Accounting News and Notes

Atlanta/Johns Creek/Hall Award Winning CPA on Tips to Preparing Your Business Books & Records

Accounting for Beginners: Bookkeeping 101

Providing Atlanta With Bookkeeping, Accounting Needs & Financial Statements for Decades

This is the Latest of A Financial Survivability Series of how you can look to the future by analyzing the present to help plan both short and long term for the future. Business Owners throughout Metro Atlanta will continue to be challenged as the U.S. economy strives to unlock itself from the economic frailties which still hold it down. Struggling with a Weakening Dollar, a High Jobless Rate, Limited Demand and Purchasing Power still have to overcome to get our economic steam engine back on track. 

First and foremost in keeping your company legitimate is to make sure that you keep your personal expenses separate from your business expenses. To keep and maintain a clear delineation of your company from your personal affairs you should only pay business expenses out of your business/corporate account. Accordingly you will want to ensure that you only issue monies for your personal affairs out of your business and not out of your corporate account/monies.

Secondly it is prudent to have a sound basis and understanding of what is, and what is not tax deductible and how to properly record and account for your business expenses and revenue. Below is sample letter of one that might be used to give a client insight and guidance on their tax and bookkeeping issues. For convenience I have recapped my answers to the inquires in all capital letters: 

Hi John,

I hope you and your family is having a great Christmas season. I am still working on the statements.  Most of the work I have to do relates to figuring out the charges on my credit cards.  98% of the time my business card was only used for business expenses but I have had to go back through them to try and figure out the category of the expense.  To make matters worse, I have transferred balances and opened new accounts and so forth so I have had to chase down the original transactions.  Here are some questions I had. 

1)  Categories.  I guess this is also referred to as my chart of accounts.  I know you want me to put a lot of things in Office Supplies but I wanted to check on these because I wasn’t sure if Office Supplies is where you wanted them.  

a)  Client gifts:  Christmas gifts or just sometimes purchasing them a piece of equipment or something.  I also remember something about $25 being the maximum per client each year so if this is true where should the rest of it go?  $25 IS THE LIMIT AND THE EXCESS WILL GO TO SHAREHOLDER DISTRIBUTIONS

b)  Referral fee:  If a client refers another person I write them a check for between $50 and $100.  ADVERTISING

c)  Internet education subscriptions:  I pay a monthly fee to access articles and forums relating to fitness.  I am a member of 2 of these sites which charge around $10 per month.  TELEPHONE & UTILITIES

d)  Water Delivery:  I have bottled water for my clients to drink. TELEPHONE & UTILITIES

e)  National Memberships:  I have 2 certifications that I maintain annually for about $100 to $200 per certification.  OFFICE SUPPLIES 

2)  What if I charged my credit card for some gas and then paid that credit card out of my business account but the gas was not a business expense? IF YOU PAID THE CREDIT CARD PERSONALLY THEN YOU WOULD JUST NOT LIST IT AS YOU ARE RECORDING BUSINESS EXPENES NOT YET REIMBURSED. 

IF YOU PAID THESE DIRECTLY OUT OF THE BUSINESS AND WAS FOR GAS, AS YOU WILL BE DEDUCTING MILEAGE, YOU SHOULD CODE THESE TO SHAREHOLDER DISTRIBUTIONS. 

IN THE FUTURE I WOULD SUGGEST PAYING ALL CAR EXPESES PERSONALLY AND THEN TURNING IN A MONTHLY EXPENSE REPORT TO GET REIMBURSED FOR ANY BUSINESS EXPENSES PAID PERSONALLY 

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 Proudly serving Duluth, GA, Gwinnett County and Beyond. 

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!” What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31 Why are these verses here? Learn how His CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html  

John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Gwinnett CPA Teaches Bookkeeping to Metro Atlanta Business Owners & Financial Statement Preparation

Entrepreneurs either initially or over time become extremely proficient in their field of choice for it is by this growth of knowledge and wisdom which affords them the insight to make prudent decisions. Each and every hour of a business owner’s day, there are a series of insignificant and important thoughts and directions that directly impact the profitability of a business. Continually you are faced with making a positive impact towards bringing your business closer or further away from your goal. A company’s financial statement is the measuring stick by which you are able to gauge a company’s progress along the business continuum and are able to accurately measure the distance between where you are and where you want to be. To this end we work with Atlanta Business Owners to Ensure that their bookkeeping stays current, relevant and useful. Below is a sample of what we might sent to a business owner to work with them regarding their internal bookkeeping issues:

Below are critiques to your internal books: 

-Your Inventory Asset account should be zero and not a negative balance.

-Please combine all of the Loans to Shareholder accounts and Distributions account to one account, while correctly classifying it as an asset or liability accordingly.

-You had several debit balances in Credit Card amounts on the Balance Sheet. These should either be a zero or should be a credit balance reflecting the amount owed.

-Please be sure that the credit card balance and all liability accounts are correct and reflect the year-end amounts owed.

-The Opening Balance Equity account should be zero.

-The Retained Earnings account should equal the prior year’s corporate income tax return.

-Please re-class the Other Automobile Expenses account to what it paid for.

-Your are showing both mileage and actual expenses for cars. As you owned a business car for the first part of the year, for that portion you should use actual. For the rest of the year, then you should use mileage. For any excess amounts please charge the difference to the Due to Shareholder account described above and re-class as necessary. 

If you have any questions as you are posting these please do not hesitate to call. After you make the above changes please re-send your Balance Sheet and Profit and Loss.

Bookkeeping for Atlanta Small Business
Unleash the power of information by learning the ABC’s of accounting for the business and financial operations of your business. To learn the nuances of Small Business Bookkeeping http://www.hiscpa.com/keeping-books.html

Preparing and Reviewing Financial Statements for Atlanta Business Owners
As your financial results of your business are like a doctors chart of their patient, this will help enable you to understand financials and their use. To learn more visit http://www.hiscpa.com/financial-statements.html

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about tax entities and the taxation thereof visit http://www.hiscpa.com/article2.html There you will also discover a wide host of resources for Atlanta Entrepreneurs.

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Atlanta Bookkeeping & Accounting Services

Critiquing the S Corporation Books of a Business Owner

Many business owners struggle with the preparation of their own internal financial statements. It is widely believed that if a CPA can help a client keep their own internal books current and correct that a business owner will help mitigate CPA fees as well as having more reliable internal data, from which to run their business. Having served as a CPA and a Believer/Christian for decades it is essential to help clients to the best of the customer’s advantage and having reliable internal books is the best first step in that direction. Below is a sample of the critiques a business owner might receive to help guide in the preparation of their own internal bookkeeping:

Below Please Find Critiques to your Internal Books as of 10-31-09 

-Do you have Bank Reconciliations for all of the cash/checking/saving accounts.

  -Please be sure your Accounts Receivable Aging Equals the Balance Sheet. 

 -Please be sure your Accounts Payable Aging Equals the Balance Sheet. 

-Please be sure your Accrued Expenses and Accrued Payroll Taxes, are correct. 

-Please be sure that your Customer Deposits account is correct and current. 

-Please be sure that you have in your Accrued Workers Compensation Insurance Account is correct all open and due monies are correctly recorded. 

-Please be sure that all of your Prepaid balances are accurate and correctly reflect the amount of monies that you have paid in advance and have not yet used/accrued. 

-Please be sure you have take out of A/R any amounts you deem uncollectible, while being sure to change the write off to the Allowance for Doubtful Accounts. 

-At present you have enough Depreciation Expense to cover a prorated amount as this is an interim statement. Please reduce this amount accordingly. To understand depreciation expense and its application and use for your business http://www.hiscpa.com/depreciation-expense.html  

-If the distributions on the books are monies paid to all shareholders based upon their ownership percentage, then leave the number as is. However, if these monies are to primary owner only please re-class these monies to the Due to Shareholder account.  

-Please be sure the gross wages on the Profit and Loss equals your year to date payroll reports. For help on how to prepare your company’s financial statements see http://www.hiscpa.com/financial-statements.html  

-Your retained earnings account should be adjusted  in 2008 to the amount per last year’s Balance Sheet balance. Please review, correct and re-send the corrected data. 

-Please be sure that your Accounts Receivable over 120 days in your ageing and an anticipated amount of uncollectable monies in your A/R balance are less than your Bad Debt Reserve account. To help understand how to prepare and manage your company’s financial statement visit http://www.hiscpa.com/profit-loss-statements.html  

-What is the Negative Balance in Cash/Checking account as this would suggest you have written checks over your checkbook balance.  

- I would suggest to re-title your checking accounts to reflect the name of the bank and type of account. 

-Your Accounts Payable Balance reflects a negative balance, which would indicate an error or overpayment to an vendor. Please review and correct.

-Please be sure your Accrued Credit Cards are correct and reflect the open and due business monies incurred to the business account.

-You have $4000 in the Line of Credit account on the Profit and Loss. If this is interest expense, please re-class. If it is a principal payment, please code it to the liability account accordingly on the Balance Sheet.

-Your retained earnings account should be adjusted  on your internal books in 2008 to the amount per last year’s Balance Sheet balance. Care should be exercised to ensure that no other Balance Sheet accounts are inadvertently adjusted from their “closed” year end balances that agree to the filed tax returns.

-Please break out into the appropriate business expense categories that at present you have added to the Operating Expense category, as tax law requires appropriate business categories to be used.  

 If you need help in reclassifying these monies, please do not hesitate to call. For tips to monitor your monthly books visit http://www.hiscpa.com/monthend.html  

ASAP after you make these changes please re-send so that I might re-review.  

Contact HIS CPA PC (A Christian CPA Firm) today.

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.