FAQ

Frequently Asked Questions & Answers

Is cloud accounting software secure?

In short, yes. Click on the link below to access more information from the two largest accounting softwares on the market, which happen to be the softwares that we work with.

QuickBooks Online

Xero

Do I really need to keep my receipts? Aren't my bank statements enough?

Yes, if your firm gets audited, the IRS will need receipts. You can find more information in the IRS website, by clicking the link below.

Summary of Publication 583

Photo copies of receipts will suffice, according to the IRS website link found below.

Use of Electronic Accounting Software Records

My books show a net income, but I don't have the cash to show for it. Where is it?

Your firm could be suffering from a cash shortage for a number of different reason, even if you are showing a net income.

Review your accounts receivable. Ideally, you would want to see a comparison of accounts receivables for a couple of different time periods. This will show you the change in your collection records. Even if you do not collect, the income will still show in your income statement. It might be time to call your clients and ask for payment.
Have you been paying off too much debt? Perhaps you have been trying to pay too big of a chunk off of your firms debt. This can kill your business. Make sure to plan for your cash flow, because all though you show a net income, you can kill your business by paying off debt faster than you can handle.
Maybe you are paying yourself or a partner too much. In most cases, for small businesses, your net income will not reflect what you pay yourself or a partner. Therefore your bottom line number could be showing a positive, but all of the funds are going to pay yourself or a partner. If you or your business partner are on a regular payroll cycle, then you re an exception to this, as payroll will be reflected in that bottom line number.
Of course, another reason would be if there are bookkeeping errors that cause you to see a net income, when in reality it could be a net loss. Make sure your bookkeeper is reconciling your account monthly.

Lastly, look over your statement of cash flows. The great thing about the statement of cash flows is that it starts with your net income and reverses itself out to show where all your cash is going.

I paid too much in taxes. How can I reduce that number?

We wrote an awesome article on that! Click here to download.

Have another question?

Please contact us, and we will be happy to answer!