5 common errors people make in QuickBooks payroll and how to get them solved fast and easy

Most QuickBooks payroll problems occur during the set up phase as many small business owners attempt to do the work themselves. Business experts agree that if a task is only going to be done one time in your business it makes little sense to develop the skills needed to do the job – it is far cheaper to hire someone that can do it right the first time and generally for a lot less cost then struggling with the project on your own. Although an accountant may very well charge $100 an hour to make your payroll work – it generally takes them only a few hours and your done with the ugly non-revenue generating task once and for all. So with that said, we think you should call us to help with your payroll.

Here are the 5 common errors that may happen when setting up payroll.

1. Failing to keep all the forms required by the each level of government. For example the W4, I9 and W9. These must be kept on file and done correctly or you will suffer penalties during an audit. You also put your self at risk of legal action by a disgruntled employee if there are ever any questions about how you managed the government required forms.

2. Social security numbers that don‟t match the names of your staff is a common problem that will cost you hours of remedial repair up to several years after an employee is long gone and impossible to find.

3. Putting in the wrong pay type – or misclassifying your workers. This mostly has to do with paying overtime for people you may believe are being paid on salary – yet they see themselves as an hourly worker. It only takes one unhappy employee to file a claim and your life is going to be miserable dealing with one sided government employees who will act like their only job in life is to make you out to be guilty.

4. Treating employees as independent contractors. We see this every day. In an attempt to save money you skip the 19 question test and end up in deep water at the end of the year when your employee can‟t pay their own taxes and start blaming you for not withholding.

5. Not documenting a workers trade classification. Here again we may just not be aware of the rules or we might try to save some money on workers compensation – a decision you will come to regret if someone gets hurt on the job and your classifications are incorrect once the medical bills start rolling in.

Sadly to say, this is only a partial list of mistakes we make as small business owners that may very well lead to big trouble down the road. In many states your employees can easily find an aggressive willing attorney that will bring action against

you for the slightest misstep.

What are the rates, when do you need to file, can you get an extension, what to do if you have not filed. Manal Oliver & Associates, Inc. can make all this fast and easy.

Most taxes are collected by business and then forwarded to the government. This is a new development in modern history and one we will just have to put up with if we want to own our own business. Collection of taxes and forwarding the money to the controlling government entity is a fiduciary responsibility that we agree to the day we got a business license and it is not one to take lightly.

We’re all responsible for paying taxes on our own income and property on the federal level as well as some state and local taxes, plus a variety of employment taxes and more.

These taxes are assessed depending on the type of business model we adopt such as a “C” corp. or sole proprietor.  You will also find that the type of product or service you deliver is going to have an impact on your tax obligations. For example if you sell fuel or generate hazardous waste (that’s a moving target) you will pay additional taxes.

It is also important to remember that if you hire employees, you will have a whole new set of regulations to deal with.  We caution you on hiring “contractors” to get around the tax bill. Way too many people think this is a smart idea and live to regret it when they find that taxes not withheld from contractors become YOUR liability. We have recently seen a trend where “contractors” who can’t pay their taxes – turn the local business owner in for not withholding employment taxes. This will cost you thousands in legal fees and many hours of litigation.

Florida business taxes is one area where it is penny wise and pound foolish to figure this out on your own. The tax laws change constantly and over 2 dozen government agencies, in most jurisdictions, are looking at the small business owner as an easy target for revenue.  If you want to try figuring out the tax liabilities in Dade County you can find a web site with a lot of the regulations at http://www.miamidade.gov/taxcollector/ol_home.asp

It is our recommendation to invest a few hours with a great local business accountant that has gone through the paperwork hundreds of times and just let them get it all done for you so that you can spend your time finding new clients.

Just give me a call at 305.868.7620.  We’re experienced at keeping your back office headaches out of sight so you can focus on running your business.

A few weeks ago, my husband and I were going to Aventura Mall and I noticed that a business near Aventura Mall had closed. Now, this particular business was one that I had tried to sell my outsourced bookkeeping to but the owner wanted to save money and have his wife do the books for him.

I thought how sad, another one bites the dust. They had a wonderful business that imported items from all over and sold in a mall near the Aventura Mall. I thought it was a great business as it had a great location and he had a very good sales staff.

Any way, back to our vacant store – I was at that business a year ago and tried to talk them into letting my company, Your Bookkeeping Department do their bookkeeping and inventory control on QuickBooks POS system. We would log in remotely several times a week – do all the books – and leave behind management reports they could use to make wise decisions about their cash flow.

But they answered No Thank You, they were going to do the books themselves and save money. Even though I reminded them that

1. They were already 3 months behind – how will they ever catch up.

2. His wife has no idea what she is doing and does not like detail work – so she will hate doing it.

3. They don’t know how much profit they are making (if any) and that is thin ice for any business.

They were very pleasant, as they listened, but they wouldn’t give me any more coffee so I knew my time was up. Since I’m an accountant and not really a salesperson, I kind of new that they didn’t realize how important having accurate and timely reports were.

Now, this is the reason I wanted to tell you this story. Over the course of my years in accounting, I have never talked to a small business owner that ignored the bookkeeping – that made it past 2 years in business. That’s a 100% failure rate if you do NOT attend to the numbers.  100%

I’m sure there are exceptions – but so far I have not run into one.

The 3 big reasons you should outsource your books are

A. No more employee drama

B. No more high cost – it’s about half of doing it yourself

C. You get ACTIONABLE numbers every day or week so you can do the right thing and STAY IN BUSINESS.

The bottom Line: If you are not really good at bookkeeping DO NOT do it. You would never fix the company truck if the transmission went out, you would NEVER deal with a lawsuit on your own. Accounting is the first and most important clerical task in your business. Let it slide at your own peril. 100% peril.

It you are a small business owner who still does your own bookkeeping and struggles with keeping it up to date, please give me a call at 305-868-7620 and I will be happy to show how we can save you time and mine and give you accurate numbers.

Online accounting otherwise known as outsourcing accounting can easily reduce the overhead in a business with 5 employees by $25,000 to $35,000 a year.

Accounting online is the function of Business Process Outsourcing or BPO that accounting services use to provide outsourced bookkeeping. The objective is to reduce the overhead burden rate for a business that is associated with the bookkeeping department.

Few business owners realize that the total burden rate for an employee is approximately $2.50 for each $1.00 of payroll. This includes rent, computers, hiring, training, benefits, vacation pay, management time and taxes. What that means to you is that a $15.00 an hour bookkeeper is actually costing your company around $75,000 per year.

Using online accounting technology makes an economy of scale available to the local business owner that until now was only available to companies doing 50 million in sales or more.

Here is how it works.

Since the invent of the online process using document management services in 1998, over 4,000 US based accounting outsourcing and bookkeeping firms have embraced the concept of doing your bookkeeping from their office using remote access.

During the day when you are conducting business as usual, you simply throw all documents that come into your business such as invoices, checks or sales orders onto your scanner. Then several times a day hit the send to email button that all scanners utilize. You’re scanning your documents to a document management system called Delegation Magic.

Accounting services are then done in the back ground often overnight as a team of document technicians hand read every single piece of paper to name, organize, index for retrieval and set up work flow tracking. This document management service allows you to go paperless overnight and stay on top of all work being done by the outsourced accounting service.

The skill chain that works on a single companies accounting

Now comes the best part.  80% of your bookkeeping service is easy to deliver and does not require a highly skilled person to enter a bill or set up a bill for payment. So the outsourced accounting provider will use low cost staff that specializes in a certain type of transaction. For example one staff person focuses on accounts payable and another staff person is the receivables clerk while a third employee specializes in back reconciliations or payroll.

Any work that is difficult is bumped up to the “boss” through a process we call bottom up delegation. This allows us to accomplish 80% or more of the work without the high expense of an accountant. Yet anything difficult is handled by the experienced and high price employee.

Technology

Using the ASP or application service provider your accounting software is “hosted‟ on a secure server so our staff can do your work 24 hours a day. This too, reduces your cost as we can spread our labor load across multiple resources and time zones allowing for further cost reductions.

Both the document management service called Delegation Magic, and the outsourced accounting service using online access, allows your local accounting firm to do your work in about half the time it takes your internal bookkeeper. So you end up paying less in total cost for better work that has been reviewed by a local accountant.

Summary: The best next step if you are looking for a way to get better accounting at reduced cost and reduced employee drama is to give us a call at 305-868-7620. Then if you like what you hear, we’ll give you a full online demonstration to determine how Your Bookkeeping Department LLC can work for you.

Fast, Free and Easy QuickBooks Training Classes in Miami

Training on QuickBooks solutions is one of the best ways we have found to help small business clients improve their business. When your business has good numbers you can make the correct decisions about how and where to focus your resources and time.  Your Bookkeeping Department LLC provides local support in the south Florida area. Our FREE 2 Hour class takes place several times a month on Thursday morning at our office in Miami Beach or we can answer your specific QuickBooks questions using Logmein.com to host an online session.

This is a very easy way for you to get help at no cost and for us to get a handle on your bookkeeping problems.

The weekly classes held at Your Bookkeeping Department’s office at 301 W. 41st Street, Suite 501, Miami Beach, Fl 33140 and there is a free Q&A which takes place between 9 AM and 10 AM. The Q & A is available to any local business as well as their staff.

Here are some of the past questions we’ve answered.

1. My payroll deposits don’t match my net payroll amounts what did I do wrong?

2. I can’t seem to get my bank account to reconcile, what can I do.

3. My credit card account balance is off, I can’t find the error, what can I do?

4. Do I use the one step or two step method in QuickBooks to pay my bills?

5. I seem to have recorded my deposit more then one time in QuickBooks, what next?

To find out how to take advantage of our fast, free and easy QuickBooks training classes. Just call our office at 305-868-7620 and we’ll tell you if were doing the class live at our office or on-line this week using Logmein.com.

To learn more visit our website at Yourbookeeepingdept.com. On the contact page you may want to fill in your main questions today as well, that will allow us some time to prepare your answer.

The staff of Your Bookkeeping Department is looking forward to being able to help.