Lis Lee Accounting LLC

It’s that time of year

Now is a great time of year to think about investing in your business.  There are going to be plenty of upcoming sales this quarter (for software, digital products, and physical products) so let’s talk about how you can time it right to invest in your business at a great price.  

Over time, I’ve used this same approach to add tools and resources to my business to support operations and growth in a sustainable way.  Each item or tool I’ve added has special meaning and value 1)  I know that my business earned the dollars to support the spend which is satisfying in itself; and 2) each addition was well thought out and intentional.

Questions to ask yourself

When you think about purchasing something for your business, you want to ask yourself a few questions to assess needs vs. wants along with appropriate timing.  

  • Is this purchase necessary for my business?  Is this item necessary to support business operations?  This one is kind of a no-brainer, but still important to start with.  Sometimes you must spend on items that are absolutely necessary, but may not be directly related to revenue generating activities.  This is a great question to ask in all circumstances as there are items you may THINK you NEED, but they are actually just shiny “wants” that are a distraction and not the best use of your funds.  
  • Will this purchase support my business growth?  Will this purchase generate revenue?  Will you be able to turn around and make a profit using this new product or tool?  If you will be able to make a return on your investment, that’s the ultimate purchase win.  Will it enable you to offer a new service or work more efficiently?  Will it set you up for growth without the growing pains?
  • Is it time for this yet?  Sometimes a purchase may not be a bad idea, but it’s a bit too soon.  It may be a great product or service, but your business may not be able to support the spend yet or it may be a tool or software that is overkill for the stage you’re in.  
  • Does this purchase fit my current means?  Is it in budget?  Even if it would really be nice, but if it’s going to break the bank you may want to hold off until you have the plan or the funds in place to comfortably make it work without putting your cash flow and bottom line unnecessarily at risk.

Once you’ve answered these questions, you should be able to more confidently make the decision to purchase or not to purchase.  If you decide to purchase, make sure you document and record the transaction so you can see how it impacts your business as well as your tax return.

If you’re ready to invest in your business, I’ve got something exciting to share with you. In January 2021, I’m launching a 6-week LIVE program to walk you step-by-step through how to implement the most foundational financial systems and processes in your business so you can move from feeling stuck and unsure to in-control and empowered in your business decision-making. I’m opening up 10 spots to work with me to create true transformation – if you want in, book a call here (spots are limited!).

It’s been a bit quiet over here as I’m coming off of two weeks of unplugged time in which I was able to take a full week completely off from work (little bits of behind the scenes work sandwiching that full unplug) and I’m feeling refreshed and ready to push through the end of 2020 strong.  This in itself was a huge accomplishment (will have to post on that later) resulting from me investing time and resources into my business to create systems that allow me to take a true break.  To be fair, it wasn’t actually quiet as I’ve had family here with LOTS of kids in this house so there’s that haha – it was a blast and just what I needed.  

To get back to it, this week’s post coincides perfectly with the end of Q3 and the beginning of Q4.  Why does this matter?  Because it’s a possibility of a fresh start for a strong finish.  Right now, many business owners are still feeling overwhelmed and disheartened as they manage massive change in their business and personal life.  The sense of potential that comes from a temporal landmark may be just what we need to give us the oomph to make progress on that goal or take action on that one thing you keep thinking about, but not doing.  I say ride that potential as far as you can and use it to your advantage!  

A couple of practical tips to make this work for you…

  • Set aside some time over the next few days or this weekend to reflect and plan.  Review your current goals and tasks and create some realistic expectations for the next few months.  Make sure to take the holidays into consideration if you celebrate as you may want to give yourself extra space during that time to rest, recharge, and be present.
  • Make it a date and put it on a calendar (paper or digital) so it’s in front of you day to day and week to week and has time allotted to it.  For this I like to put down everything I know is going to happen to see what space I’m working with, then I can visualize what time I’m working with to achieve my goals and complete tasks and projects.  I especially utilize recurring time slots for certain projects/tasks or I block out specific windows of time for others.  
  • A few key business points to remember for this quarter:
    1. Talk to your staff and customers and ask them for their feedback on their experience with your business this year.
    2. Review what’s working and what’s not with your offers, products, or services.
    3. If you’re launching any special sales or products for the holidays – make that part of your Q4 strategy.  Here’s a great list of pertinent dates.
    4. If you filed an extension for 2019 tax filing, the due date to file is October 15.
    5. Get caught up or stay on top of your bookkeeping as year end is right around the corner.  If you’re up-to-date, end-of-year filing and reporting is going to be so much easier for you. If you need help with this part let’s set up a time to talk it over (you can book your call here). I’m also offering a new online training in early 2021 for those of you who would like support, but aren’t quite ready to jump into a one-on-one relationship yet. I’ll be sharing more about this over the next couple of months – if you want to know more, book a call with me here.

Hope this overview was helpful, leave a comment below with how you are approaching Q4. Would love to hear what you’re up to!

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.