On November 19, 2009 there will be an open house and ribbon cutting ceremony at the new office of D'Orazio Bookkeeping. The new office space is located at 122 Main Street, Littleton, NH in the Community House building. We are on the third floor.
Come meet Gina D'Orazio, have some light refreshments and have an opportunity to network with community members.
The open house is from 9:00 am to 11 am.
Friday, October 30, 2009
Thursday, August 13, 2009
The Profit and Loss Report - To fear it or Not
For many small business owners, the Profit and Loss Report can be something we fear or love. Should we fear it? ABSOLUTELY NOT! In tough economic times we may cringe when our bookkeeper gives us the weekly or monthly report and we have dispersed more money than has been generated. It is a tool that we should embrace because the report is there to assist us in making sound business decisions. The Profit and Loss report breaks down our business in two ways: Revenue and Expenses.
From looking at the report on a weekly and/or monthly basis we have a snapshot of what revenue has rolled in and what expenses we have paid out on. This report can help us determine if we have enough revenue coming in or if we need to make some adjustments to bring in more revenue. We can compare the report to last year’s (or month) report to see what is different for us. Is there industry trends that affect our Profit and Loss (i.e. traditionally a slow time)? Should we expand the services or products we offer to our customers? By monitoring the report from a revenue perspective we can project what we may want to spend in upcoming budgets.
So let’s address the other side of the Profit and Loss report….the expense end. There are monthly expenses that we HAVE to pay to keep our business operational. Those expenses may vary business to business but some typical expenses are: advertising, rent, utilities, office supplies, payroll, taxes, and repairs / maintenance. Some expenses may be adjusted depending on the revenue – we may have some “extra” money so we increase our advertising efforts or purchase a new piece of equipment.
Other expenses are fixed – we pay the same amount in rent or on loan repayment regardless of how our revenue fluctuates. Expenses like telephone and electricity are expenses that we need to pay monthly but we may be able to take up on a great telephone plan that helps to save us a little money each month or switch to equipment that doesn’t use as much electricity as some older models may.
I have to warn you; something as simple as a onetime big purchase that will generate huge profits from here on out can cause a monthly Profit and Loss to fall into the negative. View the purchase as an investment in your business and not as a “bad” decision. The purchase could range from a new piece of equipment to an advertising campaign to that consultant that will work with you short term to help grow your business.
Advertising and Marketing is one of those business expenses that we incur that helps generate revenue. What works for one industry may not work for another industry. Word of mouth is free but enough! So it is always good to try something new and see how it works. A new advertising approach may take a little time to generate results so don’t be discouraged when nothing immediate happens! If you advertise in a newspaper and clearly do not have any business from it after a few months then invest the money somewhere else. So in a nutshell, view your Profit and Loss as an old friend who wants you to succeed! We have all cringed when the report shows a negative but look at from the perspective of what can I do different? Am I on a good track for my business? You will know right away and you will make the right decision for you and your business!
From looking at the report on a weekly and/or monthly basis we have a snapshot of what revenue has rolled in and what expenses we have paid out on. This report can help us determine if we have enough revenue coming in or if we need to make some adjustments to bring in more revenue. We can compare the report to last year’s (or month) report to see what is different for us. Is there industry trends that affect our Profit and Loss (i.e. traditionally a slow time)? Should we expand the services or products we offer to our customers? By monitoring the report from a revenue perspective we can project what we may want to spend in upcoming budgets.
So let’s address the other side of the Profit and Loss report….the expense end. There are monthly expenses that we HAVE to pay to keep our business operational. Those expenses may vary business to business but some typical expenses are: advertising, rent, utilities, office supplies, payroll, taxes, and repairs / maintenance. Some expenses may be adjusted depending on the revenue – we may have some “extra” money so we increase our advertising efforts or purchase a new piece of equipment.
Other expenses are fixed – we pay the same amount in rent or on loan repayment regardless of how our revenue fluctuates. Expenses like telephone and electricity are expenses that we need to pay monthly but we may be able to take up on a great telephone plan that helps to save us a little money each month or switch to equipment that doesn’t use as much electricity as some older models may.
I have to warn you; something as simple as a onetime big purchase that will generate huge profits from here on out can cause a monthly Profit and Loss to fall into the negative. View the purchase as an investment in your business and not as a “bad” decision. The purchase could range from a new piece of equipment to an advertising campaign to that consultant that will work with you short term to help grow your business.
Advertising and Marketing is one of those business expenses that we incur that helps generate revenue. What works for one industry may not work for another industry. Word of mouth is free but enough! So it is always good to try something new and see how it works. A new advertising approach may take a little time to generate results so don’t be discouraged when nothing immediate happens! If you advertise in a newspaper and clearly do not have any business from it after a few months then invest the money somewhere else. So in a nutshell, view your Profit and Loss as an old friend who wants you to succeed! We have all cringed when the report shows a negative but look at from the perspective of what can I do different? Am I on a good track for my business? You will know right away and you will make the right decision for you and your business!
New developments
Hi All,
On Monday August 17, 2009 I begin my Enrolled Agent training! I am excited to one day be an Enrolled Agent and serve the North Country.
You may be wondering what an Enrolled Agent is? Well....simply put.....An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.
So what does this mean to you? What it means is if you receive a notice that you are being audited by the I.R.S then give me a call and I will do my best to help you out through the audit process.
So check back in for updates on how my training is going.
On Monday August 17, 2009 I begin my Enrolled Agent training! I am excited to one day be an Enrolled Agent and serve the North Country.
You may be wondering what an Enrolled Agent is? Well....simply put.....An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.
So what does this mean to you? What it means is if you receive a notice that you are being audited by the I.R.S then give me a call and I will do my best to help you out through the audit process.
So check back in for updates on how my training is going.
Thursday, May 21, 2009
Ribbon Cutting Ceremony and Open House
Hi All,
Keep an eye out in the newspaper because I will be having a ribbon cutting ceremony and open house to celebrate my new office space. Look for the announcement in the local papers and mark your calendars!
Keep an eye out in the newspaper because I will be having a ribbon cutting ceremony and open house to celebrate my new office space. Look for the announcement in the local papers and mark your calendars!
New Office Location
Hi All,
I recently have rented some office space in the Community House on the third floor! So I now offer office hours on Main Street!!! I still have office hours from my home office so your bookkeeping needs will not be forgotten!
I'd be thrilled to show you all my new office.
I recently have rented some office space in the Community House on the third floor! So I now offer office hours on Main Street!!! I still have office hours from my home office so your bookkeeping needs will not be forgotten!
I'd be thrilled to show you all my new office.
Monday, April 20, 2009
What does a bookkeeper do anyways??????
A bookkeeper can be a lifesaver to a business owner. Bookkeepers can do everything from Accounts Payable (tracking money going out) to Accounts Receivable (money coming in) to Payroll to Quarterly Tax Returns to keeping everything organized for the Accountant which saves the Accountant time (and you money) to helping apply for business loans to making bank deposits and reconciling the bank account monthly.
Bookkeeping is time consuming and having a bookkeeper you can trust (and like) can enable a business owner to devout their valuable time elsewhere in the business.
Wouldn't it be nice being at a networking event knowing that the business finances are being taken care of?
Bookkeeping is time consuming and having a bookkeeper you can trust (and like) can enable a business owner to devout their valuable time elsewhere in the business.
Wouldn't it be nice being at a networking event knowing that the business finances are being taken care of?
The Audit Explained
Internal Revenue Service Audits and You
By: Gina D’Orazio
The word “audit” is a very scary word to people. How could the whole concept of an audit not be scary? We conjure up an image of having to provide a substantial sum of money to the government that we just do not possess. Even in the most perfect economic times coming up with money to hand over is a daunting task. Though you will never see me volunteer to go through one, the reality is that we do not need to be afraid of audits.
There are three (3) different types of I.R.S. audits information to the I.R.S. office.
They are as follows:
1. Correspondence – the taxpayer receives a letter in the mail requesting information and the taxpayer has the opportunity to mail back their response/documentation by a designated date.
2. Office – the taxpayer receives a letter in the mail stating that an audit is scheduled to occur and provides the date, time, location of local I.R.S. office, and what documentation to bring to the audit. On the day, the taxpayer arrives promptly with the designated information. The audit occurs at the local office of the I.R.S. by an I.R.S. agent.
3. Field – the taxpayer receives a letter in the mail stating that an audit is scheduled to occur at the location of the taxpayer on a designated dated, time, and outlines the information the I.R.S. will review at the time of the audit.
An important fact to remember is that a taxpayer may request in writing to have the type of audit switched to a different type. The taxpayer may write to the I.R.S. promptly after receiving initial notification of the audit and request the switch and the reason for the request for switching the type of audit. A reason for the switch may be as simple as the taxpayer may rather have the audit performed on their turf versus bringing several boxes of information to the I.R.S. Office.
Rescheduling the date and/or time of an audit is available but frowned upon by the I.R.S. The Rescheduled audits can be costly for the I.R.S. However, the I.R.S. will reschedule audits if (1) the taxpayer has their information scattered in several locations and needs additional time to organize and put their documentation together or (2) a medical emergency erupts last minute that the taxpayer had no way to plan for.
What happens if a taxpayer does not have all their documentation ready at the time of the audit and does not want to reschedule the audit?
If a taxpayer does not have all their documentation together in time for the audit then the taxpayer may proceed with the audit and provide what they do have at the time of the audit. The taxpayer may request to schedule a follow up exam and provide the remaining documentation at that time. The auditor can limit or expand the scope of the audit based on the initial meeting (i.e. the taxpayer may clarify a question and the auditor does not further investigate the documentation). If the taxpayer files an amended tax return at the time an audit is scheduled then the taxpayer may present that amended return for review and possible cancellation of the audit and an immediate audit report.
The I.R.S. prefers to complete audits at the field and office examinations. The I.R.S. permits a taxpayer representative (i.e. tax preparer) to be present at the audit. There are representatives who prefer to attend the audits without the taxpayer due to concern the taxpayer may “lend” to much information to the I.R.S. The I.R.S. will conduct their audits of a particular taxpayer until the taxpayer has a clean tax return (i.e. there are no red flags in the return).
So what happens when a taxpayer owes the I.R.S. money and knows that he or she will have trouble paying? The I.R.S. fully acknowledges the tough times the country is facing. The I.R.S. is providing flexibility on collecting the money that is legitimately owed to them. So what does this mean? This means that the auditor has the flexibility to devise a payment plan for the taxpayer that meets his or her budget. Interest will accrue, so it is in the best interest of the taxpayer to pay it back as soon as possible. If the auditor reviews all the information and realizes that paying any money would be a severe hardship for the taxpayer then that is taken into consideration by the auditor and I.R.S.
So what helps an audit to proceed smoothly?
1. good quality documentation (i.e. keep your receipts, bank statements, invoices).
2. documentation that is in a logical order (i.e. figure out a good filing system and stick with it).
Remember, audits are costly for the I.R.S. so they want to complete the audit as quickly as possible. So the fewer delays the better. Once the audit is complete, the I.R.S. will provide an audit report with their findings, adjustment/recommendations and what is financially due (if applicable). Taxpayers have the right to ask questions in response to the audit report. If a taxpayer receives their audit report and they have questions then feel free to speak with the auditor and/or manager for thorough answers. If an adjustment/recommendation seems incorrect on the report then the taxpayer should feel free to question it or file for an appeal. Time is of the essence in this matter so a taxpayer will not want to wait to question an item in the report. The sooner questions or concerns are resolved the better for the taxpayer and I.R.S.
The long and short is that despite perceptions the I.R.S. really does want to work with taxpayers because at the end of the day the I.R.S. wants their money and taxpayers want to live a peaceful life.
By: Gina D’Orazio
The word “audit” is a very scary word to people. How could the whole concept of an audit not be scary? We conjure up an image of having to provide a substantial sum of money to the government that we just do not possess. Even in the most perfect economic times coming up with money to hand over is a daunting task. Though you will never see me volunteer to go through one, the reality is that we do not need to be afraid of audits.
There are three (3) different types of I.R.S. audits information to the I.R.S. office.
They are as follows:
1. Correspondence – the taxpayer receives a letter in the mail requesting information and the taxpayer has the opportunity to mail back their response/documentation by a designated date.
2. Office – the taxpayer receives a letter in the mail stating that an audit is scheduled to occur and provides the date, time, location of local I.R.S. office, and what documentation to bring to the audit. On the day, the taxpayer arrives promptly with the designated information. The audit occurs at the local office of the I.R.S. by an I.R.S. agent.
3. Field – the taxpayer receives a letter in the mail stating that an audit is scheduled to occur at the location of the taxpayer on a designated dated, time, and outlines the information the I.R.S. will review at the time of the audit.
An important fact to remember is that a taxpayer may request in writing to have the type of audit switched to a different type. The taxpayer may write to the I.R.S. promptly after receiving initial notification of the audit and request the switch and the reason for the request for switching the type of audit. A reason for the switch may be as simple as the taxpayer may rather have the audit performed on their turf versus bringing several boxes of information to the I.R.S. Office.
Rescheduling the date and/or time of an audit is available but frowned upon by the I.R.S. The Rescheduled audits can be costly for the I.R.S. However, the I.R.S. will reschedule audits if (1) the taxpayer has their information scattered in several locations and needs additional time to organize and put their documentation together or (2) a medical emergency erupts last minute that the taxpayer had no way to plan for.
What happens if a taxpayer does not have all their documentation ready at the time of the audit and does not want to reschedule the audit?
If a taxpayer does not have all their documentation together in time for the audit then the taxpayer may proceed with the audit and provide what they do have at the time of the audit. The taxpayer may request to schedule a follow up exam and provide the remaining documentation at that time. The auditor can limit or expand the scope of the audit based on the initial meeting (i.e. the taxpayer may clarify a question and the auditor does not further investigate the documentation). If the taxpayer files an amended tax return at the time an audit is scheduled then the taxpayer may present that amended return for review and possible cancellation of the audit and an immediate audit report.
The I.R.S. prefers to complete audits at the field and office examinations. The I.R.S. permits a taxpayer representative (i.e. tax preparer) to be present at the audit. There are representatives who prefer to attend the audits without the taxpayer due to concern the taxpayer may “lend” to much information to the I.R.S. The I.R.S. will conduct their audits of a particular taxpayer until the taxpayer has a clean tax return (i.e. there are no red flags in the return).
So what happens when a taxpayer owes the I.R.S. money and knows that he or she will have trouble paying? The I.R.S. fully acknowledges the tough times the country is facing. The I.R.S. is providing flexibility on collecting the money that is legitimately owed to them. So what does this mean? This means that the auditor has the flexibility to devise a payment plan for the taxpayer that meets his or her budget. Interest will accrue, so it is in the best interest of the taxpayer to pay it back as soon as possible. If the auditor reviews all the information and realizes that paying any money would be a severe hardship for the taxpayer then that is taken into consideration by the auditor and I.R.S.
So what helps an audit to proceed smoothly?
1. good quality documentation (i.e. keep your receipts, bank statements, invoices).
2. documentation that is in a logical order (i.e. figure out a good filing system and stick with it).
Remember, audits are costly for the I.R.S. so they want to complete the audit as quickly as possible. So the fewer delays the better. Once the audit is complete, the I.R.S. will provide an audit report with their findings, adjustment/recommendations and what is financially due (if applicable). Taxpayers have the right to ask questions in response to the audit report. If a taxpayer receives their audit report and they have questions then feel free to speak with the auditor and/or manager for thorough answers. If an adjustment/recommendation seems incorrect on the report then the taxpayer should feel free to question it or file for an appeal. Time is of the essence in this matter so a taxpayer will not want to wait to question an item in the report. The sooner questions or concerns are resolved the better for the taxpayer and I.R.S.
The long and short is that despite perceptions the I.R.S. really does want to work with taxpayers because at the end of the day the I.R.S. wants their money and taxpayers want to live a peaceful life.
Tuesday, March 24, 2009
RecordKeeping and your business
The IRS suggests that every business maintains their files for 3 years. Recently when I sat in on a teleconference it was suggested to keep the files for 5 years as a reference in case the business is audited. Keep current files in a filing cabinet in the business office space. "Old" files can be kepted in banker boxes in a safe location on site. A safe location would be a back room, basement, barn, garage.....just try and make sure it is secure from water damage and/or potetial fire.
The IRS and auditing
The IRS will randomly audit a business. There is nothing to be worried about if the business has accurate records and keeps their financials in order. There are 3 types of audits: 1) correspondence (through the mail); 2) field (at your location); 3) office (at the local IRS office). The IRS will notify you what documentation they are looking for so there won't be any surprises. You will have time to make sure you are well prepared in advance and avoid requesting a postponement. Postponing just drags out the process.
The IRS wants to work with you. If you end up oweing money, the IRS will work with you on paying your taxes. There are payment options so work with the IRS to what you can reasonably pay and stick with the plan.
The IRS wants to work with you. If you end up oweing money, the IRS will work with you on paying your taxes. There are payment options so work with the IRS to what you can reasonably pay and stick with the plan.
Saturday, January 3, 2009
QuickBooks class at local College
I will be co-teaching a QuickBooks class at the White Mountains Community College for the spring term beginning the week of January 12, 2009. I am excited to help individuals learn how to better use the software. I find the software to be very user friendly when one knows how to properly utilize it.
Record keeping class at WREN
I will be teaching a record keeping class at the WREN office on February 3, 2009 from 6-8 pm. The fee is small and hopefully participants will feel like they walk away with some knowledge. This is the second class I have taught at WREN and hopefully more classes will follow.
WRENzine Magazine
In the current issue of WRENzine I have an article that was published. The article pertains to good record keeping for businesses. The article stems from a teleconference I particpated in that the IRS offered.
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