If you’ve decided that it’s time to automate your company’s accounting procedures, you’ll find that there’s a lot of competition for your dollars. But there’s really no need to look beyond the market leader, QuickBooks. Millions of small businesses use it.

QuickBooks’ popularity isn’t the only reason you should consider it. If you look at the reasons it’s a household name, you’re likely to discover why it’s the first choice for so many. Here’s why it’s become the Microsoft Word of accounting software. QuickBooks:

1. Is time-tested.

The desktop version was introduced nearly 30 years ago.

2. Is multi-platform.

You can choose between a desktop version that you pay for upfront or an online version that is subscription-based.

3. Was designed by accountants for small businesses.

You don’t have to have a deep understanding of accounting to use it, since the complex bookkeeping goes on in the background.

4. Works like other software and websites.

If you’ve used other productivity applications, you will recognize the user interface and navigation conventions it follows.

5. Is generic enough that it can be used by a wide variety of small businesses.

While every business is unique, QuickBooks provides tools that allow any company to:

• Keep track of customer, vendor, and product/service records.
• Manage income and expenses.
• Create and send sales and purchase forms like invoices and purchase orders.
• Pay bills.
• Run payroll.
• Generate reports that give them instant overviews of their finances.

6. Can be tailored to meet more specific needs.

Both versions of QuickBooks are exceptionally customizable. If you need more tools in a specific area like inventory or billing or payroll, for example, you can choose from hundreds of integrated add-on solutions.

7. Helps you track down the smallest details.

When you need to find a specific transaction or customer email address or the payment status of an invoice, you can do so quickly and easily.

8. Minimizes duplicate data entry.

Once you’ve entered information once, like a customer’s address or the price of a product or service, QuickBooks remembers it, so you never have to type it in again. When you’re creating a sales receipt or invoice, for example, you can select the customer’s name and the item you’re selling from lists of records you’ve already created. QuickBooks fills in the blanks with information about pricing, sales tax, discounts, etc.

This automation:

• Saves time and money.
• Helps prevent errors.
• Keeps your financial books consistent.

QuickBooks automates so much more of your tedious bookkeeping tasks. It can connect and download transactions from your financial institution. For example, it can remind you when invoices are due (or overdue), tell you when bills need to be paid, give you a heads up when it’s time to run payroll, and show you in an instant what your current profit or loss is, how many invoices are past due, or what the balance of each of your accounts is. If you’re ready to get started, contact us. We can help you set up QuickBooks to fit your business.

If 2020 is the first year you’ve had to work as an independent contractor, you’re not alone. The pandemic has forced many Americans to take on side gigs to replace lost income. That means a whole new way of preparing and filing income taxes.

Warning: Make sure that you truly are an independent contractor and not an employee. The IRS makes this distinction very clear and takes it quite seriously. We can help you determine this as part of a broader discussion about bookkeeping for independent contractors.

As a freelancer or other self-employed individual, you are indeed expected to pay income taxes – if you make $6400 or more from your work during the tax year. You do not receive W-2 forms in January since no one is withholding and paying taxes for you. Instead, you’ll get a 1099-NEC form (Nonemployee Compensation). The individual who is paying you should have already had you complete a Form W-9 (Request for Taxpayer Identification Number and Certification) so your income can be reported both to you and to the IRS.

If you’ve been saving some of your income to pay your eventual tax bill, you’re smart. You not only have to pay income taxes on the compensation you received using the same tax tables that W-2 employees use, but you’ll also have to pay the portion that employers remit for their employees. This is the self-employment tax, which is a social security and Medicare tax. When you prepare your income taxes, you’ll be completing a Schedule SE to calculate it.

Educated Guesses

You’ll also be preparing and filing a Schedule C with your 1040, which contains a detailed breakdown of your income and expenses for each solo business you operated. It’s important that you keep receipts for all of your expenses, so you don’t miss any legitimate business deductions. You may or may not get pay stubs from your employer depending on how you’re paid, but your income will be reported to you in January on the 1099-NEC form we mentioned.

Sole proprietors are expected to pay estimated taxes four times per year that approximate the amount they might owe for each quarter. Unfortunately, there’s no foolproof way to know exactly what your tax bills will be. You’ll need to add up your income and expenses for the quarter, determine what your tax bracket will probably be for the year, and make an educated guess about what you’ll owe in taxes. You’ll then submit that amount to the IRS and to state agencies (if applicable) on a Form 1040-ES voucher, which you can get here.

If you don’t pay estimated taxes, you’ll be responsible for a full year’s worth of taxes when you file. The IRS will also attach a penalty to what you owe.

Tracking your income and expenses manually is challenging. We can get you set up with software that will automate your bookkeeping. Contact us to schedule a consultation – tax filing season is just around the corner.

As a nonprofit, minimizing your overhead expenses is essential. And while you may have very specialized accounting needs, a full-time bookkeeper might not be in your budget.

If your organization has a computer and an internet connection, you can use Intuit’s QuickBooks Online for your accounting – it was designed to be both user-friendly and budget-friendly. It can also be modified to meet the specific needs of a variety of company types.

One of these special types is for nonprofit organizations. By changing a few internal settings, you can alter QuickBooks Online in several ways to make it “fit” your special bookkeeping style. For example, you can:

• Change the Company Type. You need to tell QuickBooks what type of entity your organization is structured as, and it will accommodate the tax return you need to file. You have the ability to structure your QuickBooks as a nonprofit organization (Form 990) which will also create reporting options suited for a non-profit.
• Create new accounts. QuickBooks Online uses a standard Chart of Accounts to assign each transaction to an account type (bank, income, expense, asset, liability, etc.). You can add and customize your chart of account(s) to track your organization’s various donation and contribution revenue streams, for example, or any specialized expenses.
• Maintain a donor database. Your donor contact information needs to be recorded and safely saved, yet easy to access. QuickBooks Online provides ready-to-use templates for entering all of the details you need to track to create your donor/donation database. You can then select individual records when you record donations.
• Generate item records for pledges, donations, and grants. When you record income or an expense in QuickBooks Online, you can indicate which “item or service” the transaction was related to. You can set up customized items to use in transactions and generate reports that describe your own types of financial activities. You can track pledges and donations with certain categories, such as restricted or unrestricted.
• Run Financial and Management Reports. QuickBooks Online comes with dozens of reporting options for financial statements and management purposes. There are canned, standard reports for a non-profit, such as the “Statement of Activity” and “Statement of Financial Position.” There are also other reports you can customize for pledges receivable, etc.

QuickBooks Online was designed to be used by non-accountants, so this is a fairly user-friendly program. Still, QuickBooks needs to be setup correctly to ensure or your records will be correct. Contact us for assistance in setting up QuickBooks Online so you can save time and money on your accounting tasks and produce comprehensive, accurate records.