Accounting

Choosing a Merchant Account – How and When to Use and Setup Credit Cards for your Business

December 10, 2009

credit-cards-merchant-accounts-for-small-business

Make it convenient for your clients to pay you. The more ways you accept money, the more money you will make. If you have a strict payment policy, (i.e., only accept cash, or only use PayPal), your clients may choose a competitor who accepts all credit cards, including American Express. Even though AMEX charges more than Visa and Mastercard (and, of course, you are paying those fees), you are making the sale by accepting it.

Studies have shown that most people do not carry cash, prefer awards programs of credit cards, and are sometimes forced to use credit cards by their companies.

There are many companies that offer this service, and typically there are two methods: purchasing a point-of-sale (POS) machine, or processing transactions through a web interface. For more specific types of situations, there are specialized machines that you can purchase to fit your needs — for example, they sell wireless card swipers for contractors who are on-location (wedding vendors, farmer’s market vendors, Salvation Army workers).

The latest trend is to bypass all of these methods and just use a merchant account application on your iPhone. Intuit is a great solution, and is only $9.95/month (plus a per sale fee) and it is compatible with Quickbooks. Ask your bank for a merchant account (you will have to qualify credit-wise); they go through a third-party. For $85 I got a USB card reader for the laptop so I can swipe the cards, which saves time and increases accuracy as I do not have to  enter client billing information. The online credit card services also keep records and store your sales so you can search for specific customers.

You need a credit card service for your business — even the guy I bought my furnace from swiped my credit card on his handheld in my garage!

Should I use an Online Accounting Service?

December 8, 2009

The biggest challenge for small business owners is to find superior services at the lowest cost, which brings me to recommending freshbooks.com. This online accounting service is great (especially if you travel) because you have access to your financial records from any location. It is tempting for small business owners because it is easy to learn, and your data is backed up. If you lose your time records, you have lost income — time is money! You can record your time through their iPhone app making it easy to keep track of your time contemporaneously. It has been proven that if you record your time every day versus once a week or once a month, you will consistently bill more.

Your Chart of Accounts is the Map of your Business

December 6, 2009

Here is the sure-fire way to set up your Chart of Accounts in Quickbooks:  follow the categories on the federal tax form (Form 1040 Schedule C, Profit & Loss From Business).  This will save time and headaches at year-end as your P&L totals can be quickly entered on Schedule C.

For instance, code auto expenses to “Car Expenses”, cost of business cards goes under “Advertising”, and put telephone costs (and anything else that has a large balance) under “Other Expenses” which are itemized in Part V, so the Quickbooks account is “Other Expenses: Telephone” (a subcategory)

Do you need help with your accounting?  Contact us for a free consultation or call at 800-921-9007 (9 to 6pm PST).