Tag Archives: Paragon Small Business Solutions

How Do You Know if Your Bookkeeper is Doing the Job Right

Most small businesses use bookkeepers to maintain their financial records, on a part-time, full-time or as-needed basis.

Some bookkeepers are exceptional and knowledgeable, while others, not so much.

A good bookkeeper is imperative to the financial health of a business. She pays the bills, reconciles the accounts, and properly categorizes revenue and expenses into the correct accounts.

A bad bookkeeper is dangerous. By failing to follow proper accounting procedures, she creates an inaccurate picture of the business’ financial stability, and in the long run, the business pays a far greater price – in the form of late fees and interest on missed filings or late bill payments, and a much larger CPA bill at year end to fix the mess.

What Information Should You Review

1. Reconciliation Reports
Your bookkeeper should reconcile your bank and credit card accounts monthly. QuickBooks (and other accounting software) will generate a reconciliation report showing the date the account was reconciled, the transactions that cleared in the month (meaning they appear on the bank statement), and the transactions that did not clear in the month. Comparing the reconciliation report to the bank statement allows you to check on your bookkeeper’s work. If the dates of the uncleared transactions are recent, then they are fine. Checks written at the end of the month that have not been cashed, deposits “in transit” on the last day of the month – those are to be expected. When deposits are several months old and still showing as uncleared, there’s a problem because your bank balance in QuickBooks is overstated and not truly reflecting the balance at the bank. Uncleared expenses cause your QuickBooks bank balance to be understated.

2. Aging Reports
Are your customers paying you on time? Your bookkeeper should be notifying you of old balances and attempting to collect on them. After 90+ days, you may need to send the account to a collection agency for resolution. Are there unapplied credits from your customers?

Is your business paying its vendors on time? Are there duplicate bills? Not recording bill numbers is a symptom of a greater problem – bills may be paid twice, or the correct bill may not be paid at all.

3. Profit and Loss (Income) Statement
Review this report. If you don’t understand it, ask your bookkeeper. If she can’t explain it to you, there’s a problem. Your bookkeeper must be able to explain your P&L to you and make suggestions for improvements if applicable.

4. Balance Sheet
Your balance sheet shows your liabilities and assets. It provides an accurate financial picture of your business and should be looked at often. If accounts look odd to you, chances are there is a problem.

5. QuickBooks
The most popular accounting software for small businesses is QuickBooks. Your bookkeeper should know QuickBooks inside and out, and ideally be certified. Knowing the software as well as knowing bookkeeping will ensure your books are correct and enable your bookkeeper to spot errors.

For more info on reviewing your books, contact Tammy Collins today. 401-952-9919 voice or text, or at tcollins@paragonsbs.com.

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When Should You Hire a Bookkeeper

Most entrepreneurs go in to business to do what they love. When starting out, money is often tight, and most business owners try to do it all. Hiring a bookkeeper, even for a few hours a week, can provide a number of important benefits.

1. More time to do what you do. Rather than focusing on paying bills, tracking expenses, and reconciling bank accounts, you can continue to grow and run your business.

2. Up to date info for decision-making. If you record your business’ revenues, but never seem to get all of your expenses posted, you never have the whole picture. Think about it this way. A friend sends you a photograph, but it’s torn in half. Until your friend provides the other piece of the photo, you never really know for sure what he was trying to show you. Not posting all of your business activity on a regular basis only gives you half the picture – and that’s not good for anyone.

3. Error and fraud detection right away. We all know about hackers stealing credit card information, but if you don’t spot it, you may have a serious problem with cash flow if your account is misappropriated by criminals. It happens. And the theft can be closer to home, if a trusted employee is suddenly hurting for cash and decides to “borrow” from you just to get over their troubled time. Banks make errors, too. Your bookkeeper is an impartial third-party checking your bank and credit card accounts and spotting errors and fraud promptly.

Your business needs you. Your business needs a bookkeeper who helps you run your business and succeed. The cost is probably far less than you think, and can provide peace of mind for you, the entrepreneur. Check into a bookkeeper – you won’t be disappointed!

 

QuickBooks Support – Shop Local

Most QuickBooks users know that the software often comes with support at Intuit via 800 number, available 6 am to 6 pm PST Monday through Friday. What do you do when you have a problem after hours, on the weekend, or a holiday? If you have a Certified QuickBooks ProAdvisor as a consultant for your company, you’ve got the best support – local, knowledgeable and reachable after-hours if needed.

Paragon Small Business Solutions clients enjoy the convenience of support when they need it. You can too. Call or message today to get started!

Why You Need to Reconcile Your Bank & Credit Card Accounts

Let’s face it. No one REALLY likes to reconcile their checkbook, but here’s why you have to hunker down and get it done.

1. Spot mistakes. The bank makes ’em. You make ’em. Transpositional errors are the most common when recording deposits and writing checks, and can cause problems with your balance. Checking your transactions against the bank statement can help keep your bank account in the black.

2. Spot fraud. Fraud can start with a stranger stealing your credit/debit card and charging small amounts to “test” your account. Reconciling can help spot inaccurate and fraudulent charges to your account before a thief wipes you out completely.

3. Spot employee theft/misuse of company funds. We’ve all read the stories about a trusted employee who fell on hard times and then “borrows” the company checkbook or credit card to get themselves out of a hole. As the owner, reviewing the accuracy of your company’s expenditures can help catch internal theft before it gets out of control.

You can reconcile yourself, of course, or you can engage an outside, impartial bookkeeper to do it for you. A remote bookkeeper will reconcile monthly (or more often if you so choose) and report back to you. Having monthly reconciliations can help point out spending patterns that are out of the ordinary for your business as well.

For more information on monthly reconciliations, call or message Tammy Collins at 401-952-9919 or tcollins@paragonsbs.com.

How Does Remote Bookkeeping Work? Part 3

Now that you’ve learned about how to get started with a remote bookkeeper, here’s how it all plays out. Consider this scenario:

Your business sells widgets. You process about 500 transactions a month through the bank including payroll, sales tax, bills, and customer receipts. You receive the payments and make the bank deposits. You scan the bank statements, monthly bills, credit card statements and upload to our client portal. Your remote bookkeeper processes the data, reconciles the bank and credit card accounts, and produces monthly reports.

Sound easy? It is really that simple. We can complete all year-end  financial statements through Trial Balance for any CPA firm to prepare your tax return. Call Tammy Collins at 401-952-9919 or email  tcollins@paragonsbs.com to for a no-obligation review of your bookkeeping needs.

How Does Remote Bookkeeping Work? Part 1

By now, you’ve probably seen ads for remote bookkeeping, and may wonder if it could be the solution for your business.

Do you use QuickBooks Online or would you consider it? Remote bookkeeping is also a simple option with QuickBooks desktop.

Do you own a scanner (flatbed or upright)? Scanning your documents (bills, receipts, etc) can eliminate the need for bulky filing cabinets and is most people’s biggest obstacle to making the leap to remote bookkeeping.

The next step is a telephone meeting to determine your business’ needs. A brief interview will help your bookkeeper build a service package customized to you.

In our next post, you’ll learn more about the process and what to expect.