Ask MetaFilter questions tagged with business and accounting

Where can I learn about accounting and small business administration?

Tarumba — Thu, 26 Nov 2009 10:12:15 -0800

Where can I learn about accounting and small business administration? My husband and I own a small record label. In the last couple of years, it began picking up, and at the moment we find ourselves working with at least 5 bands at a time. Anyway, things are paid for, records designed and printed, artists fees met, and revenue is received, all in an incredibly disorderly manner. We tried to keep track of things but we have come to the realization the we haven't a clue about how to do it. a friend even told us that it was very silly of us not to keep track of our business expenses for tax purposes, and also said we should be paying ourselves wages. Is this true?

Can you help me find a place were I can learn how to manage a small business, that isn't necessarily college? I am thinking something on the lines of accounting/business administration would help, but i definitely don't want a degree, since I may soon start graduate school, and my husband is currently enrolled.

Green Eyeshades Needed

Barrows — Sun, 22 Mar 2009 18:01:57 -0800

I'm trying to set up Quickbooks and accounting was never my game... here's a type of transaction I find that I do alot and need to find out the right way to book it: If you pay a business expense with your personal credit card (say $100) Then you pay your personal credit card from your business account ($1000) would you

credit expense 100
debit cash 100
credit credit card 900
debit owner's draw 900

Basically the business pays out 1000 to the credit card bill but 100 of that credit card bill was a business expense and the rest was "draw" (income) for the business owner. Thanks and YARMA but ILY

What kind of records do most sole proprietors, freelancers and consultants keep?

Anonymous — Tue, 17 Feb 2009 19:39:33 -0800

What sort of state of organization are the financial records of most sole proprietorships in? I've had a small freelance business for about 15 years. About 3 years ago, I was in a car accident that was 100% not my fault. (The other driver admitted fault and there were witnesses.) I am now in the middle of legal dealings with my insurance company, because of the state of whiplash, the effect on my pregnancy and the effect on my ability to run my business and maximize earnings. (I do have a lawyer.) The insurance company is asking for all my financial records from the past nine years. They want copies of every receipt, invoice, mortgage interest statement, etc.

I've never kept a general ledger or anything like that. I just invoice and pay my expenses and credit cards and stuff like that. I've never been very formal about things, although I am excrutiatingly honest. I don't lie on my taxes. However, there have been situations where I just phoned the mortgage company to get the interest amount for my mortgage for the year (for business use of home), because I figured that if I got audited by the government, I would just phone and get a statement sent out. And, as I mentioned, I don't have cash flow statements or anything like that. And sometimes my receipts are in my name, my husband's name or both our names. But I always put money into our joint account to cover everything, usually lump sums throughout the year.

I had planned to incorporate and set up with an accountant, but, because of the car accident, I am just beginning that process now. Going forward, my records will be more diligent, since I'll be incorporated.

But, I'm wondering...what is the typical state of financial records for most freelance and consulting type businesses? My lawyer seems baffled that I have unaudited records...he's not used to sole proprietors. He seemed surprised that I had been doing my own taxes (for all but 3 of the total years, because, honestly, the accountants never got me any more tax back than I got on my own). For the most part, my business records are my personal income tax records, since the sole proprietorship income tax is part of that. I never saw any point to doing balance sheets and neither did the bookkeepers or accountants. Are other freelancers and consultants in a different situation? (Again, I'll be changing this going forward.)

Raw materials into scrap for later use in Quickbooks?

daniboi1977 — Wed, 11 Feb 2009 15:43:04 -0800

How do I transfer raw materials into scrap to use later in Quickbooks Premier 2009? Hey everyone, I searched the archives, but didn't see anything that was similar to this. I apologize if it has been asked before and I missed it. I own a small jewelry making/selling business, and have recently started using Quickbooks Premier 2009. I have all my raw materials listed as inventory items, which I then combine into a "build" for a finished product. When I'm working, I often generate "waste" silver, which can't be used in a project, but which I can later melt down and cast into something else. Does anyone have any idea what the best way to handle this in quickbooks would be? Would I just make another inventory assembly item called "scrap silver" and transfer amounts from the original form (i.e. 14 gauge wire) into it? Or should I treat it as some type of account?

I'm extremely new to quickbooks, but have figured out the majority of what I need to know to be up and running, I'm just somewhat stumped with this. Any help would be great. Thanks!

How do I master my small business’ accounting and financials?

battlecj — Tue, 02 Dec 2008 07:19:04 -0800

How do I master my small business’ accounting and financials? My wife and I own a small retail shop. We do our accounting faithfully in QuickBooks and file most of our tax returns and process our own payroll. According to review by our accountant, we are running our numbers correctly, but what do all these numbers mean? We want to have a better understanding of cash flow, profit and loss, and our balance sheet so we can make better financial decisions. Are there any books or online courses that teach this well? Ideally, any course would have tests so we can really measure how much we are learning. This looks intriguing, but I wanted to see if there were resources out there that are escaping my googlebatics.

Sgould I become a limited company? (UK)

hatmandu — Thu, 30 Oct 2008 04:15:56 -0800

I've been a sole trader for 10 years, but calculators such as this suggest I could save maybe £2000 a year on tax by becoming a limited company. Have others found it worthwhile? I'm aware the incorporation means more paperwork, as I'm already a director of another small company, though that's largely defunct now. As far as I understand it there are two main options for income in this way:
1. Draw a salary
2. Draw dividends. The site mentioned above suggests a salary of around £5000, and taking the rest as dividends as the way to minimise tax burden.
Does anyone know if it's legal/sensible to go down a third route:
3. Subcontract work to oneself as a sole trader. (ie so corporation tax is only paid on profits above the costs of subcontracting and other expenses, and I would pay normal personal tax on the profits from the contracts.) Or is this not allowed? Or too complicated?

I'll need to talk to an accountant about all this, of course, but any relevant experiences would be interesting to hear. (I'm below the VAT threshold, by the way.)

What's the perfect app to track expenses?

mathowie — Thu, 31 Jan 2008 14:04:39 -0800

Is there an expense reporting app that's flexible, handy, and will help me finish next year's taxes quickly and easily? I know about excel, quicken, and various financial transaction apps, but what if I drive 100 miles to a tech conference and want to note my mileage? And what if I'm out entertaining clients and I want to pop onto my iPhone to note the total bill for the evening (before I forget the next day to open excel). Are there any web-based flexible apps for doing all the expense reporting you might need for a small business' bookkeeping needs?

My head's about to explode...

Zé Pequeno — Sun, 28 Oct 2007 17:20:43 -0800

Can someone please point me in the right direction to find practice test papers for Financial Accounting? (Balance Sheets, Income Statements, Statements of Returns on Equity, Cash Flow Statements, Depreciation, Ratios, etc. etc.) Assorted business schools worries inside. Coming from a liberal arts academic background, I'm starting to really feel the pressure from my recently-started international business masters and get the impression I need to study ten times as hard as my classmates, most of whom have studied the subject at undergraduate level. At the moment, I'm fretting over Financial Accounting. Please help me to understand this subject!

Extra points for whoever can help me with Corporate Finance...

I was never strong at mathematics in school. Though I'm pretty good at mental arithmetic, I found the subject boring and didn't pay attention in class. Now I'm faced with the daunting task of getting to grips with Corporate Finance and have some decent books to help me, all of which cheerfully claim that the author needs no prior knowledge of Finance, just a knowledge of algebra! At the risk of appearing extremely dumb... I can't remember any algebra! What do I need to learn in order to understand the nimiety of equations by which I'm beginning to feel very overwhelmed?

What's better: Get paid less now, or more later?

Wild_Eep — Wed, 01 Aug 2007 12:13:30 -0800

AccountingFilter: Client convenience aside, does receiving "instant payment" for my services via PayPal make financial sense rather than waiting for a check to come in the mail 30 days later? Help me unlock the secrets of the Time Value of Money. I'm sure this is a complete textbook example of TVM, but humor me.

An example:

Let's say that on July 1st, I perform work for a client, and the total for the work is USD $150.

In which scenario do I come out ahead on July 31?

Scenario A.) In which I process an "instant payment" for the client at the time of the services, and the client pays immediately via PayPal. PayPal takes out their 3%+$.30. I get the rest, and put it into my high-interest savings account which earns 5% annually and compounds monthly.

or

Scenario B.) In which I wait 30 days for a check to arrive in the mail, deposit the check's funds into the same 5% high-interest savings account. Assume that the check clears instantly, and that I have access to the full $150 on July 31.

So far, my guess is that if the 30-day window were expanded to 90 or 120 days, it would make sense to get-what-you-can right now, paypal fees be damned, but at 30 days, waiting for the check nets me more money.

I've checked out the wikipedia entry for Time Value of Money, but can't figure out the interest rate (decimal or integer?), period (month? year?). It sounds so easy, but my brain keeps getting in the way when it sees the equations.

Help me get my friends' businesses off the Microsoft and Intuit upgrade treadmills

flabdablet — Wed, 13 Jun 2007 01:10:46 -0800

Has anybody already done the work of configuring GnuCash for an Australian small business? If so, what's involved in electronic submission of a BAS, and is there an easy way to transfer records to an accountant who thinks QuickBooks is the Only Thing? No more inside.

Standard Chart of Accounts for Machine Shops?

randex8 — Thu, 02 Nov 2006 17:37:10 -0800

Is there a “standardized” chart of accounts setup that is widely used among machine shops/small manufacturers (USA)? Working with other industries in the past (veterinary and restaurants), I have found that many choose to use a standard industry-specific chart of accounts – often established by a national industry association, etc. I have googled, etc. but have not found anything worthwhile for machine shops/small manufacturers... Any accountants or shop owners out there?

Best small-business accounting software?

YoungAmerican — Sun, 03 Sep 2006 17:27:07 -0800

Number-crunchingFilter: What's the best small-business accounting software for a non-accountant? I recently started accepting donations for my podcast, and they're amounting to enough money that it seems like I should be accounting for them, both for tax purposes and... well... accounting purposes.

I also have some income from the sale of show t-shirts, and I've been tracking my expenses related to the show (capital investments, marketing costs, etc), and saving receipts.

All the income comes in through PayPal, and I use one bank account, set aside for this purpose, for everything.

What software should I be using to track all of this? I use a PC, and have strong "computer skills" and a decent head for numbers, but no accounting background. I'm looking for something that costs no more than a couple hundred bucks, and is easy to use.

Online Invoice Payments?

letterneversent — Fri, 16 Jun 2006 08:59:40 -0800

Online payments: I need a way to invoice and have clients pay invoices online. Not with Paypal because that requires too many hoops for the client. Preferably with something that will allow payments via a credit card using Authorize.net or Paypal Web Payments Pro. I currently invoice using Microsoft Money and print the invoice to PDF and email. I need a way to collect invoice payments online using a credit card or bank draft.

Small-business accounting

Anonymous — Fri, 04 Feb 2005 23:11:15 -0800

I run a small design firm out of the house, with 2 employees and yearly sales of about $250K. How much should I pay for basic accounting services? He only does my taxes, I have a payroll service for payroll, and I do my own bookkeeping.

PayPal me my taxes.

Orkboi — Sun, 16 Jan 2005 13:14:14 -0800

I am running a free Web-based service for friends and acquaintances. Lately, the volume on this service has been growing greatly. The next step is to move the service to a professional host. I am thinking of putting a paypal donation button on the site to help pay for it. Are there any legal or tax issues I need to worry about? Do I need a business license? What if I want to start selling Cafe Press items or running Google ads? I am located in the USA.

SUV tax write-offs

mathowie — Wed, 04 Aug 2004 15:32:14 -0800

I never understood how the "SUV as a business write-off" thing works. Can any tax-savvy folks explain to me how this saves you taxes or gets you a virtually free car? More >> I've read the article, the Slate article today that mentioned it, and this list of vehicles you can buy to qualify. But I still don't get how this works to someone's advantage, I mean you're still having to pay for a $60k car right?

If someone was a sole proprietor, bought one of these new vehicles and claimed it and their home office for their business, then claimed 100% vehicle use for the new car, they'd get to write the whole purchase price off. I get that part.

What I don't get is where the money goes. Say the business owner made $100k in a year, and owes say $30k in tax. Say the heavy SUV cost $60k, and is completely deductible.

Does that person get a refund for $30k? Or is the benefit merely that instead of the money going to the IRS it goes into a new car?

Whenever I read a story about this loophole, it sounds like greedy business owners are getting free Hummers thanks to the $100k writeoff, but I guess I don't see where the free money comes from, since you still have to actually break down and buy a really expensive vehicle. What am I missing here?

Starting a very small business.

shotsy — Thu, 29 Jul 2004 17:56:01 -0800

I am thinking of starting a very small business, but I have a few questions for those of you who have done so before I really make up my mind wheter to go forward or not. [More Inside] I'd like to start selling original t-shirts over the web, essentially. My goal is not to get rich, just to get a little extra change and also to get some t-shirts I'd want to wear. Hobby meets Cash. I've looked over some of the previous threads on setting up small business, but none seemed to quite address my questions.

A bit about my plan: Start with small runs, maybe 50 prints each of two designs, see how they sell, then react accordingly.

1) I've looked into the process and there are a lot of custom printers out there, and if anybody has experience in that area, I'd appreciate a reccomendation.

2) Taxes: I don't see myself making all that much money on this venture, but I don't want to play games with Johnny Law, so I am wondering how difficult figuring this stuff out will be. Do I need to officiate myself as a company or anything?

3) Advertising: I'd love to hear the good and bad stories of internet advertising. How does it usually work? I'd obviously target sites that cater to people with similar aesthetic ideals, but I'd love to get a rough (or very rough) estimate for how much I should expect to budget for that sort of thing (though I understand it will vary wildly by site).

4) Any other tips on things I haven't thought of would be appreciated.

I realize I've thrown a lot out there, so please just answer parts if you can. Many thanks.

Help with small business tech resources

skallas — Fri, 12 Mar 2004 21:42:28 -0800

Can someone recommend a book or a resource for the small business owner, especially in regards to tech/eCommerce? Not a tech book, but something that can clue me in to 'businessy' stuff like advertising, accounting, employee issues, etc? There's *a lot* of stuff at amazon and at my library. A few recommendations would really be appreciated.