mischelle watkins

Welcome! This collection of Former Ezine Articles I wrote for business owners are only a few of the over 30 useful articles that you’ll find helpful for a variety of business-related issues. EXPLORE MORE TITLES HERE!

Be Sure to see my Blog for Business Tips, Bookkeeping Tips, Budgeting Tips, and Tax Tips – Hundreds of Tips & Information at MischelleWatkins.com

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Click Here For Full Blog Article  – End of Year Tax Preparation – What Does Your CPA Need – Really?

It is that time of year again when you are ready to think about what you need to give to your bookkeeper or accountant. Here is a simple and easy to understand list of the paperwork and the reports that person needs to help them prepare your taxes as easily and ‘pain free’ as possible. No need to put things off this tax season.  This article moved to blog because of article theft.



“That’s NOT What I ASKED YOU TO DO,” screamed the customer at the contractor. “But I thought it was what we agreed to,” replied the contractor angrily. In the majority of cases, these misunderstandings and hostile experiences can be avoided with the simple step of creating a contract that outlines expectations and expenses.

When you are an independent contractor you want to make sure to cover yourself in the event of any misunderstandings down the road. As a bookkeeper, I always knew what my job functions were ‘supposed’ to be, but every once in awhile, the water was muddied by miscommunication, and that always resulted in disaster. Had I taken the time to create a simple contract outlining my understanding of the job BEFORE we got started, I would have prevented those disasters.

mwbmw-com-getcontractsinwritingWhen what you thought you knew is wrong:

While attending college I worked at the college bookstore.  A man came into the store one sunny morning and asked me for directions to an area I thought I knew. It turned out that he wanted to go one place and I gave him directions to another place. The end result was him cursing at me, and me asking security to remove him from the premises. Lesson Learned!

During my first year in business as a bookkeeper I saw the need to create an outline for myself of the job duties and the tasks I would be performing for my clients, as well as a brief explanation of our billing policy and payment expectations. With each of my clients, I had to make a few modifications, but the contract example below has (and continues to) served me well through these years.

Having a contract can mean the difference between expecting to get paid and begging to get paid.  PROTECT YOURSELF.


Date: ______________

This letter is to confirm my understanding of the terms, nature and extent of _________________ services I will provide.

I will prepare your ______________ for the function/s that we agree upon. I will not ________________________, although I will ask for clarification as I am reviewing the relevant paperwork.

All _____________ work is subject to review by you and/or your Partner. You should all relevant paperwork and information and any other supporting items relevant to your work situation. In the event _____________________, I will be available to assist you or recommend appropriate action. Such additional services are not included in the fee for preparation of ____________________. Application of the law often involves conflicting authorities and interpretations. Although I may recommend a position or course of action, you have final responsibility for the accuracy of your ____________ and should review the data you provide to complete _________________. You are responsible for penalties and/or interest attributable to future modifications of ___________________________.

My fees for these services will be at my standard hourly rate divided in half for the time spent. My hourly rate is $________ per hour, or $________ per hour for these purposes.

Beginning ______________________, ______, (Your company name) billing cycles will commence on the first day of each month and the 15th day of that month. Our new billing policy is as follows:

Invoices will be mailed out on the first and the 15th day of each month, and are due upon receipt. If the balance is not received in our office within seven (7) days of your receipt, a 10% late fee will be added to the balance and interest will begin to accrue on the unpaid balance at the rate of 18% per annum, 1.5% per month. Accounts that are not paid within 60-days of receipt will be sent out for collection with a private agency.

You are strongly encouraged to pay your invoice balances before these additional charges are added. Once late fees are added, they will not be waived.

Do not hesitate to call and discuss with me any questions you may have about this policy.

(Your name)
(Name of Your Company)
(Company Address)

You may want or need several different contracts on hand, depending on the nature and extent of the job you are performing.

The bottom line is really this: If you do not get it in writing then you do not have a leg to stand on. You have no friends when it comes to business relationships and (mis)understandings.

Got it? Any questions?


Business Referrals That Lead to Sales – Your NEW BUSINESS LEADS WILL ROCK YOUR SALES!

If you decide to get involved in a networking group, it can be hard (at first) to get referrals from your other networking group members. What you can do, instead of tossing in the towel and giving up, is to motivate and encourage these people to spread the word about your services and your company. That may seem daunting at first – especially if you are normally the person ‘behind the scenes’ and feel a bit awkward or shy. You may even feel as if you are wearing blinders and that getting involved in a referral group is the carrot dangling in front of you. In a sense, that is true, the leads are the carrots, and everybody but you seems to have a sack full of them.

mwbmw-com-getsalesreferrals3tips to help you succeedWhen business people begin a business and start to develop a referral-base, their first year they only get a small referral percentage. Their credibility is being tested by the other group members in their first year and people have a, “wait and see if they will be in business the second year,” attitude. After their second year, the statistic nearly doubles that of the first year (for some the percentage is higher), and after the third year the percentage goes way up.


Three things help you build a successful word-of-mouth based business:

1 – Cultivate Relationships If you approach your first year with the sole motivation of getting to know the original members of your networking group, you will be farther ahead than the majority of ‘newbie’s’ in the group. You first have to build a strong foundation with the people you hope will refer you to others, because people do business with people they know and trust. Everybody else just looks like a desperate phony and they will quickly wash out of the group. Seasoned professionals can spot the fakes from far away.

2 – Be Reliable – For the first year you are basically putting in your time and you just have to be credible to the other professionals with whom you want to network.

3 – Give Referrals –After building and seeding your relationships and proving yourself to be the reliable you are, the result is that you will get referrals. Building a word of mouth referral based business is all about the building of solid relationships – from the ground up. This is all because in these groups you have to give in order to receive.

Perform a check on yourself to see how well and effectively you are referring the people in your networking group. You might be surprised to see how little you actually refer or that you always give your leads to the same 2-3 people. Others in your group will notice that behavior. Being aware is the first step to correcting a pattern.

Track your referrals and look for those types of behaviors. The worst thing you can do is run like a rabbit if you are not getting the results you want in a week. Believe me, your reputation will go ahead of you with that attitude. Take the time to get to know the people in your group and help them understand that they are important — to you (not your pocketbook).

Where will you be in one year?


Beginning a bookkeeping business in 1999 had me running to try to find different software that was both effective and affordable for my clients. The accounting software I was ideally looking for also had to be as easy as possible to use and understand because I had to teach people how to use it and get the most out of it. That was when I found QuickBooks.

Sure there are other accounting software programs, but QuickBooks accounting and small business software proved to quickly become an industry standard, narrowing my choice almost immediately.

Although Peachtree and Quicken continue to be used by a smaller percentage of users, these programs still provide a good accounting tool for beginning users.

Every version of QuickBooks since 1999 still occupies my computer – Yes, some people just do not like change. If my clients have other software then I use it on their premises instead of keeping their accounting software loaded on my computer. This helps keep my costs lower and my hard drive capacity controllable.

These things make using QuickBooks an amazing accounting software tool:

– Quickly became an industry standard used by most businesses, bookkeepers and CPAs.
– Makes creation and generation of easily understood reports and files that can be sent to your bookkeeper or CPA over the internet.
– Uses an auto-generated chart of accounts for your choice of business operations and that chart can be easily modified to add or delete accounts as you need or want them.
– Understandably and Easily walks you through your company set-up in just a few minutes
– Is Used both across the USA and Canada
– I work in both places and use both Canada and USA QB Products.
– Automatic memory function and decimal placement on entries reduces data entry and speeds up all entries
– Basic Payroll functions are effective and mostly accurate, but an end of year  or quarterly adjustment may be necessary by your accountant to reconcile some necessary government paperwork reporting and filing requirements.

If you’re not a bookkeeper these things will make you crazy:

– It is a double entry system and you have to know how debits and credits work or you will be in a constant state of ‘needing help’ with your bookkeeping entries, reports, and understanding how the program works.
– Although you can automatically download your bank statement entries, I do not recommend it because it downloads them into generic chart of account line items (like miscellaneous instead of Office Supplies) and it does not download them with the vendor names, it uses exactly what your statement says, so the $4.99 you spent at an office supply store goes into your books as a “miscellaneous expense” from vendor “000123524579” This equates to a re-do on each entry by hand when you could have done it by hand in the first place and saved time.
– The payroll function works best for smaller businesses – say up to around 30 employees. After that it gets a little confusing and time consuming to monitor.
– QuickBooks support is difficult and expensive, but they have a QuickBooks Pro Adviser designation for those CPA and bookkeeper professionals who sign up for it. If you look online you can find those helpful people, or just ask me. I am a former QB Pro Adviser.
– The Multi-Currency function makes data entry a challenge if you go back and forth a lot and use different currencies.  If you do then just create a separate account for – Foreign Currency Banking.”

There are other software programs available. Check them all to find the best one for you and ask your CPA, bookkeeper or tax adviser what they suggest. It’s been my experience that you will love the way this software works with and FOR your business.


Writing Your Business Plan –

Tips on What Goes in a Great Business Plan

Writing “The” Business Plan

mwbmw-com-Writing Your Business Plan – What Goes in a Great Business PlanWhat goes in it? No one business plan is truly better than another, although there is general agreement in the industry about what makes a business plan easier to read, therefore easier to defend. Here are my thoughts on an effective business plan.

1. A Business Plan includes these – list each section in your table of contents

1a. A Description of your business – Please use your words effectively. There is nothing worse than 150 pages of fluff and 5 pages of real content. The method of if you can’t dazzle them with brilliance, baffle them with B/S does not work here. You are not talking to stupid people when it comes to business plans. Never assume they can be fooled. You aren’t that smart. Nobody is.

1b. Marketing – The methods you intend to use or already are using and what has worked well in the past (proven results are ALWAYS a win-win). Online research is perfect for this!

1c. Competition – Who is YOUR competition and how are you going to manage to take a significant portion of the market share of your niche? Grandstanding is not allowed. Don’t boast about anything here other than PROVEN results. If you do then you risk losing respect and end up looking like an… dummy opportunist.

1d. Operating procedures – What type of an office do you intend to operate, and how will you operate it? Do you have office space or are you looking for something to rent/buy?. If you are looking then when you go out take your camera and have 3-4 sites documented – with address and map information (PowerPoint presentations have excellent formats to create this type of document-with eye appeal). Will you use an answering service or a receptionist?…

1e. Personnel – You don’t need a list of everyone down to the janitor (unless you are creating a business plan for a janitorial service), but you will need a list and resume of the main corporate structure beginning with the president down to the secretary, a listing of a board of directors if you have one (3-5 is a good amount to begin with). List your advisors here too, like your CPA, Business Advisor, attorney, and other professionals that you use regularly – they may be your Board of Directors.

1f. Business insurance – As a bookkeeper I carry a 2 million insurance bond on myself. That is a lot, but I would include my insurance paperwork in this section to prove my integrity.

2. All of your Financial Data – also listed in your table of contents

2a. Loan applications – any paperwork that you prepared for a loan and if you are asking a partner or friend, stop by a bank and get a copy of their loan request documents and use those for yourself. You’ll look like a pro if you do!

2b. Capital equipment and supply list – from the supplies on the desk to the desk itself – get an office supply catalog if you aren’t sure so that you do not leave things out that might add up to unexpected costs down the road.

2c. Balance sheet – If you don’t know how to make one, ask a professional or create one from the numerous examples online, or go to your small business administration and ask them. They have mentors there who will sit down with you and review your business plan with you to see how it can be more effective – usually retired professionals with a lot of business savvy.

2d. Breakeven analysis – See ‘Balance Sheet.’

2e. Pro-forma income projections (profit & loss statements) – See ‘Balance Sheet’

2f. Three-year summary – Do each year separately and do a summary of years 1-3 combined also, so that you have year by year comparisons and a total column too.

2g. A first year detail by the month (Month 1, Day 1 through 30)

2h. Detail by quarters, Quarter 1, 2, 3, 4 for your first year, second and third year.

2i. List the assumptions that your projections are based on – example: additional staff decisions are based on growth projections of 20% per month for the first 8 months in year one…

2j. Pro-forma cash flow – See ‘Balance Sheet’

3. Any and All remaining Supporting Documents – List in your table of contents

3a. Tax returns of principals for last three years Personal financial
statement (you can pick these forms up at most all banks). Even though it seems like it is none of anyone’s business these are relevant to a bank or loaning institution so that they can see your history and how you operate (or don’t operate).

3b. For any franchised businesses, a copy of your franchise contract and all the supporting documents provided by the franchise operator.

3c. A copy of your proposed lease or purchase agreement for building or rental space.

3d. A copy of any licenses you may have acquired for your business and any other legal documents you may have.

3e. A copy of the resumes of all the principals – people you consider to be your main people you are putting in the top company positions.

3f. Copies of letters of intent from suppliers, etc. – those that will buy from you if you go into business (can also be considered a list of potential customers who signed a document to do business with you.

3g. A well executed exit strategy is worth its weight in gold for paying back a loan, or money to an investor (if you are asking for private funds). Don’t forget to write this out and include it in your business plan as well (also in your table of contents).


Choosing a New CPA – Question Tips on What to Ask to Find a Good CPA

Ask. . . Because, A good Accountant will file your taxes, but a Great Accountant Works With you to Help Save You Money!

changing accounts to save money-mwbmw-comOk, so you are looking for a new or different CPA.

. . . Maybe you had a great CPA in the past,

. . . Maybe you are just looking for someone new and different because you want to or

. . . Maybe you are feeling as if you could do better on your taxes if you switched your CPA (OR Bookkeeper).

Whatever your reasons, there are a few things to keep in mind when you are choosing a new CPA (OR Bookkeeper).  Tax filing season is upon us and ideally, your search has begun long before this time of the year. The bottom line is that the sooner you get started, the better, because good relationships have a chance to develop before it’s crunch time!

Overwhelmed Accountants are hard pressed in March or April to help a client who is completely new. if you decide to show up at a CPA’s office on April 1, hoping to be put first in line for completion of your Schedule C and your Corporate tax filing (plus your payroll and 1099/1096 filings) – think again. You are more than likely to be put at the end of the waiting list and will probably have to file an extension.

SEE HERE for a current list of Federal tax filing deadlines/calendar.

There are important issues that matter beyond your tax preparation. You will need (and want) to find a professional who understands – specifically – your type of business and may understand your personal financial situation too. You’ll also want someone you feel comfortable with. I have found that it is one of the most important choices you will make. You are trusting someone else with the information that makes up your business, your assets, and your problems. Complete confidentiality.

Choose a CPA carefully. Most people start looking by asking like-minded business owners for referrals, especially if they are in the same industry. For instance, a restaurant owner is going to want an accountant with experience in restaurants and an auto repair business will want someone with experience in auto repair… because their experience in that area is important.

Once you have some names to call, make an interview appointment with that person. Do not be shy when it comes to asking probing questions about a CPA’s experience and background. They will be handling all of your issues regarding your financial security. It’s not out of the ordinary to ask these questions.

Good questions to ask –

Has anyone ever sued you for malpractice?

Have you ever been reported for malpractice?

Do you have references? May I have three?

When you call the references ask them:
(1) How that accountant works with them
(2) Whether or not they are satisfied with the service they are getting.

Do I pay by the hour, OR as I go along?

OR, one lump sum for designated services (contracted)?

Do you require a retainer? Is the retainer applied to my balance or is additional money due?

Often people with a small business require the help of a CPA who knows more than tax prep. They need a person who is willing to also give them business advise. Not just their business, but their lives in relation to their business – vacations (for instance) that can be taken as business trips. Those kinds of business owners need quarterly tax help, business projections, tax projections, and generally want a comptroller type of accountant to watch over them.

If you are that kind of business person then another question you need to ask is if that accountant is willing to work with you in that capacity and what percentage of their client base makes up those kinds of clients?   For example, you’ll want to know if you can get the numbers you need for projections in time for your year-end meetings.

And some business owners want even more help yet – they want a CPA who will also do their bookkeeping.

– Watch out for this for the simple reason that a bookkeeper AND a CPA can work together and a bookkeeper will – in general – charge less than a CPA to do the same work, plus you have the added bonus of two set of eyes cross-checking the work of the other, therefore your chances of theft are lowered. Theft is big business these days.

Other questions you want to ask include:

If I am audited by the IRS will you handle the audit for me?

Do you provide correcting general journal entries to my bookkeeper at the end of the year when my taxes are filed or do you charge extra for that?

Do you do on-site visits for tax ‘health checkups?’

Coming from the side of the accountant you want to hear them asking YOU these questions:

What areas do you need help in? (Corporate taxes, individual taxes, business succession, estate planning, strategic planning are just a few of the things they should be asking you about).

The best question will be saved for last by any good accountant:

Why are you changing accountants?

  • Have a good answer ready because if you answer this one with, “I didn’t want to pay them,” you’ll be told by the person you are talking to that they aren’t accepting any new clients right now. It’s a small community and accountants call each other.

Finding a good CPA and bookkeeper can be scary, so use these simple tips to get yourself started.