Payroll and Employee Benefits
If a business is associated with a person providing services to the business it is mostly likely that person is an employee. Payments to employees are considered wages and carry with them the burden for Social Security and Medicare Taxes, Federal and State unemployment taxes and other obligations. Please consult us to determine if these apply to the associates in your organization.
Each business with employees needs to find a way to incentivize them to their best for the business. The most common way to do this is with employee benefits. These can range from simple to very complex. We consult with our business clients as to establishing a compensation package which will meet the objectives of the business and the employee. However, we do not implement, monitor or file returns for employee benefit plans. The world of health insurance and employee benefits has become much more complex and specialists are needed for the implementation. If you consider providing employee benefits you will need to partner with a Third Party Administrator to ensure you are compliant with ERISA and other regulations.
Any person who hires an individual to come into their home and perform personal services is a household employer. The requirement for quarterly or annual filing depends upon the amounts paid for these services and the number of employees hired. There are requirements for reporting when an employee is hired, and reporting periodic payroll details. If one is considering hiring a household employee they should consult with us immediately to fully understand the payroll ramifications and their responsibilities.
Bookkeeping and QuickBooks Specialists
Bookkeeping may sound routine and hum-drum. But in fact it is the basis of the record of operations for any business. It can be as simple as an excel spreadsheet of income, expenses, customers and vendors or very complex requiring specialized computer software. The information contained in the books of a business tells the story of the business in numbers. The information is not only for income tax reporting but for communicating to owners & senior staff members the results of operations. The information in the books is the basis for business decisions.
Many people can record information – checks, deposits, expenses, income, etc. in the bookkeeping system for the business. However, most don’t do it completely and correctly. There is often not enough detail recorded with each transaction to really assist the users of the information. For instance a purchase at Staples may be office supplies, services (copying, etc.), or purchase of fixed assets (desks, computers, etc.) If one doesn’t fully explain the transaction the detail may be recorded incorrectly and mislead the readers of the information.
The bookkeeping system can also keep track of all the clients/customers/patients and vendors. One could record details of what items are typically purchased from which vendor – standard pricing and delivery methods, etc. Details regarding clients/customers/patients can also be kept (under certain circumstances) in the bookkeeping system to enable the user to effectively manage the accounts receivable and communicate with them.
At our office we support and use QuickBooks. Internally we use the desktop version of QuickBooks. Many of our clients also use the desktop version and some of them use the online version of QuickBooks. We support our clients with both versions. For some clients we do all the accounting in QuickBooks for them and for others we review the books periodically, help with reconciliations and adjusting journal entries.
QuickBooks Tips – there are literally hundreds of tip and techniques in QuickBooks. But here are a few which from our experience seem to cause issues.
- Do not delete a transaction, particularly one in a prior year. This will likely put other things out of balance. There are better ways to make a correction. Journal Entries are typically used for special corrections.
- Be sure to record all bank charges, credit card fees in the correct period.
- Use a business credit card for business transactions and do not commingle personal and business transactions on the same credit card.
- Use the accounts payable features in QuickBooks to record invoices from vendors and then paying the bills via the pay bills routine. This will help you manage the cash flow, understanding which invoice needs to be paid first and if you can get any discounts by paying an invoice early.
- Always include a detailed description of the transaction particularly with mass vendors such as Amazon, BestBuy, Paypal and the like.
- If you download transactions directly from your bank, be sure they are recorded correctly as Paying Bills, etc. Be sure also to correct the category, correct date and description. A check written in Dec 2016 and mailed out right away but which clears the bank in Jan 2017 is a 2016 expense/deduction/payment, not 2017. But if you download the transaction it will carry the 2017 date.