| I’m just going to write the responses rather than trying to quote. Hopefully the result is clear enough Accountant - you prepare everything, send to accountant prior to tax deadline. They prepare your taxes for you. Most accounting firms have various levels of service, this is the most basic and “unaudited” one. In various scenarios when you have a public company, you would have fully audited services where your accounting firm would go over every detail posted in your accounts, that’s not needed. For an accountant to take your G/L from accounting software and prepare your taxes shouldn’t cost a lot. You do not have an accountant do daily entries, that would be expensive and .. highly unusual. Basically you are your own book keeper. Typically gross sales matters most, not so much the number of sales and it is because everything you’re doing relates to taxes. If you had 500 errors for sales under $20 it isn’t that big of a deal, if you had 20 errors on sales over $500 it’s a much bigger deal. (This is relative, to show a point, in reality you want every penny to balance with no errors) I kind of got off topic but when you start talking millions an accounting firm with various specialists have a lot more input and help than 1 accountant who is independent can provide and that was my point in my original post. Profit and loss / balance sheet - I mention this only because I meet high paid E suite executives everyday who don’t clearly understand the difference, it’s just good to know. Here’s a basic overview link .. https://www.indeed.com/career-advice/career-development/bala... Trial Balance - Accounting software I have seen usually uses this method, it is called the double entry system of accounting. I have never heard of gnu cash, but after a quick google I found you this article which explains the theory. https://lists.gnucash.org/pipermail/gnucash-user/2018-July/0... You will want to check your trial balance prior to sending to accountant. Don’t waste a lot of time thinking about this right now. In fact overall I don’t want you to get overwhelmed or too far into the weeds on any one topic. Try and get a basic high level understanding (which you are doing) then get setup and start focusing on your business (not so much accounting, this is what your accountant is for at year end) Chart of accounts, one more thing - don’t change them during the year. Change them at year end from one year to the next. Eg, you don’t want to explain that from periods 1-8 in week 3 you posted Starbucks to account 5200 but then week 4 of period 8 through period 12 you added account 5203 and started posting there.. it’s just confusing Software - I understand, in fact I haven’t used quickbooks in years, we switched to a custom ERP that runs on Linux which also does accounting. It is industry specific so no need to mention the name, But it’s no where near as sweet as quickbooks for user friendliness. It does other amazing things for our industry though and can import and export in archaic standards to our vendors and B2B customers that were developed over 20 years ago. Yes A/R is accounts receivable, and banks just consider the money unrecoverable after a certain period of time. This only applies if you want funding or have an annual review on a business line of credit with the bank. It’s important to remember though if you are coming into such a situation. Also, good luck! I love entrepreneurs ! |
It makes more sense that I would just give an accountant my G/L (General Ledger?), and it makes sense that gross sales matter most.
It also makes sense that more input is good past a certain threshold. I'll definitely go with a firm at that point, but I admit that I don't want accountants to save me money on taxes; I want to have bulletproof accounting so that the IRS doesn't audit me or finds absolutely nothing to worry about if they do.
Thank you for the two links. I had found the first, and the second only confirmed what I thought. I think any misconceptions I have from here can be correct by an actual accountant.
I actually check my trial balance every week. (I didn't know that's what I was doing, but that's what I do.) Other than that, I'll try to leave it up to my accountant. (I can be a control freak.)
I definitely would have made the mistake of changing accounts in the middle of a year, thank you.
If banks consider old A/R's unrecoverable, that means they generally are, and that means I should not allow customers to get lax on paying them. That's a great tip, thank you.
And thank you for the encouragement and help!