isn't enough to cover the repairs AND for compliance construction, updates, and major repairs like the roof, basement, etc.

It is always best to keep these funds split out so you can see exactly where you are with income, if you need to move some money for a major repair, and exactly how much is in your deposit account. If you have been operating your business from 1 account and would like to implement this strategy, schedule a call with AMH. I can help.

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Recording & Reconciling 3rd Party Merchant Payments

Discrepancies occur often with bookkeeping and one of the most popular I have seen is during the reconciliation with 3rd party payments.

There is usually a 1-3 day turnaround before funds paid by a 3rd party are deposited into a business' checking account.

For example:

  • Company A performs Jobs for Companies 1,2,and 3, respectfully, on 3/30/XX.
  • March 30 is on a Monday.
  • Companies 1 and 2 pay via check and company 3 pays via credit card.
  • Checks are recorded and deposited Monday, March 30 at 4:30; the credit card payment is recorded on March 30.
  • Reconciliation is performed April 1 including the credit card payment which has not cleared the bank at the time the reconciliation is completed.
  • This results in a discrepancy in your bank reconciliation which will continue to affect all other reconciliations in the amount of the credit card payment.

It is important that you verify when deposits hit your bank by logging into the business' operating bank account and matching those deposits with payment received via 3rd party merchants that processes your credit card transactions. Doing this before you reconcile will save you or your bookkeeper countless hours in unreconciling and re-reconciling to correct the issue.

If you have found issues like this and others, contact AMH immediately and let us help you unravel it!

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Tax Tips – Vol. 1

Parents with working dependents, this post is for you and your working dependent.

Below is the link to an article I found giving some insight into the requirements to file with your working dependents and if they should file on their own as well. I am going to highlight the key points AND provide the link to the article as well.

Happy reading!

What can you claim on your return?

For 2019, dependents who are not 65 or older or blind, who have earned income more than $12,200, must file their own return. Income levels required to file a return for those 65 and over or blind are higher. You do not include their earned income on your taxes. If they earned less than $12,200 in 2019, they do not have to file a return, but may wish to do so to recover any withheld income taxes. You can still claim them as a dependent on your return.

Dependents who have unearned income, such as interest, dividends or capital gains, will generally have to file their own tax return if that income is more than $1,100 for 2019 (income levels are higher for dependents 65 or older or blind).

A parent can elect to claim the child's unearned income on the parent's return if certain criteria are met. Generally, for tax years prior to 2018, the unearned income is taxed at the parents' tax rate. Beginning in 2018, all net unearned income over the annual threshold ($2,200 in 2019) is generally taxed using the tax rates for trusts and estates.

From <https://turbotax.intuit.com/tax-tips/family/should-i-include-a-dependents-income-on-my-tax-return/L60Hf4Rsg>

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A Word From AMH

I want to keep this post short and sweet. It's listing the 5 major things THIS bookkeeper wants small business owners of all industries to know. Let's get into it.

 

Bookkeeping is not a glorified data entry position.

It takes education and industry knowledge to properly enter transactions so that they are hitting the proper income and expense categories. This is to ensure maximum

business tax deductions for you, the owner, which in turn reduces your tax liability.

 

The price of your accounting software does not equate the monthly cost of your ongoing bookkeeping service.

I say again, the price of your accounting software does not equate the monthly cost of your ongoing bookkeeping service. When all you care about is the price, you underappreciate the experience, knowledge, and expertise of all bookkeepers. Cheap work is often not the best work. Think about it. Anything you see as high quality always comes with a higher price right? Treat your bookkeeping needs the same…you will not regret this decision.

 

Your bookkeeping needs are NOT simple.

If your bookkeeping needs were as simple as you say they are, you would not be behind or in need of an accountant or a bookkeeper. Let's be honest only a knowledgeable accountant or bookkeeper can distinguish how simple or complicated your books really are. You understand how to do the service your business is in, not the accounting requirements, right? Why would you think they were simple if you don't understand them?

 

Do not micromanage your bookkeeper or accountant.

Especially if you have no idea how to do the work. Do not try to tell them how to shed time down on doing the work YOU hired them to do. You will get labelled as a PITA (Pain In The ASS) and the rest of the industry may be on alert for you. Imagine how you would feel if a novice came in telling you how to run your business and you KNOW they haven't the slightest clue about what you do? Why would you do the same to an accountant or bookkeeper?

 

Respect the boundaries your accountant or bookkeeper sets.

You would expect the same from him or her. If they tell you all correspondence is to be sent via email, do that. If they tell you they are on vacation and will get to your issue when they return, respect it. We are business owners too and our time is just as important as your time.

 

We WANT to work with you and we need the same respect FROM you as you expect from us.

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Efficiency: Tenant Exit Interviews

The final installment in the efficiency series is on Tenant Exit Interviews.

How will this make me efficient?

When a tenant moves out (this is when you want to conduct an interview, not when they are evicted) he or she can give you valuable insights that can level up your rental business.

You can ask questions like the following:

  1. What did you like about the application process?
  2. Was it easy to get through?
  3. Were you fully aware of what we expected from you and what you could expect from us?
  4. Would you rent from us again?
  5. What was the best thing about the entire process?
  6. What was the worst thing?
  7. What could we have done better?
  8. What do we need to keep doing?
  9. If you were renting from us again, what amenities would you like to have that weren't present now?

The key to growing your business is making your rentals stand out to your ideal prospects. What better way to do that than to interview those tenants that are moving on their own accord? Especially if they are caught up on rent, didn’t damage the place, and actually give you a notice BEFORE they move. It's tenants like this that can really give you invaluable feedback that you can use to level up you processes and scale your business by attracting your ideal tenant.

Remember, the way your building looks on the outside, the inside, the amenities, location to places like schools, shopping, and entertainment are all just as important to your ideal tenant as the amount of rent they are paying. You cannot expect A+ tenants in D- units.

Conduct the exit interview with your tenants and let them help you get to where you want to be.

For more information about this blog post and the rest in the efficiency series, schedule a call with AMH!

AMH Bookkeeping, LLC. The Landlord's Bookkeeper™

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