April 2, 2025 • 17 mins
We tackle the critical but often overlooked task of proper bookkeeping for business owners and share how avoiding common mistakes can save you thousands of dollars and countless headaches.
• Bad bookkeeping comes in many forms—from procrastination to incorrect QuickBooks entries
• Cleaning up messy books often costs more than starting from scratch
• Hiring an inexperienced bookkeeper can be more costly than doing it yourself or contracting an external accountant
• Monthly bookkeeping creates visibility into your finances and helps avoid tax surprises
• Regular review of financial reports is essential to catch errors before tax filing
• Separate business bank accounts are crucial even for simple businesses using spreadsheet accounting
• Setting regular calendar appointments for bookkeeping helps maintain financial clarity year-round
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
you have to set aside time for bookkeeping.
It's not something that you canjust go through the end of
December and do it all becauseyou don't have useful books all
year.
Speaker 2 (00:17):
Welcome to what your CPA Wants you To Know.
Speaker 1 (00:20):
Tax and accounting help can be expensive, so we've
created this podcast to helpguide you through it all and
make you feel like you have aCPA in your back pocket.
Speaker 2 (00:30):
I'm Carson Sands.
Speaker 1 (00:32):
And I'm Taryn Sands.
Speaker 2 (00:33):
I'm a CPA with over 10 years of experience helping
people start and grow theirbusinesses.
Speaker 1 (00:39):
And I'm an MBA with a specialization in marketing and
entrepreneurship.
Taxes suck and we want to makesure you don't pay more than
your fair share.
Speaker 2 (00:49):
We're here to share everything your CPA wants you to
know in a fun and easy tounderstand way.
Let's get started.
Speaker 1 (00:57):
Let's do it.
Today's episode is all aboutbookkeeping and I know there's
nothing like two accountantssitting here telling you how
important bookkeeping is.
But if you listen to thispodcast and you selected this
episode, that tells me that youknow that it's fairly important
(01:20):
and you are going to listen towhat we have to say today.
But this episode really comesfrom problems that we've had
this tax season.
That we'll share so that youdon't make the same mistakes,
but really it always happensevery tax season.
We see this over and over againand we try so hard to make sure
(01:41):
it doesn't happen, but it justalways seems to pop up.
So that is just bad bookkeeping.
That can mean a lot of things.
That can mean not keeping upwith your bookkeeping and then
getting the tax time andreaching out to us and saying,
hey, I'm ready to file my taxreturn and Carson looks at it
and goes, no, you're not, yourbook hasn't been reconciled or
(02:02):
anything.
It can also mean doingQuickBooks or something and just
not being familiar with it.
So whenever you look at yourreports, they're just not right
because you're clicking thingsall the time.
Speaker 2 (02:15):
And that's actually worse than not doing it at all.
Speaker 1 (02:17):
Absolutely, because it is a way more difficult to go
back and just clean upsomeone's QuickBook mess than it
is to just move forward doingit correctly.
Speaker 2 (02:26):
There's so many times where I know after the fact it
would have been easier to startover the books from scratch and
just with nothing.
But I usually don't know thatuntil I'm already so far deep
that it's too late to go back.
Speaker 1 (02:39):
Right, and there there's so many things to mess
up in QuickBooks.
But the thing is, if you don'tknow what you're doing, don't
just keep moving forward doingthat.
Ask questions, either get helpfrom your CPA or Intuit or
whatever, but just don'tcontinue down that road.
Speaker 2 (02:57):
And most of the things you're doing wrong could
probably be fixed with one ortwo hour-long consultations with
an expert in QuickBooks or aCPA that could teach you exactly
how to do it.
Speaker 1 (03:09):
And I know when you look at accounting rates and
you're like, oh, that's $200 anhour or $300 an hour, whatever
your CPA charges, you think, oh,I don't really want to spend
that.
But so many cases of people nottaking the time or wanting to
spend the money on that and thenturning around and having to
spend thousands.
We had one of our clients spentI don't know five to ten
(03:32):
thousand dollars with QuickBooksand their QuickBooks help, and
QuickBooks actually madeeverything worse and then
wouldn't respond.
So that's just a scenario.
Whenever you know you need helpwith it, it's just time to make
sure that you put that in thebudget and get it straightened
out, because it will cost youmore money in the long run or a
(03:52):
ton more time if you're justgoing to start back over.
Speaker 2 (03:55):
Yeah, it's scary and I wouldn't hire one of those
people that you don't know, thatyou haven't vetted through a
friend or know somebody that'salready actually used them, just
a random person that QuickBooksgives you.
It just means that they'recertified in QuickBooks, which
is pretty easy to do.
It doesn't really mean you knowwhat you're doing necessarily.
Speaker 1 (04:14):
Now we can't speak for all of those people, but the
ones that we've heard fromclients.
They haven't been good so far.
That's all I can say.
Speaker 2 (04:22):
I've been certified in QuickBooks too, and I do know
what I'm doing.
But getting that certificationisn't really enough to prove
that you know what you're doing.
Speaker 1 (04:32):
Absolutely.
And that leads me to my lastpoint.
In bad bookkeeping and we seethis a lot because we work with
large businesses and they get tothe point where the business
owner can no longer do all ofthe tasks with accounting and
bookkeeping.
So that's when they hiresomeone.
Okay, so it's worth payingsomeone to do all those things
(04:52):
in their company, but they hiresomeone that has no idea what
they're doing and then theyeither create a big mess or
they're paying someone to dothat job and paying their CPA to
help with the bookkeeping.
Speaker 2 (05:05):
And I know, if you have an in-house person,
experienced bookkeepers, peoplethat have been doing this for a
while or that have been trainedproperly, they're expensive and
you're like, well, I can'treally afford a good bookkeeper,
and maybe that's true, but youreally can't afford a bad
bookkeeper.
Speaker 1 (05:19):
No, a bad bookkeeper has cost our clients so so much
money.
Speaker 2 (05:25):
So if you can't find somebody good or you can't
afford somebody good, do ityourself is one option, and I
would rather you hire someone todo something else you do so
that you can focus on the books.
It will help keep your mind onthe business finances, which is
important, and at least you knowyou'll be doing your best, and
you can't say the same thing forevery employee you hire.
(05:45):
The next thing is you could getan external accountant.
That's going to be cheaper thanhiring someone full-time to be
a bookkeeper, and that could bethrough your CPA firm.
Some CPA firms do bookkeepingor it could just be a
professional bookkeeper, butthat contracts and they would
only be.
You know they have multipleclients and you would be one of
them, but you know that would beanother option as well, and
(06:06):
that's going to be cheaper thanhiring somebody in-house, for
sure.
Speaker 1 (06:09):
And if you vet them prior to hiring them on, then
that will, in the long term, beso much cheaper.
Speaker 2 (06:21):
Right.
So don't just hire somebodyjust to do bookkeeping, unless
you have a really big companyand you can afford somebody like
$60,000, $70,000 a year minimumIf you're paying them $40,000,
they're not.
Speaker 1 (06:29):
That's not it.
It's not going to work.
And if you bring someone inwe've seen this a lot where
they're like, yeah, I've donesome QuickBooks, I can learn it.
You don't want that.
It never ends well.
Speaker 2 (06:37):
Or if you have a great administrative assistant
secretary whatever you want tosay and they do all these things
great, and you're like you knowwhat?
I'm just going to assign thisto her.
She has room in her schedulefor that.
No, do not do that, please,Because they want to say yes,
they want to please you and keeptheir job and they're going to
just start guessing, that's whathappens every time.
Speaker 1 (06:58):
That's not their job.
Speaker 2 (06:59):
They're not a bookkeeper, even if you say
don't be afraid to reach out tome or to the CPA, they won't.
They won't reach out, They'lljust guess it's going to be bad.
Just do it yourself.
Speaker 1 (07:07):
Yeah, we've seen so many clients paying a salary to
someone and then we jump on thephone with them for one of these
meetings and realize they knownothing.
So really really vet anybookkeeper that you hire to do
your bookkeeping and then.
So right now we're obviouslytalking mostly about doing
QuickBooks or any other sort ofsoftware that's bookkeeping.
(07:29):
And last year it's been aboutsix months we started a monthly
accounting membership and that'swhere all of the business
owners in that they are doingtheir own bookkeeping.
But the good thing is, once amonth they jump on the phone
with Carson and they go throughthe QuickBooks.
He can look on QuickBooksonline very easily.
Make sure they're doing itright, make sure they're getting
(07:51):
those reconciliations done.
If they have an asset thatneeds to be entered or something
a little bit more complicatedthan just the monthly
reconciliations, he's there tohelp.
Speaker 2 (07:59):
Right and those meetings.
You know they change and evolveover time.
In the beginning sometimes itis very basic QuickBooks
training, not for everyone.
Some people already have thatpart down.
But some people were teachinghow to categorize.
I'm helping them set up rulesfor QuickBooks so that some
things are automaticallycategorized and teaching them
how to reconcile.
And then it startstransitioning into higher level
(08:20):
tax planning and tax projectionsand, of course, overviews of
their entire financial setup tosee which aspects of their
business are making the moneyand which aspects of their
business are not making themoney.
And sometimes they're surprisedby the numbers and they realize
that they don't even like doingthis thing, but they thought
they needed to and it's not evenmaking them any money.
So you never know what youmight find when you're able to
(08:42):
look at it from a higherperspective.
But that's not possible unlessyou have good numbers to work
with.
Speaker 1 (08:47):
Exactly, you have to have good bookkeeping to make
good business decisions, sothat's so important and we know
it's not always in everyone'sbudget.
So that's why, in this episode,we're talking about the
different options that you have,and we've been doing the
monthly membership for sixmonths.
It's been amazing so much goodfeedback and we weren't really
going to talk about it in thisepisode, but we're going to open
up a few more spots.
(09:08):
So if you are interested, youknow, feel free to message us
about it.
We can give you moreinformation on that, but we're
going to open up a few morebecause we have really loved
working with clients this wayand it's provided them so much
value.
Speaker 2 (09:23):
Well, it takes all the surprises out.
You know, they know exactlywhat they're going to owe in
taxes.
Their books are already readyas soon as.
But they said, you know, it'skind of like getting a personal
trainer.
Speaker 1 (09:33):
They're only going to do it because you have someone
(09:54):
there waiting for you, so it'sreally helped them stay on top
of everything, and it'ssometimes people need that.
As a business owner, if you'rethe one that's doing your books
which for the most part, that'swhat we recommend for our level
of clients this is a good way tojust make sure you have that
monthly date with your CPA andmake sure that you're doing what
(10:14):
you should be doing for yourbook.
Speaker 2 (10:15):
But, unlike a personal trainer, we're not
going to give you a hard time Ifyou show up one month and you
didn't categorize everything inQuickBooks and we need to knock
some of that out before we diginto other things.
Look, we're not going to beatyou over the head about that.
We'll help you with that too.
You know we don't think it'sthe most useful use of our time
once we've trained.
You had to do that part.
But you know we're happy to dowhatever we can to help.
Speaker 1 (10:36):
I know some people set aside that time just so they
will categorize, and that'sfine too If that's the way that
you want.
Cover in this episode is just,you have to set aside time for
bookkeeping.
It's not something that you canjust go through the end of
December and do it all becauseyou don't have useful books all
(10:57):
year.
So I guess you can do that anda lot of people try to do that,
but why does somebody not wantto do that?
Speaker 2 (11:04):
Oh, there's so many reasons.
The worst one is taxes.
You might find out in Decemberthat you made a lot of money and
you spent it all and now youowe taxes and you're not
prepared to pay those taxes.
So knowing that you'reprofitable through the year and
how profitable you are canreally help you go.
Okay, I need to set aside thismuch money for taxes before I
(11:25):
spend any of it.
Speaker 1 (11:27):
Absolutely.
You need to know your profit.
You need to know it for taxes,you need to know it for making
good business decisions.
If you're getting a loan,you're going to need that.
You need it for so many reasons, so staying on top of it.
A good way to do that is to putit in your calendar, either
weekly or monthly.
It just really depends on howmuch activity is going on in
your business.
Speaker 2 (11:46):
And that is a big one .
You know financing.
It seems like a small thing,but you send the bank your
profit and loss and balancesheet.
Well, you're trying to get anew loan from them.
You already have an existingloan from them on your balance
sheet and they see that itdoesn't match their records for
how much you're supposed to owe.
Well then, how confident do youthink they're going to be in
your other numbers?
Because the one number theyknow for sure they can confirm
(12:06):
is wrong.
Speaker 1 (12:07):
Absolutely, and that's something I think people
fail to do.
A lot is to review their books,because you're likely going to
be able to look at it and saythis is not correct compared to
your CPA, we have no idea howmuch revenue you had for the
year.
So, that being said, sometimesin tax season actually a lot of
(12:29):
times this happens somebodysends over their P&L and they
don't really look at it.
I guess they don't see thatthey had this much in revenue,
which means they made this muchin profit, and then, whenever
the tax return is done, theylook at that and they're like oh
no, I didn't have this much inprofit.
So always, always, always, lookat those reports, because that
would give you an indication ifsomething was being done wrong
(12:52):
in your books and there is anerror, because for some reason,
people just do not look at thosereports.
Speaker 2 (12:58):
Right and you know we can fix that stuff and it's not
like we file it before they geta chance to look at it.
But it's expensive to fix it.
It can be if it's very timeconsuming and it can give you a
heart attack.
When I'm like, oh OK, well, youowe this much money and yeah,
of course, if they're anexisting client, then I would
recognize before I even sentthem the return.
I wouldn't give them a heartattack.
I'd be like, uh, you know, thissays you made a million dollars
(13:20):
and the most you've ever madein the last five years was a
hundred thousand.
So are you sure there's not amistake in there?
But it does happen a lot oftimes with new clients and I'm
like, oh well, they just, theyjust did awesome, great Good,
they made so much money.
Speaker 1 (13:32):
Congratulations to them and they're like I don
makes you spend a lot more moneybecause your CPA is preparing
the tax return all over again.
Speaker 2 (13:49):
Right.
Speaker 1 (13:50):
If it's a simple fix.
Obviously you know we don't.
We do updates all the time,like if something needs to be
updated but not like that.
I mean that's all new numbers,everything's wrong.
You have to go back and gothrough what changes Basically?
Speaker 2 (14:01):
like you did the tax return twice.
Speaker 1 (14:03):
Yeah, and so you're paying for two tax returns, so
that's also a costly mistake.
So make sure that everythinglooks great before sending it
over, and for that to happen,you just have to focus on your
bookkeeping all year long, notjust in December.
So this episode mostly we'rejust chatting about QuickBooks,
because most people useQuickBooks, but I did want to
(14:24):
mention that if you're not usingQuickBooks and you're using
like an Excel spreadsheet orsomething like that, which is
completely fine we do have a lotof clients that are sole
proprietorships or something,that have simple businesses and
they use a spreadsheet, and welove that.
The only thing is that a lot oftimes they're missing a lot of
expenses because they're mixingtheir business expenses and
(14:47):
their personal expenses together.
So they missed one step of thebookkeeping, and that very
important step is to open a bankaccount for your business so
that when they're making thatspreadsheet, they're looking at
that bank account.
They're not looking at theirpersonal Wells Fargo bank
account and going scroll, scroll.
Oh, this was business, oh, thiswas business.
That is going to mean that youmiss a lot of expenses that were
(15:11):
business because you arecombining the two.
Speaker 2 (15:14):
Oh yeah, it's so easy to overlook it.
If you have just a businessaccount, then you can just go.
Okay, I have to go down everysingle transaction in the bank
account and I need to say whatit was for.
But it was definitely forbusiness, but what you know,
which expense account was it?
Or whatever.
But yeah, like Taryn's talkingabout, if you are just operating
out of your personal account,you know, technically there's no
(15:35):
rules against that, but you aregoing to miss expenses because
you're kind of sort of pickingup the things you think maybe
are business expenses and youcatch most of the big ones, but
you know there's going to beusually a couple thousand
dollars worth of expenses atleast that you've missed.
Speaker 1 (15:51):
Well, and when people are operating like that,
they're just not really treatingit as a business.
So I imagine you know theyprobably have a credit card that
they put some things on Maybethey're earning points or miles
for flights and things like that.
So then they forget to checkthe credit card.
So maybe there were some bigpurchases on that and it's just
very messy.
It's so easy to open a freebanking account and put all of
(16:13):
your business income andexpenses in there, which also
makes it easy.
If for some reason in July youdidn't get to the bookkeeping,
you didn't update yourspreadsheet, you can easily do
two months and once if you haveto.
Let's be honest, that'sprobably going to happen at some
point.
So, let's just make it easy onyourself.
So if you're listening to thisand that's you here is your
(16:34):
reminder just to go open abusiness bank account or regular
bank account, whatever, toseparate the two so that all of
your income and expenses for thebusiness, even if you don't
really consider it a truefull-time business, are
separated.
Speaker 2 (16:49):
Well, I think that's about all y'all can handle on
the bookkeeping.
We don't want to get y'all tooexcited.
You might not be able to sleeptonight.
Speaker 1 (16:55):
Or get nightmares about bad bookkeeping costing
you money Right.
Speaker 2 (17:00):
So, anyway, we hope that you liked this episode and
if you have any accountingquestions or you want to see
what some of our resources areto help you with your business,
we do have those on our websitewhatyourcpawantsyoutoknowcom.
Speaker 1 (17:15):
And until next time.
Thank you so much for listeningto.
Speaker 2 (17:19):
What your CPA?
Speaker 1 (17:20):
Wants you to Know.
Podcast you.
you have to set aside time for bookkeeping.
It's not something that you canjust go through the end of
December and do it all becauseyou don't have useful books all
year.
Speaker 2 (00:17):
Welcome to what your CPA Wants you To Know.
Speaker 1 (00:20):
Tax and accounting help can be expensive, so we've
created this podcast to helpguide you through it all and
make you feel like you have aCPA in your back pocket.
Speaker 2 (00:30):
I'm Carson Sands.
Speaker 1 (00:32):
And I'm Taryn Sands.
Speaker 2 (00:33):
I'm a CPA with over 10 years of experience helping
people start and grow theirbusinesses.
Speaker 1 (00:39):
And I'm an MBA with a specialization in marketing and
entrepreneurship.
Taxes suck and we want to makesure you don't pay more than
your fair share.
Speaker 2 (00:49):
We're here to share everything your CPA wants you to
know in a fun and easy tounderstand way.
Let's get started.
Speaker 1 (00:57):
Let's do it.
Today's episode is all aboutbookkeeping and I know there's
nothing like two accountantssitting here telling you how
important bookkeeping is.
But if you listen to thispodcast and you selected this
episode, that tells me that youknow that it's fairly important
(01:20):
and you are going to listen towhat we have to say today.
But this episode really comesfrom problems that we've had
this tax season.
That we'll share so that youdon't make the same mistakes,
but really it always happensevery tax season.
We see this over and over againand we try so hard to make sure
(01:41):
it doesn't happen, but it justalways seems to pop up.
So that is just bad bookkeeping.
That can mean a lot of things.
That can mean not keeping upwith your bookkeeping and then
getting the tax time andreaching out to us and saying,
hey, I'm ready to file my taxreturn and Carson looks at it
and goes, no, you're not, yourbook hasn't been reconciled or
(02:02):
anything.
It can also mean doingQuickBooks or something and just
not being familiar with it.
So whenever you look at yourreports, they're just not right
because you're clicking thingsall the time.
Speaker 2 (02:15):
And that's actually worse than not doing it at all.
Speaker 1 (02:17):
Absolutely, because it is a way more difficult to go
back and just clean upsomeone's QuickBook mess than it
is to just move forward doingit correctly.
Speaker 2 (02:26):
There's so many times where I know after the fact it
would have been easier to startover the books from scratch and
just with nothing.
But I usually don't know thatuntil I'm already so far deep
that it's too late to go back.
Speaker 1 (02:39):
Right, and there there's so many things to mess
up in QuickBooks.
But the thing is, if you don'tknow what you're doing, don't
just keep moving forward doingthat.
Ask questions, either get helpfrom your CPA or Intuit or
whatever, but just don'tcontinue down that road.
Speaker 2 (02:57):
And most of the things you're doing wrong could
probably be fixed with one ortwo hour-long consultations with
an expert in QuickBooks or aCPA that could teach you exactly
how to do it.
Speaker 1 (03:09):
And I know when you look at accounting rates and
you're like, oh, that's $200 anhour or $300 an hour, whatever
your CPA charges, you think, oh,I don't really want to spend
that.
But so many cases of people nottaking the time or wanting to
spend the money on that and thenturning around and having to
spend thousands.
We had one of our clients spentI don't know five to ten
(03:32):
thousand dollars with QuickBooksand their QuickBooks help, and
QuickBooks actually madeeverything worse and then
wouldn't respond.
So that's just a scenario.
Whenever you know you need helpwith it, it's just time to make
sure that you put that in thebudget and get it straightened
out, because it will cost youmore money in the long run or a
(03:52):
ton more time if you're justgoing to start back over.
Speaker 2 (03:55):
Yeah, it's scary and I wouldn't hire one of those
people that you don't know, thatyou haven't vetted through a
friend or know somebody that'salready actually used them, just
a random person that QuickBooksgives you.
It just means that they'recertified in QuickBooks, which
is pretty easy to do.
It doesn't really mean you knowwhat you're doing necessarily.
Speaker 1 (04:14):
Now we can't speak for all of those people, but the
ones that we've heard fromclients.
They haven't been good so far.
That's all I can say.
Speaker 2 (04:22):
I've been certified in QuickBooks too, and I do know
what I'm doing.
But getting that certificationisn't really enough to prove
that you know what you're doing.
Speaker 1 (04:32):
Absolutely.
And that leads me to my lastpoint.
In bad bookkeeping and we seethis a lot because we work with
large businesses and they get tothe point where the business
owner can no longer do all ofthe tasks with accounting and
bookkeeping.
So that's when they hiresomeone.
Okay, so it's worth payingsomeone to do all those things
(04:52):
in their company, but they hiresomeone that has no idea what
they're doing and then theyeither create a big mess or
they're paying someone to dothat job and paying their CPA to
help with the bookkeeping.
Speaker 2 (05:05):
And I know, if you have an in-house person,
experienced bookkeepers, peoplethat have been doing this for a
while or that have been trainedproperly, they're expensive and
you're like, well, I can'treally afford a good bookkeeper,
and maybe that's true, but youreally can't afford a bad
bookkeeper.
Speaker 1 (05:19):
No, a bad bookkeeper has cost our clients so so much
money.
Speaker 2 (05:25):
So if you can't find somebody good or you can't
afford somebody good, do ityourself is one option, and I
would rather you hire someone todo something else you do so
that you can focus on the books.
It will help keep your mind onthe business finances, which is
important, and at least you knowyou'll be doing your best, and
you can't say the same thing forevery employee you hire.
(05:45):
The next thing is you could getan external accountant.
That's going to be cheaper thanhiring someone full-time to be
a bookkeeper, and that could bethrough your CPA firm.
Some CPA firms do bookkeepingor it could just be a
professional bookkeeper, butthat contracts and they would
only be.
You know they have multipleclients and you would be one of
them, but you know that would beanother option as well, and
(06:06):
that's going to be cheaper thanhiring somebody in-house, for
sure.
Speaker 1 (06:09):
And if you vet them prior to hiring them on, then
that will, in the long term, beso much cheaper.
Speaker 2 (06:21):
Right.
So don't just hire somebodyjust to do bookkeeping, unless
you have a really big companyand you can afford somebody like
$60,000, $70,000 a year minimumIf you're paying them $40,000,
they're not.
Speaker 1 (06:29):
That's not it.
It's not going to work.
And if you bring someone inwe've seen this a lot where
they're like, yeah, I've donesome QuickBooks, I can learn it.
You don't want that.
It never ends well.
Speaker 2 (06:37):
Or if you have a great administrative assistant
secretary whatever you want tosay and they do all these things
great, and you're like you knowwhat?
I'm just going to assign thisto her.
She has room in her schedulefor that.
No, do not do that, please,Because they want to say yes,
they want to please you and keeptheir job and they're going to
just start guessing, that's whathappens every time.
Speaker 1 (06:58):
That's not their job.
Speaker 2 (06:59):
They're not a bookkeeper, even if you say
don't be afraid to reach out tome or to the CPA, they won't.
They won't reach out, They'lljust guess it's going to be bad.
Just do it yourself.
Speaker 1 (07:07):
Yeah, we've seen so many clients paying a salary to
someone and then we jump on thephone with them for one of these
meetings and realize they knownothing.
So really really vet anybookkeeper that you hire to do
your bookkeeping and then.
So right now we're obviouslytalking mostly about doing
QuickBooks or any other sort ofsoftware that's bookkeeping.
(07:29):
And last year it's been aboutsix months we started a monthly
accounting membership and that'swhere all of the business
owners in that they are doingtheir own bookkeeping.
But the good thing is, once amonth they jump on the phone
with Carson and they go throughthe QuickBooks.
He can look on QuickBooksonline very easily.
Make sure they're doing itright, make sure they're getting
(07:51):
those reconciliations done.
If they have an asset thatneeds to be entered or something
a little bit more complicatedthan just the monthly
reconciliations, he's there tohelp.
Speaker 2 (07:59):
Right and those meetings.
You know they change and evolveover time.
In the beginning sometimes itis very basic QuickBooks
training, not for everyone.
Some people already have thatpart down.
But some people were teachinghow to categorize.
I'm helping them set up rulesfor QuickBooks so that some
things are automaticallycategorized and teaching them
how to reconcile.
And then it startstransitioning into higher level
(08:20):
tax planning and tax projectionsand, of course, overviews of
their entire financial setup tosee which aspects of their
business are making the moneyand which aspects of their
business are not making themoney.
And sometimes they're surprisedby the numbers and they realize
that they don't even like doingthis thing, but they thought
they needed to and it's not evenmaking them any money.
So you never know what youmight find when you're able to
(08:42):
look at it from a higherperspective.
But that's not possible unlessyou have good numbers to work
with.
Speaker 1 (08:47):
Exactly, you have to have good bookkeeping to make
good business decisions, sothat's so important and we know
it's not always in everyone'sbudget.
So that's why, in this episode,we're talking about the
different options that you have,and we've been doing the
monthly membership for sixmonths.
It's been amazing so much goodfeedback and we weren't really
going to talk about it in thisepisode, but we're going to open
up a few more spots.
(09:08):
So if you are interested, youknow, feel free to message us
about it.
We can give you moreinformation on that, but we're
going to open up a few morebecause we have really loved
working with clients this wayand it's provided them so much
value.
Speaker 2 (09:23):
Well, it takes all the surprises out.
You know, they know exactlywhat they're going to owe in
taxes.
Their books are already readyas soon as.
But they said, you know, it'skind of like getting a personal
trainer.
Speaker 1 (09:33):
They're only going to do it because you have someone
(09:54):
there waiting for you, so it'sreally helped them stay on top
of everything, and it'ssometimes people need that.
As a business owner, if you'rethe one that's doing your books
which for the most part, that'swhat we recommend for our level
of clients this is a good way tojust make sure you have that
monthly date with your CPA andmake sure that you're doing what
(10:14):
you should be doing for yourbook.
Speaker 2 (10:15):
But, unlike a personal trainer, we're not
going to give you a hard time Ifyou show up one month and you
didn't categorize everything inQuickBooks and we need to knock
some of that out before we diginto other things.
Look, we're not going to beatyou over the head about that.
We'll help you with that too.
You know we don't think it'sthe most useful use of our time
once we've trained.
You had to do that part.
But you know we're happy to dowhatever we can to help.
Speaker 1 (10:36):
I know some people set aside that time just so they
will categorize, and that'sfine too If that's the way that
you want.
Cover in this episode is just,you have to set aside time for
bookkeeping.
It's not something that you canjust go through the end of
December and do it all becauseyou don't have useful books all
(10:57):
year.
So I guess you can do that anda lot of people try to do that,
but why does somebody not wantto do that?
Speaker 2 (11:04):
Oh, there's so many reasons.
The worst one is taxes.
You might find out in Decemberthat you made a lot of money and
you spent it all and now youowe taxes and you're not
prepared to pay those taxes.
So knowing that you'reprofitable through the year and
how profitable you are canreally help you go.
Okay, I need to set aside thismuch money for taxes before I
(11:25):
spend any of it.
Speaker 1 (11:27):
Absolutely.
You need to know your profit.
You need to know it for taxes,you need to know it for making
good business decisions.
If you're getting a loan,you're going to need that.
You need it for so many reasons, so staying on top of it.
A good way to do that is to putit in your calendar, either
weekly or monthly.
It just really depends on howmuch activity is going on in
your business.
Speaker 2 (11:46):
And that is a big one .
You know financing.
It seems like a small thing,but you send the bank your
profit and loss and balancesheet.
Well, you're trying to get anew loan from them.
You already have an existingloan from them on your balance
sheet and they see that itdoesn't match their records for
how much you're supposed to owe.
Well then, how confident do youthink they're going to be in
your other numbers?
Because the one number theyknow for sure they can confirm
(12:06):
is wrong.
Speaker 1 (12:07):
Absolutely, and that's something I think people
fail to do.
A lot is to review their books,because you're likely going to
be able to look at it and saythis is not correct compared to
your CPA, we have no idea howmuch revenue you had for the
year.
So, that being said, sometimesin tax season actually a lot of
(12:29):
times this happens somebodysends over their P&L and they
don't really look at it.
I guess they don't see thatthey had this much in revenue,
which means they made this muchin profit, and then, whenever
the tax return is done, theylook at that and they're like oh
no, I didn't have this much inprofit.
So always, always, always, lookat those reports, because that
would give you an indication ifsomething was being done wrong
(12:52):
in your books and there is anerror, because for some reason,
people just do not look at thosereports.
Speaker 2 (12:58):
Right and you know we can fix that stuff and it's not
like we file it before they geta chance to look at it.
But it's expensive to fix it.
It can be if it's very timeconsuming and it can give you a
heart attack.
When I'm like, oh OK, well, youowe this much money and yeah,
of course, if they're anexisting client, then I would
recognize before I even sentthem the return.
I wouldn't give them a heartattack.
I'd be like, uh, you know, thissays you made a million dollars
(13:20):
and the most you've ever madein the last five years was a
hundred thousand.
So are you sure there's not amistake in there?
But it does happen a lot oftimes with new clients and I'm
like, oh well, they just, theyjust did awesome, great Good,
they made so much money.
Speaker 1 (13:32):
Congratulations to them and they're like I don
makes you spend a lot more moneybecause your CPA is preparing
the tax return all over again.
Speaker 2 (13:49):
Right.
Speaker 1 (13:50):
If it's a simple fix.
Obviously you know we don't.
We do updates all the time,like if something needs to be
updated but not like that.
I mean that's all new numbers,everything's wrong.
You have to go back and gothrough what changes Basically?
Speaker 2 (14:01):
like you did the tax return twice.
Speaker 1 (14:03):
Yeah, and so you're paying for two tax returns, so
that's also a costly mistake.
So make sure that everythinglooks great before sending it
over, and for that to happen,you just have to focus on your
bookkeeping all year long, notjust in December.
So this episode mostly we'rejust chatting about QuickBooks,
because most people useQuickBooks, but I did want to
(14:24):
mention that if you're not usingQuickBooks and you're using
like an Excel spreadsheet orsomething like that, which is
completely fine we do have a lotof clients that are sole
proprietorships or something,that have simple businesses and
they use a spreadsheet, and welove that.
The only thing is that a lot oftimes they're missing a lot of
expenses because they're mixingtheir business expenses and
(14:47):
their personal expenses together.
So they missed one step of thebookkeeping, and that very
important step is to open a bankaccount for your business so
that when they're making thatspreadsheet, they're looking at
that bank account.
They're not looking at theirpersonal Wells Fargo bank
account and going scroll, scroll.
Oh, this was business, oh, thiswas business.
That is going to mean that youmiss a lot of expenses that were
(15:11):
business because you arecombining the two.
Speaker 2 (15:14):
Oh yeah, it's so easy to overlook it.
If you have just a businessaccount, then you can just go.
Okay, I have to go down everysingle transaction in the bank
account and I need to say whatit was for.
But it was definitely forbusiness, but what you know,
which expense account was it?
Or whatever.
But yeah, like Taryn's talkingabout, if you are just operating
out of your personal account,you know, technically there's no
(15:35):
rules against that, but you aregoing to miss expenses because
you're kind of sort of pickingup the things you think maybe
are business expenses and youcatch most of the big ones, but
you know there's going to beusually a couple thousand
dollars worth of expenses atleast that you've missed.
Speaker 1 (15:51):
Well, and when people are operating like that,
they're just not really treatingit as a business.
So I imagine you know theyprobably have a credit card that
they put some things on Maybethey're earning points or miles
for flights and things like that.
So then they forget to checkthe credit card.
So maybe there were some bigpurchases on that and it's just
very messy.
It's so easy to open a freebanking account and put all of
(16:13):
your business income andexpenses in there, which also
makes it easy.
If for some reason in July youdidn't get to the bookkeeping,
you didn't update yourspreadsheet, you can easily do
two months and once if you haveto.
Let's be honest, that'sprobably going to happen at some
point.
So, let's just make it easy onyourself.
So if you're listening to thisand that's you here is your
(16:34):
reminder just to go open abusiness bank account or regular
bank account, whatever, toseparate the two so that all of
your income and expenses for thebusiness, even if you don't
really consider it a truefull-time business, are
separated.
Speaker 2 (16:49):
Well, I think that's about all y'all can handle on
the bookkeeping.
We don't want to get y'all tooexcited.
You might not be able to sleeptonight.
Speaker 1 (16:55):
Or get nightmares about bad bookkeeping costing
you money Right.
Speaker 2 (17:00):
So, anyway, we hope that you liked this episode and
if you have any accountingquestions or you want to see
what some of our resources areto help you with your business,
we do have those on our websitewhatyourcpawantsyoutoknowcom.
Speaker 1 (17:15):
And until next time.
Thank you so much for listeningto.
Speaker 2 (17:19):
What your CPA?
Speaker 1 (17:20):
Wants you to Know.
Podcast you.
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