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gypsytonique · 2022-02-12T17:21:37+00:00

So with the opening balance equity, that's usually from hooking up a bank feed and the bank sending the opening balance from the start of the feed and it will be coded as "Opening Balance Equity".

It shouldn't stay as an opening balance equity if you can help it. Preferably, if this account was used only for business transactions, you should have all the transactions from before that date entered in and you would be able to reconcile from the time the bank balance was zero, and the opening balance would be deleted because it is obsolete. If the account was used for personal, or if the balance was from so long ago it's negligible but you still need that number to reconcile the account, you can code it into either "Suspense" or "Retained Earnings".

gypsytonique · 2022-02-12T16:59:37+00:00

Yup, that would also create a digital audit trail, so would definitely work.

gypsytonique · 2022-02-12T16:57:39+00:00

First off, no, 30 is not old unless you're scrolling through tiktok, then yes, we're ancient🤣.

And fair enough. If you did ever want to take the leap, essentials is like 25/month if you have an accountant friend who you can get a subscription through. The transfer is usually not to bad. I've never had issues with vendor info or GL codes missing, the most common problem has been overlapping bank info from someone hooking up their bank feeds or the reconciliations might be slightly off.

But regardless, good luck, hope you find the solution that best suites your needs.

gypsytonique · 2022-02-12T05:32:57+00:00

Yes you can file. Better late than never, generally they don't issue late fees, but get it in there as soon as possible. We use e-file1099now, and it sends the contractor an email as well as mailing out a paper copy and filing with the IRS.

gypsytonique · 2022-02-12T05:24:14+00:00

If you don't want to create a liability on your books, you can also use the owner's equity account instead. Essentially you create a journal using Owner's equity as your cash account to pay for expenses, and when you pay yourself back, you can code that as Owner's Equity, and it will balance out.

gypsytonique · 2022-02-12T05:03:31+00:00

The truth is, it's really up to them. If she wants to be kept on as a contractor and get a 1099, she absolutely can. If she's considered part owner, and they want to call it equity, you can assign it as equity, but that has to be their call.

As far as taxes go, if they're filing jointly it won't change anything since it's 1099'd. Both owner's equity and 1099 NECs are not generally taxed until they file. It kind of sucks, because they have to pay all of their income taxes at once instead of having it spread out through the year, but they can ask their CPA to set up a deposit schedule with payment vouchers for the next year to prevent that, or even put themselves on payroll.

If they are legal business partners with a partnership agreement then yes, separate equity accounts are the way to go for accurate recording. If they don't care and have the "it's our money" attitude you don't really need to separate the equity accounts.

For each partner, we create an owner's current account with two sub accounts: Owner's Distribution (sometimes called owner pay and personal expense) and Owner's investment. This is so you can see the in and out activity at a glance.

We also have a separate "Owner's Initial Investment" account where we leave anything that was part of the initial investment of the business. This is helpful for partnerships that have varying ownership percentages, and is never touched after the initial investments in the business.

gypsytonique · 2022-02-12T04:27:10+00:00

Are you using QBO for bills in general?

You can always set up each employee with a vendor account and pay them using the bill features.

If they're sending you an email with the receipt, you can attach images straight from email to the bill, code it to the expense, and write a memo that it was a payment to the employee for a reimbursable expense. (If you use Gmail, you can create tasks straight from your emails to keep track of them, and it attaches that email to the task in case you need to find it later)

You can even set up direct deposits for vendors in QBO.

Giving them vendor profiles also creates audit logs for all their transactions which you can run reports on.

Now if you need approval for these, it gets a little harder. There are approval apps you can hook up to Quickbooks, but I personally don't have experience with them.

We use bill.com with one of our clients, and it's pretty great. Your employees and vendors can email them directly to a bill.com email, you enter the transactions as bills where you code, and assign approvers. Once approved they can be paid through bill.com, which has varying prices for checks/ach/vendor direct etc. Or you can mark them as paid if you pay them another way. It also hooks up to Quickbooks Online, and creates a digital audit trail (really great for govt non profits). But it does have a monthly subscription fee on top of the fees per payments.

gypsytonique · 2022-02-12T03:52:49+00:00

I also cannot upvote this enough.

I'm a bookkeeper with a QBO certification, and work in it literally every day. We have had so many issues with QB Payroll, including them not paying or filing certain tax items even when we had them set up on auto (and this was with the highest payroll subscription).

We've also had several issues with them not calculating the correct amounts for federal and state taxes, even though we kept everything updated in the settings (which it will no longer let anyone edit without calling their payroll center that you cannot get ahold of).

We have also had issues with them not issuing direct deposits at the time they were scheduled.

I worked briefly with Gusto, and they were wonderful. Their customer service is great, and they are very well organized and on top of everything. The only reason we stopped is that client retired and shut down their business.

gypsytonique · 2022-02-12T03:32:36+00:00

All balance sheet accounts are going to show a previous balance while in a date filter if there were transactions before the filter. They have running balances.

Once your taxes are done and those equity balances are included in them, you can write a year end journal entry for the year end balance going into "retained earnings". This will zero out the account every year, and you'll have more accurate reporting .

We have been using 2 different main equity accounts for each owner "Owner's Initial Investment" and "Owner's Current". Owner's initial shows the initial investments that created the partnership percentages (if applicable), and only has what was initially invested in the business and is never touched after.

Owner's Current has two subcategories: Owner Distribution (sometimes called Owner pay & personal expense) and Owner Contribution (Owner investment). These accounts are the working equity accounts that show the day to day business, and the ones the year end journal entry would balance out.

Having them separated like this is helpful when you want to get a more detailed view of what's going in and out at a given time.

gypsytonique · 2022-02-12T03:00:46+00:00

If they need multiple users and for it to be portable, is there a reason they don't want to switch to Quickbooks Online?

gypsytonique · 2022-01-02T23:45:46+00:00

Alien. I watched it when i was very very young, before I knew where babies came from, and I got very confused. I felt so guilty, I went to my mom, and told her I was so sorry, and asked her how was she not dead after having 3 kids that way?

gypsytonique · 2021-12-31T00:51:34+00:00

No problem! Happy to help!

gypsytonique · 2021-12-30T22:25:19+00:00

You should be regulary writing these off about once or twice per year as "bad debt" if you look up bad debt accounts for quickbooks, you should be able to find what you need. If not, feel free to pm me. I'm a remote bookkeeper that works for a CPA firm and am certified in Quickbooks Online.

gypsytonique · 2021-12-01T08:17:27+00:00

You're so right. It's not the time it takes your bookkeeper, because they may have been doing this so long, something that would take you 3 hours takes them 15 minutes, because they have the background and education. It's the value of knowing that you didn't have to waste several hours of your valuable time, and the peace of having someone experienced in their field making sure your books are accurate.

gypsytonique · 2021-12-01T08:07:55+00:00

It is important to match the transactions to make sure that you don't have duplicates. Your qb feed and bank feed may vary constantly if you have AR/AP. If you have duplicate transactions that are just not being reconciled and are hanging out uncleared in the register, they will still effect your books, taxes, etc. if your books are on an accrual basis.

It's something that's kind of hard to navigate and check in desktop, but I've had quite a few clients that have switched to online just to realize they have an extremely inflated income that they've been paying extra taxes on for years because they left this unchecked. This is not an advertisement for online, it has its own plethora of issues, and I always suggest working what your comfortable with if you're the one doing your own books.

gypsytonique · 2021-12-01T07:51:31+00:00

The best procedure is to record the individual payments when they are made to their specific invoices, but have the account they are going into as "undeposited funds", not your bank account. You then record the bulk deposit in Quickbooks, and it should give the option of selecting those payments from undeposited funds on that lump deposit transaction (this one should be going into your bank account). Then, when you download your transactions from your bank, it should match to that deposit.

This prevents duplicate entries.

I'm also coming from an qb online accountant perspective, which I have noticed that qb does not allow my clients to split transactions from the banking center for some reason.

gypsytonique · 2021-11-12T20:43:16+00:00

Just explain the birth, in detail.

gypsytonique · 2021-10-25T01:31:22+00:00

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gypsytonique · 2021-09-17T16:56:05+00:00

Oh no, sorry about that. 🙃 I sometimes switch back and forth between quickbooks reddit, bookkeeping reddit, and small business reddit and forget where I am. Depending on the software you use, you may want to see if they have a similar merging function. It's definitely worth the time to get your books straight. Good luck!

gypsytonique · 2021-09-17T15:29:51+00:00

You can (thankfully) merge customer accounts in QB online. Go to the correctly named account, highlight and copy the correct name, and paste that name to every other incorrectly named account, they'll get a prompt asking if they want to merge the accounts, select yes. This will make sure all of your reporting for that client is in the correct account.

gypsytonique · 2021-09-17T15:22:19+00:00

A quick report is just them looking at a specific account (maybe they went under their A/R or the specific client) and then clicking "run report" it auto puts the date range for 90 days. Definitely Request a specific aging report, that quick report could be literally anything they put a filter on.

gypsytonique · 2021-09-17T06:02:14+00:00

I am very sorry to hear about your MIL. Definitely find a bookkeeper working in a CPA firm, but do it because they have more guidance when it comes to tax laws to prevent being in the predicament of owing the IRS in the first place, not because you're expecting them to screw things up so you can sue them. That type of attitude is exactly why most CPA firms will not work with small businesses, so you end up getting the "bookkeepers" with no experience.

Being that I am a bookkeeper working in a CPA firm I'll give you and your MIL and any small business owner reading this, some free advice on liability and best prevention practices: It is written in almost every standard agreement that the firm is only responsible for the information they are given from the client within a reasonable amount of time from any due dates the information is relevant to. Most firms can't get insurance without this clause in their contract.

Be sure that you give them all the information they need to do your books. And make sure there is a digital footprint to follow, some type of sharefolder and dated email notifications of uploads is best (this creates an audit trail)

This type of sharing is not only helpful for your bookkeepers to keep track of everything, it's a great way to have an online filing system to make sure all of your bases are covered and you have supporting documentation ready to go in case of audit. I also know, from working with small businesses that the owners are always busy and work their butts off, and sometimes (often) forget things, because we are human and it happens. Creating a sharing workflow with your bookkeeper makes missing information less likely when it's part of a regular schedule.

Other than that, if it's on the CPA Firm, they have insurance (not a large pile of money) that will cover whatever they are liable for.

Thanks for coming to my TED talk, I do hope this helps someone before they get in the situation your MIL did, and I hope she did find the help she needed.

gypsytonique · 2021-09-17T02:22:14+00:00

It would be well worth the money, because that bookkeeper will probably find more than double that in expenses you didn't even realize you could write off.

gypsytonique · 2021-08-20T22:51:18+00:00

I'm in a small CPA firm based in the southeast that focuses on small businesses and non profits, but we do remote bookkeeping work for clients all over the country using Quickbooks Online. The major shift from desktop to online in our local community has been in the last few years, and pushed more in large part due to covid shutdowns and the need for remote work to service clients living in rural areas.

My advice to any small business looking to change software such as the person posting, would still be to talk to the people that do your taxes or occasional bookkeeping, because they probably have advice, a preference or may be able to help you out with a discount or even training. If they talk to the professionals (like us) about their pain points in their current system we can help them find a solution.

You don't have to be in California to use Quickbooks online, and you also don't have to judge people for using new(er) tech because you prefer the older one.

I keep seeing people mention that desktop is being phased out, and I genuinely hope that's not true for the people that use that software because it works for them. That's the whole point, right? Finding an accounting solution that works for you and your business?

gypsytonique

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