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Tuesday Tips and Tricks
                                  February 5, 2013

Five Bookkeeping Tips for Business Owners

     Adopting some good habits can help stave off costly errors 

                              when it comes to recordkeeping.  

 

Entrepreneurs keep a lot of the financial details of their business in their heads. Doing so has its advantages: No new software to learn, no danger of a system crash that loses all your data, and you can tweak your budget as often as you need without sitting down at a desk.

 

But when you don't have a system and some processes in place, unpleasant surprises can pop up, goals can be easily missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and maybe improve your profits. It can also help you to stay out of trouble with the Internal Revenue Service.

 

Five Tips from Entrepreneur.com:

 

(1) Track expenses.

 

Why it's helpful: You otherwise might some miss tax write-offs and may lose out on others.

 

Managing payroll is an especially time consuming and detail-oriented task that can quickly consume even the savviest business owner. Some of the operational and fiscal benefits of outsourcing payroll to a third party service provider include:

 

Most card statements categorize expenses, so you can see which outlays relate to which business activities. If you always use your business credit card for business expenses, you're less likely to pay cash at, say, Staples and lose the receipts, forfeiting tax-time write-offs. Pens and printer paper can add up.

 

Additionally, Mari says, routinely jot down business trips, lunches, coffee dates and other events with cash outlays in your electronic or paper day planner. This habit can go a long way toward substantiating those items for your tax records in the event of an audit.

 

"Often on tax returns, those numbers are too round. No one drives exactly 5,000 miles for business in a year, so the IRS knows this is an estimate," Mari says. "In an audit, if you can't substantiate those numbers, the whole category [of write-offs] can get thrown out."

 

One of his clients provides a link to a Google map for each trip instead of trying to remember to note the mileage for every trip he takes on his odometer. That data, along with a day planner recording the trip, are usually enough record keeping to satisfy the IRS, Mari says.

 

Read all the other bookkeeping tips for entrepreneurs from Entrepreneur.com.

 

If you have any questions or would like a quote on providing bookkeeping services, call us at 877-966-4441 or email us.

  

 

We're Going Into Overtime

    Federal Overtime Pay Regulations Highlighted

 

The goal of the American Institute of Professional Bookkeepers is to raise bookkeepers' professional status. They do this by keeping current and offering practical tipsfor employed and freelance bookkeepers in their member newsletter, The General_Ledger.  As a member of the AIPB, I thought I would "pass" along some examples from their publication:

                                     

You must pay 1.5 times an employee's regular pay rate for each hour worked over 40 in the workweek (any 168 consecutive hours).

 

Employers can structure the workweek (e.g., starting Sunday at 9 a.m. for 10 hours a day, 4 days a week).

 

Employees cannot waive overtime.

 

You need not count for overtime purposes paid non-work hours (vacation, holidays, sick days, jury duty, etc.).

 

You may give time off in lieu of overtime only in the same workweek. Hospitals have exceptions under the 8/80 rule.

 

Always check state laws.

 

from The General Ledger

Avoid Check Fraud

As I was reconciling one of my clients' bank accounts this morning, I discovered two fraudulent checks had cleared their account. The person who cashed the check had taken a corporate check and logo from one firm, put a random bank and address on it, and used my client's routing and account information. It took several hours to complete but the good news is my client's account will be credited for both amounts. This made me think it might be a good idea to let you know to reconcile your bank statements in a timely manner.
 

According to the NationalCheckFraudCenter, check fraud is one of the largest challenges facing businesses and financial institutions today. With the advancement of computer technology it is increasingly easy for criminals to manipulate checks so as to deceive innocent victims.

It is estimated that billions of dollars are lost annually due to check fraud and the number continues to grow steadily as criminals seek new ways to earn a living by defrauding others. For the average person, the inconvenience and anxiety caused by resolving problems with the account, local merchants, as well as possible repercussions with credit bureaus, can be considerable.

Due to advances in readily available technology such as personal computers, scanners and color photocopiers, fraud professionals have become increasingly skilled and sophisticated. Criminals today can defraud you or your financial institution quite easily with a blank check taken from your check book, a canceled check found in your garbage, or a check you mailed to pay a bill.

Therefore, it is important to follow a safe approach with the way you use and store your checks.

Some ways to protect yourself from being a victim of check fraud are as follows:

 

 If possible, do not mail bills from your mailbox. It is a favorite location from which a criminal can gain possession of your check with the intent to defraud you. Criminals will remove a check from your mailbox and either endorse it using bogus identification, photocopy and cash it repeatedly, scan and alter the check, or chemically alter it. The Post Office is the best location from which to send your bill payment.

 Make sure your checks are endorsed by your financial institution and incorporate security features that help combat counterfeiting and alteration.

 Store your checks, deposit slips, bank statements and canceled checks in a secure and locked location. Never leave your checkbook in your vehicle or in the open.

 Reconcile your bank statement within 30 days of receipt in order to detect any irregularities. Otherwise, you may become liable for any losses due to check fraud.

 Never give your account number to people you do not know, especially over the telephone. Be particularly aware of unsolicited phone sales. Fraud artists can use your account without your authorization and you may end up being responsible.

 Unless needed for tax purpose, destroy old canceled checks, account statements, deposit tickets, ATM receipts (they may show your account number or balance). The personal information on it may help someone impersonate you and take money from your account.

 If someone pays you with a cashier's check, have them accompany you to the bank to cash it. If at all possible, only accept a check during normal business hours so you can verify whether it is legitimate. Make sure you obtain identification information from the individual.

 Limit the amount of personal information on your check. For example, do not include your Social Security, driver's license, telephone or credit card numbers on your check. A criminal can use this information to literally steal your identity by applying for a credit card or loan in your name, or even open a new checking account.

 Don't leave blank spaces on the payee and amount lines.

 Don't make a check payable to cash. If lost or stolen, the check can be cashed by anyone.

 Never endorse a check until you are ready to cash or deposit it. The information can be altered if it is lost or stolen.

 The type of pen you use can make a difference. Most ballpoint and marker inks are dye based, meaning that the pigments are dissolved in the ink. But, based on ink security studies, gel pens often use ink that contains tiny particles of color that are trapped into the paper, making check washing a lot more difficult.  

 
Another Free Quickbooks 2013 Seminar for
                                                                  Small Business Owners
 
Kimberly Shannon, President of Off-Site Business Services is once again the featured speaker on "What's New for Quickbooks 2013" this time on Tuesday, February 12 at 8:00 am at Standard Bank, 9700 W. 131st Street in Palos Park. The program is open to all small business owners. Call Cathy Majerczyk at 708-499-2062, ext. 60610 for a seat. 

                                                           

Off-Site Business Services, Inc.
Grow A Successful Business!
 
Kim ShannonKimberly Shannon
President
877-966-4441
 
 

 

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