Bookkeeping Money-Saving Tip # 18: QuickBooks, Quicken and TurboTax

 

At this time of year, your taxes are hopefully done, and you are probably not thinking of taxes at all. That’s all well and good, but have you begun planning for next year? Because whether your business is brand new, has never had a “regular bookkeeper”, or has been doing bookkeeping the same old ways for numerous years, it never hurts to consider if this year is the time to update your bookkeeping programs or stick with what you’ve always done.

For me, I always like the most updated version of anything… like the iPad 2… I totally want one!

Anyway… I bring this up now – after tax time – because if you are thinking of doing your taxes the same old way, or updating to something new, now is as good a time to start as any. With taxes out of the way, it is the perfect time for any business owner or bookkeeper to take a little bit of time to invest in updating their bookkeeping programs and “catch up” on anything that is still unprocessed.

The reason now is the best time is because… most banks will let you download ONLY the last few month’s worth of bookkeeping transactions instantly.

What do I mean by that, you may wonder.

Simple. Almost (and I do stress on the word “almost”) all banks have updated their online banking programs to create “downloadable bank transactions” for a specific period of time (meaning a specific number of months). The benefit here is that any business can instantly download hundreds and thousands of transactions instantly, and with the right bookkeeping program, have those transactions posted to the correct bookkeeping accounts instantly.

In other words, NOW is the perfect time to upload those transactions into your bookkeeping program and get those books up to date FAST whether or not you have the time to “work on the books”. If you wait, you may find that you have to manually key in those hundreds and thousands of bookkeeping entries, which will take a whole lot more time.

There is one catch, however. The banks do not create these downloadable transactions for ALL bookkeeping programs. Yet, because QuickBooks and Quicken are the most popular bookkeeping programs on the market today, most banks do setup the transactions into these downloadable files in such a way that QuickBooks and Quicken can process them. In fact, many banks (especially smaller banks) ONLY create these files for QuickBooks and Quicken, but for no other bookkeeping programs.

So in case you were ever in doubt as to which bookkeeping programs I prefer (especially for saving time and money), I recommend QuickBooks and Quicken all the way.

The Difference Between QuickBooks and Quicken

I’m not going to go into too much detail here, but I will give you my quick thoughts on Quicken and QuickBooks right now.

As far as business transactions go, I believe QuickBooks is the best program out there for any type of business. It’s easy to use, to input transactions, to correct mistakes, and to create all the financial reports you need. It also allows for a lot of “automatic data entry”, meaning the program does the work for you and thus allows you to save time.

As for personal bookkeeping, and especially stocks, I like Quicken. Quicken has this strange sort of programming that often cuts the user out. What you do is link it to various bank accounts (and stock accounts) and then Quicken can automatically update transactions from those accounts instantly. If you aren’t very familiar with the program, it can be difficult to find and maneuver through those transactions in case you need to change anything. (Now, I know a lot of users familiar with Quicken will disagree with me, but I have always found myself a bit frustrated with Quicken. Even though the program is cheaper, I find QuickBooks much easier to use.)

Having said that, I tend to use BOTH programs, however, especially when it comes to doing my personal and business taxes at the end of the year.

Quicken, QuickBooks and TurboTax

Quick Disclaimer: I always recommend businesses use accountants to do their business taxes, if they can afford it. It just makes dealing with the IRS simpler.

Having said that, I fully recognize that not everyone will want to use an accountant at the end of the year. Many will wish to save money and do their taxes themselves. (I am one of them.) Or, if they do not go to an accountant, they may go to a tax preparation company like H&R Block. Now, while I’m not knocking H&R Block, I do happen to know that the tax preparers at H&R Block are not always very familiar with taxes. The consultants receive 80 hours (two weeks) of training before they are put to work. Their bookkeeping programs often do the same financial prompting that programs like TurboTax and TaxCut do.

Now, when it comes to doing my own taxes, I prefer to use TurboTax as opposed to TaxCut. Yes, TurboTax costs a little bit more, but it is thus far, the only tax program I’ve seen that is compatible with Quicken AND QuickBooks. It can instantly download the files from Quicken and QuickBooks and then post the account balances to the accurate forms and lines in your tax return. This saves tons of time on data entry, and all you have to do is go through the questionnaire. With TaxCut, you have to manually enter everything yourself, and thus FIND every number from your bookkeeping reports / program.

The reason I use BOTH QuickBooks and Quicken is because I have a rather large taxable portfolio. I have rental properties that I maintain, as well as my Office Administration business, and then my writing business. On top of that, I dabble in the stocks. Ironically, it was this last bit of my portfolio that brought the IRS to my door several years ago.

Reporting Stocks

When I first began dabbling in stocks, I incorrectly thought I only had to report the money I withdrew from my stock account as income to the IRS. Since I only took $10,000 out of my stock account that year, I reported $10,000 in stock income to the IRS. My stockbroker, however, told them that I had made $750,000 – and the IRS wanted a chunk. You can imagine my shock when I got the IRS bill.

After contacting the IRS and realizing where I went wrong, the IRS agent told me that I had to report EVERY PURCHASE AND SALE in order to determine the taxable income, whether or not I had withdrawn the money. Since I liked to dabble a LOT (a LOT a LOT), I knew immediately that I wanted to shoot myself. Fortunately, I had Quicken for one of my clients, and that version of Quicken could handle stocks. When I logged in and “Updated” the program to my stock account, then linked it to that year’s TurboTax file, it immediately reported the new correct amounts for the year. I was then able to do an Amended Tax Return that took my tax bill from having to pay $250,000 to only owing $4,000 for the $40,000 in stock profit I made that year. You can see how profitable that can be.

Therefore, if you do have a stock account and do not wish to use an accountant, I highly recommend Quicken for your stocks and QuickBooks for your business accounts. It will help to take the guesswork out of preparing your return and still save you more than you would spend on an accountant. Once linked with TurboTax, you can finish all your taxes very quickly and efficiently, and even transmit your return online instantly.

To save even more money, remember that Quicken often has a free trial that will allow you to “try out” their program. Use the free trial during tax time with TurboTax, and you may just be able to avoid the fee for Quicken.

Diary of a Bad, Bad Bookkeeper (Day 14) – The Carnage Begins

Well Diary,

Betty Bookkeeper HeadshotToday was the day… the FIRST day that I stole from the company.  Today, I forged my first check with the owner’s signature. I would have done it a couple days ago – as soon as I found out the owner doesn’t open the bank statements, and in fact expects me to do it – but the owner suddenly changed his pattern. Instead of staying out of the office, like he had done every day of the first nine days, he decided to stay in the office to “take care of some things.” Since I wasn’t expecting it, I decided to wait to see what it was he needed to take care of. Luckily, it wasn’t anything that had to do with me or the books.

Well, even if it did have to do with the books, he wouldn’t have found anything. I’m doing a very good job right now. After all, I have to prove my worth somehow.

I wrote the check for $100. I know, it’s not much, but it’s a start. Just something to see if he notices that I stole it. I’m sure he won’t notice since I took the check out of sequence. But if he does, I can say it’s for the Petty Cash Box that he doesn’t have. If he doesn’t notice… well then, I’m going to suggest he GET a Petty Cash Box. After all… “it makes MY job so much easier if we can have cash around for emergencies.” (If this was a video, then right now is where I would do the evil laugh…)

And there’s no worries about the bank clearing it.  Banks don’t have enough time to check every signature.

***********************************************************

To Stop The Carnage Caused by Forgery:

Unfortunately, when superhero_edited_no_maska bookkeeper forges a check, the only way a Small Business Owner is going to know is if they open the bank statements first.  And…the general rule is: He who opens the bank statement is the one who can hide or destroy the checks. So if an SBO opens the bank statement, they will get a chance to find the forged check before it can mysteriously disappear.

When yo do open the bank statement, check that all signatures are your signatures.  Take a second look at anything that was signed by a signature stamp or a doesn’t look like your signature.  Also, look for check numbers that are obviously way out of sequence or missing a check number because there’s a good possibility that it’s a forged check.

If your bookkeeper did cash a forged check, contact your bank and inform them that the check was forged.  Sometimes, they will be able to pull the funds from whatever bank account they were deposited in and put those funds back in your account.  But – more than likely – once the check has cleared, you can’t get the money back.  So be vigilant in opening the bank statement BEFORE your bookkeeper does.

Click Here to Read More Bad, Bad Bookkeeper Diary Entries

How to Make QuickBooks Enter Transactions For You

If you’ve already gotten OUR EBOOK: “How To Do A Year’s Worth Of Bookkeeping In One Day”, then you’ll probably already know how to do this step.  This excerpt is straight from that eBook with only a few modifications for those who haven’t read the book yet.

____________________________________________________________________________

Do you have a lot of transactions that repeat from day to day, week to week, month to month in your business?  What about repeating transactions that need to happen once or twice a month?  I’m sure you do.  After all, if you have to pay rent, or make a car payment, then you have a repeating transaction.  But what about invoices or sales receipts?  Do you bill any of your customers the same amount monthly, weekly, daily?  How about deposits?  Do you receive a specific preset amount of money on a timely basis (like an insurance payment, disability, social security, or just a flat fee for services rendered)?  What about vendor bills or credit card entries that are charged to your account every month?

All of these things, no matter how big or small, can be “Memorized” by QuickBooks.  In other words, you can set them up so that QuickBooks does the data entry for you.  It’s really easy.  All you do is set up the transaction as if you are about to enter it, then “Memorize” it.  Once you do, QuickBooks will automatically enter the transaction as a check, bill, invoice, deposit, etc., as soon as the date you preset passes.  Then, when you open QuickBooks after that date, you will be notified that the transaction(s) have been entered.  This one little step can save hundreds and even thousands of minutes in data entry time.

Here’s how to “Memorize” a Transaction in QuickBooks:

  1. Create your transaction, but do NOT press “Okay” / “Enter” / “Save and Close.”  (You can also pull up a transaction you’ve already saved if you don’t want to re-enter the information.)
  2. With the transaction open, Press Ctrl + M.
  3. The screen that pops up should look something like this:
  4. Choose “Enter Automatically”, then the frequency (weekly, monthly, quarterly, etc.) under the “How Often” section.
  5. Choose the next date you want the transaction entered (which is going to be the transaction for the NEXT month – Thus, you would choose February if you are entering January’s transaction).
  6. Choose the number of transactions remaining (which is useful for items such as car payments that are only paid for three years), and the number of days to enter the transaction in advance if you’re going to mail that transaction in the future.
  7. Click “OK” to return to the Original Transaction.
  8. Press Ctrl + Enter to Save That Transaction for THAT MONTH.
  9. That’s it.  The next time that entry needs to be entered, QuickBooks will enter it when you open the program.

Quick Important Note:  Once the transaction is Memorized, you can simply Close and then Reopen QuickBooks and QuickBooks will automatically enter ALL of those transaction from the first entry up to TODAY. That means, if you create an entry for January of 2007, but it’s May of 2010, this transaction will be entered multiple times until all of the transactions have been entered up until today’s date.  What this means for anyone who’s behind on their bookkeeping is that they only need to memorize one of each transaction and amount, then close and open QuickBooks to become instantly up to date.

Now go forth and take advantage of this fabulous tool. It will save you OODLES of time!

Let me know how it works for you.

BOOKKEEPING MONEY-SAVING TIP # 13: Make Money With Your Website (Part 1)

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Believe it or not, when I first decided to start my own business seven years ago, I did not want to do bookkeeping.  I may be good at it, but I’ve never LOVED it (not like my Mom does).  Instead, I wanted to make “just enough money” so that I could stay home with my newborn daughter, and maybe do a bit of romance-writing on the side.  If that meant busting my behind and selling Mary Kay products to support my family, I was going to do it (even if I am a bit of a Tom Boy).

But then I thought, why sell only one product line?  Why not sign up at as many consultant companies as I can so that I could sell more products at “in-home shows” then just one line?  Logically, I could make more money because I would have more products to offer.  So I looked into Weekenders, Party Lite, Pampered Chef, Tastefully Simple, Avon, and a few others who I can’t recall at the moment.  I was bound and determined to join them all, and then start my own website to sell all those products and make even more money.  Who cared if selling the products from a personal website was strictly forbidden by all of these companies.  There were legal ways around that (like not actually naming the products on the website, but having the catalogs available to download).  And with Yahoo!’s SiteBuilder program, building my own website turned out to be no challenge at all.

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Instead, life took me down another road.  Someone referred a new client to me, and I ended up running my own company doing bookkeeping, research, and office administration.  But even though life took me down another road…I still had my website…and I was supplementing my income with that website.  It didn’t take much to realize that anyone can make money with their website – the key is just knowing how to do it.
Since there are a lot of ways to do this, and since I have way too much information in my head, I’m going to turn this into a mini-series.  I will post at least two methods per week you can use with your site to make even more income.

Here are the First Two Things I did to Supplement My Business Income:

  1. Affiliate Income: I first started with Affiliate Income.  Affiliate Income is basically putting other company’s ads on your website and then making a commission every time one of your customers or readers buys a product through that ad.  That other company basically writes it off as marketing dollars or sales commissions, and then sends you a 1099 at the end of the year so you can report it as income.  They don’t pay unless someone buys, BUT…you can make a fairly decent-sized commission on whatever is purchased – anywhere from 1% to 30% or even a flat fee.  The best part is, you also make money on every order YOU MAKE through your website.  While this may not be income, to get an extra 30% discount on products you buy through your website can obviously increase your profits quite a bit. 
    1. a. My Recommendation: I like Commission Junction.  The account is free, and there are thousands of companies you can choose from, as well as individual products you can display.  It’s a nice way to expand whatever your inventory without actually carrying an inventory…and you can choose products that complement instead of compete with your company’s products (like products you might not want to carry because they are too expensive).  Just think about the things your customers ask you for that you don’t carry, and then join those programs.  That way, you can direct them to your website, and then make money just for recommending where they find what they’re looking for.
  2. Blogging – The New Door-to-Door Salesman: A few years and a few thousand dollars later, I was really wanting to see what else I could do to make money online.  After all, my website was up 24 hours a day and could make money for me even when I was asleep.  I began reading about “blogging,” and I thought, “How Stupid…who would want to read someone else’s online diary? BORING!!!”  (I know…the irony…because on THIS blog, I write “Diary of a Bad, Bad Bookkeeper.”)  But as time ticked on, I began to see that everyone has a blog – including businesses.  Not only does everyone have a blog, but there are tons of professional bloggers out there making six figures a year from just having conversations with their readers.  To top it off, it’s a great way for your readers and customers to get to know you on a personal level, which will make them more likely to purchase from you later.  In other words, it’s the newest way to do door-to-door sales without actually leaving your office.  So, I added a blog to my website, and began looking for advice on how-to write and what-to write.  Soon, I was making an additional income that has a bit of a “Snowball Effect.”  The income starts out small, but over time, those blogs keep working for you, and eventually, you end up making quite a bit of money from each blog.  So, if you would like to know more about blogging, start here: 
    1. a. What to Blog About: No matter what you do, you have a special knowledge base.  Maybe it’s bookkeeping; maybe it’s scrapbooking.  Maybe it’s even operating a forklift on a steep hill or how to screw your ex in court.  Whatever it is, you have knowledge to share.  The key is to figure out what excites you, and then write about that.  Because the more excited you can get, the more excited your readers will be.  (If you’re still stumped, write about the things you tell your customers – the “Must-Know Information” you impart when they come to you…) 
      1. i.      To get blog-post ideas, start surfing the forums on LinkedIn, Facebook and even Yahoo! Answers.  The questions you find there should be enough to inspire you.
    2. b. How to Blog: If you want to be a blogger, I recommend you start reading Darren Rowse’s blog, ProBlogger.net.  He is my guru, and his book “31 Days to a Better Blog” is extremely helpful. 
    3. c. Where to Blog: If you want to start making money on your blogs right away, and getting people to actually come to your blog, there are a few places you can go.  I recommend the following sites.  (You may only make a few cents per month when you first start, but the more controversial or instructional your articles, the more money you will begin to make.) 
      1. GoFreelance.com
      2. Elance.com
      3. Triond.com
      4. Helium.com

Not only is blogging great for supplementing your income, but it also helps bring traffic and customers to your site.  So, if you don’t like to blog or want to blog, you can always get other people to blog for your site at places like EzineArticles.com.

So, there are my first two ways.  Come back next week for the next two.

BOOKKEEPING MONEY-SAVING TIP # 13: Turn Your Website into a Money Maker (Part 1)

Believe it or not, when I first decided to start my own business seven years ago, I did not want to do bookkeeping. I may be good at it, but I’ve never LOVED it (not like my Mom does). Instead, I wanted to make “just enough money” so that I could stay home with my newborn daughter, and maybe do a bit of romance-writing on the side. If that meant busting my behind and selling Mary Kay products to support my family, I was going to do it (even if I am a bit of a Tom Boy).

But then I thought, why sell only one product line? Why not sign up at as many consultant companies as I can so that I could sell more products at “in-home shows” then just one line? Logically, I could make more money because I would have more products to offer. So I looked into Weekenders, Party Lite, Pampered Chef, Tastefully Simple, Avon, and a few others who I can’t recall at the moment. I was bound and determined to join them all, and then start my own website to sell all those products and make even more money. Who cared if selling the products from a personal website was strictly forbidden by all of these companies. There were legal ways around that (like not actually naming the products on the website, but having the catalogs available to download). And with Yahoo!’s SiteBuilder program, building my own website turned out to be no challenge at all.

Instead, life took me down another road. Someone referred a new client to me, and I ended up running my own company doing bookkeeping, research, and office administration. But even though life took me down another road…I still had my website…and I was supplementing my income with that website. It didn’t take much to realize that anyone can make money with their website – the key is just knowing how to do it.

Since there are a lot of ways to do this, and since I have way too much information in my head, I’m going to turn this into a mini-series. I will post at least two methods per week you can use with your site to make even more income.

Here are the First Two Things I did to Supplement My Business Income:

1. Affiliate Income: I first started with Affiliate Income. Affiliate Income is basically putting other company’s ads on your website and then making a commission every time one of your customers or readers buys a product through that ad. That other company basically writes it off as marketing dollars or sales commissions, and then sends you a 1099 at the end of the year so you can report it as income. They don’t pay unless someone buys, BUT…you can make a fairly decent-sized commission on whatever is purchased – anywhere from 1% to 30% or even a flat fee. The best part is, you also make money on every order YOU MAKE through your website. While this may not be income, to get an extra 30% discount on products you buy through your website can obviously increase your profits quite a bit.

a. My Recommendation: I like Commission Junction. The account is free, and there are thousands of companies you can choose from, as well as individual products you can display. It’s a nice way to expand whatever your inventory without actually carrying an inventory…and you can choose products that complement instead of compete with your company’s products (like products you might not want to carry because they are too expensive). Just think about the things your customers ask you for that you don’t carry, and then join those programs. That way, you can direct them to your website, and then make money just for recommending where they find what they’re looking for.

2. Blogging – The New Door-to-Door Salesman: A few years and a few thousand dollars later, I was really wanting to see what else I could do to make money online. After all, my website was up 24 hours a day and could make money for me even when I was asleep. I began reading about “blogging,” and I thought, “How Stupid…who would want to read someone else’s online diary? BORING!!!” (I know…the irony…because on THIS blog, I write “Diary of a Bad, Bad Bookkeeper.”) But as time ticked on, I began to see that everyone has a blog – including businesses. Not only does everyone have a blog, but there are tons of professional bloggers out there making six figures a year from just having conversations with their readers. To top it off, it’s a great way for your readers and customers to get to know you on a personal level, which will make them more likely to purchase from you later. In other words, it’s the newest way to do door-to-door sales without actually leaving your office. So, I added a blog to my website, and began looking for advice on how-to write and what-to write. Soon, I was making an additional income that has a bit of a “Snowball Effect.” The income starts out small, but over time, those blogs keep working for you, and eventually, you end up making quite a bit of money from each blog. So, if you would like to know more about blogging, start here:

a. What to Blog About: No matter what you do, you have a special knowledge base. Maybe it’s bookkeeping; maybe it’s scrapbooking. Maybe it’s even operating a forklift on a steep hill or how to screw your ex in court. Whatever it is, you have knowledge to share. The key is to figure out what excites you, and then write about that. Because the more excited you can get, the more excited your readers will be. (If you’re still stumped, write about the things you tell your customers – the “Must-Know Information” you impart when they come to you…)

i. To get blog-post ideas, start surfing the forums on LinkedIn, Facebook and even Yahoo! Answers. The questions you find there should be enough to inspire you.

b. How to Blog: If you want to be a blogger, I recommend you start reading Darren Rowse’s blog, ProBlogger.net. He is my guru, and his book “31 Days to a Better Blog” is extremely helpful.

c. Where to Blog: If you want to start making money on your blogs right away, and getting people to actually come to your blog, there are a few places you can go. I recommend the following sites. (You may only make a few cents per month when you first start, but the more controversial or instructional your articles, the more money you will begin to make.)

i. GoFreelance.com

ii. Elance.com

iii. Triond.com

iv. Helium.com

Not only is blogging great for supplementing your income, but it also helps bring traffic and customers to your site. So, if you don’t like to blog or want to blog, you can always get other people to blog for your site at places like EzineArticles.com.

So, there are my first two ways. Come back next week for the next two.

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Diary of a Bad, Bad Bookkeeper: A Warning Sign

Betty Bookkeeper Headshot

Dear Diary,

Betty Bookkeeper HeadshotToday sucked… and I mean, straight up sucked.

There I was, minding my own business, when in walks the boss with a receipt. On the receipt are stamped the letters C.O.D. It was from one of our vendors that apparently hasn’t been paid in so long, they’ve changed our account from credit to C.O.D.

“What is this, Betty?” the boss asked me. “Why has ABC Hardware turned our credit account into a Cash-on-Delivery account? I’ve been with them for five years, and they’re saying we’re three months behind in our payments. I told Bill – the boss over there – that it can’t be right. We’ve never missed a payment with them, but their bookkeeper swears we’re late. What’s going on?”

I looked at him as innocently as I could, and shrugged. “It has to be a mistake, Boss. I’m certain we’re current.”

“Can you call them and fix this, please?”

“Sure. No problem.”

Then, the boss practically tosses the bill at me and storms out of my office.

I picked up the phone line, figuring he’d probably be watching the extension from his office to make sure I called, but I didn’t bother dialing the number right away. I knew the truth – we were behind. I should have made that payment a while ago, but I knew if I sent it, the checking account would go in the hole. Since I wasn’t quite sure how far behind we were, I figured I’d better check.

Typing a few things into the computer, I saw that we were about $1,200 behind. That wasn’t too bad. So I did actually call the bookkeeper over at ABC Hardware. When she got on the phone, I said, “Hey, Jane. How’s it going?”

“Betty,” she said coldly.

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A few choice words ran through my head, but of course I kept them to myself. “Listen, Jane. I just got reamed by my boss about some notice he got from your company. He said you made our account a C.O.D. account. What’s up with that?”

“Well, Betty, you’re company’s late in paying us. And it’s not the first time.”

“Well, Jane… I just mailed a check for $1,200 a couple days ago. Have you checked your mail today?”

“’The check’s in the mail?’ Really, Betty? You’ve used that one before. And then we never got the check. So my boss decided to make your account C.O.D. from now on. Besides, you owe us $3,100 – not $1,200.”

No kidding. “Are you sure about that? I only have invoices for $1,200.”

“I’m sure. In fact, I emailed you and faxed you hard copies of the invoices several times over the last couple months.”

The temptation to hang up on her was irresistible, but I didn’t. “Well, I’m sorry, but I don’t know what happened to the invoices. And I did send you $1,200 just a couple days ago. So, what’s it going to take to forget this whole C.O.D. thing?”

“If you want the account to revert back to a credit account, you need to pay the balance in full immediately. That’s the only way.”

“Okay. I can do that. I’ll put a check in the mail today.”

“No, that’s alright. I’ll come and pick it up.”

Of course you will, you snotty… “Okie dokie. How about five o’ clock? I can have a check for you by then.” And the boss will be gone by four, so he’ll never see the real balance due.

“Fine, see you at five.” Then, she actually hung up on me.

Long story short, I had to scramble and figure out a way to pay $3,100 without letting the boss know what was going on. It took me a bit, but I finally figured out that I could write a balance transfer check from one of the new credit cards I opened in the company’s name…a credit card that goes to the Company P.O. Box the boss doesn’t know about.

I told the boss it was just a misunderstanding, and that Jane actually found our payment in the mail that day…so there should be no problem from now on. The boss went back to thinking I’m a genius, and Jane showed up at 4:45 – Eager twit.

All I have to say now is: Man, that was a close call!

*******************************************************************

Why This is a Warning Sign

superhero_edited_no_maskA lot of small business owners don’t realize it, but when a credit account is changed to a C.O.D. account, that’s usually a BIG warning sign that “the business is suffering”. (Notice, I’m NOT saying anyone’s embezzling…this is quite simply a sign that the business needs to handle their finances better, and possibly their cash better as well.) Most vendors that offer credit to their preferred clients are loathe to take that line of credit away if it means they might lose a business as a customer. Usually, the only reason a vendor would change a credit account is if there is a history of serious delinquency or bounced checks. So the minute any vendor demands a COD payment, realize that your company’s credit history is on shaky ground and become proactive.

How to Know for Sure

Should the above scenario happen to your company, don’t go running to your bookkeeper first. Instead, ask the bookkeeper at your vendor’s company to print up a Statement of at least 90 days to 6 months so that you have a record of EXACTLY how your bookkeeper has been paying them. Look it over and take note of how far apart the payments are. Are there any amounts that were subtracted and added back on? (That could be the sign of a bounced check.) Most credit accounts require a minimum of one payment a month, while some require more. Ask the other bookkeeper what the terms are for your company, and THEN approach your bookkeeper.

Before you make any accusations, however, there is one more thing you can do to double check your bookkeeper. When you have the Vendor’s Statement for your company in hand, ask your bookkeeper for the last three bank statements. Also, ask for a “Check Detail” listing all of the checks for the same three months. A good bookkeeper will know exactly where those bank statements are and will be able to give you both documents in less than 10 minutes. (The key is to ask for this information immediately and DO NOT let your bookkeeper put you off ‘til the end of the day…they can cover their tracks if given too much time.) Then, when you have the Vendor Statement, the Check Detail, and the Bank Statements in your hand, do a quick check for the following:

  • Highlight the check numbers listed on your Vendor Statement.
  • Find the corresponding check numbers on your Check Detail printout. From here, you will be able to tell exactly when the check was supposed to have been printed and then mailed. The dates should be a week apart if the vendor is in town…up to 10 days if the vendor. (Of course, the time it takes to cash a check also depends on how big the vendor is.)
  • Now check the bank statements for the same check numbers. Do the dollar amounts actually match, and when were the checks cashed? Sometimes, the other company may hold onto the check for any number of reasons, but it will give you a good idea of how long the check cashing process takes with THAT particular vendor…and how long your bookkeeper may be holding checks.

Your Bookkeeper May Be Embezzling if…

Now, before I tell you exactly what to look for as far as embezzling goes, let me just say one thing. This does NOT 100% mean that your bookkeeper is embezzling. There can be reasons for any discrepancies you find. However, if you do find the following discrepancies, don’t be stupid and sit on your hands either. Ask an accountant or an independent bookkeeping company for help immediately. Make a backup of your bookkeeping program without the bookkeeper’s knowledge, and put that aside…(you may need it later).

And whatever else you do… DO NOT…I repeat… DO NOT confront your bookkeeper with what you find. If your bookkeeper IS an embezzler, the MINUTE you accuse them of anything, they will WIPE their hard drive, and your bookkeeping program, and they will destroy any evidence of embezzlement you may have in your office. Be certain first, and then do a cold hard lockout. The minute you KNOW – without a doubt – that they’re embezzling, DO NOT let them back in the office, and disconnect the bookkeeping computer from the internet. (You don’t want them logging on remotely to destroy your bookkeeping program.)

  • To know if your bookkeeper might be embezzling, look at the Check Run and look at the Bank Statements. Do the check numbers and amounts match? Bookkeepers can always go in and change the check names and amounts later on (which they will do if they want to show the boss an inflated bank balance), but the Bank Statements will give them away every time.
  • Another thing to pay attention to…are the checks being cashed months after they were written? If they are, then your bookkeeper was sitting on them for some reason (probably to make sure they didn’t bounce)…but keep in mind, YOU may have told your bookkeeper to hold those checks. That happens a lot, so don’t make any accusations unless you’re sure you did NOT ask the checks to be held.

Again, this is just a warning sign, but it’s a good sign to look for. Do not ignore it.

 

Diary of a Bad, Bad Bookkeeper: Deletions and Voids

Betty Bookkeeper Headshot

Dear Diary,

Let me just premise this entry by saying — crap crap crap crap crap.

I got a phone call from the accountant today.  It’s tax time, and the accountant wants to meet with me to go over the books.  Since I’ve never worked with this accountant before, I have no idea how closely they are going to want to look at the books.  I can’t help but fear that the accountant is going to figure out what I’ve been doing if he looks too closely at the books.  So I was in full blown panic mode all day.Betty Bookkeeper Headshot

So after thinking about it, I did what I could today to clean up the books.

I started by voiding out some of the checks and deposits that I had made, hoping that would be enough.  But then, when I realized that the checks were recording in the check register as “voided checks”, I had to rethink that strategy.

My solution:  I began deleting the checks and deposits instead.  That way, they disappear completely from all registers.

But then another problem popped up.  By deleting the checks and deposits, the bank balance began to change.  So, I went back and made sure to delete just enough to keep the balance close to what the original balance was.  Hopefully, it will be enough to fool the accountant.

Hopefully the accountant is a fool…

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How to Spot This Problem:

superhero_edited_no_maskWhether you have a good bookkeeper or a bad bookkeeper, deletions and voids are always a part of bookkeeping.  Mistakes happen and bookkeepers have to find and correct those mistakes to make sure their books balance.  One of the biggest benefits and downfalls of various bookkeeping programs like QuickBooks (especially QuickBooks) is that many of the programs make it really, really, really easy to do voids and deletions.  In fact, just doing a “Ctrl + D” while in any facet of QuickBooks will instantly delete that item.

Having said that…let me point out that bad bookkeepers will do an excessive amount of deletions, especially after reconciling the bank accounts.  Finding those deletions and voids are an excellent way to know if there is a problem with your bookkeeper.

While I am not familiar with EVERY bookkeeping program, I do know QuickBooks.  And if you have QuickBooks, it is very, very easy to find those deletions and voids.

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QUICK NOTE:  Now if you do suspect your bookkeeper of embezzling, the easiest thing to do would be to take a previous backup and “Restore It” to your QuickBooks program.  By doing this, you wipe out any and all changes that might have been made.  This is NOT a good idea if you want to know what your bookkeeper might have changed.  Instead, make a backup copy of the current program before restoring anything else, that way you can always go back and look more closely at any changes that have been made.

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Now, if you do have QuickBooks, finding these deletions are super easy.  All you have to do is go to Banking – Reconcile.  By doing so, you will then see a screen like this one with a “Locate Discrepancies” button:

By clicking on “Locate Discrepancies”, you can see ALL CHANGES THAT HAVE BEEN MADE SINCE THE LAST BANK RECONCILIATION.  If the account has never been reconciled, then nothing will appear here, which indicates a whole other set of problems.  If the account has been reconciled, you can find a list of every change that has been made and what the change was SINCE THE LAST RECONCILIATION.

After you have your list, simply “Undo (the) Last Reconciliation” to see what deletions were made in the reconciliation period before that.  You can keep doing this all the way to the very first reconciliation, and thus get a a fantastic picture of what has been deleted, voided and changed without your knowledge and after the reconciliation.  Remember… excessive deletions, voids and changes can mean that there is a problem with the bookkeeper…not necessarily that they are embezzlers so much as that they make a lot of mistakes.  But again, keep in mind that all bookkeeping has a certain amount of small mistakes that are caught every month when the reconciliations are done.

Bookkeeping Money-Saving Tip # 14: Making Money with Your Website (Part 2)

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In the last BOOKKEEPING MONEY-SAVING TIP # 13: Make Money With Your Website (Part 1), I discussed two ways that you can supplement your income with your business blog.  As promised, here is another tip that anyone can do to make money with their business website.  However, today I am only going to focus on one main money-making idea because it is such an important and valuable way to make money.  It is your business blog.  With a business blog, you are basically getting free advertising (for really only the cost of your time to write an article), you are creating a relationship with your customers (whether you know it or not), and you can build a community that will only help your business in the business world.  Here’s why the Business Website Blog is so important:

Blogging: If you haven’t noticed lately, one of the biggest trends going on in businesses today is blogging.  It seems like anyone and everyone has a blog, and even an eBook.  There’s a reason for that.  (In fact, there are multiple reasons for that.)  It’s one of the cheapest ways to advertise and to build lasting relationships with your customers – and since you’ll want to save money on advertising…

Having said that, here are some of the most profitable reasons to add a blog to your website:

  1. Blogging is the Sharing of Free Information AND a Person/Company’s Personality: I don’t care what anyone says – Companies have personalities.Maybe that personality is to be “a Big Bad Corporation” or maybe “an Environmentally-Friendly Non-Profit.”  Either way, there is a mission involved and a way that company has of sharing information.  Blogging is the best way for any person or company to share their personality and information, while also educating a customer about the products they sell.  It doesn’t necessarily matter what information you share or how you share it (i.e. words, podcasts, videos, etc.), so long as you share who YOU and your Company are in the process.
  2. Constant Blog Updates Lead to Lots of Traffic: New blog information should be added on average of once a week or more, which means the website is constantly changing.  Since the website and blog are constantly changing, people have a reason to return to the website again and again, which reminds people that there are products to buy.  Constant visits increase the likelihood of “Impulse Purchases, which obviously helps the company’s bottom line.  (On the other hand, websites without blogs are only visited when people are looking for something in particular to buy, which can end up being “rarely.”)
  3. Lots of Traffic Leads to Popularity and New Customers: The more often people visit your blog, the more popular your site will become.  The more popular your site, the higher your website will rank in a Search Engine’s Ranking List.  That means when a customer searches for your product, you have a better chance of being the website that Google or Yahoo! recommends.  The end result is that new customers will begin to visit your website as well, recommended both by your current customers, and the Search Engines.  And thus…
  4. New Customers Leads to New Additional Sales.
  5. Finally, Customers Will Keep Coming Back: As crazy as this might sound, people want to buy from people they know and feel comfortable with.  Even if they don’t buy from your website every time they visit, every blog you post cements you as an “Expert” in their mind, and someone they “just like.”  Thus, they will come to you first when they need advice regarding your industry or when they need your products.  Every blog – whether you make money right away or later – will lead to building customer relations and eventual sales.

Thus, if you haven’t started a business blog, you really need to consider it.  Especially because a blog is the best way to bring traffic to your site again and again, and it will help you make even more money later on.

Come back next week as I talk a bit more about adding Google Adsense to your blog, and how to use it correctly.

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Quick Note: In the month of September, I will be doing a very intense 30-day online workshop on How to Turn Anyone’s Business Blog into a Money-Making Blog. The intent is to teach people how to supplement their income no matter their industry. The cost is $20 for the online workshop, and everyone who joins will receive a $20 gift certificate to Elance.com so that they can hire help for any aspect of their business or website development.

If you would like to know more, you can click the “Workshop” tab above, or Click Here.

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Diary of a Bad, Bad Bookkeeper (Day 112) – Theft by Signature Stamp

Betty Bookkeeper Headshot

Dear Diary,

Today the boss went on vacation and guess what he gave me…the Signature Stamp.  I couldn’t believe it when he handed it to me.  I think my smile was from ear-to-ear.  Doesn’t he realize how stupid it is to give me the signature stamp?

“Are you sure you want to give this to me?” I asked all innocent like.  In the back of my mind, I was already calculating how much money I might be able to get now that I had this new stamp.

“Of course.  I trust you,” he told me with an amused little smirk.

That smirk told me everything I needed to know.  My question had just convinced him that I was the sweet innocent young lady he had come to know so well.  Because – fool that he was – he sincerely believed that everyone was as open and honest as he was.

I almost felt bad about stealing from him.  Almost.  But then I would remember that I was making less money than everyone else in his company…everyone except the receptionist.

“I don’t know.  That’s a lot of responsibility,” I commented in the best hemming-and-hawing voice I could manage.  “I really don’t want to let you down.”

“It’ll be fine,” he assured me with a light pat on my shoulder.

Then he strolled out of my office.  An hour later, he left the office for good.  He was off to the Caribbean for the next two weeks.

I waited an hour after he left just to make sure he wasn’t coming back.

And then…

Over the next week…

  • I signed some IRS paperwork with that signature stamp.  Whether or not the IRS paperwork is accurate…?  Who cares.  At least it’s filed.
  • I opened a new cell phone account with his signature stamp…got the “Unlimited Text and Talk” package…for my whole family.  My daughter may only be 8, but she loves her pretty new pink cell phone.  And of course, I love my new iPhone.
  • I also got a new Business Gas Card Account.
  • I downloaded a new bank account application from online, signed it with his signature stamp and faxed the paperwork back .  Got instant approval.
  • I sent out several applications to local vendors to get lines of credit.  They all got approved.  I now own a chainsaw from the local hardware store (because I can), an electric lawnmower from Lowes, solar panels for the garden from the local garden supply store, and $300 window blinds from Home Depot.
  • I ordered a bunch of magazine subscriptions in his name and sent them to my house.  (I really love Cosmo.)
  • I walked into Office Depot and paid for a whole bunch of office supplies with a blank company check and his signature…including a new printer for my kids and a portable scanner for… I guess for the “heck of it.”
  • I went to the bank with a check made out to Cash.  (That was an easy $500.)
  • I paid my new car’s DMV bills with his check…and got my husband’s car smogged.
  • I signed a few petitions in his name.  He’s now a Democrat that actively supports breast cancer funding.
  • I also got a PO Box in his name at the local Mailboxes Etc. office.  All that new paperwork will never even come to the office.
  • …And I did a whole bunch of other stuff, although I can’t remember them at the moment.

You know what the best thing is, Diary?  When he comes back, he’ll have no idea what I’ve done.  Most of the paperwork will go to the new PO Box I opened in his name.  And even if he comes back and asks to see the bank statement for the first time ever, he still won’t know what I’ve done.  I can explain away the DMV and car-related bills as “work needed on one of the company vehicles,” the Office Depot check as “supplies we needed” and the Cash check as “Petty Cash” issues that came up.  All the rest…well… there’s just no way he can find out about that stuff.   At least none that I can see.

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How to CATCH this Kind of Theft:

You can’t.

You can’t catch this kind of theft because you’ve given them a free pass to steal from you.  And since your bookkeeper has access to all of your most personal information – social security numbers, DOBs, Tax ID Numbers – you’ve just made it super easy for them to take anything they want in your name.   That means – YOU are responsible LEGALLY for EVERYTHING they’ve done.  The IRS says you owe money, and they have your legal signature on file…then you have to pay it or try to fight it.  It’s your signature. And if you lose, you have to pay penalties and interest on top of the paperwork they’ve filed.

Okay – you CAN catch this kind of theft, but you’ll need a professionals help after the fact to find out what that bad bookkeeper did.  Now you can PREVENT this kind of theft by NOT giving your signature stamp to anyone who has access to your checks, credit cards, or any kind of personal information.  Maybe that person is your office manager or receptionist.  Maybe you can give it to your accountant and make your bookkeeper go to them to get your signature.  Either way, by adding a second person to the mix whenever you go on vacation, thus giving the second person you’re signature stamp, you are taking steps to actively prevent embezzlement while you’re away.

AND REMEMBER – IF YOU EVEN SUSPECT BOOKKEEPING FRAUD, ASK YOUR ACCOUNTANT FOR HELP.  You’re not crazy.

Diary of a Bad, Bad Bookkeeper (Day 40) – Stealing the Boss’s Identity

Betty Bookkeeper Headshot

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I got a new credit card today. Well, technically, I got a new “company credit card” today. When the boss wasn’t around, I went ahead and called his credit card company and told them we had lost his company card and needed a new one. They asked me for all of the usual identifying information – social security number, mother’s maiden name, address, phone, account number, etc. – and of course, I gave the guy on the other end of the line all of that information. I then told him that I wanted to change the password question “because the last bookkeeper got fired, and we need to protect my boss’s identity.”

The guy at the credit card company didn’t even miss a beat – after all, companies get new bookkeepers all the time. “Which question would you like?” the guy asked me. “Do you want a question about your high school, pets, favorite cities…” and on and on and on.

“How about the question about pets,” I answered innocently.

“Okay. What is your pet’s name?” he asked.

I thought really quickly, then answered, “Moron.”

“Excuse me,” the guy on the phone said.

“My pet’s name is Moron,” I repeated sincerely. What I wanted to add was – “and Moron’s my boss” – but I managed to hold my tongue… barely. It was so hard.

“Okay. Moron it is,” the guy said in a serious tone while clicking away at the keys on the other end of the phone.  “Anything else I can help you with?”

“Oh. I almost forgot,” I added. “Our office has moved. The address I gave you was for the old address. The new address and phone number is…” and then I gave him my home address and personal cell number.

Again, I heard clicking on the other end of the line as the poor dupe updated my boss’s “new information.” When he was done, he said, “You should get that credit card in the mail by…”, which turned out was today.

So, I swung by my house and checked the mail during lunch. The card was already there. So I went ahead and treated myself to lunch – on the boss, of course. After all, he doesn’t pay me nearly enough for all the excellent work I do for him. And since the boss never opens the mail – especially that particular credit card bill– what he doesn’t know what hurt him.

I wonder what I’ll buy tomorrow… Maybe some new earrings. I’ve always wanted pearls…

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How to Prevent this Kind of Bookkeeper Theft:

You would not believe how incredibly frustrating it is to call into your credit card company and find out that all of your password information has been changed. Not only can your password info be changed, but some people even go so far as to change the “mother’s maiden name” question. Of course, the simplest way to stop this is to catch it early. You can do so by doing the following:

  • Open your credit card statements, or check your transactions online regularly. If anything seems questionable – no matter how small or large – call the credit card company immediately and ask them how many cards they’ve sent out. You can also verify that your security information is still what you originally created.
  • If they tell you your password information has changed, be sure to throw a high holy conniption fit and demand to speak to an account manager or “their boss.” Get this account closed immediately because whoever has your card can still make purchases even while you’re on the line. They will send you a new credit card with a new credit card number within a matter of days.
  • Get copies of your three credit reports as soon as you possibly can because – quite frankly – if your private information has been changed, there’s nothing to keep them from signing up for more credit cards at vendors you may never even have heard of. But, the good news is that every single one of those stolen cards will show up on your credit reports!, but not always all three of the reports, which is why you should spend the extra money to access all three. (In fact, for $14.95 a month at Transunion, you can actually access those three reports and credit scores for free every month. It may be worth it if you ever find yourself a victim of identity fraud.)
  • If a credit card company calls you and says there is questionable activity on your account, get online immediately and see what they are talking about. If they are contacting you, they are probably seeing something they’ve never seen on your account before. So even if you have your credit card on you, it never hurts to double check whatever charges they’re concerned about.
  • And lastly, make sure you know where ALL cards are at all times. I once had a client who ordered a card for his wife – a card which never arrived. It turned out, someone stole it from his mailbox and was shopping with it in the next town and my client never knew. Luckily, I caught it with the very next credit card statement when I asked for receipts that matched the charges, and we realized immediately what had happened. So even though the thief had managed to steal more than $7,000 in 15 short days, my client was not liable for a penny, especially because he disputed the charges right away. (Which is another good reason to check those statements every month.)

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Click Here to read the Previous Entry: Diary of a Bad, Bad Bookkeeper (Day 30) – The Double Payday Scam

Click Here to Read the Next Entry:  Diary of a Bad, Bad Bookkeeper (Day 55) – The Sister Company Scam


Diary of a Bad, Bad Bookkeeper (Day 30) – The Double Payday Scam

Dear Diary,

Today was payday – the second since I’ve been here.  I figured it was about time to test the Double Payday Scam – to see if my boss would actually catch me.

So, I started the day by doing the Payroll.  Just like two weeks ago, I created and took all of the paychecks to the boss to sign.  He signed them, with only the occasional request to see a corresponding timecard…then he signed mine without question.

I took the checks back to my office and set mine aside.  Then, I printed up another paycheck that I took back to him.

“What’s this?” he asked me, glancing briefly at my double payday.

“It’s a replacement check.  I double-checked my income and realized that I had entered my withholdings incorrectly, and QuickBooks took out too much in taxes.  So I voided the other one and reprinted this one.”

“Okay,” he said, shrugging and then signing my check.

And just like that – Double payday.  If he had asked me to produce the voided check, I would have gone back to my office and voided the first check… but since he didn’t, he’ll never know.  Even if he opens the bank statement (which let’s face it, he probably won’t), he’ll see the extra paycheck and think he’s just looked at the same check twice.

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How to Catch the Double Payday Scam:

All a small business owner has to do to catch the Double Payday Scam is to ask to see the voided check, or to insist that you will void all checks personally.  They can then refile the checks, and you have protected yourself… it’s that simple.

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Click Here to Read the previous entry:  Diary of a Bad, Bad Bookkeeper (Day 14) – The Carnage Begins

Click Here to Read the Next Entry:  Diary of a Bad, Bad Bookkeeper (Day 40) – Stealing the Boss’s Identity

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