Oh the weather outside is frightful? Then cozy on up to ye olde quickbooks and sit next to that roaring fire…. here it is… the mac-daddy of all year end checklists:

1 Reconcile bank statements.
2 Reconcile petty cash.
3 Reconcile credit card statements.
4 Reconcile loan statements.
5 Ensure all AR & AP activity has been posted for the year.
6 Clear suspense/clearing account balances or note composition of balance with subsequent clearing dates.
7 Review AR for uncollectible accounts to either reserve for or write off
8 Prepare recap of due to/ from balances on all companies and reconcile with each company’s books.
9 Inventory - determine adjustments needed from either analysis or physical inventory
10 Fixed Assets
a. review detail to determine if all assets are still in service. If not, write off NBV.
b. review expense accounts to determine if any expenses should be capitalized, ie meet capitalization threshold.
11 Review AP to ensure all balances are recorded and reconcile to vendor statements.
12 Reconcile all other Balance Sheet Accounts - ie detail the composition of the ending balance, not all activity.
13 Accruals - accrue for items not yet recorded such as bonus, sales tax, property tax, etc.
14 P&L Review
a. After all of the Balance Sheet accounts are reconciled and current, review the P&L by Month report
b. Compare Gross Profit by month & explain significant fluctuations.
c. Explain unusual fluctuations in recurring expense accounts (excluding COGS)
d. Analyze composition of large YE balances or non-recurring YE expense such as legal, bad debts, taxes, etc.
15 Vendor 1099 Eligilbility Review
a. Run Vendor Contact report modified to include Taxpayer ID & 1099 Eligibility.
b. Run 1099 Summary report modified to include “all vendors” and “all accounts”
c. Compare two reports to see which vendors had activity in 2009 and which are missing ID # &/or 1099 Eligibility
d. Obtain missing information and update above reports.
e. Provide Manager preliminary 1099 report to review.

Now treat yourself to that hot toddy! mmmm…. hot toddy!

posted by,
Stephanie Lasure
The Organic Capitalist

Taxes are filed, (extensions are filed) and we can all breathe and get back to work! Like New Years Day, post tax-day we sit back, evaluate what just happened here and vow to “Get Organized” and swear we won’t do it again next year.

For some, tax day is a wake up call to stop procrastinating and start the business they’ve always wanted to do, be in control of their income and live the day they want to live.

I had a radio conversation with Michael Koolidge from “The Michael Koolidge show”, sharing my thoughts on ‘Starting a business’.

You can find the clip here:

http://koolidge.com/audio.php and click on podcast #139. My interview starts at 40.00 minutes in.

Enjoy!

posted by,
Stephanie Lasure
The Organic Capitalist

Lately, we’ve had numerous “what do I need” requests on starting a business. We are located in Nevada, so I am attaching a step by step process as well as relevant agency contact information.

For those outside Nevada, the process is nearly identical, just replace your state / city name and google the respective agencies.

Without further ado, what you need to start doing business:

STEP ONE:
Create a Corporation, Limited Liability Company, Partnership or Sole Proprietorship Legal Organization

ROSS MILLER
Secretary of State
206 North Carson Street
Carson City, Nevada 89701-4299
(775) 684 5708
www.nvsos.gov

STEP TWO:
Obtain a Fictitious Name Certificate (or DBA – doing business as). If you plan to use a name other than your legal name, you must file a Fictitious Name Certificate

Clark County Clerk
200 Lewis Avenue
5th Floor #5313
Las Vegas, NV 89155
(702) 671-0500
www.accessclarkcounty.com

STEP THREE:
Obtain a State Business License:

Nevada State Dept. of Taxation – Las Vegas
Grant Sawyer Office Building
555 E. Washington Ave., Suite 1300
Las Vegas, NV 89101
(702) 486-2300
http://tax.state.nv.us/

STEP FOUR:
(If Required): Obtain a retail sales permit

Nevada State Department Of Taxation – Las Vegas
Grant Sawyer Office Building
555 E. Washington Ave., Suite 1300
Las Vegas, NV 89101
(702) 486-2300
http://tax.state.nv.us/

STEP FIVE:
Obtain a local license
In the State of Nevada all new businesses are required to obtain a business license
within the city / county in which they operate.

www.accessclarkcounty.com and /   or    http://tax.state.nv.us/

STEP SIX:
(If required): Obtain Special Permits
In addition to city and county licenses, certain businesses / occupations are required to obtain special state licenses (i.e. - contractors, beauticians, etc.).  As a new business you may be required by the city or county to obtain additional permits from Health, Police, Fire or Building Departments. Inquire with the individual licensing agency for more information.

And there you have it! Whew, not the fun work to do, but when it is all over with, you be compliant and be saving yourself a TON of headache and fees for NOT having the requisite licensure.

To take it one step further, below is a list of what you need to be familiar with, NOT requirements to open the doors, but if you neglect to be familiar and compliant, these too will land you in hot water with said agency if you ignore them:

ZONING ORDINANCES
To insure that you are in a location zoned for your type of business, check the city and county ordinances before signing any lease. For home-based businesses, verify if a Home Occupation Permit is required.

NEVADA LIVE ENTERTAINMENT TAX
A 10% tax applied to revenues derived from entertainment venues.  Some of the taxable items include, ticket sales, merchandise, food and refreshments.
Contact the Nevada State Department of Taxation for further details.

U.S. INTERNAL REVENUE SERVICE IRS W-4 FORM
The law requires every employee to complete a W-4 form so that the employer can withhold the proper amount of income tax from each paycheck.

U.S. IMMIGRATION SERVICE I-9 FORM
All employers must also document proof of an employee’s right to work in the United States. Every employee must have a properly completed I-9 on file in the business office.

STATE LABOR LAWS
All employers must comply with the state minimum wage and overtime laws and must post a sign explaining these laws at their place of business.

PERSONAL PROPERTY TAX
All businesses must pay an annual tax on business equipment and furniture (excluding inventories) based upon the assessed value of the property.

My dear friend Dayana taught me that golden rule. What she rings in your ears as a financial advisor for the Motley Fool for the individual, I pass along to you, the business owner.

The small stuff gives the framework of your business a solid foundation on which to grow.

The small stuff allows you to focus on what you do best, the reason why you started a business in the first place.

The small stuff will reap you financial rewards in the long run.

The small stuff will make you look like big stuff when up against the giants in your industry.

OK, so what is the small stuff?! I will break down some of the important elements of the framework of your business, the small stuff, and give you winning ideas on how and why you need to sweat the small stuff.

What? Too obvious? Certainly managers are necessary, yet in my experience, I have seen too many small businesses fall into one of the following categories:

a) The “I can do it” mentality
b) The “I hired a manager” but without a job description mentality
c) The “I hired a manager with a job description” but neglect to train, give feedback and hold accountable mentality.

Without clear organizational structure, without hiring managers with clear job descriptions and responsibilities, without training and feedback, most small business owners will spend their days working IN their business, rather than working on GROWING their business. Let’s break down the thought process and the pitfalls of each category. (I will leave the Human Resource (HR) discussion aside for now, as we’ll get into the quicksand of troubles for the small business as it relates to employees in the future). For now, let’s focus on the emotional reasoning:

a) The “I can do it” mentality - This is a very common thought process for the entrepreneur - it also leads to the most frustrated entrepreneur. “I know it will get done right if I do it myself”. Not true. “I know it will get done right if I HIRE a qualified candidate” is the mental shift that needs attention. If you are spending your days answering the phone, taking out the trash and dealing with vendors, chances are you are not spending your time speaking with your customers, analyzing marketing (or creating one!) plans or going through your financials to determine your profitability - where and how you are going to grow.

b) The “I hired a manager” but without a job description - Great! You’ve got a leg up on entrepreneur A, alas, unless you’ve given the manager a clear understanding of their job and responsibilities, in the long run, you will be as frustrated as entrepreneur A. Writing a job description doesn’t need to be a daunting task, with no need to recreate the wheel. Basic and elaborate outlines of job descriptions can be found all over the web, and with a tailoring to your business, a job description can be developed without too much agony.

c) The “I hired a manager with a job description” but have neglected to train, give feedback and hold accountable. So you’ve hired and given the manager, in writing, a clear picture of their position…now… now.. please don’t walk away! If you are determined to grow and develop your business, you must be committed to your managers, and understand that training, feedback and accountability are all part of YOUR job description, as a business owner. Without adequate training, the manager will stumble and inevitably make mistakes. Train them to do the tasks you initially thought could only be done right if done by you. Give your managers feedback - constructive and with encouragement. Give them the attention they deserve, after all, you’ve hired them to be on your front line in your absence. Hold them accountable. Holding your managers accountable to their job descriptions will alleviate any stress - and conversely- make your business day much more pleasurable - if everyone knows there are consequences for mistakes, and rewards for jobs well done.

To manage or not to manage? The answer is obvious, but the commitment to your hire, job description, training, feedback and accountability will be key to your ability to step back and focus on GROWING your business, not working IN your business.

How do you know where to go if you don’t know how to get there? Understanding your cash flow is essential to your business. Simply knowing that your business generates and costs ‘X’ dollars a day/month/year isn’t enough to guide your decision-making process. A financial analysis of your business is essential to making short, medium and long term business decisions.

The first step is basic — take a good look at how your money is being managed, and by whom. Excel spreadsheets? Word documents that have notes scribbled on them? A filing system that consists of ‘to pay’ and ‘to bill’? And who is managing it? Your mom/ sister/ brother/ uncle? Temp help? The office administrator? Gather all your notes and scribbles and say, “Thank you very much” to your overachieving but under-qualified money manager and proceed to the second step.

The second step is to gather your financial scribbles and ‘get organized, baby!’ You need software to manage your money, and people with the know-how to organize it. Quickbooks is by far the most popular small business accounting software, and Quickbook Pro Advisors are easily found, even specific to your industry. Buy it, install it, and hire someone to manage it. A QUALIFIED Quickbooks advisor is essential, they will save you time and I promise you, lots of money in the long run. Check references and use your network for referrals. There are lots and lots of good bookkeepers, but you need a GREAT bookkeeper. Hire them, and pay them well, as they will become your backbone in your growth.

Your bookkeeper is also your lias to your CPA. You don’t need to be paying your CPA (at CPA rates) to sort through your receipts. You need to understand your receipts. And your CPA more often than not will not have the time for the daily/ weekly/ monthly analysis of your finances.

Third, if you are not familiar with accounting software, make the time to sit with your bookkeeper at least once a week in the beginning, then minimally once a month to go over your Profit and Loss and your Balance Sheet. You will start to become familiar with where your money is going and begin to understand how to manage it. A good bookkeeper should be offering suggestions and being proactive with how you can save money, negotiate rents, establish credit and be a good source for general financial know-how.

Last, make financial goals. Once you understand your customer profile — where, when, how and by whom your money comes from — start to make goals on how to keep increasing that dollar amount in your bank at the end of each quarter. If you are a retailer and Mondays and Wednesdays become a trend as the slowest days of the week, adjust your staffing to reflect that. If your vendors are adding ‘fuel fees’ to your deliveries (and more and more are), consolidate and organize your inventory so deliveries can be made once a week instead of twice. Get the picture?

Understanding your cash flow makes you a stronger and more sound small business. You will be smiled upon by the financial gods who rule over your line of credit and business loans. And you will be rewarded with minimal (or nominal!) financial fees, better interest rates, and bigger loans with better terms.