ACCOUNTING

Dear Matthew,

Wanted to start a thread on the issue of accounting. No matter how big or small your practice is, it can be a challenge to keeping good records in terms of accounting. For the last 7 years I have used Quickbooks more or less unsuccessfully, and so in desperation, I have been using a book keeper to keep me current. It costs quite a lot of money between accounting and bookkeeper fees and I wanted to explore the topic and see what you or other people are using and how you can effectively keep your accounting costs down but still able to track everything for tax purposes and for your budget purposes.

Sincerely,

Acujosh

I am very interested in this as well.  I too have used Quickbooks and Quicken.  I would be interested in any alternatives to this.  Thank you,

trenfroe

I hope some others will offer their advice also but it is a bit difficult to give advice on bookkeeping as different practitioners can have vastly different needs and complexity of their operations especially if one has employees or not. For about our first 15 years, we did everything by hand – write out paper receipts and checks, enter all income and expense into a ledger-type bookkeeping system, etc. If you have a small practice, you could still do it that way although it is so much better to learn how to use a program like Quick Books. When we finally started down that path, we hired someone to come-in, set-up a system for writing all receipts from the computer and then train my wife on how to do that. It may have costs us $200 or so for that. Later we did the same thing to write all of our checks in a similar way. We make sure every penny the practice makes (gross income) goes into one account and then every penny we spend on the practice (expenses) comes out of the same account. That way we can easily calculate our gross income and expenses just from the bank statements even if those statements don’t give us details of that income and expenses. When you set-up the software properly, it will give you a break-down of the income and expense types – maintenance, utilities, and so forth which is great for doing taxes but the bottom-line with the IRS is that you show every penny of income and expense and you can get that just from your bank statements. The exception to that is if you buy equipment that needs to be calculated for depreciation. Usually, however, for a small AOM practice even this is not really important as our equipment expenses are usually so light. We now use Intuit for all our payroll accounting. Once you set it up, they send you reminders and it is most all automated and give us the info we need come tax time. It costs $35 a month and my wife loves it.

I hope this helps. My tax guy is a CPA who is also on the Board of an AOM school and I think we would be happy to give some free advice on some of these matters IF THERE IS ENOUGH OF A DEMAND. I won’t ask him to go to that kind of trouble for 2-3 people so all of you out there, if you want me to spend the time to get others with this type of knowledge to teach you these types of things, I need to hear from you in sufficient numbers to justify the trouble.   

Matthew Bauer