Why Remote Bookkeeping

Some business owners think that finding a good bookkeeper and corporate tax professional in the remote areas the US can be a challenge because of the vast distances involved.

Our bookkeeping and tax team have overcome the problem of distance by working closely with businesses that need help with their bookkeeping, using remote access desktops or “Private Cloud” which we introduced in 2012. Which some have described, “it’s like Simply-Bookkeeping gave me a fully loaded bookkeeping PC we both share” online.

You can find almost anything on the internet these days, from mail-order books to mail-order brides! As well as online shopping, online banking, online education, and movies, you can now get remote bookkeeping!

Many of our US bookkeeping clients outside of Houston have taken advantage of our new remote outsourced bookkeeping services accessing the expertise of our Houston team of bookkeepers and the Remote Bookkeeping Servers at our offices.

Our rural and remote bookkeeping clients send us their documentation by logging onto a dedicated desktop for their company and placing whatever data on it. We then process their bookkeeping weekly, fortnightly, monthly or quarterly depending on the volume of data.

It is a simple process to have your bookkeeping and corporate tax outsourced, in whatever part of the US that you are located.

Contact us today for more details about remote bookkeeping services available throughout the US and beyond.

The IRS asked "Were's the Audit Trail?"

Many small businesses use basic accounting software, such as QuickBooks, to cut costs. However many users are not properly trained with the software or the practice of bookkeeping leading to little mistakes that can be easily fixed by adjusting or creating a transaction.

Small businesses have always been a target for IRS audits and now the IRS has the authority to collect and examine electronic records to accurately compute the taxpayers liability. IRS auditors would prefer to view and assess the original entries to evaluate the audit trail and the reliability of records. The audit trail shows transactions that have been changed, the changes and the user name of the person who changed it. Such information is directly relevant to the evaluation of the accounting system and internal controls. Many are concerned that adjustments in the software files may raise red flags with the IRS unnecessarily which may prompt rushed conclusions by interpreting corrections of bookkeeping errors as attempts to manipulate the books. Small business owners working with sub-par bookkeepers run the risk of attracting the gaze of the IRS. Bookkeeping is about consistant accuracy, but do business owners keep check on what the books are saying?

Rest easy with Simply-Bookkeeping, our processes are always audit ready allowing you to avoid unnecessary IRS inquisition into past records.

Entertaining The Books

The "Wall Street Journal" reports that Americans spend more than $705 billion on entertainment each year. However, not all of this is profit. Entertainment companies and individuals incur a considerable amount of expenses to provide consumers with movies, videos, books, magazines and music. Establishing a solid, efficient method of bookkeeping for your entertainment company ensures that you operate within your production budget and generate maximum profits.

Specifics

No specific method of bookkeeping exists exclusively for the entertainment industry, however, certain practices required under governing sources. In the production segment of the industry, the IRS Code governs the treatment of income for taxation purposes. Financial statements are governed by accounting principles issued by the AICPA and other regulatory entities.

Cost Bookkeeping - Type 1

As an example using film production, a company typically has two tiers of bookkeeping and accounting to perform. The first level of bookkeeping is like that of any other business, as it deals with accounting for cost of everyday operational functions. Such elements of bookkeeping typically include expenses related to administrative payroll, human resources, rent, utilities and office equipment and supplies. This is called outside accounting, because all costs and such are outside of a film's production budget.

Cost Bookkeeping – Type 2

The same film production company then performs a second level of accounting and bookkeeping. This is called inside accounting level, because such bookkeeping is done to account for the costs inside of the production budget.  Such expenses typically include grips, gaffs, set construction, stagehands and talent. This level of bookkeeping should be kept completely separate from the outside accounting to determine if your film is on budget.

Income Forecast

Typically, a film production company cannot write off the cost of production for the first year. The standard procedure for taxpayers in the entertainment industry is to use the income forecast method of bookkeeping to account for properties that the IRS deems appropriate, according to Norris. Such properties include book patents, copyright, film, video tape and sound recording. Basically the income forecasting method entails writing off the cost of production proportionately. For example, if the company earns 10 percent of its income on one film for 10 years, it is then allowed to write off 10 percent of its films costs each year.

Considerations

Your method of bookkeeping may vary depending on the type entertainment company you are affiliated with. Several other code section elections pertain to film and entertainment industries, such as an election to write off the first $15 million of film costs, or the 15-year amortization of creative property costs. The bottom line, is that production and entertainment companies generally have more levels of accounting and bookkeeping to perform that other businesses do not

Contact Simply-Bookkeeping here in Houston for more information about Entertainment & Music Bookkeepings and Management Services

Reducing Business Financial Management Fee's By a Tidy Chart of Accounts

So many companies fail to set up their charts of accounts correctly in QuickBooks. All too often as a professional  bookkeeping and business financial management firm we observe charts of accounts resembling a collage of accounts in unfathomable format without any logical order, containing duplicate if not triplicate accounts, inconsistent protocols, and even inappropriate, if not undecipherable, names. When the outside finance professional receives this mess at tax time, the trial balance necessitates countless hours of reclassifications and groupings to connect and coordinate the amounts with the classifications required on tax returns and financial statements. At an average public accounting fee of $150 per hour, clients bear the costs of needless expensive clean ups, often tacking on an additional $500 to $600 per year to their annual financial management bills

There is no excuse for not having a chart of accounts set up in a format compatible with and reported on one’s tax return as well as one’s financial statement. Once set up, a simple click in QuickBooks prints a readable and well-organized financial report for internal management, bankers, other creditors, bonding companies, shareholders, et al. In addition, with some mapping to a compatible tax software program, the client’s trial balance amounts can be exported to the company’s tax return by the tax preparer with another click of the mouse.

And so, in order to minimize costs associated with the preparation of tax returns and those  interim and year-end financial reports by an outside accountant, businesses would be well advised to adopt account names, account groupings, and an overall format predicated upon their requisite tax returns. This format need not be inconsistent with that used for internal and external financial reporting, since subaccounts would provide any necessary detail required by management and interested outside parties; while a simple click under report modification in QuickBooks re-arranges the expense accounts in alphabetical order, often the desired presentation for banks.

Setting up a robust and ordered chart of accounts is not an overwhelming task in QuickBooks. Through the availability of wizards and industry specific templates Accounts easily can be created, edited, and merged with a matter of clicks. If you need a starting point, grab your tax return or financial statement compiled by your outside finance professional, and enter the accounts found therein, decomposing summary accounts into subaccounts in QuickBooks. In addition, always remember to backup your company’s QuickBooks’ file before merging two accounts in the event you wish to reverse the process. By creating a more organized and efficient chart of accounts, you will not only save on financial management fees but you will improve your financial reporting in-house as well.

If your still not sure or have a Tax or Bookkeeping question? Please feel free to submit it via the contact us form on our website www.Simply-Bookkeeping.com or call us at +1 832.426.3845.

Getting the best property lease terms through Audit Ready Bookkeeping and the perfect agent

When we talk to start-ups or small busnesses who are getting ready to lease commercial space, they often tell us that they are being asked to prove the business viability and as part of this require a great looking set of books, unfortunately many companies are not able to deliver and then find they are required to give a personal (a personal guarantee requires the individual to pay back a loan (usually a business loan) in the event of default.) In the past, this requirement for a personal guarantee on a lease was not common.

There was a time when landlords were willing to negotiate leases without personal guarantees. With the commercial real estate industry collapse, those days are long gone. Landlords may be more willing to negotiate on rents and common area maintenance (CAM) charges, but one thing they will insist on is a personal guarantee.

When a business enters into a lease, usually the lease is signed by any officer on behalf of the corporation. If the business fails and defaults on the lease, the landlord is out of luck. Which is why landlords now require personal guarantees and a complete financial check on the business owner to ensure the owner has the finances to back up the guarantee.

Negotiating a Personal Guarantee on a Commercial Loan

Just because landlords require guarantees does not mean there isn't some room for negotiation. You may want to consider one of these options:

• Prepare a very robust set of bookkeeping and financials to demonstrate to the landlord the strength and stability of your business, and that you will be able to sustain a lease for quite some time. This can be used to reduce the length of the guarantee or indeed negotiate it away all together.
• If you have the financial resources, you can also offer to put a letter of credit in place for a set dollar amount, and the letter can be tapped if the property is abandoned.
• You could offer to guarantee rent for a set period of time after early termination. If a tenant breaches a lease with three years remaining, the landlord has to try to re-lease the space. Courts usually will not award the landlord the right to recover all three remaining years worth of rent. The court may try to determine how many months the landlord would need under the current leasing environment to re-let the space, and that's all they will award. So, by offering that deal up front, saying you'll agree to guarantee 6 or 12 months, basically cuts through all of the legal negotiations and wrangling at the end and sets out the deal between the parties up front.

There are other lease negotiation alternatives. A smart, accountant, broker or lawyer should be able to help you with some other ideas.

There are many ways to avoid a long drawn out leasing process and potentially costly guarantees starting with finding the right team to work with. Here at Simply-Bookkeeping we work with companies to provide our clients the advantage of being able to present Audit Ready Books to landlords and lending institutions and we recommend combining this with leasing agents that understand our clients’ needs perfectly and we have found one way of achieving this is through services like thesquarefoot.com  here in Houston who act like the perfect matchmaker of client and commercial agent.