Category: Bookkeeping Practices

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

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

Small Business & Bookkeeping – HubDoc

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

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

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

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.

Efficiency: ACH for Rent Payments

In part two of the Efficiency series, I am going to discuss rent payments; specifically the most efficient way to receive payments that can “kill two birds with one stone” for your rental business. First let’s discuss the most common ways rent is paid. Cash – This method is a bit antiquated but still acceptable. Lends itself to being spent before being deposited into the rental checking account and understates the income received. Aside from that, proper handling isn’t always completed. When receiving cash payments for rent, AMH recommends that a receipt, signed by the property manager or landlord, be given to the tenant, that the payment gets recorded into the accounting system, and a deposit slip is immediately made for that payment listing the address and tenant the payment came from. Multiple cash payments can go on one deposit slip. Check – Another acceptable and somewhat antiquated method of payment. There are benefits for the tenant in being able to pay rent via check not for the landlord or property manager. For tenants, particularly if they are using a checkbook with the carbon copy feature, have written proof that a check was written for their rent. For the landlord

Schedule C & E: Using These Forms for the Setup of Your Accounting System

Depending upon your entity type and industry for your business, setting up the books for bookkeeping can be quite simple. For the purpose of this post I am going to discuss the two setups I am most familiar with. The first is based upon the IRS Form Schedule C. Page one of the form handles the income and expenses of your business to arrive and the profit and loss. The business expense categories listed are all that is needed in your accounting systems’ Chart of Accounts. Having this form handy keeps the Chart of Accounts clean and streamlined. You can always add sub-accounts for the things you want broken down for reports to be used internally. Another form I like to use as a reference is the IRS Form Schedule E. I love this form because my specialty is rental property accounting and it helps keep my clients Chart of Accounts clean as well. Page one of this particular form deals with the income from rent or royalties and the other page deals with other kinds of passive income such as income from Partnerships or S Corps. For this purpose, only the rents concern us. When you have property that you allow

QuickBooks for Property Management: Owner/Tenant Workflow

Now that we have classes, tenants, and owners all set up, it is time to talk how these three things will flow together. The workflow for property management does not have to be daunting. The goal is to make it simple, easy to follow, and repeatable. Let’s dive right in! Step 1: Assessing Rent Charges to Tenants Statement charges are a great way to assess the charge for rent. It is a register for each tenant that shows all the transactions that involve that tenant. The process for assessing a rent charge this way is very simple.  Open the tenant register and input the charge for rent. Step 2: Collecting Rent from Tenants Next, process the payment from that tenant. You can right click on the tenant name and choose receive payment. Here, it is imperative to make sure you have the right account listed that you want the payment to post to. If you do not have a main account where all tenant payments are kept, please pay attention to this. It will save a lot of headache in the long run. Step 3: Paying Owners Enter what you owe the owners as a bill minus your property management

QuickBooks for Property Management – Owners

As many of us know, there are several schools of thought on the best processes for any business when using QuickBooks. Property Management is no different. In this series you have learned about using classes and the best practices for setting up a class as well as how to set up your tenants. Like these two sections,  setting up owners also comes in several methods. The method I practice is to use the Vendor Center in QuickBooks. Why setup an owner as a vendor when they are your customer? The reason for this is simply because getting their rents to them is a liability to the property management firm just as a bill for utilities is. It also makes your workflow smoother. We will get more into workflows under this method of property management in a later post for now let’s continue discussing setting up owners. There are two ways that owners can be listed as vendors. One way is to use the “address first owner name” method that is similar to setting up a tenant. This way works well for owners with only one property. The other is  using the owner name for those with multiple properties. Using the