The importance of bookkeeping
- Thread starter alangeh
- Start date
friendoffrancis
New member
@alangeh Also, if disaster strikes, the SBA will literally do whatever they can to save smallbusiness. Look at the PPP, EDIL funds. It was hectic, and it took a long time, but they were there for us. They literally took businesses on the brink and pumped us full of life. That is, if you kept proper bookkeeping like you explained.
I have a lot of clients whom Im recommending to the EIDL Loan program but they dont keep their books in order and I dont think they will get much help if any.
I have a lot of clients whom Im recommending to the EIDL Loan program but they dont keep their books in order and I dont think they will get much help if any.
janblessed
New member
@ktorres08 The SBA won't do anything for one small business, but in aggregate, you're right. There's a lot of covid related assistance that was/is available... if you have a 2019 tax return and so forth. If you're like OP's client, you're SOL.
@ktorres08 Interesting I did not know that
@alangeh Problem is there's a lot of business owners out there who just don't understand basic accounting.
When I first started in business, I had no clue about financials or bookkeeping. Didn't know the meaning of assets, liabilities, income, expenses, equity. I had a bookkeeper and she would call and ask me questions but half the time I didn't know what she was talking about. It took a long time for me to comprehend it. Once I understood it was like a light went on and I felt really empowered.
This could be the mindset of your client. If they don't understand balance sheets, p&l's and the like they need to be educated and I guarantee they will be motivated to keep better records.
When I first started in business, I had no clue about financials or bookkeeping. Didn't know the meaning of assets, liabilities, income, expenses, equity. I had a bookkeeper and she would call and ask me questions but half the time I didn't know what she was talking about. It took a long time for me to comprehend it. Once I understood it was like a light went on and I felt really empowered.
This could be the mindset of your client. If they don't understand balance sheets, p&l's and the like they need to be educated and I guarantee they will be motivated to keep better records.
rayfordsteele
New member
@alangeh This guy is red flag city. He's bad with his money. He's not scared of the IRS. He doesn't care what happenes to him, the IRS destroys lives, garnish your paycheck they can seize your property they took down Blade for Christ sakes .noone is safe from them. This man kind of doesn't care. So cover your ass.
Make an air tight engagement letter. You need to be paid in full to mail out the final returns or to turn them over for the client mail out.
Make an air tight engagement letter. You need to be paid in full to mail out the final returns or to turn them over for the client mail out.
rayfordsteele
New member
Round it off to 20k and get 10k on retainer. Good faith in his part and that's your fee not monies used for paying off his mess.
aussiecatholicboi
New member
@rayfordsteele I've always found it amusing that the Joker isn't scared of much, but he is scared of the IRS.
@alangeh Second this. I'm a business owner and also the keeper of our books. Our business would not be what it is without my attention to these matters. (Our CPA tells me he'd hire me if I decided to leave the business owner life.) I "do bills" every week, update our budget/projections and reconcile every couple of months. It's important. You can't know how to plan for the future and make improvements if you don't know what's going on financially. And fees, penalties and interest can be oppressive as OP points out.
@alangeh Quite a few years ago I was disorganized and always late filing. When I took over full ownership of my business and then started another, I really didn't have a clue what I was doing. There were always more pressing issues than keeping books up to date, not to mention I didn't know the first thing about bookkeeping. The anxiety and stress just kind of snowball and before I knew it I was in denial and just put it off.
After it was all cleaned up and taxes, penalties, interest, and tax accountant and attorneys paid up in full I sat down and added up just the penalties, interest, and service fees related to it all. Not the taxes, just the stupid tax.
My back of the napkin calculation was if I had just saved and invested that money in my early 30's it would be over $1,000,000 by retirement (at very conservative growth estimates). Maybe more.
That was a wake-up call if I ever had one. My books are up to date. My accountant is on speed dial. I read books on small business finances and tax strategy. I pay my estimated taxes every quarter, even if it means overpaying from time to time.
After it was all cleaned up and taxes, penalties, interest, and tax accountant and attorneys paid up in full I sat down and added up just the penalties, interest, and service fees related to it all. Not the taxes, just the stupid tax.
My back of the napkin calculation was if I had just saved and invested that money in my early 30's it would be over $1,000,000 by retirement (at very conservative growth estimates). Maybe more.
That was a wake-up call if I ever had one. My books are up to date. My accountant is on speed dial. I read books on small business finances and tax strategy. I pay my estimated taxes every quarter, even if it means overpaying from time to time.
@tammyinga Any books or online materials that you recommend that start with the basics?
@rdevotie I've been in business over 21 years, so I can't even find a lot of the books and resources I used in the early days but here are some that I do remember. The top two had a profound impact.
Taxpayer's Comprehensive Guide to LLCs and S-corps
This book easily saved me six-figures on taxes over multiple years. It's the best book on S-corps I've found and is written by tax accountants and updated frequently as tax laws change. It's worth it's weight in gold.
Financial Intelligence for Entrepreneurs
Great for entrepreneurs who don't have a finance background or slept through college accounting classes (or just didn't go to college). This book explains business financial reports (profit & loss/income statement, balance sheet, cash flow statement) in a way that you can understand and more importantly, teaches you how to use financial reports to determine the financial health of your business, forecast trends, and foresee problems that may arise.
Deduct It!: Lower Your Small Business Taxes
This is a good book that simply explains small business deductions, expenses, and how to use them to lower your overall tax burden. If you're new to business, there are probably some things you're not deducting that could save you money, or you may be taking deductions that are not allowed and putting yourself at risk of an audit. Understanding what is and is not deductible is important.
Accounting All in One for Dummies
Just a general all-in-one book on small business accounting. I use it more as a reference, I don't want to learn accounting I just want to know enough about my accounting and books to make sure I'm not making mistakes and to understand what my CPA is saying.
Taxpayer's Comprehensive Guide to LLCs and S-corps
This book easily saved me six-figures on taxes over multiple years. It's the best book on S-corps I've found and is written by tax accountants and updated frequently as tax laws change. It's worth it's weight in gold.
Financial Intelligence for Entrepreneurs
Great for entrepreneurs who don't have a finance background or slept through college accounting classes (or just didn't go to college). This book explains business financial reports (profit & loss/income statement, balance sheet, cash flow statement) in a way that you can understand and more importantly, teaches you how to use financial reports to determine the financial health of your business, forecast trends, and foresee problems that may arise.
Deduct It!: Lower Your Small Business Taxes
This is a good book that simply explains small business deductions, expenses, and how to use them to lower your overall tax burden. If you're new to business, there are probably some things you're not deducting that could save you money, or you may be taking deductions that are not allowed and putting yourself at risk of an audit. Understanding what is and is not deductible is important.
Accounting All in One for Dummies
Just a general all-in-one book on small business accounting. I use it more as a reference, I don't want to learn accounting I just want to know enough about my accounting and books to make sure I'm not making mistakes and to understand what my CPA is saying.
@tammyinga Oh my goodness, what a reply - thank you!! This is so helpful. 
@tammyinga This is a great personal story. I love how you used the term taking full ownership of your business. Exactly how small business owners should approach their baby.
elainesnoah
New member
@alangeh ADHD. Just wanna mention that there r a lot of ppl struggling with this because they r undiagnosed (like I was).
The public still think it = little boy can't sit in his seat. Or, that it just affects focus. Focus is the least serious symptom.
Ppl with ADHD r 4x more likely to have serious financial trouble & r more likely to attempt opening a biz. We set ourselves up for trouble.
If anyone is struggling - there r such a thing as ADHD coaches that u can find thru reputable coaching schools.
If you need low cost help - volunteer to let their students coach you as part of their practice experience.
The public still think it = little boy can't sit in his seat. Or, that it just affects focus. Focus is the least serious symptom.
Ppl with ADHD r 4x more likely to have serious financial trouble & r more likely to attempt opening a biz. We set ourselves up for trouble.
If anyone is struggling - there r such a thing as ADHD coaches that u can find thru reputable coaching schools.
If you need low cost help - volunteer to let their students coach you as part of their practice experience.
@igor784hg Depending on volume of transactions/ doing payroll, yes in this case
@alangeh I would like to pick your brain a bit. So I’m a brand new business owner (been in business 2 weeks), and I’m using Square for my POS and Quickbooks Accounting. I have an accountant that does my taxes at the end of the year, but is there any more I need? Is there something I’m missing? I don’t want to mess up.