Interview: Certified QuickBooks ProAdvisors Help Small Businesses through Economic Downturn
As difficult economic times accentuate the challenges and concerns of small business owners, Certified QuickBooks ProAdvisors find themselves providing more consulting services to help companies weather the downturn. Lise Quintana, editor of the QuickBooks Payroll Bulletin, recently spoke with two ProAdvisors about trends they're seeing in small businesses and their advice for the months ahead.
Amy Vetter is a CPA and has been a Certified QuickBooks ProAdvisor® for eight years. She currently is part of Technology in a Box, a QuickBooks consulting and technology company and Intuit Solution Provider that has offices in five states.
Laura Madeira has 23 years of experience in helping companies with their accounting and financial information. She is an Advanced Certified QuickBooks ProAdvisor and a QuickBooks Point-of-Sale Advisor. Her company, ACS, Inc., is an accounting software sales and consulting firm and Intuit Solution Provider located in the greater Dallas area. ACS provides full payroll services for 20 percent of its clients and handles the payroll filings for another 10 percent.
Watching the Money
QuickBooks Payroll Bulletin: Has the nature of your business changed during the recession?
Laura Madeira: The nature, no, but the volume has. I saw this same sort of pattern in the 1980s. When the economy was failing and companies were downsizing, a lot of family members would be brought in to do the bookkeeping and they would need training. Or, employees are being let go and the owners must handle everything. So we're getting more requests for consulting to help with QuickBooks and all of the needs around QuickBooks. We've seen a greater need to provide clients with advice than we have in the past.
Companies are really trying to watch their money now. It's not only important to learn how to track the money, but it's important to save money. We have lots of small retail establishments that are hurting, but they're paying mind to their money now. They want inventory tracked correctly; they want their accounting and financials tracked correctly. Whereas, I think when you're busy and the money's in the bank account, sometimes you don't really pay attention to what's going on.
Amy Vetter: Some clients that I've had for a very long time are struggling cash-wise. Everything's tied up, and they're up to their eyeballs in debt. They don't have much wiggle room at all, and they have to hold on to see if it's going to turn around. And hopefully they can make it that long. The work that I've been doing with those clients is to manage their cash flow, help them with budgeting and forecasting, just trying to keep their doors open. Earlier, there was no time to have discussions about "We need to budget for things; we need to manage the cash." Now, that's all people want me to do.
QBPB: Are there some tools that you specifically recommend for budgeting and forecasting?
Vetter: We have a tool called Dashboard in a Box that links with the QuickBooks file. The tool runs benchmarks and helps businesses with ratio analysis, so that we can set goals for them of what targets they want to hit. We can bring their data into Dashboard in a Box monthly through the Web, look at it with them, and make sure they're on target. It also tracks against their industry. Not only can they set their own goals, but they also can see how they're doing against their industry.
Budgeting involves consulting. That takes time to talk through the parameters of what they're predicting and to put together their scope limitations. From there, we use the budget tool in QuickBooks to monitor the budget versus the actual results. But the process itself still takes that brain power between you and the client, talking through all the different scenarios.
QBPB: It sounds like it's more important than ever to partner with a good financial advisor.
Vetter: Absolutely. When people start a business, they often try to save money in the financial area. They're focused on whatever their concept is and that doesn't seem as worthwhile [a way to spend] money, but it can save them so much money in the long run if they properly plan from the beginning and get set up right. Because when things are wrong and they can't read their financials, and they need to pay to get that all fixed, it may be too late.
Starting a Business
QBPB: Because a lot of people are getting laid off, the theory is that many of those people might go into business for themselves. What are you seeing?
Vetter: I would agree and disagree. I'm in south Florida and we've been hit with the construction and real estate market [slowdown], but it's still a very entrepreneurial area of the country. There are still a lot of new businesses coming.
But I don't think people are willing to take the risks that they were willing to take three years ago. Even if someone has some cash, they would have to have a LOT of cash, because there aren't many loans you can get as part of business. If you're sitting on cash, you're more scared to use it, because you don't know what's going to happen. I think more people are more willing to work for somebody now, just so that they have a salary.
QBPB: What's your biggest piece of advice to people who are just now looking to get into a business?
Vetter: They should be well funded. They should know they can survive on whatever money they have, whether it's from an investor or debt or their own money. They need to be able to survive at least two to three years not knowing whether they're going to be profitable, and they need to believe enough in their concept of a business that they believe that can happen. Second, they need to budget, forecast, and plan. You can't just ride the business and let it take you wherever it goes. You've got to steer it so that you're prepared for the good and the bad.
Keeping Up with Updates
QBPB: Have any of your clients talked to you about the economic stimulus plan and what it's going to mean for them?
Madeira: It's interesting you should ask, because my husband, who is also in the business, is at a client right now dealing with some COBRA issues for a terminated employee and the new rules in the economic stimulus plan for COBRA. We don't claim to be all-knowing about the stimulus plan, but I can tell you that QuickBooks makes it so easy. In my own data file, I've had a link that says, "Do you want to know more about the economic stimulus plan?" These are the kinds of things my clients can see easily as well, and it was a quick route for us to get information. Knowing the details, being provided links to supporting documentation from the IRS, is really one of the advantages to using QuickBooks for payroll.
QBPB: What mistakes are people making with regard to payroll and the economic stimulus plan?
Madeira: Businesses that do not have a payroll service or that are not using one of the many options in QuickBooks to handle their payroll are going to find themselves in need of help. And it's going to be down the road, because it's going to take time before the federal or the state institution catches up with the errors.
Most important is to keep your payroll tax tables up to date. Fortunately, when you run a payroll in QuickBooks, the software prompts you to update that payroll tax table. QuickBooks really has an upper hand at making sure it's easy for the small business owner, who really doesn't have time, doesn't have the knowledge, maybe hasn't contracted with an expert like ourselves. Generally speaking, if your tax tables are up to date, [you're OK]. And tools like the "Run Payroll checkup" in QuickBooks will look to see that the payroll has been set up correctly.
Preparing for Year-End
QBPB: Someone who's just getting into business right now and setting up their accounting probably won't have any mistakes backdating to the beginning of the year when the economic stimulus plan first came about, but are there things that they'll need to know about for the end of the year?
Madeira: Definitely. You need to know about things such as the Making Work Pay tax credit. But the forms in QuickBooks pretty much handle it all. With the e-file ability, I think all of it is handled. If your payroll is set up correctly, and if you have some of these unique circumstances, then you have the ability to click right in the QuickBooks program to go find information about it. Behind the scenes, the payroll program is thinking about this for you.
QBPB: Is the biggest tax year-end challenge for business owners just to make sure that they've accounted correctly for all of the stimulus changes?
Madeira: Yes. The biggest challenge will be "Did any one of these factors in the American Recovery and Reinvestment Act affect me?" They may not even know. And did they handle it correctly.
QBPB: Any other words of advice for small business owners?
Madeira: I will tell every business owner: Don't wait until December 31 or January 31 to look at what your business has done and how it's been set up. Every single payroll quarter, you should look at your numbers and make sure things are set up correctly. A good eye on the company's financials and on payroll setup during the year assures you that the end of year, which is a busy time of year anyway, is painless, not subject to error, and in the end, results in a lack of any penalties for misfiling.
We recommend Intuit QuickBooks Assisted Payroll a lot. When we have clients who are small but too busy to handle the payroll, and they want something done regularly, we recommend Assisted Payroll for them, so that Intuit really takes charge and takes care of all their payroll needs. We find a fit that works best both in our business model and our clients'. We want them to be compliant, and we want it to be a painless part of their accounting process. QuickBooks does that.