February 14, 2020
Happy Valentine’s Day! While this holiday is traditionally focused on the love and well being of your special someone, it’s our job here at LBF to encourage you to give your books a little TLC as well.
You know – your QuickBooks Online (QBO) account. The one where, in the words of legendary pitchman Ron Popeil, there was largely a “set it and forget it,” approach to 2019. Well, it’s 2020 now, and moving forward we strongly suggest reconsidering the approach.
“But Josh, our bank and credit cards are linked to QBO, so all transactional activity is already being imported. What difference does it make if we review this monthly/quarterly versus at year-end?”
Thanks for asking, Straw Man! There are a few things to consider here. First, both banks and QBO are likely to periodically update security settings. That login/password combination used to initiate automation will work until one of those updates requires additional user verification (a password change, additional permissions, etc.). If that happens and the bank feed is not reviewed for some time, then the link fails. Not only will the relevant information be conspicuously missing from the bank feed, if you wait long enough, it may even be difficult to obtain appropriate bank downloads to easily upload and cover the periods that were missed. In that event, transactions must be entered manually, which is frustratingly time consuming. Secondly, digital fraud (identity theft, credit card fraud, etc.) may occur, and it is important to be as vigilant as possible in ensuring that expenses charged to accounts are valid. Regular reviews of accounts, including monthly bank and credit card reconciliations help identify fraudulent activity early, allowing steps to be taken quickly to mitigate any damage that may occur. If you find yourself to be the victim of identity theft, or would like to know more about what to do if you become a victim, please see Amy Chandler’s recent blog here.
“But Josh, we know how to operate our business, but our understanding of bookkeeping is limited, and we are not sure how particular transactions should be recorded. We want to properly accept/import activity from this bank feed you helped us set up, but rather than make mistakes which may make our year-end more difficult, we’d just as soon wait and let you do it. Our lack of action was intentional, and we believe for both your benefit and ours.”
Well Straw Man, while I appreciate your faith in me, I disagree with the approach. There are plenty of tools at our disposal to reclassify transactions or otherwise get your books in order. QuickBooks learns as we record activity, so at the very least any errors that are made are likely to be consistent, quick to address, and once corrected, unlikely to be duplicated. Moreover, if you find yourself unsure where a particular transaction should go, that’s a perfect excuse to send us a quick note or give us a call. The best part about QBO is that both of us can be on the same page at the same time – and in just a few minutes we can walk you through what should be done.
We are pleased to announce that Congress changed some of the PPP rules over the weekend. It is important to note that several of the rules have been relaxed; those of you who were getting close to the end of your “8 week window” can now take a deep breath, as that period has been extended. As always, we are staying up-to-date as the new rules are rolled...
Many of you reading this have received, or will soon receive, the Payroll Protection Program (PPP) loan. And that’s good news. Not surprisingly, however, this distribution now shifts the focus to “what qualifies as forgiveness under this program?”
As of now if you spend at least 75% on payroll costs over an 8-week period, from the date you received the funds,...
Frequently Asked Questions
If I am applying or already received an Economic Injury Disaster Loan, is my small business eligible to participate in the Paycheck Protection Program?