• Dagley & Co’s Six Best Practices in Billings and Collections

    5 November 2015
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    Get organized, and get paid! Image via public domain

    Have a small business? One area where you can improve cash flow is in billings and collections. Getting paid late can often hurt a business, and there are ways to get paid faster so you can keep growing. Here are six best practices that can make a real difference in your cash balance at the end of every month.

    1. Get it right.

    One legitimate reason for nonpayment is a confusing or inaccurate invoice. Make sure your invoices spell out in clear, plain English what was purchased, the price, when payment is due, the customer’s PO number, when it was shipped, to where it was shipped, and any tracking number. We highly recommend QuickBooks for all of our clients for easy invoicing and payments.

    You may also want to tighten your sales process. Don’t start work without a formal PO from your business customers—many companies won’t pay against a verbal PO. When you receive a PO, make sure that it matches your quotation. Companies often put their payment terms on their paperwork, so if your customer tries to play this game, resolve any discrepancies before you start work.

    Finally, make certain every shipment and invoice is 100% correct. Set up processes to assure the customer gets exactly what was ordered and that invoices are equally accurate.

    2. Get it out.

    See that four-day-old pile of shipping papers waiting to be invoiced? That’s a pile of cash you can’t collect.

    Set a goal to issue all invoices within one working day of the ship date or completion of work. If your team struggles to meet this, give them the tools and/or manpower to make it happen. And if an invoice gets held up internally, make sure your supervision is immediately notified so the problem can be quickly resolved.

    To further speed payments, try to invoice your customers by email. Some won’t accept emailed invoices, but getting even a portion of your billing done electronically will help overall cash flow.

    3. Get it to the right person.

    How many times has one of your employees called about a past-due payment and been told “we didn’t receive your invoice” or “that needs to be approved by the department manager”? It’s another game, one that can take weeks to play out. As part of getting an accurate customer PO, make sure your sales staff gets a valid address for invoicing.

    Large sales deserve special attention. Where applicable, have your salesperson get the contact information for the customer employee that will approve payment. This might be a department or plant manager and maybe even the business owner. Also get the contact information for the customer’s finance-side people (accounting manager, accounts payable clerk), who will cut and approve the check. When your invoice goes out, make sure they all get a copy.

    4. Get it sooner.

    Offer a discount for early payment—for example, 2% off for payment within 10 days. Not all of your customers will take advantage of this, but it’s a great way to pull cash in.

    5. Get friendly.

    The best way to get paid on time is to build a positive working relationship with your customer before the money is due.

    Have your salesperson call his or her customer contacts shortly after the invoice goes out. Confirm the product has been received or affirm that your assignment is now complete. Ask them if they’re satisfied with your work, what you can do better to improve, and if they’ve received your invoice. This communicates (in a nice way) that it’s time to start the payment process. If these calls uncover problems, it’s an opportunity to address them on the spot as opposed to when payment is past due.

    Your employee responsible for collections should also make a call—in this case, to the customer’s finance-side people. Your employee should confirm the receipt of your invoice, remind them of any discounts for early payment, and check whether there are any administrative problems with the document. They should not ask for a payment date. If possible, they should also try to get to know their counterparts. A simple “How’s the weather where you are?” is a great opening that can lead to a long conversations about, well, everything. Your customer’s payables team can be your best friend later in the collections process, but it won’t happen if you have not built a working relationship.

    There’s one other person who needs to get friendly: you, the business owner or general manager. As your company develops large customers make sure you get to know your customer counterparts. A phone call from you asking “How’s my team doing?” is a great way to initiate a conversation and assure customer satisfaction. For very large projects, make a face-to-face visit. It will pay off later. If the time comes when a payment problem needs to be escalated, you will have an established relationship on which to call.

    6. Make it fun.

    Some companies take the “get friendly” notion to the next level. From putting silly “Thank You!” notes on their invoices, to handing out promotional swag, to sending little stuffed animals for on-time payment, it’s amazing how these goofy gimmicks can change the atmosphere around the collection process.

    You want your customer to smile and shake his head as he signs the check to pay your bill. And if the day comes when your customer needs to decide whom to pay and whom to put off, chances are he will pay you first.

    In Closing

    What about the actual collections process? Good companies contact their customers if a payment is more than five working days late. You should do the same.

    What’s different is that you’ve laid the foundation for a successful endgame. Any excuses for non-payment have been addressed. Your people know whom to call, and you have working contacts who will give you straight answers. Above all, you’ve strengthened the relationship with your customer and have built a basis for future business.

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  • September 2015 Tax Due Dates for Individuals

    31 August 2015
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    A fresh month means a new list of deadlines. Here are the upcoming tax due dates for individuals for September 2015. Check back later this week for September deadlines for businesses.

    September 1 – Tax Planning

    Tax season is around the corner! Contact Dagley & Co. to schedule a consultation appointment. You’ll find our information at the bottom of this screen.

    September 10 – Report Tips to Employer

    If you are an employee who works for tips and received more than $20 in tips during August, you are required to report them to your employer on IRS Form 4070 no later than September 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

    September 15 – Estimated Tax Payment Due
    The third installment of 2015 individual estimated taxes is due. The United States’ tax system is a “pay-as-you-go” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-go” requirement. These include:

    • Payroll withholding for employees;
    • Pension withholding for retirees; and
    • Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding.

    When a taxpayer fails to prepay a safe harbor (minimum) amount, they can be subject to the underpayment penalty. This penalty is equal to the federal short-term rate plus 3 percentage points, and the penalty is computed on a quarter-by-quarter basis.

    Federal tax law does provide ways to avoid the underpayment penalty. If the underpayment is less than $1,000 (the de minimis amount), no penalty is assessed. In addition, the law provides “safe harbor” prepayments. There are two safe harbors:

    • The first safe harbor is based on the tax owed in the current year. If your payments equal or exceed 90% of what is owed in the current year, you can escape a penalty.
    • The second safe harbor is based on the tax owed in the immediately preceding tax year. This safe harbor is generally 100% of the prior year’s tax liability. However, for taxpayers whose AGI exceeds $150,000 ($75,000 for married taxpayers filing separately), the prior year’s safe harbor is 110%.

    Example: Suppose your tax for the year is $10,000 and your prepayments total $5,600. The result is that you owe an additional $4,400 on your tax return. To find out if you owe a penalty, see if you meet the first safe harbor exception. Since 90% of $10,000 is $9,000, your prepayments fell short of the mark. You can’t avoid the penalty under this exception.

    However, in the above example, the safe harbor may still apply. Assume your prior year’s tax was $5,000. Since you prepaid $5,600, which is greater than 110% of the prior year’s tax (110% = $5,500), you qualify for this safe harbor and can escape the penalty.

    This example underscores the importance of making sure your prepayments are adequate, especially if you have a large increase in income. This is common when there is a large gain from the sale of stocks, sale of property, when large bonuses are paid, when a taxpayer retires, etc. Timely payment of each required estimated tax installment is also a requirement to meet the safe harbor exception to the penalty. If you have questions regarding your safe harbor estimates, please call this office as soon as possible.

    CAUTION: Some state de minimis amounts and safe harbor estimate rules are different than those for the Federal estimates. Please contact Dagley & Co. for particular state safe harbor rules.

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  • Everything You Need To Know About Balance Sheets (And Why You Need Them)

    25 August 2015
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    Alright small business owner. Let’s talk about balance sheets.

    The best way for small business owners to stay aware of their company’s financial status is to have an accurate, up-to-date balance sheet. By keeping this information up to date every quarter, you can help yourself avoid a lot of problems and surprises down the road.

    A balance sheet provides you with an at-a-glance summary of your company’s financial health as of a specific day. It is broken down into what the business’s assets are, what the business’s liabilities are, and the amount of owner or shareholder equity. The balance sheet gets its name from the fact that the assets must be balanced by and equal to the liabilities plus the equity. Some business owners have found current balance sheets so helpful that they update them every month.

    Understanding the Asset Portion of the Balance Sheet

    When entering assets onto the balance sheet, the business owner needs to include everything that is owned by the business, whether current or liquid assets, fixed assets (http://www.investopedia.com/terms/f/fixedasset.asp), or some other type of asset. Current or liquid assets include:

    • Cash that is immediately available
    • Money that is owed to you (Accounts Receivable)
    • Products currently in stock (Inventory)
    • Expenses paid in advance, such as insurance premiums
    • Money-market accounts, investments and other securities
    • Additional monies owed to you

    Fixed assets are items that can’t be easily sold or moved, including equipment and furnishings, buildings, land and vehicles. In most cases these assets depreciate, or decrease in value. Beyond current and fixed assets, items that are intangible, such as goodwill, copyrights and patents, are also considered assets on a balance sheet. It is important to note that money that is owed to you that you expect will not be paid is classified as a Reserve for Bad Debts, which decreases the amount of the Accounts Receivable on the balance sheet.

    Understanding the Liability Portion of the Balance Sheet

    When entering liabilities onto the balance sheet, the business owner needs to include all of the business’s debts, both current and long term. Current liabilities include accounts payable, sales and payroll taxes, payments on short-term business loans such as a line of credit, and income taxes. Long-term liabilities are those that are paid over a longer period of time, generally over more than a year. These include mortgages and leases, future employee benefits, deferred taxes and long-term loans.

    Understanding the Equity Portion of the Balance Sheet

    When entering information onto the equity portion of the balance sheet, you should include the value of any capital stock that has been issued, any additional payments or capital from investors beyond the par value of the stock, and the net income that has been kept by the business rather than distributed to owners and shareholders.

    In order to be sure that all of the information on the balance sheet is correct, you can double-check your numbers by subtracting assets from liabilities – the result should equal the equity amount. For more information on how to structure a balance sheet, check out this website: “http://www.accountingcoach.com/balance-sheet/explanation/4″>sample balance sheet</a>.

    The Value of a Balance Sheet

    At first glance a balance sheet may look like an incomprehensible collection of numbers, but once you understand all of the various components and how they relate to one another, they will provide you with the opportunity to detect trends and spot issues before they become problems. Your balance sheet can alert you to:

    • Times when inventory is outpacing revenue, thus alerting you to a need for better management of your inventory and production process
    • Cash flow problems and a shortage of cash reserves
    • Inadequacies in your cash reserves that are making it difficult to invest in continued growth
    • Problems with collecting accounts receivables

    The most essential tools that are available to you as a small business owner for gauging your operation’s financial health are the balance sheet, the income statement and the cash flow statement. If you are unsure of how to prepare these documents for yourself or don’t have the time, then let a qualified professional at Dagley & Co. take over and provide the information that you need.

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  • Bunch Your Deductions For Big Tax Benefits

    6 August 2015
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    Have you heard of the “bunching” strategy for tax deductions? If your tax deductions normally fall short of itemizing your deductions, or even if you are able to itemize, but only marginally, you may benefit from using the “bunching” strategy.

    The tax code allows most taxpayers to utilize the standard deduction or itemize their deductions if that provides a greater benefit.  As a rule, most taxpayers just wait until tax time to add everything up and then use the higher of the standard deduction or their itemized deductions.

    If you want to be more proactive, you can time the payments of tax-deductible items to maximize your itemized deductions in one year and take the standard deduction in the next.

    For the most part, itemized deductions include medical expenses, property taxes, state and local income (or sales) taxes, home mortgage and investment interest, charitable deductions, unreimbursed job-related expenses, and casualty losses.  The “bunching strategy” is more commonly associated with medical expenses, tax payments and charitable deductions, although there are circumstances in which the other deductions might come into play.  There are many opportunities to bunch deductions, and the following are examples of the bunching strategies most commonly used:

    • Medical Expenses – You contract with a dentist for your child’s braces. The dentist may offer you an up-front, lump sum payment or a payment plan.  By making the lump sum payment, the entire cost is credited in the year paid, thereby dramatically increasing your medical expenses for that year.  If you do not have the cash available for the up-front payment, then you can pay by credit card, which is treated as a lump-sum payment for tax purposes.  If you use a credit card, you must realize that the credit card interest is not deductible, and you need to determine if incurring the interest is worth the increased tax deduction.  Another important issue with medical deductions is that only the amount of the total medical expenses that exceeds 10% of your adjusted gross income (AGI) is actually deductible. If you are 65 or over the medical deduction floor is 7.5% through 2016, unless you are caught by the Alternative Minimum Tax (AMT). Then only the amount that exceeds 10% of your AGI is actually deductible.  So, there is no tax benefit in bunching medical deductions unless the expenses exceed these limitations.

    If the current year is an abnormally high-income year, you may, where possible, wish to put off making medical expense payments until the subsequent year when the 10% (7.5% threshold is less.

    • Taxes – Property taxes on real estate are generally billed annually at mid-year, and most locales allow the tax bill to be paid in semi-annual or quarterly installments.  Thus, you have the option of paying it all at once or paying in installments.  This provides the opportunity to bunch the tax payments by paying one semi-annual installment or two quarterly installments and a full year’s tax liability in one year and only paying one semi-annual installment or two quarterly installments in the other year.  In doing so, you are able to deduct 1-½ year’s taxes in one year and 50% of a year’s taxes in the other. If you are thinking of making the property tax payments late as a way to accomplish bunching, you should be cautious.  The late payment penalty will probably wipe out any potential tax savings.

    If you reside in a state that has state income tax, the state income tax paid or withheld during the year is deductible as a federal itemized deduction.  So, for instance, if you are paying state estimated tax in quarterly installments, the fourth-quarter estimate is generally due in January of the subsequent year.  This gives you the opportunity to either make that payment before December 31st, and be able to deduct the payment on the current year’s return, or pay it in January before the January due date and use it as a deduction in the subsequent year.

    A word of caution about the itemized deduction for taxes!  Taxes are only deductible for regular tax purposes.  So, to the extent you are taxed by the AMT, you derive no benefits from the itemized deduction for taxes.

    • Charitable Contributions – Charitable contributions are a nice fit for “bunching” because they are entirely payable at the taxpayer’s discretion.  For example, if you normally tithe at your church, you could make your normal contributions during the year and then prepay the entire subsequent year’s tithing in a lump sum in December of the current year, thereby doubling up on the church contribution one year and having no charity deduction for church in the other year.  Normally, charities are very active with their solicitations during the holiday season, giving you the opportunity to make the contributions at the end of the current year or simply wait a short time and make them after the end of the year. Be sure you get a receipt or acknowledgment letter from the organization that clearly shows in which year the contribution was made.

    If you think a “bunching” strategy might benefit you, please call this office to discuss the issue and set up an appointment for some in-depth strategizing with Dagley & Co. You’ll find our information at the bottom of this webpage.

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  • Tax Tips For Sending Employees on Business Trips

    20 July 2015
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    Do you often send your employees abroad – or even a state or two over? Sending employees on business trips is essential for many companies – even though travel can result in tax headaches for both the employer and the employee if the tax regulations are not adhered to. If the rules are followed, the cost of the employee’s travel will be fully deductible to the employer, with the exception of meals, which are only 50% deductible, and tax-free reimbursement to the employee. In addition, the reimbursement is not subject to FICA or payroll withholding.

    With that said, if the rules aren’t followed, the expenses are still deductible by the employer, but the reimbursement must be added to the employee’s taxable wages, subject to both FICA and payroll withholding.

    An employer is able to deduct ordinary and necessary business expenses, including an employee’s job-related travel and lodging expenses that are not lavish or extravagant, and under the rules of working condition fringe benefits, any such item that is deductible by the employer is not includible in the employee’s salary. In addition, an advance or reimbursement made to an employee under an “accountable plan,” which requires the employee to adequately account for the expenses and return any excess advances, is deductible by the employer and not subject to FICA or income tax withholding.

    Reimbursements not made under an accountable plan are fully taxable to the employee, and the only way for the employee to deduct the expenses is as a miscellaneous itemized deduction on his or her 1040. To do that, the employee must itemize his or her deductions on Schedule A, as opposed to taking the standard deduction. The employee business expense category on Schedule A is subject to a 2% of AGI nondeductible threshold, and this frequently results in the employee not being able to deduct any or only a portion of the expenses.

    With the exception noted below, to deduct the cost of lodging and meals, the taxpayer must be away from home overnight. Any trip that is of such a length as to require sleep or rest to enable the taxpayer to continue working is considered “overnight.”

    Under an exception to the away-from-home rule, the cost of local lodging is deductible if the lodging is necessary for the individual to participate fully in or be available for a bona fide business meeting, conference, training activity, or other business function and the duration does not exceed five calendar days and does not recur more frequently than once per calendar quarter. For an employee, the employer must require the employee to remain at the activity or function overnight, the lodging must not be lavish or extravagant, and there can be no significant element of personal pleasure, recreation, or benefit.

    A taxpayer’s home, for purposes of determining if he or she is away from home and can deduct lodging and meals, is generally where the taxpayer normally lives and works, although that fact is sometimes difficult to determine, in which case the IRS has numerous special rules that apply.

    Where an away-from-home assignment, at a single location, lasts for one year or less, it is “temporary,” and the travel expenses are deductible. If the assignment is longer, there is a good chance the expenses will not be deductible based upon some complex rules.

    The rules for the tax treatment of travel expenses and temporary away-from-home assignments can be complex. Please give us at Dagley & Co. a call or drop us an email for further details or assistance. You’ll find our information at the bottom of this webpage.

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  • Eight Ways to Get Your Customers to Pay On Time

    16 June 2015
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    You shouldn’t have to wrestle your customers for payments owed to you. Here are some tips for smooth invoicing. Image via public domain.

    A wise businessman once said, “a sale isn’t a sale until you’ve collected payment — it’s just a loan.”

    If you’ve been in business for any length of time, you know how true this quote is. Many small businesses that were profitable on paper have gone bankrupt waiting for payments from customers to arrive.

    This makes accounts receivable (AR) collections one of the most important tasks for small business owners. Unfortunately, it’s also one of the most neglected. Here are eight strategies you can implement to help boost your AR collections and improve your cash flow:

    1. Make sure your invoices are clear and accurate. If invoices are vague, ambiguous or flat-out wrong, this is sure to delay customer payments as they call to try to get things straightened out. In short, you don’t want to give customers a reason not to pay your invoices quickly. We recommend QuickBooks to our clients for clear, accurate invoicing.
    2. Create an AR aging report. This report will track and list the current payment status of all your client accounts (e.g., 0-30 days, 30-60 days, 60-90 days, 90+ days). This will tell you which clients are current in their payments and which clients are past due so you know where to focus your collection efforts. To go on our earlier point, QuickBooks is great because it automatically does this for you.
    3. Give a bookkeeping employee responsibility for AR collections. If collecting accounts receivable isn’t the main responsibility of one specific employee, it will probably fall by the wayside as other tasks crowd it out. Therefore, make one of your bookkeeping employees primarily responsible for this task.
    4. Move quickly on past-due accounts. Don’t delay taking action once a client’s account reaches the past-due stage. Studies have revealed that the likelihood of collecting past-due receivables drops drastically the longer they go uncollected. Your designated bookkeeping employee should start making collections efforts the day after an account becomes past due.
    5. Plan your collections strategy carefully. Decide ahead of time how you will approach late-paying clients. For example, a friendly reminder call and/or email from your designated bookkeeping employee is probably a good first collection step. If this doesn’t get results, you can proceed to more aggressive steps such as sending past due notices and dunning letters.
    6. Consider offering a payment plan. Sometimes, customers have legitimate reasons why they can’t pay their invoices on time. Maybe the customer is having temporary cash flow problems and wants to pay you but simply can’t right now. In this scenario, you might consider working out a payment plan that allows the customer to pay the balance due over a period of time. The agreement should be made in writing and signed by both parties.
    7. Hire a collection agency. If all of these steps fail to resolve a collection problem, you might have to turn to a collection agency as a last resort. However, this is a serious step that should not be taken lightly, since it will probably jeopardize your relationship with the customer. Decide whether or not collecting the past-due amount is worth possibly losing the customer. Also keep in mind that the collection agency will keep a large percentage of the amount collected.
    8. Hire Dagley & Co. We are here to help if you have customers that are falling behind. Sometimes it’s best to have a third party go after late bills, and we can handle the correspondence in a way that is professional so that you can keep your personal relationship with your clients and customers upbeat.

    Very few small businesses can afford not to make AR collections a top priority. Following these eight steps will help you improve your collections — and these improvements will boost both your cash flow and your bottom line.

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  • Accounting Tips For Better Small Business Management

    8 June 2015
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    Business Owner

    If you are the owner of a small business, like many of the clients we work with at Dagley & Co., we know that you are endlessly busy. Between keeping track of the day-to-day requirements and monitoring growth and profit, it’s easy to get overwhelmed and that means you might neglect important recordkeeping that will help you in the long term. Here are five helpful hints that will make accounting easier and make sure that you don’t miss any milestones or deadlines.

    1. Business and personal expenses should be kept separate.

    It’s easy to make the mistake of using your business credit card for personal expenses and vice versa, and those errors can always be amended through reimbursements and revised record-keeping, but you’ll save yourself a lot of time, trouble and aggravation if you keep the two types of expenses completely segregated from the start.

    2. Don’t underestimate the difficulty of your taxes – hire a tax professional.

    If you’re smart enough to run your own business, it’s natural to assume that you can save yourself the expense of hiring a tax professional to file your taxes. The truth is that there’s a lot more to accounting then filling in forms, and a tax professional will be familiar with deductions you don’t realize you’re entitled to take, or inform you of an underpayment that might lead to trouble down the road. Plus, your accountant/CPA (like Dan Dagley) might end up saving you a lot of money!

    3. Be realistic about upcoming expenses.

    When things are moving along swimmingly, it’s natural to assume that the status quo will remain, but you need to be realistic and anticipate that office equipment will wear down or need to be upgraded, staffing needs will change, and overhead costs are unlikely to remain the same. By planning for future major expenses and setting aside funding for those eventualities, you will save yourselves many headaches in the future.

    4. Don’t forget your employees when calculating expenses

    A lot of business owners will sit down to forecast their expenses or try to figure out where their money is going, but forget to give proper weight to the amount that they are spending on staffing expenses such as insurance, health care and payroll taxes. Your employees are generally one of your biggest assets, so it’s important that when you’re calculating costs, you make sure that you haven’t forgotten about all of the expenses involved with keeping them, as well as with expanding.

    5. Don’t lose sight of your Accounts Receivables

    If you were an employee of a business that failed to give you a paycheck, you’d be more than just upset – you’d take action to make sure that you get paid. Yet many owners of small businesses get so enmeshed in the minutia and big decisions of their day-to-day operations that they lose track of whether clients are paying promptly and what percentage of invoices remain open! Getting behind on your record keeping regarding accounts receivables lets things get so far behind that it becomes costly and difficult to collect, and you may end up not getting paid or creating negative feelings. Track payments as they come in, note how far behind payments due are, and take note of which clients are presenting you with collection problems. We at Dagley & Co. highly recommend QuickBooks to help you keep track of your accounts receivables (and no, we’re not paid to say that!).

    These tips are straightforward and simple, and following them can make a significant difference in your ability to keep your business on track, to keep your forecasts accurate, and to allow you to take action when it’s needed. For more information on other steps you can take, contact us at Dagley & Co. to make an appointment for a consultation. We are also here to help you manage your QuickBooks set-up, billing, payroll and more, thereby giving you more time to do what you do best: grow your business!

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  • Memorizing Transactions in QuickBooks

    26 March 2015
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    Quickbooks CPA

    One of the reasons you started using QuickBooks, among many others, was to save time. And it has complied.  (Or maybe you use QuickBooks because Dan Dagley told you to.) Once you create a record for a customer, vendor, item, etc., you rarely – if ever – have to enter that information again; you simply choose it from a list.

    You no longer waste time searching through endless piles of papers to find the one you need; you just do a search. And when you need a report on your monthly sales or inventory purchases or your payroll liabilities, you don’t have to wrestle with Excel or locate the right paper records; you just click a few times.

    Memorized transactions can be another major time saver. You might use them when you, for example:

    • Provide the same service for a customer on a regular basis,
    • Charge a monthly fee for rentals, maintenance, membership, etc.,
    • Pay a bill to the same company regularly, or
    • Have a standing order with a vendor for a similar set of items.

    It’s easy to create memorized transactions. QuickBooks provides an icon for them in the toolbar of every transaction form that’s supported, like invoices, bills, and purchase orders.

    Fig1

    To get started, create a transaction that you know will be repeated – even if the amount will be different every time (you’ll still save time because you won’t have to fill in or select absolutely every detail). Let’s say you’re doing some social media consulting for a customer, and you’ve contracted for eight hours every month. Create the invoice for that billing. Then click the Memorize icon. This window opens:

    Fig 2
    Your customer will already appear in the Name field. You’ll have to choose from among three options so that QuickBooks knows how to handle this recurring form:

    Add to my Reminders List. If you choose this by clicking on the button in front of the option, QuickBooks will add this transaction to your existing Reminders List.

    Note: Confused about how you get QuickBooks to remind you about actions you have to take? We can walk you through the setup process.

    Do Not Remind Me. We don’t recommend this option unless you have an exceptionally good memory, few memorized transactions, or a tickler file in another application. Even then, reminders are a good idea.

    Automatic Transaction Entry. This absolutely saves the most time. It’s also the riskiest option. If you select this, QuickBooks will send the transaction through at the intervals you’ve defined. You’ll have to enter a number that indicates how many times you want the form sent and how many days in advance it should be entered. Please consult with us if you are planning to automate transactions. We don’t want you to have unhappy customers or vendors or an unpredictable cash flow.

    Next, you’ll tell QuickBooks how often this transaction needs to be created by clicking on the down arrow to the right of How Often. Click on the calendar icon in the Next Date field to select the exact day this should occur next (you’ll have an opportunity when you work with the Reminders List to specify how much advance warning you want).

    When you’re done, click OK.

    Once you start memorizing transactions, QuickBooks will store them in a list. When you get a reminder that one is due soon, open the Lists menu and select Memorized Transaction List. You’ll see this screen, populated with your own work:

    Fig 3
    Highlight a transaction in the list and click the down arrow next to Memorized Transaction in the lower left corner to see your options here. You can also click Enter Transaction, and your original form will appear. If you’ve saved it with a permanent amount, you can just save and dispatch it. Otherwise, enter the correct amount before you proceed.

    If you’re fairly new to QuickBooks and don’t feel like you’re well acquainted with its time-saving features, give us a call at Dagley & Co. and we’ll set up some training. Better to do that upbfront than to have to untangle a jumbled company file. We’re always happy to help.

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  • March 2015 Tax Due Dates for Businesses and Business Owners

    26 February 2015
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    March 2015

    You may have April 15th on your mind, but there are some crucial due dates in March that may require your attention as a business owner. Be sure to get in touch with Dagley & Co. if you need help with any of the items listed here.

    March 2 – Payers of Gambling Winnings

    File Form 1096, Annual Summary and Transmittal of U.S. Information Returns, along with Copy A of all the Forms W-2G you issued for 2014. If you file Forms W-2G electronically, your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms was February 2.

    March 2 –  Informational Returns Filing Due

    File information returns (Form 1099) and transmittal Forms 1096 for certain payments you made during 2014. There are different forms for different types of payments. These are government filing copies for the 1099s issued to service providers and others.

    March 2 – 2 All Employers

    File Form W-3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W-2 you issued for 2014. If you file Forms W-2 electronically, your due date for filing them with the SSA will be extended to March 31. The due date for giving the recipient these forms was February 2.

    March 2 – Large Food and Beverage Establishment Employers

    File Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips. Use Form 8027-T, Transmittal of Employer’s Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to March 31.

    March 16 –  S-Corporation Election

    File Form 2553, Election by a Small Business Corporation, to choose to be treated as an S corporation beginning with calendar year 2015. If Form 2553 is filed late, S treatment will begin with calendar year 2016.

    March 16 –  Electing Large Partnerships

    Provide each partner with a copy of Schedule K-1 (Form 1065-B), Partner’s Share of Income (Loss) From an Electing Large Partnership, or a substitute Schedule K-1. This due date applies even if the partnership requests an extension of time to file the Form 1065-B by filing Form 7004.

    March 16 – Social Security, Medicare and Withheld Income Tax

    If the monthly deposit rule applies, deposit the tax for payments in February.

    March 16 – Non-Payroll Withholding

    If the monthly deposit rule applies, deposit the tax for payments in February.

    March 16 – Corporations

    File a 2014 calendar year income tax return (Form 1120 or 1120-A) and pay any tax due. If you need an automatic 6-month extension of time to file the return, file Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information and Other Returns, and deposit what you estimate you owe. Filing this extension protects you from late filing penalties but not late payment penalties, so it is important that you estimate your liability and deposit it using the instructions on Form 7004.
    March 31 – Electronic Filing of Forms 1098, 1099 and W-2G

    If you file forms 1098, 1099, or W-2G electronically with the IRS, this is the final due date. This due date applies only if you file electronically (not paper forms). Otherwise, March 2 was the due date. The due date for giving the recipient these forms was February 2.

    March 31 – Electronic Filing of Forms W-2
    If you file forms W-2 for 2014 electronically with the IRS, this is the final due date. This due date applies only if you electronically file. Otherwise, the due date was March 2. The due date for giving the recipient these forms was February 2.

    March 31 – Large Food and Beverage Establishment Employers 

    If you file forms 8027 for 2014 electronically with the IRS, this is the final due date. This due date applies only if you file electronically. Otherwise, March 2 was the due date.

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  • Tips For Customizing QuickBooks For Your Company’s Needs

    16 February 2015
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    Quickbooks

    Dagley & Co. has clients all over the world, and one of the tools that makes this easy is the wonderful, versatile accounting program we all know as Quickbooks. QuickBooks is ready to use when you install it. But with a few adjustments, you can change its settings to make it work the way your company needs it to.

    There are some features that all small businesses need in their accounting software. Everyone needs a Chart of Accounts and a good set of report templates. There must be tools to bill customers and to document income and expenses. Some companies need payroll management, and some need the ability to create purchase orders. These days, many businesses want to accept payments online.

    But what does your company need? It’s unlikely that you would use absolutely every feature that QuickBooks offers, but you need to make sure that every tool you want to use is set up properly.

    If you’ve been using QuickBooks for a while, you may have been directed to the Preferences window already (accessible by clicking on Edit | Preferences). If you’re just starting out with the software, it’s a good idea to acquaint yourself with the most important elements contained there. Here are some of them.

    figure 1

    Figure 1: QuickBooks’ Preferences window. Some features are already turned on or off by default, but you can change their status.

    Accounting
    Click on the Accounting tab in the left vertical pane, then on the Company Preferences tab. Here, QuickBooks wants to know whether you plan to use account numbers. It also offers the option to turn on class tracking, which lets you define classes like company locations or divisions, or salespeople. Not sure what you should do here? Please ask us.

    Desktop View
    Options here involve usability and visibility issues. Getting them right can save you time and frustration. For example, under the My Preferences tab, you can choose between a VIEW that displays only One Window, or one that keepsMultiple Windows open. Click on the Company Preferences tab to turn specific features – like Payroll and Sales Tax — on and off.

    Finance Charge
    Should you decide to apply Finance Charges to late payments, for example, please let us go over this feature with you. We’ll explain how it is set up and how it works in day-to-day accounting.

    Items & Inventory
    This is critical: you must visit this screen if you will be buying and selling products. First, you need to make sure that the box in front of Inventory and purchase orders are active has a check mark in it. If not, click in the box. Also important here: QuickBooks can maintain a real-time inventory level for each item you sell so that you neither run short nor waste money by stockpiling. Check the box in front of Quantity on Sales Orders if you want the software to include items that appear on sales orders in the count. Also, do you want a warning when you don’t have enough inventory to sell (as you’re filling out an invoice, for example)? We can explain the difference between Quantity on Hand and Quantity Available; it’s rather complex.

    Figure 2

    Figure 2: Some inventory concepts may be unfamiliar to you. If you’ll be buying and selling items, let us walk you through this section.

    Payroll & Employees
    Payroll is integrated with QuickBooks, but it’s so complex that it almost acts as another application. If you’re planning to take this on yourself, some training will be necessary.

    Reminders
    Unless you have a very simple business or an extraordinarily good memory, you’ll probably want Quickbooks to remind you when you need to complete certain tasks. Click Reminders | Company Preferences to see the lengthy list of events that QuickBooks supports, like Paychecks to Print, Inventory to Reorder, and Bills to Pay. You can have the software display either a summary or a list of what needs to be done, and you can specify how many days in advance you want to be alerted.

    Sales & Customers, Sales Tax, and Time & Expenses
    If your accounting workflow includes tasks in any of these areas, you’ll need to visit them to turn features on and make other preferences known.

    You probably won’t need to have absolutely every feature turned on from the start. But as your business grows and changes – and we hope it does – you can always revisit the Preferences window to let QuickBooks know about your new needs. We hope you’ll let us know, too.

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