Do Your Own Bookkeeping with QuickBooks Online

Few reminders:

• Use Category or Match only

• If unsure - look at Bank Detail

• Do NOT accept items into Uncategorized Asset, Income or Expense

• Always enter Payee name for people/business payments (independent contractors, so that you can later know whom you paid and how much when you're about to issue 1099s.

• You can sort by name and do 1 name first in bulk

• You can exclude transactions if you know them to be duplicate

• You can "Undo" a categorized or an excluded transaction

• It's easy to first do "Recognized" transactions

When you first connect your banks, the software will record the beginning balance and will reconcile it too. It will record it to Opening Balance Equity. This is the only time you CAN delete this transaction completely.

Reconciliation is a process of comparing bank statements (or credit cards, PayPal or loan statements) to your books. You want to make sure that nothing is missing, nothing is extra and all is accounted for.

Use Ask My Accountant (setup as Other Expense) account if you need to record something but don't know how to - or don't have the information right this moment. But leave enough information to refresh your memory later.

Big companies: ADP/ Paychex - Pros - pay as you go insurance, retirement and health benefits with easy administration on your part. Cons - customer service is meh and they're pricey.

Smaller but established and well-known services: QBO Payroll and Gusto - my two favorites. Both have Auto Pilot, post directly to QBO Software and is affordable and great quality.

Make sure you know how to differentiate Contractors and Employees.

When hiring employees, make sure you get the Minimum Wage law compliance, get a Workers' Compensation insurance policy and ask for the following documents to set them up for payroll:

• Government-issued ID

• Copy of Social Security Card

• Form W4 (filled and signed)

• Form I-9 (filled, signed and with documents)

• Voided check for Direct Deposit

When hiring contractors, get before you pay them for the first time:

• Form W9 (if they are US-Based)

• Form W8-BEN (if they are foreign individuals never set foot on US Soil)

• Form W8-BEN-E (if they're foreign entities)

Keep those records on file for 7 years.

This will vary from software to software but the basics will be the same. Follow the steps:

1. Pick a service (Gusto, QBO, etc)

2. Activate Payroll Service

3. Setup your bank (connect to payroll)

4. To setup employee you will need: Voided check (for direct deposit), Form W4, Form I-9 with supporting documents, a copy of the ID (for various information).

5. Go through the steps and setup their Name, Email, W4 items (with state/local specifics), Pay Schedule, Pay Rate/Types, Deductions (retirement plan? health insurance), Direct Deposit, Date of birth and Date of Hire.

Remember to SAVE!

Generally, ordinary and necessary expenses for a business are deductible with a few limitations. If a reasonable business person would spend money on the expense to sustain or grow a business, chances are the deduction will be granted.

Special Cases:

Meals - calculate 100% of the expense (Business Lunch/Dinner, Employee treat, Holiday Party meals) but only 50% is deductible.

Entertainment - can be charged but is no longer deductible.

Car - you usually have a choice of Standard Business Mileage rate (around 50c per business mile - it's adjusted every year) or Actual expenses - whichever is higher. For Mileage one, keep a good contemporaneous logs for business trips (date, miles, purpose) and take a picture of the odometer every December 31.

Personal Rent - though you would pay that out of a personal account, keep track of rent/mortgage/taxes/utility totals for the year for your personal home IF you use it for business.

All you have to do is keep your antennas out.

Use these tools to make numbers-backed business decisions:

- Reports

- Budget

- Cash Forecast

- Develop your own tools