FAQ

Your reports will get to you by the 15th of each month, or the business day prior.

Ideally, we will have set up accountant read only access to all of your bank accounts so that I am able to pull statements on your behalf.

I aim to have questions to you as early as possible, and your timely response will allow me to get your reports done by the promised date of the 15th each month.

Delayed responses leads to delayed reports.

Please do your best to answer promptly so that I can ensure timely reports and you're able to put them to use.

If you prefer a different form of communication, just let me know and I will do my best to work with it.

Delays:

If reports are delayed beyond our internal deadline of the 15th, I will send an update. If the reason is due to incomplete information from the client, I will let you know what is missing.

Once the status email is sent, I won't send any additional follow ups. I will be waiting for the information necessary to complete your books.

The first half of the month is when my sole focus is on the clients and getting reports sent out. The last half of the month is when I focus on aspects of the business outside of existing client work. I can be busy in other projects during this time.

Because of this, if delayed information is received during the last half of the month, it may take up to 5 business days to turn the information around.

Inform me if you:

• Open a new credit card
• Open a new bank account
• Change banks
• Begin selling physical products
• Hire any new staff
• Apply for or receive new loans
• Accidentally pay a personal expense from the business
• Accidentally pay a business expense personally

My rates are based on the time it takes to complete your books, and not your income.

Rates are subject to increase with written notice and upon your acceptance. In the event of an increase, you will be notified of the amount and the date it is effective in advance and with your consent.

Most of the time, I will gladly brainstorm ways to work faster and keep your bill down and my busywork at a minimum. Implementing efficient systems with your willingness and flexibility makes that work.

That being said, I fully understand if the priority is in maintaining your system and dealing with the inefficiencies on the books. I am open to doing that work, however with the lack of an efficient system, the bill is subject to increase and we will discuss the increase at that point.

Things that can trigger rate increases, aside from general inflation, are:

• manual processes (example: hand keying transactions due to not being able to connect feeds)
• increases in volume of transactions that adds time (note: increase in volume doesn't always add time)
• granular detail of reporting (example: showing you detail by project or division)
• an increase in how many accounts you have

Why it's important to keep business and personal separate:

• For the purpose of our relationship - it makes it exponentially easier to track. I'll have fewer questions for you, less guesswork, reduced room for error, and time saved (which means a lower fee and more accuracy)
• Its a great practice for you and especially in the event of an audit

Personal expenses should be paid through personal accounts. Business expenses should be paid through business accounts. If cash is tight on either side, make that transfer between the accounts before the purchase.

If you accidentally pay a personal expense from a business account

I will typically code it as owner's draw and it will not count as a business deduction. If it is an autopay item, I will remind you to correct the billing account.

If you accidentally pay a business expense from a personal account

I have no way of knowing unless you remember to tell me. That means you miss the ability to deduct what you spent. Just shoot me an email with the following information: Date, Amount, and Vendor, and I will enter it in your books. You also have the option to reimburse yourself by writing a check or transferring from your business to your personal checking with a memo, and tell me it is a reimbursement. If you don't tell me this was done, it may accidentally get coded to owner's draw which means you miss the deduction. 

I kindly request that this is kept to a minimum. These funds should not be mixed, as it creates more work and is an inefficient process with more room for error.

Did you know... estimated tax payments and payments on your personal tax return are personal expenses and are not deductible? If you pay them from your business, I will treat them as owner's draw.

Receipts will be your responsibility! They are used to back yourself up in the event of an audit. I do not manage receipts for you, nor will I ask for them.

In our working relationship, you can reduce the need to reference your receipts by keeping your business and personal expenses separate!

Deciding if a new hire is an employee or contractor is a matter of which one the IRS would determine them to be. Ultimately it comes down to control.

The IRS has a 20 point test to determine if someone is considered a contractor or employee.

You can read through this article, and I have listed the 20 factors below to reference.

• Level of instruction. If the company directs when, where, and how work is done, this control indicates an employer-employee relationship. 
• Amount of training. Requesting or requiring workers to undergo company-provided training suggests an employment relationship since the company is directing the methods by which a worker performs their duties. 
• Degree of business integration. Workers whose services are central to the business operations or significantly affect business outcomes are likely to be considered employees. 
• Extent of personal services. Companies that insist or demand that a particular person performs the work have asserted a high degree of control, which indicates an employment relationship. In contrast, independent contractors are typically free to assign work to anyone. 
• Control of assistants. If a company hires, supervises, and pays a worker’s assistants, this control suggests an employment relationship. If the worker gets to control the hiring, supervising, and paying of assistants, they could be defined as an independent contractor. 
• Continuity of relationship. A continuous relationship between a company and a worker indicates an employment relationship. However, an independent contractor arrangement can also be an ongoing relationship that spans multiple, sequential projects. 
• Flexibility of schedule. If a company gets to dictate a worker’s days and hours of work, this degree of control suggests an employer-employee relationship. 
• Demands for full-time work. Workers who work full-time hours suggests a company has control over most of their time, which indicates an employment relationship. 
• Need for on-site services. Requiring someone to work on company premises —  particularly if the work could be performed elsewhere — suggest an employer-employee relationship. 
• Sequence of work. If a company requires work to be performed in specific order or sequence, this type of control suggests an employment relationship. 
• Requirements for reports. If a worker has to regularly provide written or oral reports on project status, they could be viewed as an employee. 
• Method of payment. If a worker is paid hourly, weekly, or monthly, this could suggest an employment relationship, unless the payments simply are a convenient way of distributing a lump-sum fee. It is more characteristic to pay contractors upon project completion or commission.
• Repayment of business or travel expenses. Independent contractors are typically responsible for paying for travel or business expenses, and most contractors set their fees high enough to cover these costs. In contrast, reimbursement of travel and other business expenses by a company suggests an employment relationship. 
• Provision of tools and materials. Workers who use company-provided equipment, tools, and materials to perform their work are more likely to be considered employees. Work largely done using independently obtained supplies or tools supports an independent contractor classification. 
• Investment in facilities. While independent contractors and freelancers usually pay for their own work facilities, most employees rely on their employer to provide work facilities. 
• Realization of profit or loss. If a worker’s earnings are predetermined and have little chance to realize significant profit or loss through their work, they are generally considered to be an employee. 
• Work for multiple companies. Workers who provide services for multiple companies concurrently are likely to qualify as independent contractors. 
• Availability to the public. If a worker regularly makes services available to the general public, they could qualify as an independent contractor. 
• Control over discharge. If a company has the unilateral right to discharge a worker, this suggests an employment relationship. In contrast, a company’s ability to end an independent contractor relationship generally depends on the terms specified in the contract. 
• Right of termination. Most employees can terminate their work for a company unilaterally without liability. Independent contractors cannot quit their work engagements without liability, except as permitted under their contracts.

If you hire an employee, you will need to register with your state and begin running payroll (if you aren't already). I recommend using ADP or Gusto. We can chat to determine what is best.

Both have HR packages should you need help with employment contracts, benefits, and job descriptions.

If you are hiring a contractor, it is best practice to obtain a W9 from them upfront. You can do this by sending this form and retaining for your records.

You should pay them in a way that either prepares the 1099 for you (a payroll system) or allows you to not need to file one.

You can email me to help you decide, but I will list my general recommendations below.

Payroll systems will handle the 1099 for you and allow you to send payment to your contractor. They have monthly fees. If you are paying yourself salary as an S Corp owner anyway and this person will be ongoing, paying them through the same payroll system is a good way to pay.

(again, ADP or Gusto are my recommendations)

To avoid having to issue a 1099 at all, pay via a third party processor. This may happen if your contractor invoices you through a payment processor like Stripe, PayPal, Dubsado, Honeybook, Wave, QBO, or Xero. In this event, you do not need to file a 1099-NEC because the payment processor will issue a 1099-K if requirements and thresholds are met. This is my preferred method though your worker may get confused. See the next question.

If you have a client who paid you via cash, check, bank transfer, or a personal app (Zelle, Venmo, PayPal friend & family), then your client is right to ask you for a W9.

However, most of my clients should not receive 1099s from their clients because they accept payment via a third party processor (Stipe, PayPal goods & services, Wave, Honeybook, etc..)

Below is a swipe copy you can share with your client who is making this request. 👇

Per our accountant, a 1099-NEC is not required because we were paid via a third party payment network that will issue a 1099-K instead.

Please reference the 1099 instructions, page 3 bottom right that reads "Form 1099-K. Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for Form 1099-K."

https://www.irs.gov/pub/irs-pdf/i1099mec.pdf

The best way to say "I appreciate you" is by referring your friends who could use a good bookkeeper! 

Send them my quote form www.composurebookkeeping.com/quote and tell them to put your name in the "how did you hear about working with me?" field.

If they sign on for monthly bookkeeping services, I'll send you an $88 referral bonus via PayPal when their first payment is made. 🩵