Helping Small Businesses Grow and Succeed

Pursuing Your Dream.....Is It Practical?

2009-12-04T03:34:00Z

Is pursuing your dream practical in this economy? Many will say no, but I say, there has never been a better time. This is a time of survival, but also of reinvention, of learning, of finding your passion and living it every day. When you make a decision about your career, your job, your means of income, there are a lot of factors to take into consideration besides the salary. Things like, how many hours will you be working, how many will you be commuting, what kind of flexibility will you have to do the important things in life (like your child's school play or field trip, attending to sick relatives, etc.), will you be happy and excited to get up and go to work every day, will the stress outweigh the salary and benefits, how much will you really be making when you weigh all the cost factors, including your health?

These are some of the questions I have had to ask myself over the last few years, and especially over the last few months. They are not easy questions, mostly because you feel so guilty if you don't answer them the way everyone else thinks you should, or even the way YOU think you SHOULD. But who made those rules? What happens if you don't follow them? Whatever happened to 'do what you love and the money will follow?'

Now I am not suggesting that you just quit a good job and run off and join the circus without a plan. Starting a new business or career takes some planning and maybe even some education. It is important to research everything about your dream job, especially the stuff you don't know. Find experts who are willing to help, to answer questions for you, or search online, there are tons of free articles about every aspect of almost every job or business. A few important things you need to think about if you are starting your own business: Will you have employees? Will you need to lease an office space, do you know how that works? What accounting system will you use? How will you market and advertise your business? Where will you find customers (if that applies)? How will you finance this business? What type of legal entity should your business be? What state, local and federal taxes and laws will apply to your business?

I believe that if you are passionate about something and you seriously plan for it, you can and will make it work. When you are excited and passionate about something, people can see it and they get excited too. Find a way to live your dream, life is short and I think we have all learned that money is not everything, but it is necessary for survival, so find a way to make it, doing something you love.

As always, if I can be of any assistance to you in answering the questions above or helping you find the answers, don't hesitate to contact me. Happy dreaming........

The Day the World Stopped

2009-04-23T01:29:00Z

For Earth day, I wanted to share with you something my brother wrote after 9/11. He was living in Europe at the time, between France and England. My sister was getting married at the end of September, so it was very stressful that my brother and his wife would have to fly home from Europe.

This is the e-mail we all received from him:

Dear friends and family,

I know that we've all been affected by this past week's tragic events in New York, Pennsylvania, and Washington. While most of you are physically closer to these events than I am right now, I think that it's very insightful if I share with you what I witnessed in Europe yesterday.

On the 14th of September 2001, the free world stood as one.

At exactly 11AM GMT (12PM CET) on Friday the 14th of September, the people of the European Union (15 countries with a population similar to that of the entire United States of America) observed a perfectly synchronized 3 minutes of silence. A similar response was reported in 28 additional countries.

Being a part of this event was not only overwhelming, moving, and touching, but also shockingly powerful. Bustling streets became as frozen as a photo as commuters, bicyclists, and even vehicles stopped - completely - for 180 seconds. Office workers turned off desk phones, mobile phones, and stopped the constant hammering away at their keyboards to sit, stand, or kneel in utter silence. Stock markets (where fortunes can be made and lost in seconds) stopped completely. No, not the market itself, but rather all of its traders, market makers and transaction processing. Utter silence.

European Heads of State stood powerfully silent and still as they were blanketed by the US Ambassadors to their countries. The 3 minutes of silence was observed at Embassies, Churches, Government offices, Cathedrals, Synagogues, and tourist attractions alike. Many television channels observed the 3 minutes by stopping all transmissions, except for a blank screen. Radio stations similarly were eerily silent.

My immediate reaction after taking part in this powerful and moving action was a sense of amazement and a powerful resolve of the world to mourn the dead and vow to rid the world of these type of devastating acts.

Additionally, the Changing of the Guard at Buckingham Palace in London was altered for the first time in over 200 years, as the Queen ordered that the US National Anthem was to be played prior to the standard ceremony. Meanwhile, throughout the European Union flags are at half mast. Not just US flags, but ALL flags.

Yes, yesterday I watched the world stop.

James R. Small

I was so proud of what my brother wrote and I was truly moved just reading his words. When I thought about Earth day and what it meant to me, this letter came to my mind. To me, it represents how powerful it can be if we all come together for a common cause, what we can do if we really want to and how we can all be one when the need arises. I hope that today, and every day forward, we will all work together to take care of the Earth, each other and all the creatures. I hope that we can rid the world of all the negative people and actions that affect so many. I hope we can change the attitudes of all the people on this planet to a positive, loving attitude.

With this, I send my love and positive energy to all of you. May you be happy, loved and blessed in everything you do.

I Know....There's Nothing Sexy or Exciting About Accounting

2009-04-14T19:34:00Z

I know, I know, accounting is not in the least sexy or exciting or creative, but it is necessary if you own a business. You know, one of those necessary evils, but it doesn't have to be evil, or even difficult. All you need is a few basic tools and a good accountant/bookkeeper that knows how to explain things in terms you can understand. Ok, so maybe that's the hard part, finding someone like that. The key, I think, is to be open to learning about it, don't automatically assume that you won't ever understand it or that you can't get the concepts, if you believe that, it will be true.

I want to share with you one of the biggest mistakes I see in small business accounting - recording assets and liabilities properly. Ok, I may have just lost you there, but I promise I will help you understand if you just stick with me for a few minutes. Assets are the economic resources owned by an entity; entailing probable future benefits to the entity. In other words, they are things like computers, equipment, vehicles, buildings, etc that are necessary to run your business and help you make money. Liabilities are amounts owed by an entity to others. These are usually loans, mortgages, credit cards, notes, etc., money you received to help you pay for assets or operating expenses, that you have to pay back.

These two elements of accounting are critical to a company's financial statements. These are the items on the balance sheet. They are based on the simple accounting equation, which is Assets=Liabilities + Owners Equity. I know this may not sound simple to some people, but if you own a business, it is really important for you to understand because these numbers can tell you a lot about the financial condition of your business.

Most small business owners do not understand the importance of a balance sheet or how to record these items. They only seem to care about profits and losses. This is a mistake, because it does not give you a true financial picture. If you own a business, take the time to learn business and financial terms, to understand the numbers on your financial statements and what they mean, to look at your cash flow and to know how different things that happen with your business will affect you. If you judge the success of your business only by the bank balance, you will probably not be in business very long.

The mistakes in recording these items in your books can be costly. For instance, if you make a payment on one of your loans, say for a vehicle, and you code it to an expense account, you are overstating your expenses. This entry should go to the liability, which is a balance sheet account, it should not reduce your profits. If you didn't set up your assets and liabilities, you are probably coding everything to expense accounts and your books will not be correct. If you give those reports to your CPA to prepare your taxes, it will result in your tax return not being correct, because you will end up claiming too many deductions and not paying enough taxes.

The bottom line is, if you don't know how to set up your books or record things properly, I encourage you to get some help. I can usually look at a QuickBooks file and tell you fairly quickly which things are not coded correctly, any accountant, bookkeeper or QuickBooks consultant should be able to do that for you. If I can be of assistance, please contact me. You can also go to Intuit.com and search for a qualified ProAdvisor to help you in your area. Whether you are just starting out, or have been in business for awhile, don't let this important part of your business go another day without being correct. You will be glad you took care of this when you can get an accurate picture of the financial condition of your business and know that your records are correct.

If I can help you, contact me at Teresa@Winning-Edge.net. I welcome your comments and feedback, just go to the Leave a Comment section below, fill in your information and click on Submit Comment. If you find this blog useful, I would love for you to subscribe so that you will be the first to know when new entries are posted. If you have a suggestion for a topic you have questions on, please e-mail it to me at the address above.

The American Dream - Starting Your Own Business

2009-04-04T20:19:00Z

It's the great American dream - start your own business and get rich! Well, not to burst your bubble, but there is a lot more to it than that. If you want to start your own business, which is happening more in this economy, I want to help you be realistic about it and be prepared. I find that a lot of people get an idea and just jump in, without researching anything, without planning anything and without knowing exactly what they are getting into. Most of the time, they don't know anything about how to keep their books, what licenses, permits or government registrations are required, how they are going to evaluate their progress and success, where they are going to get the money to start up and keep going, and how it will affect their taxes. Other questions you need to ask yourself: is my credit good enough to get the financing I will need for my business? do I have a business plan? do I have people to help and support me? what will I live on until my business becomes profitable? do I have all the skills I need to handle every aspect of owning a business, or do I know who I will hire to help me, and how much those services will cost? do you have a passion for the business you want to start? how will you market your business and get customers? what about business insurance? These are all issues that you should look into BEFORE you start a business.

There are two areas that seem to be booming right now for entrepreneurs, they are home-based businesses and MLM's. They both potentially require a small start up investment and both have the potential to create good income, but you need to know the challenges associated with each. Be sure to do plenty of research on any MLM opportunity and realize that with so many people out of work, some markets may be saturated. The key is to know all the facts about what you are getting into, the costs associated and the true story of the benefits you may get. Beware of anyone trying to sell you on an MLM that is promising you all kinds of tax benefits. In general, these people know nothing about taxes or legitimate write-offs, you should do your own research on that, check with your CPA to make sure you have the correct information.

The important thing is that you are prepared and that you have a passion for what you want to do. Be aware that the IRS expects you to be in business to make a profit, and if you don't, eventually, they may classify it as a hobby. See my prior post about Profits/Taxes - The Catch 22 for more information on this subject.

If you want to start your own business, please call me or e-mail (teresa@winning-edge.net) so I can help you get started on the right track to a successful business.

Profits/Taxes - The Catch 22

2009-03-21T18:41:00Z

Most business owners are greatly concerned with owing taxes. They are concerned to the point they create fear and anxiety for themselves worrying about it. Ok, so I agree that no one likes to pay taxes, but there is another way to think about it. Try thinking about the fact that if you end up owing taxes, you made a profit!! Now that's a good thing, right? I always advise my clients to think about what all that means for them. It is not just about paying taxes.

Here is where the Catch 22 comes in, if you have losses, and don't owe taxes, you have a whole other set of potential problems, that can be much worse than owing taxes. Think about what would happen if you needed a loan, line of credit, financing for equipment or want to sell your business; and you come with a financial statement showing only losses. What do you think your chances are of getting what you need? As a business owner, you need to think long term and big picture. Your goal should be to have a profitable business that provides you a comfortable income and the IRS agrees. If you have too many years of losses, they could consider your business a hobby and disallow all the deductions you took for your business. This would mean you would end up owing even more in taxes, penalties and interest.

I know many business owners that try to write off everything under the sun in order to minimize their taxes. Now, if these are legitimate business expenses, go right ahead. But if you are trying to write off your wife's spa vacation or you dog's grooming appointment, or your kid's birthday party, you might be headed for trouble. I am conservative when it comes to business expenses and I encourage my clients to do the same. Better to do things right and be able to sleep at night than to constantly worry about an audit.

I want my clients to know that if they ever got audited, they would have nothing to worry about, primarily because they took only the deductions they should, they reported all the income they received, because they have good records and because they are doing everything correctly. I truly believe this is the best way to run a business.

The other important thing to know is, don't panic if you get an IRS letter. That is one of the most important things I learned working for CPA's for the last 20 years. The IRS makes mistakes and sometimes, it is something really minor. I always advise that if you get a letter, please let your CPA look at it before you do anything. Don't ever just pay the amount on the notice, unless you know for sure that you owe it. I often handle IRS letters for my clients, since it was part of my job at the CPA firms and I can usually take care of it for them.

If you have a question about what you can deduct, or on an IRS letter, please let me know, I will help in any way I can. I would love for you to leave a comment below. Also, have you subscribed to my blog? Please click on the Subscribe button so you will get new postings as soon as they are available. Thanks!

New Blog Name!

2009-03-21T18:36:00Z

Just wanted to let everyone know that I changed the name of the blog - it used to be Taking the Stress Out of Accounting. I wanted to make it something more about helping small businesses, which is what I do. I also wanted to take the words 'stress' and 'accounting' out of the title, because I think that stresses people more, lol.

Anyway, hope you will continue to read the blog and get valuable information. Please subscribe so you will know when there is a new entry and I really would love more comments and feedback. Tell me if you learned anything, if you found the information helpful, what you would like to see more of, or any specific questions you have.

Thanks for your support and I look forward to helping your business succeed and grow!

Giving Back

2009-03-10T21:42:00Z

Do you know that there is an opportunity for you to give back in almost everything you do? I want to share with you some ways to give, without spending any more than you already spend. I know the economy is tough and everyone is tightening their belts, however, there are some simple ways to help others with activities you do every day. Do you shop online? Do you search online? Do you have a small amount of money you could give that would keep helping people over and over, with no further investment?

If you shop online, you can sign up for iGive.com. This site allows you to choose a cause to donate to (or set up a new one if the one you want is not on there). Then, whenever you buy online from any vendor set up with them, it earns donations for your cause. Each vendor decides their contribution amount, usually a percentage of the amount you spend. Some are as high as 13.6%! There are over 728 online merchants that participate in this program. There is a simple application you install that tracks when you visit the listed merchants to make sure you get credit for your purchases. There is also a search application you can install that generates donations every time you search for something on the internet, how many times a day do you do that? Wouldn't it be great if you could be raising money for a worthy cause every time you search or shop?

I recently heard of another search engine that generates donations, GoodSearch.com. They help over 76,000 non-profits and schools through this site. They also have a shopping/donation feature. From my research, the causes listed on this site have to be a non-profit, on iGive, you can list any cause, there would just be no tax deduction for those donations. There may be other sites/companies offering this service, but these are the two I am familiar with at this time.

If you work for a large company, just think about the huge impact you could make by installing one of these on every computer in your business. You could choose a 'company-wide' cause, or let each person choose their own cause, which may help boost morale since they will feel good about the donation, but it didn't cost them or the company anything extra. If everyone used these services, the amount of donations generated would be amazing. If you own a business and would like to be part of the program, you can sign up as well to donate a percentage of your profits, what a great way to give back and get some exposure for your business.

Another way to give back is with sites such as kiva.org. Through this site, you can invest a small amount of money, $25 or more, and choose who you want to help with that money. The person or business you help, then pays back the loan, the money goes back in your account with Kiva and you can loan it out again and again with a single investment. This site helps people in other countries who need a small loan to help their business. They learn to be financially responsible by repaying the loan. "Kiva lets you lend to a specific entrepreneur in the developing world - empowering them to lift themselves out of poverty." I believe there are other sites that have similar programs, but I personally have an account set up with Kiva.

These are just a few simple, inexpensive ways that you can give back and help others. Please leave a comment if you have any other ideas on ways to do that. I look forward to hearing your ideas and feel free to share a story of an experience you have had using these or other methods for giving back.

Using a Dream Board

2009-03-06T15:12:00Z

Do you have a vision for your business? For your life? Having a visual reminder of your goals and dreams is a very powerful way to achieve them.

To help me visualize my dreams, I use a dream board. This can be any kind of board in any place that you will see it every day. I have a big bulletin board that hangs over my desk, so I see it all day, every day when I am at my computer. On my board, I have pictures, words and quotes to help me focus on the things I want. It is a powerful, constant reminder of what I need to focus my attention on every day. See this article for a quick How-To create a dream board. It is important to remember to focus on what you DO want, not on what you don't want. For instance, if you want your business to be debt free, don't say 'I want no debt,' instead, say 'I have financial abundance.' State things as if you already have them. If there is a particular car you want, put a picture of that car on your dream board and imagine yourself driving it. Try not to worry about HOW this is all going to happen, just believe that it will, and then continue to take actions to move toward those goals. Here is a way to create one on your computer.

I am telling you all of this because I know it works, I have experienced it first hand. Several years ago, I made a dream board, put up pictures of things I wanted, that, at the time, seemed completely unobtainable. I tried not to think about how I was going to get these things or when. I had the board up for about six months, at which time I moved and forgot to put the board back up. When I got ready to move again about a year later, I found the board and was astounded when I looked at it and realized I had gotten all the things on my board! Truly amazing!

I now have a new board and wanted to encourage others to try this as well. If you own a business, hopefully you have some goals for that business. Maybe it's an annual amount of income you aspire to have, or a certain number of clients or customers; whatever the goal, try to find a way to quantify that and put it on your board. Remember to state it as something you already have. You can have personal and business goals on the same board, or if it's helpful, have one at your office for business goals and one at home for personal goals. This is something you can have your employees do and your children as well. You can start teaching children early about goal setting.

What are your goals and dreams? Get started now on your dream board and making your dreams come true! Please comment below, share your goals and your ideas for your dream board.

Savings=Security

2009-02-25T17:42:00Z

Learning to save is going to be one of the biggest keys to recovering our economy. If we, as a nation, don't learn to save and quit accumulating more debt, we will never get out of this crisis. I know for me personally, it is a big challenge to save, but I also can see the impact that not saving has had on me. It's difficult when you are trying to make ends meet, when your income is down and you can't see that it will go up any time soon; to figure out how to save money, but I think it is also critically important right now.

There are articles everywhere online about how to save more Seven Easy Ways to Save, 55 and Haven't Saved a Dime? Yikes, How $10 Could Save Your Retirement. There are now savings programs at most banks, and online, I particularly like the ING online savings. Right now, is the best time to start teaching your children (and maybe even yourself) about the importance of saving, about how to manage money responsibly. ING even has programs to teach this to children Financial Literacy Programs. This is something that should be part of every child's education. There are many programs available to help teach children about savings How to Help Kids Save Money, Encouraging Kids to Save Instead of Spend, and even software programs to make the process more interactive and fun KidsSave.

With so much information and so many tools available, why does it still seem so hard? Well, my opinion is that we lost the lessons of the Great Depression that our parents and grandparents learned. We have become a society of' 'I want it now, and I don't care if I have to pay for it later.' People want instant gratification, so they are not willing to wait until they have saved up for something or they can truly afford it. We have learned to live way above our means, it seems to be more about having everything we want, than having the security to afford ourselves.

With the challenges we are facing now, it is more apparent than ever that we have missed some important lessons. We are all suffering the consequences of that now as jobs are being cut and people are losing their homes. I think we will learn the hard way, what is truly important, especially when it comes to our money. I know this has been a wake-up call for me and I intend to focus my attention on making my situation better, saving more and living on less. I am going to cut back or completely eliminate things I don't need, stop buying things just because I want them or it's a good deal, clip coupons, make more meals at home, walk or ride my bike whenever possible, find ways to entertain myself without spending money-maybe board games or just talking, and most of all, I am going to make saving a priority.

What are you doing to survive this economy?

Recording Credit Card Charges

2009-02-22T03:31:00Z

If you use QuickBooks for your accounting, I suggest you use the following method to record credit card charges, especially if that is your primary payment method. This method is especially useful if you do not pay your credit card bill in full every month. Here is the best way to record charges:

1. If you have a newer version of QB, there will be an icon on your main QB page that says "Enter Credit Card Charges" or to get to it manually, you can click on Banking in the top menu, then Enter Credit Card Charges.

2. Pick the correct credit card from the drop down menu at the top. Make sure the correct bubble is checked for a Charge or a Credit.

3. Fill in the Purchased From (you can select from your current list of vendors, or add a new one). Anyone you pay, especially for services, should be a Vendor. If it is someone you pay for services, please make sure you set up the vendor as eligible for a 1099, even if you don't have their ID number right now, you can set it up later. This will be critical at year end when you need to produce 1099s.

4. For the date, use the date of the transaction, which should be printed on your statement. Type in the amount of the charge, and a memo if you want to add more detail.

5. The Account field is also very important to your accounting. Most of what you charge will be expenses, however, if you are purchasing equipment, furniture, software, computers, etc. that cost over $500, you will need to pick a Fixed Asset account. These items need to be classified this way so that you can take a deduction for the depreciation at year end.

6. The other great thing about recording your charges this way is that you can code the expense to a particular Customer (or Job) and it can be billed out later. You can also classify your purchases by Class if you use that feature.

Here is a screen shot of the Enter Credit Card Charges screen in QB 2006:

I have found this to be the best way to record all your charges and keep track of your credit card balance. It also allows you to "reconcile" your credit card every month when you get your statement. When you make a payment, simply code it to the account for the Credit Card and it will get recorded in that register as well, and be reflected in the balance. This is a helpful, useful, clean way to record your expenses and other charges. Plus, if you pay vendors using this system, you can keep track of what you have paid them and make sure you don't overpay.

If you have any additional questions on this process, or any other accounting issues, please leave a comment here or e-mail me directly at teresa@winning-edge.net. I look forward to your comments and helping you succeed in your business.

The Importance of a CPA

2009-02-10T23:16:00Z

Do you know why it is critical to use a CPA if you own a business? There are several reasons.

The tax laws are complicated and they constantly change. CPA's are required to take continuing education and keep up to date on the laws.
They have access to information and software that makes it more efficient for them to prepare tax returns for you.
If you need a loan or line of credit for your business, the bank will most likely require financial statements prepared by a CPA. If you haven't been using a CPA and contact one to prepare these for you, they will have a hard time if they haven't been doing your tax returns and have never seen your business information.
CPA's can help you save money on taxes by reviewing your business records to see if you are missing out on any opportunities, they can also do future tax planning for you.
It's important that you have a legitimate business, not just a hobby. Here is some more information on that: Your Own Business. Your CPA can answer your questions about what you can deduct and how to properly record and report it.
It is also important to know which financial professionals to trust and what their obligations are to your money: Can You Trust Your Financial Adviser.
Check with your local State CPA Society to make sure the professional you are working with is certified and in compliance with continuing education, ethics and other state rules: State CPA Society List.
Most people who own a business or have complicated personal taxes think they can't afford a CPA, my advice is that you can't afford NOT to have a CPA, especially in this economy.
If you don't already have a CPA or know one, ask friends for recommendations, search the state society list or ask another trusted professional you work with for a referral. If you don't feel comfortable when you meet with the CPA, look for another one right away.
Most important of all, if you do not understand accounting or how to keep your records, ask your CPA for advice, or call or e-mail me and I can help you. Teresa Howell, 623-764-5334, teresa@winning-edge.net.

Happy Tax Season!

Free Money?

2009-02-05T18:48:00Z

Remember that **FREE** money you got from the IRS last year? Most of you probably don't because you spent it so fast that it is nothing but a faded memory now. Well, if you did get a check, you need to be aware of how to report it correctly on your tax return for this year. Please see this article for some common errors being made: Stimulus Checks. Make sure you report it on the correct line of your return, otherwise, it could cause some problems.

If you talked to a tax advisor last year when you got that money, the smart thing would have been to adjust your withholding so you didn't get a refund at all this year. My advice is always to make your withholding so you don't get a huge refund, it is such a waste. I understand that some people use that as a means of savings because they can't seem to force themselves to save. However, it is not smart money management, see this article: Why I Hate Income Tax Refunds. You are basically letting the government use YOUR money, interest free, for the whole year, then they just give it back to you. If you, instead, change your withholding and get more money on your paychecks, then put that extra money in an interest-bearing savings account, your money will be working for you and you will actually earn interest on it. If you don't know how to calculate your withholding, you should consult with a CPA who can help you do some tax planning, or you can try to figure it out yourself using this: IRS Form W-4.

You should be aware that you could potentially qualify for a check this year, which would be determined on your 2008 tax filing. Please see this article for more information: 2009 Tax Stimulus. Since nothing has been finalized yet on the President's new stimulus package, you should keep checking for new information as it becomes available.

How Can I Help You Succeed?

2009-01-30T03:27:00Z

My goal, as a small business consultant, is to help you succeed in your business. Sometimes I do that by taking care of the accounting, sometimes by answering general business questions and sometimes by referring my clients to people I know. There are lots of ways I can help my clients, but my favorite way is to help them build up their business and succeed. Since one of my biggest goals this year is to practice an "Attitude of Gratitude," one way for me to accomplish that is to be grateful for the clients I have and to help them in any way I can.

I do this in several ways; refer them out to other people, list their businesses on my website, take care of their accounting needs so they can focus on running their business and provide general business management help and advice. I believe that an attitude of community and helping others is the key to making our economy work and our lives better. The more we help each other, the more we all succeed and grow. Here is a way to share your story and possibly win a business grant to help your business grow: Small Business Grant.

So, my question is, what can I do to help you succeed?

Do You Have a Backup Plan?

2009-01-24T23:19:00Z

Backing up your data is one of the most important, and most overlooked, aspects of your business. It is critical that you have a backup plan for your computer(s), especially the data files, which would be difficult to replace. Your accounting data file is one of the most important, especially if you do not print hard copies of accounting records. How long would it take you and how much would it cost you to have to re-create all of that information? Sure, there are data recovery services out there, but they sometimes can be very expensive, and there is no guarantee that they can recover everything.

My suggestion is to have a backup plan. It is important to somehow backup your data and keep it offsite, somewhere other than your office. This is just in case there is a fire, or a break in, you want to be prepared. You could back up to a tape, a disk, a memory stick or a portable hard drive every day and then take it with you. Or, you can subscribe to an online backup service, which is what I suggest. The data is encrypted and you can restore it when you need it. The service I use, and recommend is Mozy, but there are lots of different services available. Check out their limit of data size, the cost, the encryption method, the guarantees, the ease of restoring your data and how it works before you sign up for a service.

This will give you just one more little piece of mind and, if you ever need it, something to be thankful for finally getting done. Please let me know if you have found a service or option you really like, I am always looking for great information to share with my clients.

Economic Challenges

2009-01-22T13:15:00Z

I truly believe that this time of economic challenges is a blessing to our country. I choose to see it as an opportunity to learn to live our lives a little differently, focusing on what is necessary. Our country has become a nation of excess in so many ways, this current situation will force us to return to a way of life that is better all around. My hope is that it will teach Americans to value what is truly important, not making more money or having more things, but appreciating what you have, making family a priority, counting your blessings.

Many of my clients, family and friends are struggling right now, but I say, see that as a challenge, an opportunity. Learn to live within your means Can I Live Without a Credit Card?, learn to carry way less debt Reduce Debt, use the time that has been freed up to spend with your family, or taking care of yourself, learn to save money Start Saving, learn to appreciate all you have instead of always wanting more Living Your Life Without Debt.

I have seen, in the workplace and with my own family, the effects of living with excess. The teenagers and young people, for the most part, have very little work ethic. They have been given everything, by parents mostly well-meaning, wanting their children to have all the things they didn't have. Most of them have not been taught the concept of saving up for something they want, working your way up or going without the latest gadget, simply because their parents couldn't afford it. This has created, in my opinion and observation, a generation of young people who think they should make a huge salary and not have to do very much work to earn it. They, unfortunately, will be the ones to suffer the most in this economy. They will have to learn the hard way, the concept of doing without, giving up having everything you want and not being able to find a job.

For the little ones, like my nieces and nephew, it is not too late. They are still young enough that we can teach them the things we may have forgotten, or that some of us have never experienced. Things like how to make due with less, the fact that you can't get every toy, gadget, etc. that you want; how to live on a budget, with a lot less coming in, how to save, how to make your dollars stretch further. I hope that they will benefit from this in many ways, the most important being that they get more quality time with their parents and they learn how to be financially responsible with a strong work ethic. Here is a link to help you teach your children about saving: Learn to Save.

As for my clients and all small business owners, see this as an opportunity, to streamline your operations, to provide the best service possible, to make sure all your expenses are absolutely necessary, to truly understand your financial statements Accounting Terms Every Business Owner Should Know. A word of caution though, in this time of lowered income, do not let your accounting records get behind. This is the most important information you will need to effectively manage your business and know for sure if all your hard work and cut-backs are paying off What a Small Business Owner Should Know. It is critical that you keep that information up to date, especially if you have a loan or line of credit from a bank, they will be asking for your financial statements regularly. If your business is on the verge of closing down, you will need your accounting to be current to help you decide whether or not to keep it going. Not that you shouldn't focus on your marketing, business relationship building, products, services, etc., but don't leave out the accounting, bookkeeping and tax returns.

As for me, I am choosing to be excited about this opportunity, to see how much I can save, to see what I can get rid of or do without, to look for opportunities for new ways to generate income, to truly be of service and help as many people as I can to make it through this critical time. Our country will survive, this will make us stronger, it will make us better, now and in the future. We have a choice right now, hunker down and put our noses to the grindstone, or give up. What are you going to choose?

Gratitude

2009-01-19T14:53:00Z

I know what you're probably thinking, what does gratitude have to do with accounting? Well, that is what I am going to explain in this post. I believe, from personal experience, that practicing gratitude will help you achieve your goals in every area of your life, including your business.

Having gratitude for all the blessings in your life, and acknowledging them, is a great way to bring more of what you want into your life. I know that the economic situation seems a little depressing right now, but if you focus your attention on what you DO have, it will bring more. For instance, do you have a client, or a few clients, that are still doing business with you? You need to be grateful for them, and let them know it. Everyone likes to hear nice things and I have found a great way to help me do that regularly. I use something called UG cards to acknowledge my appreciation for clients and others I come in contact with that provide great service. I found them on this site Unleash Gratitude. Every month, I get a set of 10 cards that expire at the end of the next month. My goal is to give them all out to people I feel deserve them before they expire. The recipient gets a code that they type into a website, they get to see a beautiful video about gratitude and enter a drawing to win a $300 prize. I give them to the person that serves me at Starbucks, a waitress that has been especially attentive and helpful, my massage therapist, anyone who I have gratitude for, for any reason.

I have found this to be a helpful way to practice more gratitude in my life. I have made it a ritual to say what I am grateful for every night before I go to bed. This keeps me centered and focused on the positive and the blessings in my life, and I have many to be thankful for, great clients, an amazing family, a roof over my head, plenty of food, and lots of other things.

So I encourage you to not only be grateful to the clients/customers you do have, but to let them know it. It's a great feeling to let someone know you appreciate them, and to receive acknowledgments from others as well. Set a goal to tell at least 5 people every day something about them that you are grateful for, you will be amazed at how good it feels.

Last, but not least, I am grateful to you for reading this and I would love to have you post a comment telling me your thoughts on this. Please click on Add Comment and share what you think, I look forward to reading your comments.

The Scoop on 1099's

2009-01-18T20:01:00Z

I know, no one likes 1099's, but they are a necessary evil of doing business. If you own a business, you are required to send form 1099-MISC to any vendor you pay for services. The only exceptions are Corporations, unless they are lawyers, then they get one anyway. Lots of complicated rules, but I will give you the basics here and you can read the IRS instructions if you need more detail at 1099-MISC Instructions.

In general, if you pay someone more than $600 for SERVICES, you are required to give them a 1099. The forms are due to the recipient (the person you paid) by Feb. 2, 2009, and to the IRS by Mar. 1, 2009. You should have each person you paid fill out a form W-9. I highly recommend that when you hire someone for a job, you have them fill out the form BEFORE you issue them a check, people tend to disappear and then it is difficult to issue their 1099.

The consequence, if you don't issue 1099's, is that the IRS can disallow all of those related deductions you took if you get audited. I think, it's just not worth the risk.

If you use QuickBooks, it is very easy to set up vendor tracking for 1099's, then just buy the blank forms and print them directly from QB. You will also need to print a 1096, the transmittal form to the IRS. Please note: You must use the original red ink forms, you cannot use copies or downloaded forms.

If you have any questions on this, please feel free to post them here as a comment or e-mail me directly at teresa@winning-edge.net.

I'm Back!

2009-01-18T19:49:00Z

Hello Everyone,

I know, I have been a bad blogger. I have been away for a long time. Well, I am back on track and have lots of great information I want to share with you. Welcome to all my new subscribers, Twitter followers, etc.

2009 is going to be a great year, and I am motivated to provide you with the answers you need to your accounting and QuickBooks questions.

So, off I go to write my first new post for this year!

Teresa Howell
Winning Edge Consulting

Documenting Meals and Entertainment

2008-06-27T02:10:00Z

It is always important to keep good records, but this is especially true with any expenses you deduct on your taxes. An area that seems to be something the IRS always checks is: Meals and Entertainment. There are several important rules to know. To deduct meal and entertainment expenses, they must meet several criteria. For a complete explanation of these policies, see the IRS Publication 463. This publication also covers the rules for travel and gift expenses. It should be noted that gifts are limited to $25 per person that is deductible, so keep that in mind before purchasing gifts for vendors, clients, etc. If these rules seem confusing, you should consult a CPA to see how they apply to you. Knowing the rules can save you a lot of stress later.

One of the important parts of the policy, is proper documentation. The advice* I usually give is, at the time of the meeting/meal/entertainment, turn the receipt over and write on it the following information: who was present and what business was discussed at the meeting. Here is an example:

Keep this receipt to attach to the credit card bill or if you used cash, put it in a file titled 'Meals & Entertainment.' When you enter this in your accounting system, you should put this information in the memo field as another source of documentation.

Documentation is the key here and you should become diligent about making this a habit. If you have any specific questions on this, please contact your CPA, or post a comment here and I will try to get the answer for you.

*Any tax advice contained in the body of this document was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

Do what you love, hire someone for the rest

2008-06-21T17:34:00Z

Starting a new business is a lot of work, planning and usually a large monetary investment as well. Hopefully are you starting a business doing something you love, something that is your passion. The problem I most often see with new businesses is that the new entrepreneurs don't know how to do all the other tasks necessary in starting and running a business. Here is where a problem usually develops. Most start-ups are limited on cash, so they tend to try to do as many things themselves as they can. This is fine if it is something not critical to your business, but for critical items, my advice is to hire someone who is an expert to do the things you don't know how to do.

My advice is always to do the things you are good at, and hire someone to do the rest. No one can be good at everything and I think it is best to focus on what you know. I had a client I worked with who was a surgeon. She was constantly disappointed with herself that she could not seem to get her accounting right. I told her I could never do what she does, so if she would stick to operating, I would handle the accounting. I think this is one of the most important things any business owner can learn, and a key to the success of your business.

Through my years working with small businesses, I have assembled a list of professionals in almost every field that I know, trust and work with regularly. I am always happy to refer these individuals to my business clients. I know I personally would rather have a referral than to just find someone in the phone book that I don't know. I also feel confident that if you experience a problem with any of the services, I can call my contact and make sure it is taken care of for you.

My advice would be that if you feel you cannot afford to hire qualified professionals to help you with your business, you might want to wait to launch it until you have more cash available. Cash flow crunches are common with new businesses, but you don't want to sacrifice getting the important parts of your business set up just because you are low on cash. Sometimes, it will cost you more later to get something fixed or set up that you thought could wait.

Here are a few of the critical items that you want to make sure are correct from the beginning:

1. Payroll
2. Sales tax
3. Accounting system
4. Legal documents for set up, licenses, permits, etc.
5. Banking services
6. Merchant account to accept credit cards (if applicable)

This is not a complete list by any means, but the ones that come to my mind that seem to be sometimes overlooked or put off until later. I welcome any questions on this topic. Please see the Resources page on my website for links that may be helpful on these topics (Winning Edge Website).