Questions
Answers to questions small business owners ask about bookkeeping, taxes, and keeping financial records in order.
What does full-service bookkeeping include for a small business?
Full-service bookkeeping includes transaction categorization, bank and credit card reconciliation, and monthly financial reports. Pricing typically starts at $199 per month and depends on your transaction volume.
Read answerHow often should a small business reconcile bank and credit card accounts?
Monthly is the standard for most small businesses. Bank feeds pull transactions automatically but don't catch duplicates, uncategorized items, or missing entries. Monthly reconciliation is the checkpoint that keeps your books accurate.
Read answerWhat financial reports should a business owner review every month?
Every business owner should review the profit and loss statement, balance sheet, and a cash flow or cash position report each month. Add accounts receivable aging, accounts payable aging, and budget-versus-actual if you work with a budget.
Read answerHow do I know if my books are too messy to file taxes?
Warning signs include unreconciled bank accounts, mixed personal expenses, old undeposited funds in QuickBooks, negative balances, and unexplained loans or transfers. If you can't trust your financial statements, a tax preparer won't be able to work with them without cleanup first.
Read answerHow far back can catch-up bookkeeping clean up old QuickBooks records?
Catch-up bookkeeping can cover months or years of old records. The real limit isn't time but documentation. Bank statements, receipts, the condition of your QuickBooks file, and tax deadlines determine what's possible.
Read answerWhat records should I gather before hiring a bookkeeper?
Gather your bank and credit card statements, any accounting software access, prior tax returns, and supporting documents for income and expenses. Having these ready helps your bookkeeper get started faster and keeps costs down.
Read answerHow can a bookkeeper separate personal and business expenses after they are mixed?
A bookkeeper separates mixed expenses by reclassifying personal charges as owner draws or distributions rather than business deductions. Legitimate business expenses paid personally get documented as reimbursements with proper support.
Read answerShould my small business use cash or accrual accounting?
Most small service businesses use cash basis for taxes because it's simpler. Businesses with inventory, significant receivables, or lender reporting requirements may need accrual-basis books.
Read answerWhen should I move from DIY bookkeeping to a monthly bookkeeping service?
Move when DIY starts costing more than it saves. Signs include falling behind on reconciliations, not knowing your actual profit, tax deadline panic, and spending hours on bookkeeping that could go toward running your business.
Read answerHow are monthly bookkeeping prices usually based on transaction volume or expenses?
Pricing typically reflects transaction volume, account complexity, and reporting needs. Many firms use expense amount as a benchmark because it correlates with how much work your books require. At SRC, full-service bookkeeping starts at $199 per month based on expense amount.
Read answerWhat can cause my profit and loss statement to look wrong?
Common causes include uncategorized transactions, duplicate bank feed entries, owner transfers recorded as income, missing cost of goods sold, and payroll misclassification. Most of these stem from setup issues or inconsistent review of transactions.
Read answerHow do I catch duplicate income or expenses in QuickBooks Online?
Duplicates usually come from bank feed rules, invoice-deposit matching issues, repeated manual entries, or merchant processor payouts. Regular bank reconciliation and source document review are the most reliable ways to catch them.
Read answerWhy does my bank balance not match my bookkeeping reports?
The difference usually comes down to timing. Your bank shows cleared transactions while your books include everything you've recorded, even checks that haven't been cashed yet.
Read answerHow should I track owner draws, distributions and reimbursements?
Owner draws and distributions are equity transactions, not expenses. Track them in a dedicated equity account, keep documentation, and understand that proper treatment depends on your business entity type.
Read answerWhat bookkeeping cleanup is needed before applying for a business loan?
Lenders expect current, reconciled financial statements before approving a loan. You'll need clean bank reconciliations, an accurate balance sheet, a schedule of existing debt, properly documented owner compensation, and a profit and loss statement that supports your cash flow capacity.
Read answerDo Texas LLCs still need to file a franchise tax report if no tax is due?
Yes. Texas LLCs must file a No Tax Due Report by May 15 each year even when they owe nothing. Skipping this filing can result in forfeited good standing and penalties.
Read answerWhat bookkeeping records do I need for a Texas franchise tax report?
Texas franchise tax requires clean revenue records, documentation for any deductions you claim, and current entity information. The specific records depend on which calculation method you use, but all businesses need accurate total revenue tracking as the starting point.
Read answerWhen does a Texas business need a sales tax permit?
You need a sales tax permit before making your first taxable sale in Texas. This applies if you sell physical goods or certain taxable services and have a physical presence in Texas, or if you're a remote seller with over $500,000 in Texas revenue.
Read answerHow should I track taxable and non-taxable sales in Texas?
Configure your POS to flag each item as taxable or exempt, and make sure your accounting software tracks them separately. Keep exemption certificates on file for audit protection and verify local rates are accurate for your selling locations.
Read answerWhat happens if my Texas sales tax filings do not match my POS reports?
The Texas Comptroller can flag discrepancies between your sales tax returns and POS data, bank deposits, or marketplace reports. Mismatches may result in notices requesting explanation or audits that lead to penalties and back taxes.
Read answerWhich vendors need a 1099-NEC at year end?
Any vendor you paid $600 or more for services who isn't an employee and isn't a corporation generally needs a 1099-NEC. The key is collecting W-9 forms from vendors to determine their entity type and get correct taxpayer information.
Read answerHow do I collect W-9s before 1099 season?
Collect W-9s from contractors and vendors before you pay them, not in January when 1099s are due. The W-9 provides the legal name, TIN, and entity type you need for accurate 1099 reporting.
Read answerShould contractor reimbursements be included in 1099 totals?
Usually yes. Reimbursements paid to contractors are generally included in the 1099-NEC total unless you have documented receipts and a formal expense arrangement that meets IRS requirements.
Read answerWhat payroll setup should a small business have before hiring its first employee?
Before hiring, you need a federal EIN, Texas Workforce Commission registration, a clear worker classification, chosen pay schedule, payroll system, and proper withholding configuration. Getting these right from day one prevents penalties and keeps your books clean.
Read answerHow do I know whether someone should be on payroll or paid as a contractor?
The answer depends on the actual working relationship, not what you call the person or what your contract says. The IRS evaluates behavioral control, financial control, and the nature of the relationship.
Read answerWhat tax documents should I give my bookkeeper before business tax return prep?
Your bookkeeper needs reconciled books, payroll reports, sales and franchise tax filings, 1099s for contractors, asset purchase records, loan statements, inventory counts, and prior year returns. Gathering these documents ahead of time makes tax preparation faster and helps ensure nothing gets missed.
Read answerCan one accountant prepare both my personal tax return and my business tax return?
Yes, and for most small business owners it makes sense to use the same preparer for both. Pass-through income, owner compensation decisions, and estimated tax payments all require coordination between business and personal returns.
Read answerWhat bookkeeping mistakes create problems on Schedule C?
Common Schedule C problems stem from mixing personal and business expenses, missing mileage logs, undocumented home office deductions, incorrect cost of goods sold, unrecorded cash payments, and missing 1099 income.
Read answerHow should an S corporation owner track payroll and distributions?
S corporation owners need to track payroll and distributions separately. Payroll is your reasonable compensation subject to employment taxes. Distributions are profit sharing recorded as equity reductions.
Read answerHow do I prepare QuickBooks Online for year-end tax filing?
Start by reconciling every bank and credit card account through December 31. Then clean up uncategorized transactions, verify payroll and 1099 data, review AR/AP for accuracy, and close out stale balances before handing off to your tax preparer.
Read answerWhat chart of accounts should I use for a small business in QuickBooks Online?
Your chart of accounts should mirror how your business makes and spends money. Start with QuickBooks Online's default and customize it to track your actual income streams, direct costs, payroll expenses, owner equity, and taxes without creating so many categories that your reports become unusable.
Read answerHow should I set up QuickBooks Online for a new Texas LLC?
Setting up QuickBooks Online for a new Texas LLC starts with connecting your bank accounts and customizing your chart of accounts. You'll also want to clean up opening balance equity, set up sales tax if applicable, and establish document collection habits from day one.
Read answerWhat QuickBooks Online settings matter most before connecting bank feeds?
Configure your accounting method, fiscal year, chart of accounts, and sales tax settings before connecting bank feeds. These foundational settings are difficult to change later and affect how every transaction gets recorded.
Read answerHow do I train staff to enter bills without breaking the books?
Train staff on vendor setup, bill coding, approval workflows, attachments, due dates, and duplicate checking. Consistency in how every bill gets entered keeps your books clean and prevents costly errors.
Read answerShould I use QuickBooks classes, locations or projects?
Classes track departments or service lines, locations track physical sites, and projects track individual jobs over time. Which you need depends on what questions you want your financial reports to answer.
Read answerHow can bill payment tracking prevent missed vendor payments?
Tracking every bill with its due date, approval status, and payment record creates visibility into what you owe and when. This prevents late fees, catches duplicates before they go out, and eliminates cash flow surprises.
Read answerWhat is the best way to track unpaid customer invoices?
Track unpaid invoices by sending them promptly, setting clear payment terms, reviewing aging reports weekly, and applying payments to specific invoices rather than just recording deposits. A consistent follow-up system handles the rest.
Read answerHow do I clean up old accounts receivable balances in QuickBooks?
Cleaning up old AR requires reviewing each invoice individually. Look for unapplied payments, duplicate invoices, bad debt that needs to be written off, and payments received outside QuickBooks that were never matched.
Read answerWhat cash flow forecast should a business owner review before making a large purchase?
A cash flow forecast shows whether you'll have money when you need it, not just whether you're profitable. Review projected receipts, payroll, vendor bills, tax payments, loan payments, and owner draws before committing to a large purchase.
Read answerHow can budgeting help a seasonal business in Montgomery County?
Budgeting helps seasonal businesses plan for months when revenue slows but expenses continue. It lets you set aside money during peak season for property taxes, insurance, and equipment needs, and shows you potential cash shortfalls before they become emergencies.
Read answerWhat should be included in a monthly financial review with an external controller?
A monthly controller review should cover the month-end close, variance analysis against budget, AR/AP aging reports, internal controls check, and management-level reporting. The goal is catching issues early and giving you confidence in your numbers.
Read answerWhen does a business need fractional CFO support instead of basic bookkeeping?
Bookkeeping records what happened. A CFO helps you decide what should happen next. When you're facing major decisions, pricing questions, or growth challenges, you've likely outgrown basic bookkeeping.
Read answerHow do I use bookkeeping reports to decide whether to raise prices?
Clean books let you analyze margins by service, product, or job type rather than just looking at overall profitability. This shows you which specific offerings need price adjustments instead of raising everything across the board.
Read answerWhat financial strategy reports help identify unprofitable customers?
Customer profitability reports, gross margin analysis, AR aging, and recurring vs one-off revenue breakdowns reveal which customers drain your resources. Together these reports show who costs more to serve than they're worth.
Read answerHow do I set up internal controls for bill payment in a small business?
Separate bill entry, approval, and payment when possible. Use vendor verification, documentation requirements, and monthly bank reconciliation to prevent errors and catch fraud early.
Read answerHow should a general contractor track job costs by project?
Every dollar in and out gets assigned to a specific job. Track labor, materials, subcontractors, equipment, and overhead by project so you can see which jobs actually make money and which ones lose it.
Read answerWhat is the best way to track materials, labor and subcontractors for construction jobs?
Assign job codes to every material purchase, labor hour, and subcontractor invoice before recording or paying them. Daily tracking and coding at the point of transaction keeps your job cost reports accurate enough to know true profitability by project.
Read answerHow should Houston contractors handle retainage in their bookkeeping?
Track retainage in a separate Retainage Receivable account, distinct from standard accounts receivable. This separation shows what you can actually collect now versus what's held until project completion.
Read answerHow can a home builder see profit by subdivision or project?
Set up your accounting software to track income and expenses by subdivision using classes, locations, or projects in QuickBooks. When every transaction is coded to a specific development, you can run reports showing profitability for each one.
Read answerWhat bookkeeping reports help remodelers avoid cash flow gaps?
Job cost reports, work in progress reports, and cash flow projections are essential. These show whether you're actually making money on projects and whether cash will be there when you need it.
Read answerHow should plumbers, electricians and HVAC companies track parts and truck expenses?
The key is separating direct job costs from overhead with distinct categories for job parts, warranty parts, truck stock inventory, and tools. Tracking what goes on each job versus what's general overhead determines whether you know your true profitability.
Read answerWhat should a contractor include on invoices for progress billing?
Progress billing invoices should include the original contract amount, approved change orders, completion status, previous billings, deposits applied, and retainage held. This clarity prevents confusion between revenue earned and cash collected while reducing client disputes.
Read answerHow do I track subcontractor payments for 1099 preparation?
Collect W-9s before making the first payment, then track every payment by vendor name in your accounting software. Separate labor from materials reimbursements and remember that credit card payments don't need to be reported by you.
Read answerWhat job costing setup works best in QuickBooks Online for contractors?
QuickBooks Projects works well for smaller contractors tracking a handful of jobs. Larger operations with multiple job types or detailed cost breakdowns benefit from adding classes, items, estimates, and progress invoicing.
Read answerHow should roofers in the Houston area track storm-related jobs and deposits?
Set up each storm job as a separate project and track deposits as liabilities until work is complete. This lets you match insurance proceeds, material costs, and subcontractor payments to specific jobs and know your actual profit per project.
Read answerHow can landscapers track recurring maintenance billing and seasonal cash flow?
Set up recurring invoices for maintenance customers organized by route or service day. Track materials and crew costs separately to understand profitability, then use that data to build cash reserves during peak months for the slower season.
Read answerWhat bookkeeping setup works for pool service routes in The Woodlands?
Pool service bookkeeping needs to separate recurring maintenance from repairs, track chemical inventory, and handle prepaid service agreements. A chart of accounts built for route-based service work keeps everything organized.
Read answerHow should pest control companies track prepaid service agreements?
Prepaid service agreements create deferred revenue that you recognize as income only when services are performed. Track each contract separately with service dates, and record revenue monthly as technicians complete scheduled visits.
Read answerWhat is the difference between job costing and regular expense categorization?
Regular expense categorization shows total spending by type. Job costing assigns those same expenses to specific projects so you can see profitability per job, not just overall.
Read answerHow can a contractor know which jobs are actually profitable?
Profitability by job requires tracking from estimate through closeout. You need the original bid, change orders, all direct costs coded to the job, overhead allocation, and a closeout report run while details are fresh.
Read answerWhat should a Texas restaurant track for sales tax and mixed beverage tax?
Texas restaurants track regular sales tax on food plus two separate mixed beverage taxes on alcohol. Mixed beverage sales tax is collected from customers while gross receipts tax comes from your revenue.
Read answerHow should a Houston bar separate food, beer, wine and liquor sales in bookkeeping?
Create separate income accounts for each category because Texas taxes them differently. Mixed drinks and wine by the drink face both 8.25% mixed beverage sales tax and 6.7% gross receipts tax, while beer and food follow standard sales tax rules.
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