You may not have even completed your 2013 taxes yet. But now is an ideal time to start getting ready for your 2014 returns.

We know that you’re in some stage of preparation for your 2013 income taxes. It may seem odd to start thinking about 2014 taxes just now, but actually, this is the ideal time to start planning and making business decisions with their tax implications always in the back of your mind.

As you look at the data that will be entered in your 2013 tax forms, you’re likely to come across some expenses that you might have handled differently, or some income that should have been deferred. If you begin your planning process for 2014 while 2013 is still in the works, you can start making smarter, more tax-advantageous business decisions now, instead of late in the year when everyone is rushing to take actions necessary to lower their tax obligation.

Here’s how QuickBooks can help you with this new approach.

Overhaul your Chart of Accounts

The mechanics of doing this in QuickBooks are fairly uncomplicated, but changing this critical list – the backbone of your company file – requires solid knowledge of which accounts should be added, deleted or changed. You also need to know which accounts and subaccounts will have impact on your income taxes. They must be structured accordingly.

Figure 1: QuickBooks’ default Chart of Accounts can be easily modified to meet your company’s unique needs. But let us help you with this task.

For these reasons, we ask that you consult with us if you think your Chart of Accounts could use an overhaul. Our early involvement will be much more economical for you than if we have to come in down the road when your accounts have become dangerously tangled.

Devise an Effective System for Estimated Taxes

As you well know, there’s no magical formula for estimating how much income tax you’ll owe when all of your income and expenses have been tallied. We can make this an ongoing task by creating monthly or quarterly financial reports for your business and working from those.

If you’re self-employed, you might want to open a low-fee checking account that will serve solely as your tax fund. Because you have no employer to pay a portion of your Social Security and Medicare obligations, it’s critical that you’re putting enough away. Consider putting one-third of your taxable income into that account and see how it goes. You may get a pleasant surprise at tax prep time, or you may have to dip into other savings to be compliant.

Figure 2: You may want to set up a separate bank account to park estimated tax funds, so you know they’re committed. Ask us about numbering new accounts.

You can submit federal payments online on the Electronic Federal Tax Payment System site. Check with us to see if your state has an electronic system. Of course, the IRS will accept a check.

Run Reports on Everything. And Keep Running Them.

We already mentioned that we’re happy to create and analyze your most critical financial reports on a regular basis. You may have tried to understand the Trial Balance, Statement of Cash Flows, etc. in QuickBooks and been puzzled. Don’t feel incompetent because of that: It often takes an accountant-level individual to understand what they mean for your business.

You can define and build your own reports using QuickBooks’ customization tools. If you have employees who travel, consider bringing in an automated expense report application (we can help you find one and implement it). Stress the importance of adhering to IRS rules about travel. Same goes for your local salesforce, off-site technicians and other service providers, etc.

Figure 3: Help your staff help you by involving them in budgeting and expense management.

For employees who come into the office every day or are telecommuting, you can give them some ownership of their contribution to expenses by bringing them into the budget process and/or requesting that they submit their own monthly mini-reports on any company funds they spend. The more employees are aware of and accountable for expenses, the easier it will be for you to work toward minimizing your tax obligation. And having some information about the considerable sum you pay in taxes may help staff understand your tightening of the purse strings.

Consider Retraining Bookkeeping Staff if Necessary

You may be paying a portion of your taxes unnecessarily, simply because your company’s bookkeeping is less-than-precise. Nip that in the bud.

The more you manage your reporting, stay aware of the consequences of every expenditure and bring employees into the process, the more prepared you’ll be for 2014 taxes.

Have you ever tried on a shirt or jeans and found they didn’t fit at all? They looked great on the hanger, but that was the end of it. Accounting systems come in all sizes, shapes, and colors just like clothing; and just like clothing, some accounting systems fit your business better than others. It’s not that easy to spot in a mirror when an accounting system does not fit a business, but there are other signs that will give it away. Here are five of them:

Numerous Workarounds

A workaround happens when your current system cannot do all the things you need it to do. A workaround can take the form of a spreadsheet, a report, a program, or a database that is created with extra time spent every month so you can get the information out of your system and manipulate it the way you need it to run your business.  

Since no accounting system is a perfect fit for any one business, it’s normal to have some workarounds in place to meet your unique business needs. If you have too many workarounds, and it feels like patchwork, it might signal that you’ve outgrown your current system and need to find an accounting system that provides you with more functionality.

Downtime or Wasted Time

  If you are unable to access your system when you need to do your job, then you are experiencing downtime in one form or another. You may be waiting for a file to be fixed, or the system may actually be down. If your system runs slowly, then that’s another form of downtime that wastes your time. If you have to take time to make backups and perform restorations, this type of activity does not add value to running your business. When you have too many of these time-wasters, it could be time to look for a better way.

Old Technology

If your accounting system is more than about three years old and you’ve chosen not to update it, then you may be missing out on newer time-saving features that could help you reduce the amount of time you spend doing your accounting. If your accounting system is more than six or seven years old, then you are definitely losing productivity. It’s time to bite the bullet and learn a new system so you can experience better profit margins in your business.

Limited Users or Security

If your current accounting system does not provide you with enough users, then you might have more expensive employees doing lower level jobs, which is costing you more in payroll expenses.

You may also need certain user permissions to be more granular than they are in your current system as you grant access to certain parts of the system to different users.   If you’re on QuickBooks, that’s a really easy fix, so please talk to us about this.

We find that user access is a hot button with a lot of business owners, so if it’s true for you, please reach out and let’s have a conversation about this.

Limited Physical Access

If your accounting system is located on a private PC or server in your business, this limits access to your files. If you have more than one business location, you like to work from home, or your employees work from their homes occasionally, then you may want to look for a system that accommodates “anywhere, anytime” accounting. This is a pretty easy fix too, as this requirement is now quite common with business owners today.

The same can be said for mobile access. New apps enable many accounting features to be completed from your mobile phone, such as checking bank balances, approving a bill, and taking a picture of a receipt and uploading it, to name a few. If you want to do you accounting from your mobile phone, ask us about mobile apps that we can link to your system to enable this functionality.

Boosting Your Accounting Productivity

We might be a little biased, but accounting has gotten to be a lot more fun in the last few years with advancements in technology. If you see any of the signs listed above, it might be worth a conversation to see if your accounting system is the best fit for your business. Just reach out anytime.

Many small business owners focus on generating more revenue every year,  and that’s a great objective. But not all revenue is created equally. If you sell more than one product or service in your business, then you can benefit from looking at your revenue mix.

Although it’s fun to watch our revenues grow, it’s the profit number that really matters. If your expenses grow faster than your profits, then you have a lot of activity going on, but you don’t get to keep as much of what you make, which is what really matters.

An insightful exercise to try is to take a look at your revenue mix. Then you can ask “what if?” to optimize your profits.

Your Revenue Mix

Let’s say you offer three different services: Services X, Y, and Z. Your revenue pie looks like this:

X: $1.4 million or 70% of the total

Y: $0.3 million or 15% of the total

Z: $0.3 million or 15% of the total

Total: $2.0 million

In this example, Service X is clearly the service making you the most revenue in your business. But is it making you the most profits?

The profit you receive from each of these service lines is as follows:

X: $160K

Y: $20K loss

Z: $60K

Total: $200K

While Service X is generating the most profit volume for your business, it’s actually Service Z that’s the most profitable. Earning $160K on $1.4 million yields 11.4% return on Service X, but earning $60K on $300K yields nearly double the return at 20%. Service Z generates the most return.   And if possible, Service Y may need to be discontinued or turned around.

Optimizing Profits

Your strategy for a more optimum revenue mix might be to sell as much of Service Z as possible, while eliminating or fixing the problem around Service Y.

It’s fun to experiment with different revenue mixes. And of course, there are many more variables besides profit, such as:

  • Which service do you prefer to work on?
  • Are you able to sell more of the most profitable service or are there marketing limitations?
  • Is one service a loss leader for the others?
  • Are you able to adjust price on the lower margin services to increase your profits?

There are many more questions to ask and strategies to consider to make you more money, which is why we love our job!

A New Year, A New Mix

We hope you’ll spend some time analyzing your revenue mix and having fun asking yourself “what if?”   If we can help you expedite the process or add our perspective, please reach out anytime.

With the holiday season just around the corner, it’s a perfect time to get your financial records in order. Tax moves you make now can mean finding more “green” to spend on family gifts and festivities. Here are five quick tips for you to feel more prepared about your financial status as you go into year-end.

1. Avoid Penalties

This time of year is ideal to double-check your tax payments, both  federal and state, to make sure enough has been paid in, and even more important, to avoid overpaying so your money is not tied up unnecessarily. If you’re not sure of your 2013 tax liability, check with your tax preparer.

2. Balanced Books

Rather than wait until the busiest time of year for accountants and bookkeepers, you can get a head start now on catching up your books. You’ll have more of their attention and you may even avoid a rate increase if you get your books done early. Completed bank reconciliations are a very important part of catching up.

3. Forms

It’s not too early to get your orders in for the forms you need at  year-end like your W-2s, W-3s, 1099s, and 1096s. That way, your forms will be onsite when you’re ready. If we do not process your year-end forms, you can order the forms you need online and save 20% using code PAPWBKC.

4. Records

Information that’s missing at the last minute can take up extra time  and be costly. It’s a great idea to do an audit now of W-9s to grab missing addresses and tax ID numbers of your sub-contractors. Also do a scrub of your employee payroll records so that your W-2s will be complete and accurate.

5. New Tax Changes

Be sure to check with your advisors on new laws affecting individuals and businesses next year. One of the biggest ones making news is avoiding the fine involved regarding the new health care requirements for individuals. And there are many more you’ll want to get up to speed on so that you’ll know how they affect your situation.

We know it’s early to be talking about taxes, but we’re also all about saving you money and time. Try these five tips so you’ll have better peace of mind and be more prepared for year-end.


On a doctor’s visit, the first thing the nurse
does is take your vitals: your temperature, blood pressure, pulse rate, and respiration rate. These basic measurements are the first place doctors look to see if something is wrong with our health.

Knowing your vital signs, and especially when they are out of whack, is good for your health. In the same way, knowing your business’s vital signs, and especially when they are out of whack, is good for the financial health of your business.

Vital Measures  If you’ve been in business a while, you might already know the “vitals” you like to track. Here are some common ones for a small or new business:

  • Checking account balance(s)
  • Cash flow requirements for bills and payroll
  • Revenue for the month and year-to-date
  • Sales by customer so you can see the top five to ten largest customers

As time goes on and your business grows, you may want to add some of the following:

  • Revenue for the month and year-to-date compared to last year
  • Net income for the month and year-to-date compared to last year
  • Days Sales Outstanding which is a measure of how long it takes to collect on an invoice from a client
  • Revenue by service or product line in a pie chart

What about these important metrics?

  • Best and worst selling products
  • Tracking promotion codes and coupon results
  • Work in progress or backlog
  • Number of days to fill an order

These are just a handful of the many options there are when it comes to measuring the results of your business, and it would be difficult for us to list all of them here. The point is to decide proactively what you would like to track on a monthly basis. Then you can set up the process it takes to get those numbers delivered to you in the format you prefer.

Once you decide on the numbers you need to run your business, you’ll be able to take your “vitals” whenever you want. You can take this to the next level with one more idea: exception reporting. Being Exceptional   It’s great to glance at your numbers periodically, but there can be a lot of data to wade through. How about getting a report that tells you only when the numbers go out of range? This is called exception reporting, and requires that you set ranges for each measure you want to follow. If the measure stays within range, you do not have to be alerted. However, if it falls out of range, then you can get a report to tell you what’s going on so you can take the right business action.Exception reporting is not all that common in small business, but it should be. It can save a busy owner a lot of time. A Clean Bill of Health   By determining the vitals you want to watch for your business and putting a process in place to monitor that information, you will be helping your business stay healthy. If we can help, please reach out and let us know. The doctor is IN.

Rhonda Rosand, CPA
Advanced Certified QuickBooks® ProAdvisor
New Business Directions
Phone: (603) 356-2914 | Fax: (603) 356-2915


When your goods come rolling in, be sure to document them correctly.

You’re probably happy to see couriers delivering inventory items you’ve ordered since it means you can ship to customers, but recording the new stock means yet another repetitive task.

QuickBooks’ tools can help with this, but you need to be sure you’re using the right forms. There are two different ones that you’ll use, depending on whether or not you’ve received a bill.

Bill in Hand

Either way, you’ll get started by opening the Vendors menu (or clicking the arrow next to Receive Inventory on the home page). If you do have a bill, select Receive Items and Enter Bill (Receive Inventory with Bill on the home page). The Enter Bills screen opens; select your vendor from the drop-down list. If you had entered a purchase order, you’ll see something like this:

Figure 1: If any purchase orders exist for that vendor in QuickBooks, you’ll see this message.Click Yes. The Open Purchase Orders window will open displaying a list. Select the PO(s) for the items received by placing a checkmark in front of it/them and click OK.Tip: If you accidentally click No, the vendor’s information will be filled in on the Enter Bills screen, and you can click the Select PO icon in the toolbar.

Now the PO item information has been entered in the window. Check the form for accuracy, then save it.

Of course, if there was no purchase order, you’ll enter the information about the items you received (descriptions, prices, etc.) in the Enter Bills screen.

Delayed Billing 

If you receive items without a bill, you still need to document the shipment. Open the Vendors menu and select Receive Items (or click the arrow next to the Receive Inventory icon on the home page and select Receive Inventory without Bill).

The Create Item Receipts window opens. Select the vendor by clicking the down arrow next to that field.  If a message about existing purchase orders for that vendor appears, click Yes or No, and either select the appropriate POs or enter the information about what you received.

If the items were already earmarked for a specific customer on the purchase order, the Customer column will have an entry in it, and there will be a check mark in the Billable column. If there was no purchase order and you’re entering the information, you can complete those two fields manually

Figure 2: If a purchase order was already assigned to a customer and is billable, that information should appear in this windowEnter a reference number if you’d like. The Memo field should already be filled in with Received items (bill to follow), and the Bill Received box should not be checked.Warning: Be sure that the Items tab is highlighted when you’re recording physical inventory. If there are related costs like freight charges or sales tax, click the Expenses tab and enter them there.

Paying Up  

When the bill comes in for merchandise that you’ve already recorded on an Item Receipt, you’ll use this procedure to pay it:

*    Click Vendors | Enter Bill for Received Items, which opens the Select Item Receipt window.

*    Select the vendor, then the correct Item Receipt.

Note: If the bill corresponds to more than one Item Receipt, you’ll need to convert each into a bill separately. You can create a new bill if some items received were not accounted for on Item Receipts.

*    Click the box next to Use the item receipt date for the bill date if you want to match it to the inventory availability date.

Figure 3: You’ll select purchase orders that you want to create bills for in this window.

*    Click OK. The Enter Bills screen opens, which can be processed like you’d handle any bill.

Though it may seem like extra work, this last procedure is important, since it prevents you from recording the same inventory items twice.

It’s easy to get tangled up on these procedures. We hope you’ll consult us when you begin implementing inventory management in QuickBooks, or when you’re taking on a new task there. It’s a lot easier to prevent errors than to go back and fix them.

This article of QuickBooks Tips and Tricks was based on the 2013 version of QuickBooks.


Cash flow improvement is a hot issue for small businesses; in many businesses, it seems like there is never enough cash when you need it. The last thing a business owner wants is to reduce their cash balance unnecessarily. To help you preserve or increase your cash, here are five cash management leaks to avoid.

1. Bloated Bank Fees 

Some banks are more business-friendly than others. We recommend you assess the fees you are currently being charged to see if you can discontinue any unnecessary services.

  • Could you maintain a cash balance to avoid monthly fees?
  • Are you being charged online banking fees and bill pay fees, and are these still necessary?
  • Are you being charged for a high volume of transactions or cash drawer services, and are these competitive with other banks?

Banks, including national brands, that have not kept up with technology and have not automated a significant amount of their transactions are inefficient and must charge higher fees to cover their processing costs. If your accounts are located at one of these costlier banks, you do have a choice.

2.   Overtaxed

Are you sure that you are paying the lowest amount of taxes you legally owe? There are several places to look to make sure you have not overpaid taxes anywhere in your business or personally:

  • Payroll taxes
  • Sales and use tax
  • Franchise taxes
  • State and local income taxes
  • Property taxes
  • Federal income taxes
  • Taxes that are specific to your industry

In preparing income taxes, a few of the easiest items to overlook include carryovers from prior years and new deductions you become eligible for. If you received a large refund this year, congratulations, but that means you gave Uncle Sam an interest-free loan on your money. You can do better next year by estimating your tax payments and paying only what’s due.    

3. The Check Is in the Mail

Customers who take too long to pay you are big cash drains in your business. Consider changing your terms, asking for deposits, or becoming more aggressive with collections to bring your DSO (days sales outstanding) down. When you do, you’ll get an instant, permanent cash flow improvement.        

4. Sweat the Small Stuff

You may have an eagle eye on your largest bank account, but what about your other cash stashes? PayPal, petty cash, and business savings accounts are among the places that may not get daily scrutiny. Make sure those accounts are properly reconciled and have the proper controls in place so funds don’t go missing.  

5. It’s in Your Interest 

A nice problem to have is when your bank balances get too large and you don’t need the money immediately. Make sure that money is still working hard for you by putting the excess in an interest-bearing account. It’s not much these days, but every little bit helps.

Make a Dash to the Cash

If we can help you plug any of these cash leaks in your business, please don’t hesitate to reach out and let us know.


Running a business usually means putting in over 40 hours a week. In fact, if you’re the typical entrepreneur, you have more ideas you want to implement than you have time for! That’s when proactive, strategically executed prioritization can make all the difference. 

So Hard to Choose

If you have lots of ideas in your head or on your “to do” list that are not getting done, you’re certainly not alone. Here’s a process for helping you decide what to do first, next, and not at all.

Step 1:

Write down your ideas, tasks, “to-do’s” and projects
This includes items you need to do on a daily basis. Use a spreadsheet and list each item in a row by itself. Later you’ll want to be able to sort the list, so we recommend using Excel or another spreadsheet software.

Once you have everything down on paper, you will be amazed at how much this unclutters your thinking. You will also have all your great ideas captured so you don’t forget them. You might also get very overwhelmed, but don’t stop now. Relief is on the way.

Step 2:

Add some information about each item, creating four additional columns:

1. Is this item about working:
IN your business (client work, overhead, etc.) or
ON your business (new products or new services, developing procedures, hiring more staff, marketing, creating new partnerships)?
2. Is this item revenue-generating? Or will you lose revenue if you don’t get it done?
3. Can you delegate this task or does it have to be done by you?
4. If you were to hire someone to do this task,how much would it be worth per hour?

Step 3:

Analyze your choices

Once you have these additional items filled in, you can go wild with opportunities. Here are some very cool eye-opening activities to try:
  • Separate tasks that are working ON vs. IN your business. There is never enough time to work on your business, so force it by blocking out a few hours or a half-day a week and do it, no matter what. It might be the best way to make progress in your business.
  • Sort the list by how much revenue the task could generate or how much potential it has, and decide how to prioritize from there. If you need help calculating the ROI, return on investment of an idea, we can help you calculate that.
  • Take a look at what you marked “not able to delegate,” and ask “why not?” Does a procedure need to be written? Do you need more staff? Does your staff need training? Or do you need to learn to let go? Whatever it is, and especially if there are a lot of these items, get these roadblocks tackled so you don’t become the bottleneck in your own business.
  • Sort the list by “column D” above, the market value you recorded for the task. Then ask yourself what your hourly rate is. How many tasks are you doing that are below your hourly rate? Hiring someone to do your lowest level tasks could very well be another item you need to add to your new “to do” list.

This last one is really important, because it can so strongly affect the profitability of your business. The last thing you want to do is go backwards and give yourself a demotion with a pay decrease, but that’s exactly what you’re doing each time you do a task yourself that’s at a low market rate.

Step 4:
Prioritize with confidence
With all of this information in an organized spreadsheet, you will gain the clarity you need to make some powerful decisions about how to spend your time.


There’s nothing more precious and scarce than our time. Every day, we have a choice about how to spend it, but too often we get caught up in the urgent, but not important, daily fires. This exercise helps us take a step back and look at what’s important instead of what’s urgent.