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: The Accounting Saga  ( 302 )
Mojo
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« : August 04, 2017, 07:28:06 AM »

Since we first opened our doors I did the book keeping and filed the taxes. But as we grew things started getting more complicated and harder for me to manage. We hired an accountant last year and she has taught us all kinds of things with book keeping and additional tax write offs.

We use Quickbooks and the first thing she did was get our books in order. We ended up hiring a student intern who was a former student of Ingrids. She did all the data entry and got our books caught up. To be honest we had a helluva mess as we were running a lot of transactions for our manufacturing company through our awning company. The accountant went nuts over this and we ended up splitting the two, getting new bank accounts, etc. so now the two companies stand on their own and are 100 % separate.

We had to start at ground zero and pull all of the transactions for parts and manufacturing items out of the awning company and put those into the manufacturing company. Last week Valerie, our high school student intern completed the task. I might add Valerie is one very smart girl and did an amazing job.

I have been screwing around with Quickbooks and found that it is quite powerful. Once properly setup it can generate reports for us that nails down all kinds of things including costs, sales of various products, etc.

I never wanted to hire a private accountant but this gal is sharp. She is saving us all kinds of money and also restructuring assets so we have more liability protection in the event of a law suit. In other words despite us being a corporation she is shielding our personal assets from the company and potential liability. The other thing I am happy about is that she knows exactly how to close doors with these assets so the IRS doesn't have a leg to stand on. Very important since the IRS hates me and has audited us 3 times in the last 6 years.

I do have to say she has been very clever with write offs. She has saved us a lot of tax money by making personal assets new write offs for the company. One huge change was the coach we own is now a full write off under the awning company. Payments, fuel, plates, maintenance, etc.

My question is do most of you do your own taxes or do you hire an accountant like we do ? Are you using quickbooks ?

Mojo
kodydog
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« #1 : August 04, 2017, 08:53:41 AM »

Rose has her BA in business management. She also took all her electives in accounting. She is 3 credits shy of getting her accounting degree. Needless to say she does all of our book keeping. She is incredibly meticulous. She also spends many, many hours every year doing our taxes. If she is not happy with the results she scours the internet looking for more deductions.

You are very fortunate to find an accountant who works so hard. We hired one once during a very busy year. She was certified, a customer of ours and taught accounting at the local collage. She did our taxes and we mailed them off. Later when Rose was going through them she noticed a big deduction missing. Depreciation on the delivery van. My conclusion is these people are so busy that time of year doing thousands of returns and the tax code is so frigging complicated how can they possibly find every deduction for every client. On top of that the tax code changes every year. My feeling is the tax code should be simple enough that a high school graduate should be able to do it in just a few hours.
  

« : August 04, 2017, 08:54:59 AM kodydog »

There cannot be a crisis next week. My schedule is already full.
http://northfloridachair.com/index.html
brmax
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« #2 : August 04, 2017, 10:40:35 AM »

Chris this always is an interesting topic especially with questions.
I will gladly participate :) with that say I have been taught to be very conscious about invoices and time counts toward projects. And as you know as others here that can be the easy part to watch because there is so much more. I hire out the professional tax prep service. I would like to see more interested help in Quickbooks, and to my knowledge the pro desktop version. This reason being not enough of the same product to have the same exact inventory items. As i understand from some years looking at the internet. So for the time being its both Excel and QB pro. So i totally understand to hire out, although i am hard headed and want to present the proper task work at my end. At the moment i have interest finding a QB adviser locally to better myself. My youngest is in the 3rd year of finance and really makes the old man proud. Maybe someday give a few tips or bonk me on the head saying nope this is the correct way. I cannot afford and really not ready for programs like QB with the great inventory for a manufacture that has different custom jobs, or even the Fishbowl inventory program. I think either of these need more personnel and sales to be cost effective. By the way my QB notifies at what seems every single day i need updated because no more online support etc.. Twice now ive had to go in programs and do a update/fix the same update file, and thats a pucker moment when it wont start whoohh!


Great topic and have a good day there
Floyd
MinUph
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« #3 : August 04, 2017, 11:28:22 AM »

I also did all my book keeping and taxes in my sole prop businesses. Since incorporating I have hired a firm for accounting and taxes. We use an and I have used it ever since it came out for Windows. Many many moons ago. It Is the easiest of the bunch. Accountants are quite expensive I must say.

Paul
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SteveA
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« #4 : August 04, 2017, 02:09:20 PM »

Audited 3 times in 6 years - you need the accountant or you're making too much money - or you're a member of the tea party? 
I do what I can and the accountant looks it over and makes corrections if necessary.  He lets me do as much as I care to do.  This allows me t save some bucks -  there's no way I would not use an accountant
SA
Mojo
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« #5 : August 04, 2017, 09:09:23 PM »

Steve:

Back in 2006 I was day trading stocks as a sideline and for something to do. I filed my taxes and got a bill in the mail from the IRS for $ 1.2 million dollars along with an audit notice. I almost had a heart attack till I realized I made a stupid mistake. I never entered the cost basis for the stocks.

It took a year to get the IRS straight and a lot of documentation. In the meantime they put a lien on our properties. After it was all settled they mailed me a bill for $ 350. I paid it, they released the lien and on we went. But what I didn't know was that my returns now all get kicked out and hand processed by an auditor. If they see one thing they do not like they audit me. It is called being on their bad boy list.

I am hoping that with our new accountant and her name on the returns they will start leaving us alone.

Imagine getting a bill from the IRS for a million or more ? I damn near fainted. I hate the IRS with a passion. Nothing but a bunch of blood sucking leaches who have no common sense.

Mojo
Mojo
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« #6 : August 05, 2017, 05:30:30 AM »

Floyd:

The old saying that knowledge is power is true in business. Quickbooks has a huge amount of data hidden inside if the fields are all set correctly and the info being entered is correct.

Just some of the reports that can be generated and can help nail down costs as well as get a handle on whats selling and what isn't:

1.) A report that shows which reoccurring item is being used most and what it costs.
2.) Which service, part or whatever generates the most income.

I should also add that Quickbooks is a gold mine for marketing. It will show you trends so you can promote a certain service or line of products. It also contains e-mail addresses for every single customer we have for future mass mailings. It shows us what part of the country we are heavy in with sales and where some parts of the country where sales have dropped off. That helps me determine where we need to focus on our marketing/advertising efforts.

With our manufacturing company, cost on components is a big issue so we are able to generate reports which shows which component is being used the most and costing us the most. If I see one component cost going up then you can bet I will be on the phone trying to find a cheaper supplier.

I did a cost analysis on our guardian plates that we manufacture and sell. I was custom making every one of them. I kept accurate records on the build process and discovered it was actually cheaper for me to sub contract those plates out to another company. Each late they make is done on a CNC machine and their price beats ours making them in house by $ 20 bucks. Doesn't sound like much until you consider that plate is our best seller by a 10 - 1 margin. It also eliminated our backlog of orders and increased our shipping times by weeks.

Out of any member on here I have to say Ricat is probably the very best at nailing down costs. He has mounds of spreadsheets on everything from labor hours right down to the amount of thread used for a particular job. ( Yes he found a way to determine how much thread is used per yard of fabric ). The cost analysis he can generate on a single job blows my mind.

I admit I have been lazy for too long and let costs go and never paid attention to it. I instead just looked at the balance sheet at the end of the month. When Ingrid took over the companies she was the driver on nailing down our costs. Since then and digging into our costs I seen where I could make changes in suppliers to save money. I studied the way we were making Guardian PLates and found time saving measures there as well. It all added up to big savings. Quickbooks was a big help in that area. We are up to 40 SKU's on various products we sell and because we are almost ready to sign an  agreement with Thetford  to rep their entire product line our SKU's on the RV company side will go to over 100. That is a lot of product to keep track of. 

Mojo
Mojo
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« #7 : August 05, 2017, 05:47:53 AM »

Floyd:

I forgot to address your learning of QB. When we hired our accountant she has a separate service which teaches business owners how to setup, manipulate data, set up different fields for data entry, generate reports, navigate QB, etc. She trained Ingrid initially and then Ingrid helps me with questions I may have.

Her rate for QB training is lower then her accounting rate so it made it cheaper. She was able to save us hours and probably days from wrestling with QB. It was well worth the money.

In my prior life I used to do a lot of numbers crunching for my employer and used Lotus, Excel and Access. I was pretty used to working with numbers and manipulating data but I admit QB was a hard program to learn.

They do have books out to help. Here is one:  https://www.amazon.com/s/ref=nb_sb_ss_fb_1_22?url=search-alias%3Dstripbooks&field-keywords=quickbooks+for+dummies+2017&sprefix=quickbooks+for+dummies%2Celectronics%2C503&crid=15AL9B2YD18OW

I have a copy of this book somewhere though I never read it. :)

Mojo
brmax
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« #8 : August 05, 2017, 02:10:31 PM »

I would just like to have the ability in QB to do one off manufacturing. I was ready for premier with the group function. Although to my understanding this is still for a consistent product, or the same inventory items. Much of the time this is perfect for re-sellers or the building of product being the same.  
I just see this a big issue with QB not having this "one off manufacturing" ability in the pro or even next level premier editions.
This is my reason for the use of excel, so to have an easy bill of materials. Just for my records of inventory and any reports i may generate. In this QB method i use the other asset acct. for material purchases and may use finished product in non inventory part. As it is i need to do journal entry work manually to QB cogs. In time i am sure a better option will surface or my understanding i hope to be better.
I believe with a bit more homework an adviser in QB even within an accounting firm could be a benefit.
Thanks for the tips
Floyd
« : August 05, 2017, 02:57:06 PM brmax »
brmax
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« #9 : August 05, 2017, 02:27:07 PM »

I had this incoming-shipping or freight cost i wanted to ask for some opinions. Staying in the accounting saga post seemed the right time. So whether its ledger or any other usage of software how can these cost be addressed when it is for a bundle or qty not totally used on present job. I wondered about throwing it all in say a box and charging a percentage out to each invoice. Is this possible or can anyone further the ? Please.
Thanks
Floyd
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« #10 : August 05, 2017, 03:19:10 PM »

Floyd, I think I understand your inquiry. As far as freight, I always try to incorporate the materials I stock with material orders for a particular job. That way the freight is charged out to the job and not to the materials for stock (this especially works with a flat rate delivery fee for freight). If not, then I would approach it this way. As an example, if I was ordering 10 yds of whatever for stock and it cost $5 yd and the freight was $15, then the cost for the stock item went from $5 yd to $6.50 yd to charge out. Now, where the spread sheets really kicked in is how to charge out the materials that can't be charged out per a unit. Example of these materials would be a 1lb cone of 92 poly thread. I do charge out SolarFix because they give measured amount information on the bottom of the cone (whether a promo cone, 8oz or 1lb) so the math can be done on a running yard of SolarFix sewn to the cost of the cone (with another important step needed to get the proper calculation cost). But, how to do this charge on a 1lb cone of poly? Or, how about chalk, or marking pencils, or cleaning fluids, or razor blades, or machine oil, ect, ect. So, what I did was categorized my materials in three different categories. The first category is materials specifically purchased for a job. The next category is materials that are stocked that can be charged out per a unit - sew foam, SS staples, snaps, embossed welt, ect. The the last category is the materials for stock that can't be charged out per unit - like the materials given before as examples. So, I take the total cost of all materials bought, then run percentages on the three different category's. What the numbers showed me is that the materials that I don't charge out per unit was 7% of the total materials cost. With that, when I give a estimate, I will fill in the spread sheet for the estimate and I have it set up that it will automatically add 7% to the material cost. Same thing done with the average amount of time I spend on the admin side of things for a job. I got that number and now I just plug that in the estimate at a particular rate per hour.

Hope this helps...
Regards
Rick
Mojo
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« #11 : August 05, 2017, 04:51:10 PM »

Floyd:

I would follow Ricks example. He is brilliant when it comes to nailing costs down on individual items.
I never thought anyone would ever be able to calculate thread cost per yard bt Rick did. :)

I know he is a big proponent of excel and spreadsheets. I do use spreadsheets when calculating the cost of the parts we manufacture. There are so many components to each order that I have no choice.
I take those costs to arrive at my end cost and then apply my margins. THis gives me the sales cost and then I list that in QB's.

While I find QB's robust I also find it has some limitations. Then again I may not have found all the hidden nuggets either buried inside QB's.

I am pretty sure that by the time I master QB's, I will die of old age. :)

Mojo
brmax
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« #12 : August 05, 2017, 07:43:25 PM »

Chris thanks for the post itís a great tool you present for all.

Rick a big thank you!  This sure helps sort the many issues.
I agree and like to charge the shipping of materials to the specific job, it seems all around to be fair and efficient. I do not at this time show these charges on the invoice but do need the record. I like using the Excel sheet in this for the time being. It can be a reminder for myself if I need to order more (roll eyes)

Iím trying to keep it separated for now so my record can be a bit more consistent possibly. So, if running back over the record the product ordered is in the actual price range purchased be it 10 or 50 yards in the following months. 

Here in the sheet I have struggling other shipping of minor bulk material cost not charged out and need a method to address. If I put a note in the cell I can deal with it better going ahead.  The red triangles catch the eye so one can rely on that anyway.

Maybe we all can chuckle and work on this Thread together! I thought self you should have come up with bobbins on the spread sheet but they sure donít list that in the units. Bummer

I decided to use the lbs. on the sheet for the solarfix at this stage, no matter it hurts to buy for sure. At 2300 meters a pound its easily worth the recorded usage. I use to reload quite a bit for clays and such n such so I used the scale again on the empty and full bobbins.

So, for what itís worth a grin, laugh or real interest hereís a bit of info on my thread findings and enough to be rough but fair. Some bobbins may weigh slightly different or tension tighter as usual. Now my yard of measures were just arm length to neck the ole science method eh

In the 1541 bobbin style empty weight is 94grain
 full of SolarFix 2000/92 is 181grain, a full to empty diff of 87grain = .01243Lbs @ full = 28Yds
 full of 92 Ultra dee poly is 137grain, a full to empty diff of 43grain = .00614Lbs @ full = 32Yds
In the 1508 bobbin style empty weight runs 124grain
 full of SolarFix 2000/92 is 235grain, a full to empty diff of 111grain = .01571Lbs @full = 38Yds
 full of 92 Ultra dee poly is 186grain, a full to empty diff of 62grain = .00886Lbs @ full = 39Yds

Not much interest until 167.00 per lbs gets on the invoice, its more now!
I have some Cobra measures if any interest is there though the cost is about like other poly.
I think if one wants a price per bobbin, it could be gained from this and Ricks great information and used in a Ledger, QB or the Excel as a unit of (ea) ďAlthoughĒ if as I did this morning did not double the bobbin usage on the record, you may come up empty earlier than thought. Surely the top thread counts and sure donít need it to be forgotten  ;  )

Thanks again you all this forum has been rock solid for help
Floyd
byhammerandhand
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« #13 : August 06, 2017, 01:05:01 PM »

I had a couple of MBA classes in accounting.   But I have quickbooks and wife is a retired accountant who was an EA (IRS Enrolled Agent) and CPA specializing in tax accounting for a while.    I do the day-to-day income and expenses and monthly sales tax filing and she does the monthly books / banking closing and (God Bless her) the annual income tax return.  M,ost all my expenses are not materials.   Most of what I do is labor with incidental shop supplies.

Keith

"Opportunity is missed by most people because it is dressed in overalls and looks like work." Thomas A. Edison
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