Bookkeeping & Accounting: FAQ’s

No matter what industry your company operates in, proper bookkeeping and accounting practices are essential for avoiding legal trouble and hefty fines. From bookkeeping services to handling payroll, we’re here to help answer your questions every step of the way starting with over 30 frequently asked questions.

Bookkeeping: 

What do I do with my receipts? We connect digitally with your bank transactions so we will not need your receipts. However, it is advisable to keep them for IRS audit purposes for 3 years.

How do I write checks in QuickBooks™ Online? We’re confident you’ll find writing checks in QuickBooks™ Online to be no trouble at all. Here is a short VIDEO on how to write checks.

How do I automate my bill pay? You have many options to automate bill pay, whether through your bank, QuickBooks™ Online or other software provider such as Bill.com. QuickBooks™ Online bill pay and invoicing are not managed by your CREDO Bookkeeping team.

How do I manage my inventory? QuickBooks™ Online has a basic inventory tracking feature built in. Many customers prefer to use other 3rd parties such as TradeGecko for more robust inventory tracking features.

Catch-Up Services: 

What are catch-up services? Being behind on your books is not uncommon for small business owners who wear many hats. CREDO Bookkeeping provides peace of mind by catching you up quickly on bookkeeping and tax returns. Let our small business accounting team get you out of the past and looking ahead.

Do I need to be caught-up in order to move forward? Absolutely not! There are many customers that are behind on their books when they get started with us. We offer catch-up services to help with this.

Do I have to do all my catch-up all at once? To follow accounting and bookkeeping best practice, yes. It is recommended to catch up all at once for each year. If you have multiple years of catch up, we recommend starting with the most recent year.

How long does it take to finish catch-up? On average, it takes 2-4 weeks to complete catch up services. Depending on the number of months to catch-up and complexity, the timeframe may vary. We complete some catch-up services in just one week, and other more complex services take up to 4.

Business Taxes:

What type of return do I file? That depends on your business structure.

How does CREDO Bookkeeping help with IRS notices? We all get a shiver down our spine when we see an IRS notice. With CREDO Bookkeeping, simply open your mobile app and upload your IRS notice to your account. It’s that easy! If the notice was issued while we are handling your accounting, this feature is included free within all of our packages.

Do I have to file a state return? Whether or not a taxpayer is required to file a state tax return depends on many factors such as the state you live in, where you conduct business, etc. Your CREDO Bookkeeping CPA can help you determine whether or not you need to file a state return. Or, check out the list of states here.

What state should I be incorporated in? Did you know that you don’t have to register your limited liability company (LLC) in your home state? Instead, you can file in one of the states below, and save considerably on fees and state income taxes.
There are also advantages to keeping all the paperwork close to home. Before you decide which way to go, check out these pros and cons.

Benefits of Filing in Your Home State

For those who have a brick and mortar location and conduct most or all of their business in the state where they live, convenience will probably be a major consideration. It’s easier to do business when all your customers, suppliers, contacts, and government offices are near at hand.

When you form the LLC in any state other than your home state, you must register as a foreign LLC — requiring a fee and extra paperwork you would avoid by filing at home.

Another added expense involved in an out-of-state LLC is that you must hire a registered agent to represent your company and accept the service of process in the state where your LLC is registered.

Benefits of Filing in a Business-Friendly State

If your business does not have a set location, for example, a consultancy, the convenience of home filing may not be that significant for you.

Income taxes and business fees can be thousands of dollars less than those in your home state. And there are other factors which may swing the convenience vote in their favor, too.

Here’s a run-down of each state’s advantages.

Delaware
The most well-known business-friendly state offers:
• Simple filing process, so you can start doing business quickly
• No tax on out-of-state income, a huge deal if most of your business happens in other states
• Low filing fees and franchise taxes
• A separate court for business cases (Chancery Court), so your case will get resolved faster, and you’ll be heard by judges experienced in business law

Nevada
In addition to being a great state for combining business with pleasure, Nevada offers:
• Fairly fast filing times
• No tax on business income, capital gains or inheritances
• No franchise tax (there are fees for business licenses and annual filing)
• No requirement to create an operating agreement or hold annual company meetings
• No information-sharing agreement with the IRS (if privacy or anonymity is your priority)
• Not much state disclosure required either, allowing LLC owners to file public documents anonymously

Wyoming
A relative newcomer to the business advantage arena, Wyoming is now an equally good choice, offering:
• No business income tax
• No franchise tax
• Lifetime proxy — you appoint a permanent representative for your company stock and votes while you remain anonymous

If you don’t already know your home state’s tax rates, business fees, and red tape hassles, do some research. Then see how they compare to the 3 most popular states for LLC registrations. You may not have known these options existed, but one of them could be the perfect choice for your company.

Is there a statute of limitations on back taxes? The IRS statute of limitations is usually 3 years to audit or make an assessment. There are many exceptions from this rule that give the IRS 6 years or longer. And once an assessment is made, the IRS collection statute is normally 10 years. If you owe back taxes, please schedule a call to review with your dedicated CREDO Bookkeeping CPA.

Sales Tax:

How do I handle my sales tax? Sales tax is a specialty all by itself and your dedicated CREDO Bookkeeping CPA team is here to assist. For companies with more complex sales tax filings, we recommend a 3rd party software such as TaxJar®  or Taxify®, which directly integrates into QuickBooks™ Online software.

Do I need to file sales tax monthly, quarterly, annually? The determination and frequency of filing sales tax returns depend on factors such as sales volume, sales tax due, State, City, County, etc. To learn more, speak to your CREDO Bookkeeping CPA.

Payroll:

How should I manage my payroll? We partner with Gusto™ for payroll services and offer our clients 15% discount plus two months free. Click HERE for more information

How do I set up a 1099? Generally speaking, you must send out a Form 1099-MISC to all contractors, including Partnerships and LLC’s, you’ve hired and paid more than $600 during the year. We recommend using Gusto™ for payroll services, which includes features for issuing and filing 1099s.

Accounting Methods:

What is cash basis accounting? The cash basis accounting method recognizes revenues when cash is received, and expenses when they are paid. This method does not recognize accounts receivable or accounts payable.

What is modified accrual accounting? Modified accrual accounting is an alternative bookkeeping method that combines accrual basis accounting with cash basis accounting. This includes loan payable(s), month-end inventory adjustment and reports include AR and AP if you utilize invoice and billing in Quickbooks™ Online. Invoicing and billing is managed by the customer. This does not include deferred revenue, prepaid expenses, prepaid insurance, and other accruals. A year-end entry for depreciation and amortization is made if CREDO Bookkeeping files the company’s tax return.

About Us:

Who is CREDO Bookkeeping? CREDO Bookkeeping is a technology-based bookkeeping and accounting service focused on small business owners. By harnessing technology, we give our accounting teams more time to work directly with clients and their individual business needs. CREDO Bookkeeping offers a low, flat monthly rate with unprecedented service and response. Your monthly financials are prepared by the (unheard-of!) 5th of the following month and are available on our website or mobile app.

How fast can I get started? Fast! We can get you connected within an hour.

What do you need from me? After you have finished the online sign-up process, we’ll schedule a short, 15-minute onboarding call. We’ll need YTD balance sheet and P&L, or we can discuss catch-up work. Visit our HOW IT WORKS page for more info.

Accuracy: We accurately categorize and reconcile your monthly business transactions with a tax savings lens. Your personalized monthly reports include a balance sheet, a profit & loss statement and monthly insights to drive decision making.

Tax Savings: Compliant, expert tax returns. You can’t afford to miss tax savings. We’ll prepare and file your federal and state income tax returns and more.

Communication: Call, email or send smoke signals. We’re here when you need us. Your dedicated accounting team communicates consistently based on your schedule and is available and responsive to you and your business’ needs.

How will you bill me? Our valued customers are billed on the first day of the month for services provided for that month.

What are tax ready financials? Picture this… It’s seven months into the year. You call a traditional accountant who doesn’t know what your tax liability is until tax time the following year. Missed business opportunities may happen when you don’t have clarity on your taxes. With CREDO Bookkeeping, we keep your financials tax-ready from day one, so you have a clear picture of your tax liabilities and potential tax savings opportunities throughout the year.

Services:

Who is our service for? Our services and cutting-edge technology is tailored for the small business. Overlooked by traditional accountants, we feel the small business community isn’t getting the service it deserves. At CREDO Bookkeeping, our passion is helping small business entrepreneurs by providing bookkeeping and accounting services so you can focus on growing your business.

What does our service include?
☐ General bookkeeping
☐ Accounts payable (weekly/monthly)
☐ Accounts receivable and invoicing (weekly/monthly)
☐ Reconciliation of bank accounts (monthly)
☐ General ledger review
☐ Recording journal entries into Client’s QuickBooks™ account
☐ Financial reports (monthly):
       • income statement
       • balance sheet
       • cash flow statement
       • budget-to-actuals report
☐ Set up, install, or provide training for a bookkeeping system or software
☐ Construct Chart of Accounts specific to your industry
☐ Other: __________________________
☐ We provide Full-Service Payroll through Intuit.
☐ Tax Preparation Strategy and IRS Help – Our all-inclusive, fixed-price, year-round tax preparation concierge service guarantees you get everything you need from a tax professional and nothing you don’t. Ensure all your required forms are filed on time and properly. And have direct access to a tax code expert, so you can avoid the biggest risks and take advantage of the best opportunities in the ever-changing tax code.

Do you offer personal tax returns? Yes preparation of personal tax returns are included in the fixed price.

Is it really unlimited tax consulting? Yes! Whether you have tax planning questions or you’re starting a new venture, our team is here to help you take the guesswork out of small business accounting.

How often will I speak to my bookkeeper? Your bookkeeper is available by phone, email or text to answer any questions you may have. You are welcome to reach them at your convenience. Your bookkeeper will be in touch with you if they need any clarification on transactions. Monthly and quarterly meetings may be required to best manage your cashflow, business development and business operation’s needs.

Can we have monthly calls to go over financials? Absolutely. Our team is here to help! You will have the opportunity to schedule an appointment with your dedicated bookkeeper at your convenience.

How may I reach my dedicated CPA team? We know business owners are short on time and that’s why we are available to communicate via your preferred method – phone, email, text or scheduled zoom meetings.

Can I speak to my CPA nights or weekends? Our CPAs are readily available during standard business hours of 8am – 6pm EST. With advanced scheduling notice, CPAs are available after hours as well.

If I leave CREDO Bookkeeping, do I keep my QuickBooks™ Online account? Absolutely. We would just transfer the billing to your name if you decide to cancel your CREDO Bookkeeping services. Please contact customer support to facilitate the transfer.

What is the value of using CREDO Bookkeeping? Our customers find peace of mind in no longer needing to worry about their financials – we do it all for them! Real-time accounting, tax planning, fixed flat monthly rate and a supportive team that has your back!

For more information, call DonCarlos Bain at 404-992-6514 today to schedule a free consultation and financial checkup for your practice.