So why not just hire someone and pay them as an independent contractor and not worry about all of the issues revolving around payroll? Because if the IRS determines that the person was actually an employee the business is liable for all of the back taxes…….the employers share as well as what the employee should have paid.

So how do you determine if the person that you hire should be classified as an employee or an independent contractor? The IRS has three categories or “tests” that determine how the person should be paid.

First is behavioral.  ”Does the company control or have the right to control what the worker does and how the worker does his or her job?” I will use myself as an example. My clients have input as to how I do their bookkeeping but most rely on my expertise and experience so I have more control which makes me an independent contractor. The owner or manager of a company would have much more control over how or what an in-house bookkeeper does. They may also be experts in their field but typically the owner or manager gives more specific instructions to an employee.

Next is financial. “Are the business aspects of the worker’s job controlled by the payer? (these include things like how a worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.).” Typically an Independent Contractor will tell the client how much they charge and an employer will tell the potential employee how much they will be paid. Plus an employer will have to provide a work station and supplies for an employee but an IC might provide their own tools and supplies.

Lastly is type of relationship. “Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?” This is a hard one. My clients don’t provide me with health or retirement benefits but then again, employees don’t often receive those benefits either.  An easier way to determine the type of relationship is an independent contractor will do the same job for more than one company and may have a business license or business name. An employee may have a second job but it might not be in the same field and they might have to ask permission or at least communicate with their current employer that they are seeking a second job.

When I am trying to determine which category someone should be in I always ask “what, where, when, and how much.” An Independent Contractor has to the ability to determine what they do, where they do it, when they do it, and how much they do it for. An employee is told what to do, where to do it, when they will do it, and how much they will do it for.

So, how much is your time worth? Is networking, cold calling, or pounding the pavement interacting with your client base worth more to you than sitting at a computer entering debit card transactions?

When you are first starting out and watching every penny it is a very hard decision to make. How much does a bookkeeper cost anyway? Less than you might think. Bookkeeping rates vary greatly so talk to your business associates. Chances are they are either using a bookkeeper or know someone who is and can help you find a good one.

Most bookkeepers are experts in their field………..just like you are an expert in your field……….so below are some points to keep in mind when deciding if you need to hire a bookkeeper.

• It will take an experienced bookkeeper about half the time to do the same amount of work as it would take someone that is not trained as a bookkeeper.
• A good bookkeeper will know a few tricks in Quickbooks to make data entry easier and faster.
• Each time they work for you they get more and more familiar with your data and your company and become faster at getting the job done.
• A good bookkeeper knows how to categorize transactions which will save both you and your tax person time and frustration at the end of the year, and that will save you money!
• Hiring family is easy……..but what happens if it doesn’t work out and you need to fire them?
• This is an ongoing relationship so you have to be comfortable with the person that you choose.

The earlier in your business that you get started with a bookkeeper the less cleanup you will have to pay for and frustration you have to deal with in the long run. Plus, getting your Quickbooks set up correctly in the beginning will help you make better decisions as your business grows.

Not knowing how your business is doing financially will prevent you from making good business decisions which could cause your business to fail. Cash flow does not equal profit and understanding what to look for on your financial statements can be the difference between running a profitable business and not having a business at all.

SEO or search engine optimization. RSS or real simple something-or-other.

It really confuses me to no end.  I spent way too much time trying to do it myself and have not gotten very far.   It really is difficult to master everything you need to know about everything there is to know.  So, what do I know for sure?  I’m pretty good at taking care of accounting and bookkeeping services for small businesses. 

Most people know that when it comes to accountants, doctors, and lawyers, you really should have a good one in your back pocket that you know, like, and trust.  After my own research, trials, and tribulations with building a website and trying to get it found online, I have determined it is also a pretty good idea to have a reputable Internet professional in your pocket as well. 

If you can find one that will make you a custom built website, get you found in Google Local Maps, be your answer to taking your offline business and making it an online business, and even create a killer video marketing campaign that just blows the doors off of your competition, then you my friend have found a diamond in the rough!

Maybe you should look up Chris Darling, 302-786-1707.   They say diamonds are a girls best friend… well I am beginning to think that Chris Darling is your best friend in your online business.  Please, tell her I sent you!  It’s good Karma.

When I meet with potential clients I know that the first thing that they want to ask is how much I charge so I try and get that on the table early in the meeting. As soon as I tell them my rate I know what the next 2 questions that they want to ask will be……”why is her rate so low? What kind of work am I going to get for that?” I then feel like I have to dig myself out of a hole to prove that they are going to get the best service and the most accurate books when everyone around me charges double or quadruple what I charge.

My rate is low intentionally and here is why. My clients are small businesses. Some are just starting out, some have been in business for a while, and some are well established. What they all have in common is that they are trying to keep costs low in order to be profitable or just stay afloat. That doesn’t mean that they don’t deserve to have a great bookkeeper.

My experience and qualifications are as good (or better) than my competitors but my passion is watching a small business grow and helping small business owners realize their dreams. I want to be there at the beginning when the business is new and the path is uncertain as well as when things are going great and the money is rolling in!

First, I want to explain the difference between bookkeeping and accounting:
Bookkeeping is when you keep track of everything financial (payroll, taxes, sales, debt) in certain categories, or accounts. This is done by trained professionals, and they use special computer programs. Bookkeepers need extra schooling and certification.

Accounting is taking financial information and deciding what to do based on this data. Accountants make personalized budget plans that work for you. Accountants also need additional education, which is usually at least a bachelor’s degree. Accountants are referred to as CPA’s.

Here is a list of the 4 biggest things bookkeeping and accounting services do for their customers:

1. Managing “accounts payable”:
   Accounts payable are records of money you might owe to others. Your Tucson bookkeeper can keep track of how much you have paid already and how much you still owe. They will even write checks and mail the payments if you want. Bookkeeping services make it so much easier to keep track of the money you owe.
2. Taking care of “accounts receivable”:
   Accounts receivable are records of the money owed to you. This is great for small business owners, because a bookkeeper can manage these by keeping track of all the sales you make. They will then make sure you get paid by your customers by sending out invoices, and by often calling customers who haven’t paid by their due date to get your money for you.
3. Payroll:
   If you own a small business, accountants calculate how much you owe your employees each week. They also make sure the correct amount in taxes is taken out of each employee’s checks. When you have to do your own payroll, it takes a good amount of time out of your day. That’s why you should let your bookkeeping service handle that: to save some time in your busy schedule.
4. Taxes: 
   These can be such a pain to do on your own, plus they are often confusing!  It is much easier to have a Tucson accountant or bookkeeping service help you, if only to avoid having the IRS (Internal Revenue Service, or the US government branch that collects taxes) audit you. Nobody wants to be audited, so why not avoid mistakes in your taxes by having a professional do them for you? Your accountant does all the hard work for you, and all you have to do is sign where they tell you to do so. You will save so much time and not get in trouble with the IRS.

Why create more work for yourself in your already busy schedule? If you hire a Tucson bookkeeping and accounting service, you can spend less time crunching numbers to find ways to save money. Accountants and bookkeepers are trained for that job, and they know the best ways to save you money. Also, once tax season comes around, you’ll be very grateful for your accountant. They really save you a lot of time and stress by preparing your taxes for you!

A dedicated bookkeeping staff can be very expensive. In addition to employee wages and benefits, the business owner must invest in office space and equipment, accounting software and training. There’s also the need for a supervisor for the new staff, which requires either another new staff member or new duties for an existing employee, if not the business owner. A bookkeeping service effectively handles the cost and time of employing and organizing a bookkeeping department for the client business, in exchange for a competitive monthly fee.

In exchange for that fee, a bookkeeping service takes over a business’ accounting needs. There’s more to that than just data entry. A bookkeeping agency can monitor accounts payable and receivable, ensure timely billing, prepare periodic financial statements, reconcile bank accounts, assist with tax preparation and handle payroll. Choosing an online service can even provide daily reports of operating results – every morning the owner can see how the business did the previous day.

Handing over a business’ accounting needs may feel like losing control of the business, but this is not so! Instead, outsourcing to a bookkeeping service can help the business owner gain more control, as it frees up his most valuable resource – his time. That’s time that can be devoted to other areas, and the financial savings can be reinvested into the business.

Having a third party handle a business’ accounting provides one other important benefit – security. A bookkeeping service will be well-versed in generally accepted accounting practices and internal accounting controls. In addition, there’s a built-in control for efficiency in having a firm handle the books – the person taking care of bank account reconciliation isn’t writing or depositing the checks. That extra degree of separation provides a level of impartiality that’s important for accuracy.

A bookkeeping service can be a small business’ most important partners. Many businesses report increased cash flow within months of contracting a bookkeeping firm. If a business is looking to save money and expand, outsourcing bookkeeping can be an important first step.

Original Article found at: http://www.superpages.com/supertips/bookkeeping-service.html

Hiring a bookkeeper can be very inexpensive, especially if you are willing to do some of the work yourself.

One of the most time consuming things that I do for my clients is organize receipts. Receipts for cash spent…….receipts for credit card purchases…..receipts for debit card purchases, etc…. Most of my clients give me a pile of little scraps of paper and I can easily spend several hours matching these to bank statements and credit card statements. Keeping these organized throughout the month or separating them before giving them to your bookkeeper can save you between $50 and $150 in hourly fees each month.

Another thing you can do with these little scraps of paper is write on them. Write who you had lunch with, which vehicle you filled with gas, which job the expense is for, etc…. A good bookkeeper will put this information in the memo field of the accounting software. This will help you in the event of an audit by the IRS, it will help your accountant find errors when doing your taxes, and it will help your bookkeeper categorize the expense correctly.

Try and give your bookkeeper all of your documents at one time. It takes time to stop and write notes about missing information or questions about documents that are unclear and then communicate with you for answers. The fewer problems that I have, the faster I am going to get through your work and the smaller your bill from me will be!

Pay for only the services that you need. Hiring a bookkeeper does not mean they have to do all of your bookkeeping. Maybe you can reconcile your own bank account but need help filling out your sales tax return. Maybe you want to pay your own bills and just have me enter the checks you have written. Maybe you will do your own customer invoicing, collections, and bank deposits but you want to keep a database of customer information. You will be able to afford more help as your business grows.

Communication is key. I need to know what you expect from me and what information you would like to see. I do not charge my clients per phone call. If you have a question, call, email, text, smoke signal me! This keeps me in the loop and it helps you understand how your decision will affect your bottom line.

 My #1 priority is to give you the tools that you need to run your business in a format that you understand. If you don’t understand your financial statements I can give you other reports that are more meaningful to you……..that is essentially what you are really paying me for right?!  

www.InTheBlackAZ.com

Hiring a good bookkeeper will not only save you time and money, it could save your business…….or your house. If your business structure is not set up properly your personal assets could be at risk. You can protect your personal property by incorporating your business. A bookkeeper will categorize your expenses correctly and set up a filing system so if the IRS does come knocking your records will be in order and easy to find.

Most people would be surprised at how inexpensive it is to contract bookkeeping help. First of all you need to know the difference between an accountant and a bookkeeper. A bookkeeper will do the data entry, bank reconciliations, sales tax reports, and payroll. An accountant does your income tax and audits what the bookkeeper has done. A bookkeeper will charge between $25 and $75 an hour for their work. An accountant will charge $90 to $200 an hour for their work.

Do you need both………YES! You don’t want to pay someone $100 an hour to reconcile your bank statements but it is a good idea to have someone else look over and “audit” your books at the end of the year. The accountant will find any errors or expenses that could have been categorized differently possibly saving you money on your tax return.

Your bookkeeper and your accountant will work together to make sure you are getting all of the tax breaks that you qualify for and to help you avoid an IRS audit.

www.InTheBlackAZ.com

http://www.time.com/time/business/article/0,8599,1930312-2,00.html

What does it take to get a business off the ground? What does it take to make that first sale or land that first client? I wish I could tell you!!

I am wondering the same thing right now. Why isn’t my phone ringing? Why aren’t clients beating a path to my door? Where are they and how do I connect with them? The spammers and cold callers have found me so why not actual people that need my services?

Tomorrow night I am attending my very first networking “mixer.” I am not a schmoozy kind of person but I am going. Luckily my BFF has agreed to go with me so that we can talk to twice as many people and make twice as many connections………..or talk to anyone for that matter instead of sitting in a corner making fun of people!

I keep reminding myself that there is a point to this and that I am going to benefit from it. Maybe this will be the thing that opens the flood gates to my business success!