Lis Lee Accounting LLC

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You may be surprised to hear this, but I never thought I’d be self-employed.  I actually specifically said at a young age that I would NEVER own my own business.  We all know what happens when we say never, right?  

Here’s the backstory – for as long as I can remember, my dad worked in the family business which my grandfather started.  He worked so hard to help his father grow the business, putting in those long days and weekends to build something for his family.  Once my grandfather passed away, my dad became responsible for the business and kept putting in those long hours and there was definitely more STRESS.  That’s what I remember – all I saw was how much HARD WORK it was to own and run a business.  

My siblings and I were lucky enough to work at the business every time we were on school break.  As we watched our dad, we saw first hand what life looked like at work and at home for a small business owner.  Looking back, I’m so grateful for that experience and all it taught me, but I still thought it would be better to go to work for someone and not shoulder the responsibility that comes with owning a business.  

So at first I did just that – I ended up going to school and majoring in business accounting and then going to work for an accounting firm.  Talk about LONG hours and STRESS haha – there was a ton of that, but I also learned SO much and got to meet so many amazing people and see the backend operations of a lot of amazing businesses.  After working in public accounting, I moved into working with nonprofits and government for a while, but I kept thinking about working with small businesses and finding a way to do that in a sustainable way (get to see my family sometimes and not burnout).  How could I use my experience and knowledge to help small business owners while also still being able to build a life I loved (+family – burnout)?  That’s when I decided to start Lis Lee Accounting.  

Some days I still cannot believe I get to do this.  Yes, owning your own business is certainly hard at times.  Yes, there are days when you wish you could punch a clock for someone else and call it a day.  But there are so many rewarding moments like the absolute joy of helping business owners achieve their goals, or when I am able to be flexible in my personal life in a way I never could have imagined when I worked for someone else.  The satisfaction that comes from knowing you are using your skills and gifts in a way that is aligned with your values is unmatched.  

Thank you for taking the time to read my business story in brief.  I would love to hear more about you and your business.  If we haven’t already, let’s connect and get to know each other.   

Running a business takes A LOT of work, but when we can get the financial management piece to run a bit more smoothly, you will feel more in-control and empowered and less out-of-control and helpless.

Think about this for a moment…

What are the words and feelings that come to mind when you hear the phrase business finances?  Are they positive?  Negative?  Neutral?  For those of you who experience feelings of frustration, confusion, and fear when you think about this topic – please know, you are absolutely not alone and I want to share something with you right now that might lighten the load just a bit… 

Your business financials provide information NOT identity. 

Sometimes we are afraid to approach the topic because we may see areas for improvement and perceive them as personal failures (which are painful to face).  I challenge you to take a different approach and take on the attitude of curiosity on a quest for improvement.  What you don’t know CAN hurt you so get in there and start discovering and figuring out where you can do better.  Take a clinical approach and imagine you are searching out information to inform your decision-making vs. searching for mistakes that you’ve made.   

The process of recording and reviewing your financial information is a PRACTICE that will be unique to you and your business and will change as you learn and as you and your business grow.  The sooner you start and the more you practice, the quicker you can find out what methods and systems work for you.

Knowing your numbers and having a firm grasp on your financial picture allows you to plan AND react from a place of empowered confidence.  Even when the scenario is not what you wish it was – awareness matters. If you are aware of what is, you can take effective steps to make better, more informed decisions and have more options at your disposal.  The most sure path to improvement is to keep going, keep practicing, and keep showing up.

Simple Steps Will Get You Started

Your must have tools to get started are really only a laptop, phone, and a notebook. Coffee helps too of course:)  If you can set aside time each day/week/month to record transactions, you will thank yourself later!  When I first started working with one of my clients, they would wait until the end of the year to review their records and prepare for tax time.  Not only was that negatively hanging over their head throughout the year and putting a ton of pressure on them at year-end, they were also missing out on information that could enhance their decision-making and giving up headspace and bandwidth to that massive to-do.

Now they have a system in place that allows them to stay on track, make informed decisions (they are planning to make their first hire), and tax time was a breeze this year!  I share this to let you know that you are not alone, and with the right mindset, workflows, and tools you can get there too!

If you’re interested in a DIY approach click here to schedule a phone call to review your options.  If you’re looking for more support and someone to jump in to help you, book a call here to find out how we can work together.

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

Many of you just filed your 2019 taxes a few weeks ago.  Hopefully it was a smooth process, but I know you may have been scrambling at the last minute to get everything together.  That’s why I’m starting now with reminders for year-end 2020!  We’re just over halfway through the year so now is a great time to get on track with your 2020 financials so your year-end reporting and tax returns are a breeze this next time through.

What is year-end reporting?  Besides the tax prep piece, companies typically prepare their financial reports for a 12-month period at the end of the year to review their performance and plan for the following year.  Don’t miss out on this important performance review action for your company!  

What can you do now to prepare?  Usually, companies begin preparations for the year-end in the fall (for a calendar year-end), but that is assuming they are all caught up on their books.  If you’re behind for 2020, now is a great time to catch-up and set yourself up for success as you get closer to year-end.  

If you’re feeling less than motivated about it, just take a moment to think about how you’ll feel when you’re back on track and how you’ll feel next year when there’s no back-log.  If you’re interested in a DIY approach click here to schedule a phone call to review your options.  If you’re looking for more support and someone to jump in to help you catch up, book a call here to find out how we can work together to get you where you need to be.

 

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

Timing

We are nearing the end of the month so now is the time to start planning your monthly close. If you can block off some time to focus specifically on this during the first or second week of the month, you’ll thank yourself later.

Importance

Having a current set of books is invaluable to you as a business owner for decision-making. Besides your internal decision-making processes, you also need to present a current set of financials to obtain lending from banks or funding from investors.

Aside from the significant functional failings of the recent COVID-19 relief funding options, there were undoubtedly many businesses who missed out because they did not have their books ready to even apply. Don’t let something like this hold you back from making the moves that your business needs when it needs them.

Tasks

To do a simple, soft monthly close (vs. a hard close), do the following:

  1. Record Revenue. Confirm all invoices have been sent to customers or all sales are included in your accounting system for the previous month. Record or send any missing items. This step is to ensure you get all of your income invoiced and documented for that month.
  2. Record Expenses. Check to make sure all expenses have been entered and assigned to an expense category. This is the step where you list what each expense was for which then builds out your income statement expense line items (e.g., rent, utilities, marketing, etc.).
  3. Reconcile your Bank Accounts. Your accounting software should have a tool that enables you to do this. This step ensures that your accounting records (books) matches your bank records. Since you just recorded income (inflows) and expenses (outflows) in steps 1 and 2 above, this is where you check yourself to make sure you didn’t miss anything or double-count anything.
  4. Run Reports. Once you’ve got those three basic steps completed, you’re ready to run your reports! Run an Income Statement (Profit & Loss) to see how much revenue and expenses you had and what your Net Income is. Run a Balance Sheet to see what your cash position is and how much debt and equity you have in the business at the end of the month.

In many cases, there are more advanced parts of a monthly close that an accountant is best-suited to perform (recording fixed asset depreciation, inventory, prepaid expenses, accrued revenue, accrued expenses, and deferred revenue, etc.), but the above steps will get you pretty far to enable better decision-making and clear, timely reporting for outside parties (banks and investors) when needed.

The monthly close ties in closely with the Monthly Review. The process above is a more detailed version of organizing your monthly income and expenses. You can then use the reports you generate to complete the Monthly Review steps of analyzing your spend categories and identifying areas for improvement.

If you’re feeling stuck and keeping up with your financials is just not happening, sign-up for your FREE intro call to see if we would be a good fit to work together to get you back on track!

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

Treasury Secretary Steven Mnuchin announced the following this morning:

This is an update to earlier this week when only the payment deadline was moved. Now the filing deadline itself is moved to July 15th!

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

The White House announced the following during yesterday’s press briefing:

“We encourage those Americans who can file their taxes to continue to file their taxes on April 15, because for many Americans, you will get tax refunds and we don’t want you to lose out on those tax refunds. We want you to make sure you get them. Many people do this electronically, which is easy for them and easy for the IRS.

If you owe a payment to the IRS, you can defer up to a million dollars as an individual. And the reason why we’re doing a million dollars is that covers lots of pass-throughs and small businesses, and $10 million to corporations, interest-free and penalty-free for 90 days. All you have to do is file your taxes. You’ll automatically not get charged interest in penalties.

Now, of course, any American has the right to extend their taxes. We’re not taking that right.”

Special Considerations

This does not appear to be an extension for filing, but for paying any tax/penalty due. If you need an actual extension, you can still file that by April 15.

Look for updates to the official IRS website soon.

Check your state tax authority for your state’s position. The American Institute of CPAs (AICPA) has provided a state tax development update list here, but check your local state website or speak with your tax accountant as well.

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

NOTE/ Applications, tools, and services listed/linked in this post are NOT sponsored.

Keeping a list of resources going here from items I’ve mentioned on Instagram so you can easily grab whatever you need in one go.

Updated 8/3/2020.

Apply for Unemployment for Self-Employed/Independent Contractors

Check with you unique state for their process.  You can find your state unemployment website here.  This list is directly linked on the Department of Labor (DOL) website (CareerOneStop is sponsored by the U.S. Department of Labor, Employment and Training Administration).

Fintech companies currently accepting PPP applications…

PayPal stopped accepting applications at the end of June, but this page has helpful info on applying for forgiveness.

Kabbage still accepting applications. The Paycheck Protection Program resumed accepting applications July 6, 2020, at 9:00 AM EDT in response to President signing the program’s extension legislation. The new deadline to apply for a Paycheck Protection Program loan is August 8, 2020. 

Fundera

Nav

Intuit currently open to existing payroll customers with a coming soon status for non-payroll users.

Square applications closed. Their bank partner is no longer participating in PPP, so they have stated they are no longer accepting applications. They state they are working on an easy loan forgiveness application – the page still has some helpful FAQs.

Consider reaching out to your local community or small business bank to obtain round 2 PPP funding…

https://www.sba.gov/paycheckprotection/find

SBA Coronavirus Relief Options

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options

Sara Blakely and Spanx are gifting $5M to female-owned businesses!!!

https://www.globalgiving.org/redbackpackfund/ The application portal will open at 12 p.m. ET on Aug. 3 and close at 12 p.m. ET on Aug. 10.

Facebook Small Business Grants Program

https://www.facebook.com/business/boost/grants

Intuit QuickBooks® is teaming up with GoFundMe to create a Small Business Relief Initiative to help small businesses raise money to overcome the challenges caused by COVID-19

https://quickbooks.intuit.com/blog/news/supporting-small-businesses-with-the-small-business-relief-initiative-to-put-more-money-in-the-pockets-of-those-who-need-it-most/

Gusto (one of my favorite payroll and benefits processing platforms) has created a valuable and extensive list of current resources for small businesses that they are updating regularly. It includes details and links to all mentioned resources (including state and local).

https://gusto.com/covid-19/small-business-financial-relief?utm_source=resourcesheet

The intro/summary of what’s in the spreadsheet can be viewed here.

Help those in need PLUS get help on editing your content during COVID-19.

https://www.eringreenawald.com/editforme

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

IRS Update!!!

Just a quick post to let you know…

The IRS posted an update in response to recent storms in Tennessee. Check out their original News Release here to see if you are an affected taxpayer!

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

Each month it’s an essential practice to complete a monthly review where you assess how your business performed during the prior month and what changes you can make in the current month to strengthen and grow your business.

To get you started, below is a simple template you can follow to initiate this practice for your business so you can become familiar with what’s actually happening with your money.

Add up how much you made last month.

Go through your bank records or sales system and add up how much you made last month. If you have multiple revenue lines or categories, break those out for a clear picture of how your sales are coming in.

Add up how much you spent last month by category.

Go through your bank records and add up how much you spent last month. Group items into like categories. You can Google the most common expense categories or send me a message if you’d like a general list of the most common categories.

Review each spend category to identify areas for improvement.

Review the total amount for each category to start and dig into the detail of that total (the transactions) if you see something that appears different than expected. When you first start, you might not know what to expect or what you’re even looking for. After you’ve done this for a few months, you will begin to become more familiar with your numbers and will be better able to spot areas for investigation.

Select one to three areas for improvement and then decide on one action for each of those areas to make measurable progress on over the next month.

This is the part where you really begin to see the effectiveness of this exercise. This is where you use the information you’ve reviewed to take action in your business. Remember, limit the areas for focused improvement to three max and of those areas you select, just take ONE action-step each over the next month.

For example, you could select one expense category and take the action-step of tracking it on a daily or weekly basis over the next month to be sure you can bring down the spend in that category.

Another example could be revenue driven. You may select one revenue line that you want to double-down on and take action by implementing one strategy to boost sales in that category.

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

NOTE/ Applications, tools, and services listed/linked in this post are NOT sponsored. They are tools I’ve used and love.

What is an Annual Report?

If your business is registered with the state (Corporations & LLCs), you are probably required to file what’s called an annual report with your state.

This report typically includes general identifying information about your business like company name, address(es), contact names, etc.

If you are up-to-date with your reports, this is generally something you can handle yourself if you feel comfortable doing so and have time to do so.

When and how do I file it?

The due dates and methods for your filing can vary from state to state so be sure to check with your state’s Secretary of State office or Business office website to find out the specifics or check out the resource linked below.

I offer this service to my clients if they have fallen behind on their reports for whatever reason or if they are just too busy to take care of it themselves.

If you are comfortable with a DIY approach, Northwest Registered Agent has a GREAT resource here that helps walk you through the process for FREE.

Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

Typically, Form 1099-MISC is filed for each non-employee (independent contractor) to whom you have paid at least $600 (cash or check/ACH) for services performed for your business. When reporting non-employee compensation, the filing deadline is January 31. These payments are reported in Box 7. If you are filing less than 250 forms, you can file on paper. If you file 250 or more returns, you must file electronically. If you are early to the game, you can order your forms online. Paper forms can be found at most office supply stores (Staples, Office Depot, etc.). Besides non-employee compensation, be sure to analyze these two additional common categories for reporting:
  • Business Rent Payments should be reported in box 1 of Form 1099-MISC. For business rent payments, you do not have to report these payments on Form 1099-MISC if you paid them to a real estate agent or property manager.
  • Attorney Fees paid should be reported in box 7 of Form 1099-MISC. NOTE/ Attorney fees DO still need to be reported even if they are a corporation.
If you paid the vendor by credit card or a third- party network (like PayPal), those payments do not need to be reported as the credit card company or third party are required to report them. A few other common exceptions that typically do NOT need to be reported are as follows:
  • Payments to a corporation (including an LLC treated as a C or S corporation). NOTE/ Attorney fees DO still need to be reported even if they are a corporation.
  • Payments for merchandise, telephone, freight, and storage.
Form 1099-MISC filings should be filed with one Form 1096 (as a sort of summary coversheet). For the full list of instructions, see the IRS Instructions for Form 1099-MISC. Lis Lee Accounting is not a financial planner, broker, or tax advisor. Neither Lis Lee Accounting nor the content herein are intended to provide legal, tax, or financial advice. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Lis Lee Accounting shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

We’re officially one week out from the close of Q3 and the start of Q4!  What are you doing to prepare?  Personally, I’m listening to PwC’s “The quarter close – Q3 2019” to make sure I’m up to date on the latest in accounting and financial reporting.  You can find the print and audio versions here.