More tax questions

[yveskleinsky]

What type of organizational system do you use for your book keeping? ...Do you enter in all receipts as they come in/out? Do you wait until the end of the month? How did you figure out which system works best for you?

 

[royemunson]

Good question. To be frank, I worked as an accountant in a cpa firm that dealt with small biz's.

slow lane types, but they had good intentions, so they thought.

our most successful clients either:

-gave us all their data for us to compile, figure various taxes, etc...
-utilized an office bookeeper to do this and then give to us to review.

always done on a monthly basis.

i've seen everything from excel spreadsheets to quickbooks to more sophisticated systems (for larger more complex companies). It's up to you, but this is one area that I would delegate to someone who is educated b/c remember cash flow is the bottom rung of the B-I triangle

Joe

 

[John]

We're using Quicken. We (and by "we" I mean my wife) enter in everything pretty much as it happens, sometimes a few days behind if we (she) get busy. At the end of each month she runs the totals, does payroll, transfers our profits to our personal account, and prints out performance reports for us to go over together as we plan out the next month.

 

[Diane Kennedy]

I like using QuickBooks Pro. Quicken is a great program and works well for individuals, but I like the discipline that you have to learn to do QuickBooks. It's a true double entry bookkeeping system. If someone starts using it, and more importantly, then understands how to decipher the Balance Sheet and Income Statement, they learn vital skills they'll need as a business owner or investor.

I went from doing my own to hiring a bookkeeper. I don't like the idea of having things sitting around "waiting." At home, we don't write personal checks - run them through QuickBooks or use our credit card. That way there is a record on the accounting system.

 

[Diane Kennedy]

Oh, one more thing - if you're buying or selling real estate, make sure you have someone who understands real estate accounting making the entries. There are often a lot of missed tax loopholes right off the HUD-1 Closing Statement.

And, if you're doing creative real estate (sandwich leases, rent to own, etc), DEFINITELY make sure the bookkeeper/accountant understands what you're doing. I can't believe how many times I've seen the bookkeeper make a couple of wrong entries (mainly because he didn't understand creative real estate) and then the CPA is rushing to get a return finalized and lets the numbers go as is....costing thousands and thousands of extra dollars in taxes.

Common problems: when did the purchase actually occur, when did the sale actually occur (lease option versus wrap), installment sale calculation of income, especially if there is a later renegotation, and foreclosures.

 

[yveskleinsky]

I spoke with another bookkeeper yesterday (man, was that only yesterday?!) and I really like her. She has my energy level and swears as much as I do. She's a much welcome member of our team! I asked her to sit down with me and enter everything in, and then I can focus on maintaining. I'll get tune ups quarterly after that. I meet with her to start next Wednesday. She recommended PeachTree for accounting, so I just ordered some off ebay. I'm excited to at least start down the road! ...And thank you for all the feedback, it is helpful just to see what other people are doing.

 

[Diane Kennedy]

Yves,

Sounds like you have a good fit.

Peachtree is a great program. It seems like people are in one of two camps: QuickBooks or Peachtree. And the difference is more because of the one you're most familiar with.