Frequently Asked Questions about MyBooks
Don’t the popular accounting software programs do everything?
My wife keeps my books and she’s the most organized person I know. Isn’t that enough?
I’ve never been audited. Doesn’t that mean my records are great?
I didn’t take any money out of the business, so why do I owe taxes?
I go online and get my bank balance every day, so I don’t need to do a reconciliation, right?
What’s the meaning of the word "Affordable"?
What’s the meaning of the word "Integrated"?
Don’t the popular accounting software programs do everything?
There are many excellent software and online bookkeeping programs available today. They’re inexpensive and greatly assist the user – which is also what’s wrong with them. Great software simply assists; it will not change a poor bookkeeper into a good bookkeeper. When these programs are installed, the user has to understand sales tax, income tax, bank reporting needs, and so on. These off-the-shelf accounting programs in an untrained user’s hands are like plumber’s tools in the hands of an accountant.
Accountants seem to talk in tongues – accrual this, receivable that, payable this. Why all the jargon?
Every job has its unique jargon. The key to the accounting jargon is understanding the impact each word has on your finances. With MyBooks, these terms are explained to you so that you have the understanding necessary to make the correct business decisions. These words should never intimidate and you should always ask us when we’ve used a term that you don’t understand.
My wife keeps my books and she’s the most organized person I know. Isn’t that enough?
Organization is an important characteristic for a good bookkeeper. Typically, many things are going on at the same time: needing a check for a vendor, payroll deposits, and filing various tax reports. An organized, untrained person can cope in this environment; however, a better choice would be an organized person with a custom bookkeeping system and easy access to professional accounting help. If your wife doesn’t have solid bookkeeping training, mistakes can be near fatal for your business.
I report everything and I’m not afraid of an audit. So I don’t need a fancy accounting system, right?
Being honest is key, but then you have to prove you’re honest with good records. Consider this example. We recently worked with a small businessperson who was being audited. The NYS sales tax auditor spent three weeks with him and left a bill for $40,000. After hiring a CPA and an attorney, the bill was reduced to $4,000 – but not until after he paid a large sum to these professionals. The process would have been much easier if he had organized records from the start.
My bank wants copies of the corporate tax return, financial statements and my personal income tax return. Do I really have to produce this stuff?
You only get one chance to make a good impression. So if the bank calls on you to deliver these documents and you produce them in good form the next day, your bank will be impressed, which is a very good thing. Sound impossible? It’s not with MyBooks. We can help you understand your financial reports, assist with banking relationships, and discuss the value of plans and budgeting to grow your business.
I’ve never been audited. Doesn’t that mean my records are great?
Businesses can operate for years without being audited. Making the assumption that no audit equals good records is like playing Russian Roulette and thinking you’re doing great after pulling the trigger five times on a six chambered gun. You very well may have good books, but if you’re not an experienced bookkeeper, don’t make that assumption. Your number might simply not have come up yet. But when it does, it will feel great being prepared with accurate and organized books.
I didn’t take any money out of the business, so why do I owe taxes?
For most sole proprietors, partnerships, LLCs, and corporations, just making the money invites the taxman. You’re in for a rude awakening when taxes are being prepared and a good portion of the money you thought you made is now going to your partner – Uncle Sam . The good news is that there are strategies to help you save on your tax bill, including the choice of accounting method, various depreciation methods, financing, and retirement savings.
I go online and get my bank balance every day, so I don’t need to do a reconciliation, right?
Banks make mistakes, most often not in your favor. Reconciling your bank account is critical to making sure you know how much cash you have. Oftentimes, people think reconciling is comparing check amounts on the statement to check amounts in their check register. While this is one step in the reconciliation process, it isn’t all of it. There’s much more to ensuring that balances at the bank and in the checkbook register agree at a specific point in time.
My accountant told me that I was incorrectly recording my checks, so I went back and fixed everything in the system. Was that right?
Off-the-shelf accounting software makes it easy to go back to last year, last month, and last week to make corrections. The problem is that those numbers were used to report sales tax, income tax, and financial statements. So while changing the incorrect numbers makes you feel better, it wreaks havoc with your bookkeeping system. However, there are ways to make changes without causing major headaches down the line.
It’s too much trouble to keep two checking accounts (a personal and business), so I write everything out of the same account. Is this a problem?
Yes. Never mix business and pleasure. It’s important to keep two separate bank accounts – one for your personal life and one for business.
I don’t keep a copy of my bills after I pay them. If I ever get audited, I have the cancelled checks to show what I paid. That’s enough, right?
Generally, the tax laws allow a business to deduct all ordinary and necessary business expenses. However, without an invoice, you can’t prove that it was an ordinary and necessary expense. You have to keep invoices to support the deduction. If you don’t want the paper clutter, buy a scanner and create electronic files.
I don’t have personnel files for every employee. They just tell me what they want withheld. Is this OK?
No. This is a poor practice. Since 1986, every employee has been required to complete the I-9 Employment Eligibility Verification form and employers are required to review and verify eligibility. In addition, when employees file their own personal taxes and find out they owe money, they complain to their employer for not having withheld enough. If you haven’t maintained proper personnel files, you’ll have a hard time proving you withheld what the employee directed.
What’s the meaning of the word "Affordable"?
Affordable – MyBooks understands that a small business must stay within budget. Therefore, our business model is to provide the accounting information you need at the least possible cost. We don’t charge by the hour. We understand that you deliver your product or service on time, at a known price and we will make the same commitment to you.
What’s the meaning of the word "Integrated"?
Integrated – MyBooks integrates our professional individuals, software and the internet, giving you everything you need to meet all of your recordkeeping needs. We understand that it’s the people using the tool, not the tool. You can be assured that we are knowledgeable professionals, concerned about your specific financial and tax situation.
What’s the meaning of the word "Bookkeeping"?
Bookkeeping – MyBooks stresses bookkeeping because we believe strongly that it’s about the fundamentals. Quality records save taxes, help manage your business and give you peace of mind. We make sure that you have solid fundamentals, so that you can take advantage of tax saving opportunities, have better banking/investor relationships and have the data you need to run your business when you need it.
What’s the meaning of the phrase "Small Business"?
Small Business Solution- MyBooks is the best small business solution because we provide bookkeeping, payroll, sales and income tax services; often times at a fraction of your current cost. We setup your records, train your personnel and provide regular business consultations.