Category 3

Bookkeeping the Old Fashion Way

In my first job, I was required to provide the boss an income statement and balance sheet for the business at the end of every month. We wrote checks by hand, with carbon copies of all checks and deposits. At the end of the month I would enter the month’s check in the general ledger in the appropriate expense category then total the categories on an adding machine. I always ran a tape, and had to keep running it until I had two with the same totals. I stapled the tapes to the general ledger for proof that the totals were right. I did the same for all deposits, recording the customer’s name, check number, and the check amounts in one of two income categories.

At least, this is how I was trained. Very quickly I grew tired of all that hand entry and began to use a spreadsheet — PlanPerfect, I think it was. Read More …

Putting The Kid To Work

I am not a CPA and don’t do taxes, so talk to your CPA before you follow my example here. If you don’t have a CPA and you have a small business, stop what you’re doing and get one. Now.

O.K. now that that’s out of the way, let’s talk about why you might want to employ your child. I know CPAs that have encouraged clients to employ their kids to clean the office and their spouses to file and run errands. What’s the advantage of this? For one, there are tax savings for the business when paying a family member as an employee. If the family member is under the age of 18 (presumably a child, not a spouse) you don’t have to withhold or pay FICA or medicare, nor do you have to pay FUTA or SUTA. (If you don’t know what those are, make sure your payroll processor does.) If you decide to employ your children, you have to comply with child labor laws and the amount you pay should be reasonable for the work performed. Read More …

Grace

As a bookkeeper, I learn from my own experience, as well as that of my clients. I’ve seen that one of the advantages of being a small business owner is the opportunity to interact directly with clients, vendors and others in our community. Unfortunately, these dealings are not always easy. We all know there are difficult people out there — the customer who demands the impossible, the employee who takes advantage, the contractor who does not fulfill a commitment. The normal response — defensiveness, curtness, exasperation — too often does not lead to a comfortable resolution. These are situations that call for grace.

I’ve thought about grace in the business environment ever since a friend explained how he admires people who conduct themselves with grace– not just under pressure, but in all situations. When I asked him what he meant by “grace” he wasn’t able to define it, but mentioned several mutual acquaintances as examples. Read More …