Ledger Aid Blog

New 2017 W-2 Box and Code

 

The recently released 2017 instructions for Forms W-2 and W-3 include the following in the “What’s New” Section: A new box 12 Code FF has been added to report the total amount of permitted benefits under a qualified small employer health reimbursement arrangement (QSEHRA). The new QSEHRAs allow eligible employers to pay or reimburse medical care expenses of eligible employees— those who provide proof of coverage—up to $4,950 for individual coverage and up to $10,000 for family coverage, before indexing for inflation. For details at 2017 W-2 instructions click here.

Collecting Past Due Invoices

Collect Past Due Invoices
How to Collect Past Due Invoices

If you’re reading this you’re most likely frustrated because you have a client, or worse, several clients that have past due invoices and your accounting system is taunting you with an outstanding balance that should be in your bank account instead.

Well have no fear. Here is a simple how to that will help you collect past due invoices while maintaining a comfortable yet firm relationship with your client.

1. Make Sure Your Invoices Always Go Out on The Same Day: If you have a recurring invoice the best way to ensure that you will get paid sooner rather than later is through consistent invoicing. This way, your client will always know when to expect your invoice and it allows them to allocate their budget properly giving you better chances of collecting payment for the invoice in a time frame you can expect.

2. Accept Online Payments: It’s always a good idea to accept as many payment forms as possible but do not restrict yourself to the stone age. Mind you, I know of a pizza place that only accepts cash and people still go out of their way because the pizza is just that great. But if you haven’t been around for several generations you will want to leave your client with as many options as possible to pay their invoice. Only accepting cash or checks can increase the countdown to your pay day. Consider Paypal, Square or even your own bank’s merchant services to start accepting payments online if you don’t already do so.

3. Establish Your Follow-Up Dates: Do you want get paid net 5, net 7 or due on receipt? It’s your call. Only you know how many days you are willing to let an invoice remain past due. When you establish how many days its acceptable for an invoice to be past due on your system, set up three follow up dates. The first reminder for an initial friendly reminder via e-mail, the second for another reminder via e-mail and the last for a phone reminder.

4. Embrace the Magic of E-mail: An e-mail is a great way of sending a friendly reminder without attacking a client. This is an effective method for your first and second reminder in collecting your past due invoice because you can be positive that your notification will arrive in your clients e-mail and hopefully that nudge will be enough to get your invoice paid.

5. When do you pick up the phone?: Assess your client. Do they seem like the type to feel ambushed if you call about an invoice early on? The trick to collecting past due invoices lies in getting paid while keeping a solid relationship with your client. You can’t always be so nice that you appear as a pushover but remember that some of your income is coming from that particular client. It’s important to always remain civil, polite and firm.

6. Prepare for your phone call: So you’ve been waiting for a while now and you’re ready to make that call. In order to make the process of collecting the past due invoice run smoothly, be ready! Before you call, double check your files. Make sure the client has indeed not paid and when you confirm they haven’t, open the invoice in question from your accounting software. Double check that all of the information written on that invoice is accurate and then make the call. You want to be in control of the situation and you never want mistakes to take the attention from why you called.

7. Who do you ask for?: If your client answers his or her own phone then you’ve already won this part of the battle and there is no guesswork here. However if your client works for a company where the most that they do is approve the invoice but they cannot sign off on the checks, the best way to check the status of an invoice is by saying: “may I please speak to accounts payable?” The operator will simply ask your name and your company’s name and you’ll be right through.

8. Use the lingo: Always sound like you know exactly what you’re doing. Let the accountant or account manager know for example that you are: “calling regarding invoice 1524 sent on June 01, 2014 and my system shows that it is 26 days late. Can you please let me know when I can expect the check to be cut?

9. Follow Up After the Follow Up: The main way to collect past due invoices is by following up even after you have followed up! People get busy, try to avoid you or experience system errors. It’s important to always write down who you spoke with and keep track of what was promised. If you do not have the time to dedicate to keep track of your past due invoices, assign someone in your office who does have the time or outsource.

If you need help collecting your past due invoices, writing collection reminders or keeping track of your follows up, feel free to contact us. We have affordable fixed monthly pricing. You always know what you pay based on the amount of clients. We collect your past due invoices while keeping your customer relationship intact because everyone knows it’s more expensive to gain a new client than it is to maintain a current one!

Free Business Checking

Free checking accounts are not just for personal accounts. If you’re starting a new business and would just like a less expensive way to carry out a trial run, there are banks who are willing to help you. Some of these accounts do not require a minimum balance each month so you can rest easy knowing that there will be no maintenance fee. As your business grows, you will ideally move into premium business checking accounts and those should always be the end goal because of the amenities the accounts provide. But for now, take a look at this list compiled by Nerd Wallet and find a free business checking provider in your state.

Top 3 Cloud Accounting Software for Small Businesses

It’s no secret that accounting software is the most efficient way of handling your bookkeeping and until recently, desktop software had been the most reliable software to do so. Now small business owners, like you, are opting for cloud accounting software vs. traditional desktop software and it’s easy to see why! From the outlay to the usability of the features, the truth is, that these accounting cloud platforms were designed with you in mind.

If you’re interested in cloud accounting software but don’t know where to start, we’ve compiled a list of the top 3 cloud accounting programs and their features so that you can decide what platform works best for you and your business.

 

3. Wave
Cost: Free! Extra Payroll Service: Base price $5. First 10 employees: $4 per employee. 11+ employees: $1 per employee. Premium coaching services are available for a one-time fee of $99
Perfect For: Start-ups and small business owners on a budget, with little to no accounting experience.

Top Features:

• You can upload receipts right onto their free program
• You have mobile access
• You will experience an easy set up process
• You have a basic invoicing tool
• You can manage expenses
• You can easily generate reports
• You can calculate multiple tax rates
• You can work with multiple currencies
• You can connect to bank and credit card companies to download recent transactions
• You can allow a trusted collaborator to have access to your information
• You can collect payment online
• You can reconcile accounts
• You can integrate with Etsy for Shop Owners, Shoeboxed and Paypal

Pros: This is a great cloud accounting tool for any small business owner who is just starting to build their business or the small business owner transitioning to doing their own bookkeeping. For beginning expense management it is ideal that you have the ability to directly connect to your financial institution so that you can have the most current information rather than just downloading statements or using CSV import methods. It’s a very attractive website that doesn’t make the tedious task of handling finances as unbearable. Each section has small directions or tips to guide you in performing your tasks. It’s a great “training wheels” program because it has all the basic level options you need to run your business without you needing much of a learning curve to use it.
Cons: Although pretty much everything in this program is as free as they promise, where they get you is in support fees. In order to get live chat support you need to pay $9 per month. To have live phone and chat support you need to pay $19 per month.

Where it wins: Technically if you are the kind of person that needs peace of mind and opt for the most expensive monthly support package, it’s still cheaper than other cloud accounting services out there. If you are just starting out organization is key, and they do a great job in making sure you don’t need to have a million different apps in addition to their service in order to do your day-to-day bookkeeping.

2. Freshbooks
Cost: Free for up to three clients. Packages range from $19.95-39.95 per month
Perfect For: Small business with large amounts of invoices and those who need an efficient way to track billable time and expense.

Top Features:

• Create customized invoices that can be e-mailed or even mailed straight from Freshbooks
• You can manage your income and expenses
• You can set up reoccurring expenses
• You can track time
• You can generate reports of you company’s financial standing
• You can calculate multiple tax rates
• You can get paid faster with online payment remind options and credit card processing
• You have full mobile access
• You have free support via phone and e-mail
• You can generate support tickets
• You have automatic data storage available
• You have more than 70 Add—on capabilities including mail chimp and salesforce

Pros:
Freshbooks is king in collaboration. Clients and independent contractors can access areas of your site that you designate in a way no other cloud accounting software can do. You can easily import clients via CSV formats if you already have a list and you can import expenses in the same fashion. We mentioned in the list of top features that you have automatic data storage. What does that mean exactly? It means that you can store company documents in folders right on the site! Convenient for keeping client contracts online for example. Accepting payments online with Freshbooks is a total breeze. Not to mention that the collections process is simplified by allowing you to customize when you would like it to follow up with customers and clients when a bill is past due.
Cons:
In order to have more than one person access the system, you have to purchase the highest level at $39.95 per month and that allows you just one more employee access. In order to add more, you have to pay $10 per month. However, if it’s just you or your personal assistant handling the bookkeeping, this shouldn’t be too much of a problem. Freshbooks also does not have a balance sheet or ledger.

Where it wins: Freshbooks’ invoicing features and collaboration capabilities takes the hassle out of communicating with contractors and clients. Its task automation capabilities is also one of the best we’ve seen and their add-ons options leave little to be desired.
 
1. Quickbooks Online Simple Start/Essentials/ Plus
Cost: Simple Start (1 user): $12.95 per user. Essentials (3 users): $39.95 per month. Plus (5 users) $39.95 per month. Payroll service add-on: $31.20 a month
Perfect For: Established and growing businesses with some experience in bookkeeping

Top Features:
• You can connect to banks or other financial institutions to download transactions
• You can create purchase orders
• You can easily reconcile accounts
• You have mobile access
• You can customize your menu views
• You have extensive invoice customization
• You can calculate multiple tax rates including some international tax rates
• You have access to an activity log to track all activity within your account
• You can print checks straight from the program
• You can print tax forms straight from the program
• You can pay tax fees straight from the program
• You can manage bill payment
• You can accept online payments
• You have free support via chat, phone or e-mail
• You can set different user access permissions
• You can manage 1099 vendors
• You have access to over 32 application integrations such as for shipping and CRM
• You can import data from a desktop quickbooks program, spreadsheet, or comma delimited file

Pros: You can’t discuss accounting software without discussing Quickbooks. They have not only mastered the desktop software, but they offer the same professional and functional service in their cloud platforms. This is the number one cloud accounting software for a reason. Your accountant will most likely love you because you have an extensive amount of reports that you can generate and your books can be reconciled monthly to eliminate errors. The chart of accounts is very flexible and easy to manage. You are most likely going to keep track of quarterly tax forms within the platform, taking the guessing game out of remaining compliant with the IRS in that area. One of my favorite features is the activity log which does an amazing job of tracking your absolute every move within your account. The activity log does everything from detailing when an invoicing was deleted to tracking when a user logs in or out. This is a perfect feature if you appointed a separate individual to be in charge of your bookkeeping.
Cons: It has a bit of a learning curve even if you are familiar with the desktop program because the design outlay is completely different. This program does not yet support multiple currencies if that is something you need. If you don’t have at least some understanding of accounting it can be easy to classify incorrectly because of the many options under which you can classify expenses.

Where it wins: Quickbooks is number one not only in functionality but in support as well! They have a great team that can answer any of your questions via phone, e-mail, or chat if you are handling payroll with them also. If you absolutely cannot fix the problem you are experiencing on your own, they can remotely access your account, with your permission of course, and fix the problem for you. It’s very difficult to feel lost for more than 5 minutes when you can count on their support. If your business can make use of all of the features then the price is well worth it. You can always trust that your information is more than secure and it is a program that can meet all of your current needs and has the capacity to support any of your future needs as your business grows.

So let’s recap!

1.Quickbooks Online Simple Start/Essentials/Plus: Best overall cloud accounting for established and growing businesses to oversee their finances.
2.Freshbooks: Perfect for invoicing, tracking billable time and expense, and collaboration.
3.Wave: Perfect for start-ups and bookkeeping beginners on a budget.

Cloud accounting is the future and these three programs are leading it. To get started all you have to do is evaluate which one fits your business size, which one fits your bookkeeping needs, and then sign up! If the service is not free it will come with a free 30 day trial so in any case, you can always try them all and stick with the one that met your experience level and expectations best.

At Ledger Aid we work with a variety of not only cloud but desktop accounting programs. Feel free to contact us if you need set-up help or a if you need to hire a bookkeeper.

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