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May 14

Paperless Office!

By App Review, Cloud Accounting Option and Reviews, Document Management, Procedures, ScanSnap, Uncategorized

If you have filled the taxes and avoided filing the extension – Congratulations!

Taxes are done, and you might think it’s too early to talk about the Tax Year 2019.
The truth is, this IS a perfect time!

Imagine its January 2020, and:

  1. Your Financial Statements are done by January 15th, 2020
  2. The 1099 MISC hare done and issued by January 15th, 2020
  3. Your expenses are easily sorted and the receipts are digitally filed
  4. You can search your entire file cabinet with CRTL+F
  5. Your desk is paper free!

It’s not mission impossible and’s not a fairytale…

But how do we achieve 1-5? By working backward!

We, at Books LA, are known to work backward, but in a good way. We imagine ourselves how would it feel without the current problem at hand, and, as we identify the advantages in the future without those problems and obstacles at hand; we build the bridge between there and here.
So, in that fashion, let’s start from the end :

Step 5: Your desk is paper free!

If you glance at your desk now, what will you see? Notes? Bills? Statement? Mail?
Now, imagine you are done for today and are walking into your home. Is there a pile of papers somewhere in your home that needs to be looked at-filled-away-addressed?

So, now what?

ScanSnap to the rescue!
Help yourself, and grab ix1500. That is Fujistu’s own ScanSnap (workhorse) ix1500.
Plug it in, connect the USB to any PC or Mac, follow the simple instructions, and within 10 minutes or so, scan your first page(or receipt).
ScanSnap will use the AI and save the files (double scanned regardless of the same and sizes) and name the files by default, by reading the name of the document, date, amount…
All you have to do is to feed that workhorse and let it scan all.
Continue doing so, until every paper in sight is scanned*.

Step 4: You can search your entire file cabinet with CRTL+F

Sometime later you recall seeing a bill from Blue Shield or Blue Cross or Amex Blue… and want to take a look at it. All you need to do is open your ScanSnap Document Organizer, and in the search field you start typing “blue” and you watch as the documents are instantly filtered by “b”, then “bl”, then “blu” and “blue” and you pull that bill. Once you are done looking at it, you recall that you are mesmerized by instant search and you try to search for other bills too… Verizon, AT&T, ATT, DWP…
All your bills are searchable – ALL OF THEM!!!

Step 3: Your expenses are easily sorted and the receipts are digitally filed

Even though the bills are searchable, now we take it a step further and connect ScanSnap with Hubdoc, Dropbox, Google Drive…
By doing so, AI will help us determine the type of expenses.

Take it a step further and train your ScanSnap ix1500 and software of your choice to always recognize and sort the expenses and bills. That way, you can easily ‘push’ the receipts as a match to existing transactions and attach them into the accounting software of your choice, or add them bills to pay them via Bill.com.
So, any receipts that you might have from more than 6 months ago, that were printed on a thermal printer are now starting to fade. But yours won’t fade! Yours are now digital and readable! Those receipts are very much visible AND USABLE inside ScanSnap and other software of your choice.

Step 4 AND Step 5: Your Financial Statements are done by January 15th, 2020 and The 1099 MISC hare done and issued by January 15th, 2020

Yes, we saved that much time and were able to speed up the process so we combined two tasks into one.
Like any good bookkeeper, we are not going to say that AI will do everything for you. We are still a bit far from that day, but that day is coming.
Until then – here is where we are :

Your paper receipts are a thing of the past. Any paper that you see should be scanned and OCR’d (searchable) by a ScanSnap software
Let the data be extracted. There is absolutely no need for data entry. Let’s avoid the typos and allow the AI to fill and complete the data.
Pay close attention to data management. This is where the human is very much present and needed. This is where we, as bookkeepers, are needed and use our knowledge to the fullest. (i.e. loan payments splits, asset or expense qualifications, equity contribution vs income…. Just to name a few)
Review, review, review. Here at Books LA, we have a once-a-month meeting with our clients where we go over the current report and plan ahead. We also review quarterly and YTD reports as we go.
Therefore, once January arrives, all we have to do is do a final check. That’s why we CAN be done by January 15th

After you have scanned all your receipts, you are most likely to come across quite a few cash receipts. If you are like 95% of us, those receipts are usually forgotten about and rarely counted for at the year end, right?
On average, there are about 4 cash receipts per month, ranging between $6-$12 each, and some are even over $20. If we tally the total spent, on average, is between $288 and $576.
Now, by using a Fujitsu’s ScanSnap ix1500 to capture those receipts, your ScanSnap paid for itself within the first year or two. But, here is a $50 rebate as well! 

 

*This might seem like a tall order but wait until you are at your last piece of paper.  If you are slightly similar to me, you will be searching for papers to scan and be sad when you can’t find any. You are welcome!

Oct 03

1099s review can start TODAY!

By 1099, Cloud Accounting Option and Reviews, Procedures, Uncategorized

Counting today, we are only 79 DAYS away from the 1099s filing deadline (box 7).

Therefore, it is much better to be prepared and ready, than to wait for the deadline, which is never a good idea! 

 

So, Quickbooks Online finally opened up the review option for the current year.  Just last week we were only able to view last year’s 1099’s reports. But, as of this month, we are now able to review the current year, and get ready ahead of the time for the upcoming tax season!

To review your 1099s, Go to your Quickbooks Online (QBO) file, and navigate to (1) Expenses > (2) Vendors > (3)Prepare 1099s*

(3*) One button is housing two other options, and if you don’t see the “Prepare 1099s” option, then click on the down error next to the “Pay Bills” or “Order Checks’ and you will be able to see Prepare 1099s option*

On the very next page, you will be able to read more about the 1099s filing, deadlines, and read through FAQs. It is a very good idea to read through at least once a year:

. 

On the next page you will be able to review the following:

  1. Name of the company, business address, and Tax ID

2. Review, add or modify accounts that are currently checked for the 1099 reporting. Here you can also make sure that the correct accounts are marked correctly ( i.e. Legal Expenses are not marked in the Nonemployee Compensation group.. etc)

3. View the list of ALL vendors and confirm that all 1099’s vendors are marked to be tracked. Also, it is a VERY GOOD IDEA to add emails for each contact as the email delivery of the 1099’s forms can be 1/10th of the cost of the snail mail delivery of the 1099’s.

Make sure you do have:

W9 from any vendor, regardless of the amount you have paid the vendor in one year!

4.  It’s now time to preview (review) the 1099s

Pay attention to:

  1. The correct year is selected!
  2. Gather the missing information for the vendors listed in red
  3. Review the amounts in boxes
  4. Review why there is a difference between the ALL PAYMENTS and the BOX (that was reported) (if any

 

Books LA is jumping on the review for all of our clients! And so should you!

We can never be too prepared.

Tips:

  • Ask for a fresh W9 every 3 years. It is always a good idea to have current W9 as the addresses, entity types or DBA names can change.
  • Obtain a W9 regardless of the amount! NO exception. Why? Besides many other reasons here are two very important ones:
    • Failure to report 1099 for the lack of W9 can result in the 28% in backup withholding, plus penalties, plus interest! That $1000.00 expense that was a good deal is now costing you $280.00 +( pen.+int%) * years!
    • Vendor received less than $600.00 this year, but the next one he receives over $600.00. A few months later it’s time to do 1099’s and the vendor is MIA. They got their money, and don’t feel its urgent to comply. What do you do? Refer to the previous bullet point, and be ready to pay!

So, GET THE W9!!!!

Happy Tax Season (almost)!

 

 

Dec 29

Meal and Entertainment – Travel meals – Employee meals – Office parties

By Dining, Procedures, Uncategorized

What is the difference? Is there a difference? Why does it matter?

Mike Russo, from Less Taxing Services, LLC wrote a good, entertaining and clear guide when in comes to meals and the deduction parentage.

 

“When I talk to clients about the need for professionals being involved in their finances, I describe a box of donuts.

That simple box of donuts can be coded 10 different ways (another group came up with 11 or 12, but I can’t find that list…some of them were WAY off the wall, though, so we’ll stick with 10). Once coded, the donuts could then show up on at least 7 different tax forms. (Schedule C, 1120, 1120S, 1065, 990, Form 2106 and Schedule A)

It’s never as simple as just buying a box of donuts.

 

– No Deduction – I buy a box of donuts and eat the whole thing while in town at my tax home. (Note, this would be 50% deductible if you were out of town traveling for business.)

– 50% Deductible Business Expense – I buy a box of donuts and share them with the 10 people in my first sales meeting of the day

– 50% Deductible Non-Reimbursed Employee Expense – Same as above, but now I’m an employee and my employer requires me to supply food in my business meetings but doesn’t reimburse me for it. (While this is still 50% deductible, it’s an itemized deduction and won’t even begin to count until you’ve crossed the threshold of 2% of your income.)

– 100% Deductible Business Expense – I buy a box of donuts, takes them to my first sales call and leave them in their lobby by the coffee for all to enjoy…even people off the street.

– 100% Deductible Non-Reimbursed Employee Expense – Same as above, but now I’m an employee and my employer requires me to supply food in my business meetings but doesn’t reimburse me for it. (While this is still 50% deductible, it’s an itemized deduction and won’t even begin to count until you’ve crossed the threshold of 2% of your income.)

– 80% Deductible Business Expense – I buy a box of donuts that I use as breakfast and lunch while driving my big rig across the country. (I’m subject to DOT rules.)

– 80% Deductible Non-Reimbursed Employee Expense – Same as above, but now I’m an employee and my employer don’t have any provision for meals while I drive. (While this is still 50% deductible, it’s an itemized deduction and won’t even begin to count until you’ve crossed the threshold of 2% of your income.)

– 100% Deductible Personally – I buy a box of donuts and donate them to the church bake sale. (This is deductible, but it’s only on the personal return…even if you did this for a Corp, it would still pass through to the shareholders and wouldn’t be deductible at the corp level.)

– 100% Deductible as COGS – I buy a box of donuts to resell.

– 100% Deductible as an Ordinary and Necessary Business Expense – I buy a box of donuts to use as a prop during a tax talk where I discuss the ways a box of donuts can be coded. 🙂

Now, who wants a donut? :)”

 

The 33 Best Donut Shops in America –Huffington Post

 

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