Uncategorized Archives - Page 3 of 5 - Therapeutic Bookkeeping

Types of Business Ownership

One of the most important choices you’ll make when starting a business is the type of legal structure you’d like for your company. You need to choose from the different types of business ownership. This decision affects multiple aspects of your business culture, growth, and direction including personal liability and tax requirements.

If you’re just starting out and haven’t had experience in business start-ups, it’s important to seek advice from startup business experts and state counsel as each situation is different and the implications shouldn’t be taken lightly. There are three main types of business ownership that vary vastly in terms of liability, tax implications, and bookkeeping requirements:

1. Sole Proprietorship

The simplest type of business to operate, the sole proprietorship indicates the sole individual in charge of running the business and does not differ between owner and entity. This means that the individual is solely responsible for any debts related to the business. While it’s easy to control and simple to maintain, the owner is also personally liable for any and all financial obligations.

2. Limited Liability Corporation (LLC)

Similar to a sole proprietorship, a Limited Liability Corporation or LLC allows the owner to maintain sole control over the business. However, it differs in that the owners are not personally responsible for any debts or liability incurred by the business. While the profits and losses are transferred without taxation, it operates without liability.

3. S-Corp

The single most important benefit from S-Corp status is that there is no personal liability as the corporation becomes a completely separate entity from the owner. The disadvantage of setting up an S-Corp involves the initial cost to form a corporation and the extensive business bookkeeping involved to maintain accurate and timely records.

We love to work with businesses of all types and sizes! If you’re needing additional help with your monthly bookkeeping tasks, please reach out to us for a free bookkeeping consultation! We’re happy to help ease the burden and free up your time to focus on your business!

5 Tips for Efficient Account Reconciliation

May 10 by Alicia Bishop

Simply stated, account reconciliation is a comparison between your records and the statements provided by bank and credit companies. While the process of account reconciliation is long and tedious, it’s an extremely important step in your monthly bookkeeping tasks. It helps you find any mistakes on your statements, double charges, missed payments you otherwise may have thought went through, your own payments that may not have went through, etc!

If you have your private practice bank statements just sitting around, or in your online banking, but you never look at them, now is a great time to start! You don’t want to miss out on any of those tax deductions for therapists, or miss a double or fraudulent charge!

We’ve put together some tips and tricks to make account reconciliation not only an efficient part of your private practice bookkeeping process, but also a painless one!

1. Keep Your Receipts

In order to reconcile your accounts in the first place, you need to have something to compare and verify your statements with. Make a habit of storing your receipts as soon as they are received. Our recommendation is to snap a photo and upload right away! Digital copies are much more difficult to misplace!

2. Have all Documentation Together.

The most efficient way to reconcile your private practice bank accounts is to start with everything in one place. Having to search for missing receipts, statements, and other documentation doesn’t allow for a quick and thorough run-through. Have a designated area to keep all of your private practice documentation in one place, so it’s ready to go when you are! Whether you like digital copies or hard copies, find or create an organization system and put it to good use!

3. Separate into Sections to Reconcile.

The best way to do this really depends on your private practice expenses and bank accounts! You can reconcile by expense category, date of receipt, or by making your way down your private practice bank account statement. Or if you’d rather tackle all of your private practice income tracking in one section, then your private practice expenses in a different section, then do that! Whatever works with your private practice and also your organizational skills is what will make this the easiest for you.

4. Review Any Discrepancies Carefully.

If you’ve found a mistake or difference, or ‘discrepancy’ between your records and your private practice bank accounts – review and fix as soon as possible! If you put it off, you could forget it, but more importantly, it could be ‘expired’ by the time you take action. Meaning, sometimes with financial matters, there will be a date which you can no longer make changes or ‘return’ things. So the sooner, the better! And keep in mind, banks can make mistakes, too!

5. Automate the Process.

One of the best parts of utilizing an online accounting software for your private practice, is the automation available and how much time it will save you! You can link all of your credit cards and bank accounts for your private practice, directly with your bookkeeping or accounting software so that all of your private practice transactions automatically get pulled into the software and are ready for you to classify them!

If managing your private practice bookkeeping is just not a priority every month, please reach out to us for a free bookkeeping consultation! We’re happy to help ease the burden and free up your time to focus on your private practice!

Online Bookkeeping and Accounting Software for Small Business Owners

Apr 12 by Alicia Bishop

If you’ve researched online bookkeeping and accounting software in the past, you’ve likely noticed that you have a TON of different options! With all of the old standbys and new software solutions on the market, it’s difficult to decide which to choose. After all, it’s inevitably a large undertaking to change from your current method. You certainly don’t want to do this twice!

Perhaps you’re still doing your small business bookkeeping manually with paper receipts and Excel spreadsheets. Perhaps you’re currently utilizing desktop software and looking for a more on-the-go and accessible solution. The good news is that with all of the available bookkeeping and accounting software options, you’re bound to find one that is the right fit for your business.

Why utilize an online bookkeeping and accounting software? Unlike an Excel spreadsheet, they automatically track and categorize all income and expenses and provide you a clear picture of your business’s financial situation. Depending on your needs, many include tax preparation and accounting services, online invoicing and payment options, inventory management, time tracking, and payroll.

Here are our recommended accounting and bookkeeping software solutions for small businesses. Again, the right software option is the one that fits the most needs of your business. If you have any questions about choosing an option, please reach out to us for a free consultation! We’re happy to help!

QuickBooks Online
- QuickBooks is one of the most powerful bookkeeping and accounting tools available in the market. Many features are available based on your business needs, and pricing is based on the additional features required.
- QuickBooks allows your income and expenses to be recorded in an easy-to-use interface while backing it up with all of the power and reporting features needed to run a successful business. In addition, you can track mileage, manage contractors, facilitate payroll, and have multiple users on the account. For those individuals used to a desktop-based software, QuickBooks is the easiest transition to online.
Xero
- Xero is fast becoming known as a QuickBooks alternative. Based out of New Zealand, Xero provides a clean and intuitive interface to manage your bookkeeping and accounting tasks – even from your mobile phone!
- With a powerful project management tool, easy payroll options, and an up-to-date dashboard, Xero is popular with a new generation of entrepreneurs and small business owners!
Wave
- Wave is perfect for small, small businesses – including freelancers and consultants. Free to utilize, Wave allows you to connect your bank and credit card accounts to help automatically track income and expenses and it automatically generates financial statements.
- Wave makes money on payroll options and online payments through their proprietary invoicing system. Their professional invoicing system makes billing a breeze and even sends automatic payment reminders to customers to help avoid late payments.

Need help setting up and utilizing your new small business accounting and bookkeeping software? Still looking for that perfect virtual bookkeeper? We’d love to chat! Request a FREE consultation here, and we’ll be in touch soon!

How to Prioritize Bookkeeping When You Have Other Priorities

Mar 29 by Alicia Bishop

How to Prioritize Bookkeeping When You Have Other Priorities

Are your books a mess? Finding it hard to track expenses and income when your business requires your attention elsewhere? You’re not alone! Many small business owners, especially those just starting out or those experiencing a change in client volume, have difficulty keeping their bookkeeping in order, let alone able to prioritize bookkeeping.

However, accurate bookkeeping is essential for not only maximizing your tax deductions but ensuring the financial health and stability of your business.

You’re busy. You need a simple and effective action plan. Here it is:

Get a fresh start with a bookkeeping clean-up.
- Set aside a few days or as much time as possible to focus solely on your books. No distractions.
- Enter all expenses. Upload receipts to have digital copies.
- Reconcile all account statements.
- Hire an outsourced, virtual bookkeeper for a “clean-up”. Many bookkeepers offer this service prior to tax time to get your books in order before April!
Develop a plan for moving forward.
- Determine your biggest bookkeeping pain point. Is it tracking receipts, keeping up with mileage reports, or managing inventory? There are apps for that!
- Set rules within your accounting system to automatically categorize recurring transactions.
- Schedule a regular time each week to make sure your books are kept current. If you’d rather focus on revenue-increasing aspects of your business, consider hiring a bookkeeper for these monthly tasks.
Implement your plan.

A plan is only effective if it is actionable. An actionable plan is only effective if it becomes a habit. Now that you are up-to-date and have a plan, stick to it!

Clean and accurate books are one of the best resources you can have as a small business owner! Still looking for that perfect virtual bookkeeper? We’d love to chat! Request a FREE consultation here, and we’ll be in touch soon!

A non-boring bookkeeping newsletter?! Is that even possible?! Of course it is with a little TBK attitude added!