Tips
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- Why you should use an accounting system
An accounting system can provide an overview that can show you how your business is performing. You need to know how much money is owed to you, how much you owe and how much is in the bank. A good accounting system will make this information readily available and it will allow you to budget. As we work with you over time, we would discover more needs that your accounting system can fulfill. - Requirements for setting up an accounting system
Your accounting system will be based upon your bank account. Your bank account embodies objective reality since it's the place where most business transactions are performed. Both Quicken and QuickBooks use the check register as the basic input venue for recording transactions. - It's important to track cash transactions
Cash transactions should be recorded in your tax returns so that they can be included in your financial reports. If you receive a lot of money in cash and then spend it through cash payments, you can lose track of these expenses and also lose track of the source of this income. - Requirements for setting up a payroll
You need to determine the frequency of the payroll and then gather some basic information about your employees such as name, address, social security number and number of exemptions. There should be enough money to cover the payroll checks and also your tax payments. Finally, you will be required to obtain a state and federal tax ID number and to work out the payment method for your tax deposits. - Should you use Quicken or QuickBooks?
If you have a payroll, produce invoices, need to track inventory or if your business is divided into different departments or sections, you should use Quickbooks; if all your business information can be maintained in a single check register, then you can use Quicken which is more basic.
An advantage to using QuickBooks over Quicken is that you would have more choice in the number of reports that can be generated. QuickBooks also makes it easier to manage vendor and customer accounts and it allows for job costing. For example, you could determine that a particular job had a certain amount of revenue and expenses and you would be able to see where that revenue came from and calculate the profit margin. If these QuickBooks features would be helpful or necessary and you are currently using Quicken, then you should consider switching programs.
- Converting from Quicken to QuickBooks
This should be simple when moving from a Windows PC to another Windows PC or from one Mac to another Mac. Going from a PC to a Mac or from a Mac to a PC can be problematic.
- How to know if you need to pay estimated taxes and how to calculate the taxes due
You should use a tax preparation program for a given quarter and project your earnings over the period of a year. The program will tell you if taxes are due and how much is owed. - How to make estimated tax payments
You would make these payments through the online services provided by the state and federal governments.
For federal, go to the "EFTPS" website at:
https://www.eftps.gov/eftps/
For state, go to the California "Web Pay" site at:
https://www.ftb.ca.gov/online/webpay/index.asp - How to know if you should charge sales tax
That depends on whether you sell tangible products that can be physically "touched." For example, a training service, coaching sessions and products that are digitally transmitted from a website are not physically "touchable" so that sales tax would not be applicable in those cases. - How to make sales tax payments if you need to charge sales tax
In California, you would make these payments through the State Board of Equalization site at:
http://www.boe.ca.gov/ - Basic steps for starting a new business
You will need to go to the office of your County Clerk and obtain a "fictitious business name." You should then open a bank account in the name of your business. If you sell products, you will need a resale certificate from the State Board of Equalization.