EQ Bookkeeping's Blog

Organizing Paperwork Should be a Priority for the Equine Industry

Jennifer Foster — Wed, 05 Oct 2011 15:52:40 +0000

With so much going on in your equine business, it’s impossible to remember every little transaction that may happen. Every transaction, no matter how small, should have some piece of supporting evidence to back it up. Make notes on your documents, so when look back a couple months later you will know what the transaction was for.

Here are a few other tips for managing your paperwork:

Always get an invoice for items that you buy, but don’t need to pay for right away.
Always get a receipt for any transaction, especially when you pay in cash.
When you sell something or provide a service and expect payment later, always generate an invoice for the customer.
Whenever you receive a payment, issue a receipt.
Keep your filing organized, so that sales invoices are separate from purchase invoices.
Write a payment reference on invoices when payment is received and file the invoices in a paid file.

Following these simple rules of organization should get you well on your way to keeping good records. Just remember to never mix business and personal finances. Keep them totally separate or you’re certain to have trouble with your business and, more importantly, the IRS!

If you need help getting a handle on your equine business’s paperwork, EQ Bookkeeping can help. We are expert at taking out-of-control piles of receipts and miscellaneous papers and turning them into a clear, concise record of your business dealings.

Visit our website for more information about our outsourced bookkeeping programs for the equine industry, or call us at 877-399-8920.

Equine Businesses are as Vulnerable to Common Errors and Fraud as any Other Small Business

Jennifer Foster — Wed, 14 Sep 2011 15:37:06 +0000

Perhaps it was just a missed accounting entry or maybe it was purposely omitted from the books. The difference between the two is the difference between a simple error and fraud. Fraud and accounting errors are especially important to small businesses since cash is usually a top concern.

Unfortunately, both accounting errors and fraud are common problems for small businesses, including equine businesses. More than 30 percent of all fraud occurs in small companies, according to research by the Association of Certified Fraud Examiners (ACFE).

A common reason that fraud and errors occur frequently is that small businesses often lack internal controls and often have a single person handling the accounting. When one person handles the accounting, manages the office, and ships product, problems can happen simply because they have no one to double check their work. Sound familiar? It’s also more difficult to discover errors and fraud since small businesses, including equine businesses, rarely have regular financial audits.

Outsourcing bookkeeping or accounting to a third party not only relieves a burden on your equine business, but also helps prevent errors and loss. The more people looking at the numbers, the easier it is to catch small problems before they become large issues which could potentially ruin your business.

If your equine business needs to prevent fraud and reduce accounting errors, EQ Bookkeeping can help. We provide a full range of bookkeeping services designed especially for horse owners and equine-related businesses, including:

Vendor Payment Tracking
Cash Flow Management
Financial Statement Preparation
Payroll Processing
And more

For more information about our unique service for the equine industry, visit the EQ Bookkeeping website, or call 877-399-8920.

Budgeting for Your Horse Business: Plan for Future Success

Jennifer Foster — Wed, 07 Sep 2011 18:37:30 +0000

As you may know, I am a regular contributor of articles pertaining to accounting and bookkeeping for the equine industry to Desert Mirage Magazine, a print and digital Arabian Horse publication that focuses on the unique beauty, intelligence, versatility and prestige of the Arabian horse. My recent article, “Budgeting for Your Horse Business,” discusses how creating a budget for future years forces you to think about the direction you want your business to go and chart a course to get there, and why is it that most horse people don’t do it unless they’re forced to.

In the article, I outline the process of creating a budget, and discuss each task in detail, which include:

Creating a list of monthly expenses, based on your historical spending
Listing income from all sources
Comparing expenses against income
Customizing the budget, and adjusting for future expectations
Adjusting and re-adjusting as necessary to create the strategy you want for your business
Planning for the most efficient use of excess funds

One of the hardest parts about creating a budget is forcing yourself to sit down and do it. Once you overcome that hurdle, you’ll likely find that all of your thoughts and knowledge regarding your business flows quickly. Developing your first budget and developing the habit of reviewing it on a regular basis will be a challenge. But forcing yourself to do it is one of the best things you can do for your business, and will be well worth it in the long run. Understanding your income and expenses is a necessity for success. Once you get a handle on your budget, you will worry less about your finances, and have more time to enjoy living your life.

For more information, read the complete article, “Budgeting for Your Horse Business.” (PDF opens in new window)

Good luck with your budget!

Your Equine Business Needs to Keep an Audit Trail

Jennifer Foster — Fri, 26 Aug 2011 19:31:32 +0000

It’s August and you receive a letter in the mail from the IRS. Could it be an additional refund for your equine business? You open it up and read the word that everyone dreads “audit.” You have two choices at this point, panic or pull out your audit trail you have kept for the tax year. Hopefully as a equine business owner, you have kept an audit trail for this specific tax accounting purpose. If you don’t have one, now is the time to start.

If you are a sole proprietor, the first thing you need to do is keep your equine business and personal bank and credit card accounts separate. You should deposit all business income, including cash, into your business bank account. And as a result, you need to pay all equine business related expenses from your business credit card and bank account. This will create a visual trail of your cash flow. It’s all too easy to start intermingling your transactions if you don’t have a system set-up. Once you start paying for business expenses with personal funds and vice versa, it makes bookkeeping more complicated. Business expenses could be overstated on your return if personal expenses are included, which is a big no-no.

You also need to keep all of your receipts and make sure they are legible. This is a lot harder to do than it sounds. The key is to have a procedure in place to handle your receipts. The IRS has a simple rule: no receipt, no deduction. Make it a priority to keep and file all your receipts for the tax year.

Take the time to create an audit trail. If (and when) you are audited, you will be very thankful you did. If you need help organizing your books and establishing a proper audit trail, EQ Bookkeeping can help. Visit our website for information about our Outsourced Tax Accounting Services for your equine business, or call 877-399-8920.

Keep an Auto Log of Equine Business Travel

Jennifer Foster — Wed, 24 Aug 2011 21:23:17 +0000

We know we all must do some traveling when we are in business, and the equine business is definitely no different. The IRS increased the standard mileage rates for the last six months of this year.

The rate increased to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011.
This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011.

The IRS stated that a major factor in the higher mileage rate is due to the increase in gas prices.

The IRS allows you to deduct your actual auto expenses OR use their standard mileage rate. Both methods are based on your equine business mileage, as personal use of your vehicle is not an allowable deduction.

In order to track mileage, you will need a log of some type to show your mileage and the purpose of your trip. Remember that to deduct equine business use of an auto, you must be able to substantiate three things:

The business purpose of the trip
The date and destination of your business related trip or errand
The amount you are claiming as a deduction

It may seem like a hassle, but your auto log will help you substantiate your deduction claim in the event of an audit.

Independent Contractor Agreements Important for Equine Business Tax Accounting

Jennifer Foster — Tue, 23 Aug 2011 14:12:12 +0000

With the IRS cracking down on tax accounting practices related to the classification of W-2 vs. 1099 employees, it is imperative that you have a written agreement when working with an independent contractor in your equine business. Detailing the working provisions in written form will help strengthen your position that the worker is truly an independent contractor.

When drafting an effective agreement, keep these things in mind:

Avoid names and titles – state that the person is working as an independent contractor and do not use employee sounding titles.

Training & Instructions – a worker is more likely to be classified as an employee if you spell out how, when and where they should perform the work. Training should be kept to a minimal for independent contractors with the emphasis of work perform by existing skills.

Control of work – independent contractors should be allowed to delegate work with the stipulation that any assistance will be paid by the independent contractor.

Exclusivity – Having an exclusivity clause hurts independent contractor status as they should have the right to work with multiple employers.

Work location – When possible, the agreement should allow the worker to determine the work location. Work performed on the employer’s premises suggests control.

Hours – Set hours determined by the employer suggest an employer/employee relationship. Putting the schedule in the worker’s hands lends itself to contractor status.

In many cases for an equine business, most would fall underneath the employee designation, but there are probably times when you truly are working with a 1099 – like for your bookkeeping services. Just remember, a well written and executed agreement with your independent contractor can keep you safe from future troubles with the IRS.

Equine businesses often use contract labor to maintain their barns. Just note: the cost of trying to use contract labor for a position that needs to be filled by an employee can result in costs so high it ruins your business. Take precaution!

Horses: Inventory or Equipment

Jennifer Foster — Thu, 26 May 2011 13:37:25 +0000

Recently, we took on a new client who has 40 horses in the barn. They breed and train horses, as well as offering show and lesson programs. While reviewing the financial statements, we found all of the horses were listed as inventory.

We started asking questions and found that the client was using a tax accountant who is a friend of her father and who has no prior experience with horse businesses. He just assumed that she would be selling all of her horses.

What does that mean? All of her horses were considered inventory when in reality some of them were fixed assets (equipment that she used for her lesson program.) As fixed assets, the horses could be depreciated and would generate expense (thus lowering the taxes she had to pay.)

She has had her business for seven years, and unfortunately we can only amend her taxes for the past three. But the bottom line is that she overpaid her taxes for the past nine years.

The good news…Thanks to her decision to work with us on her monthly bookkeeping, she will be getting a refund from the IRS for about $9000.

The bad news…She actually overpaid by about $13,000.

Do you know if your horses should be listed as inventory or equipment? Does your accountant know?

www.eqbookkeeping.com

Jennifer Foster, President

Join Me at the 2011 WHIA Global Networking Expo in October

Jennifer Foster — Wed, 11 May 2011 15:37:20 +0000

The Women’s Horse Industry Association (WHIA) has announced the schedule for their 2011 Global Networking Expo, which will be held at the Radisson at Opryland in Nashville on October 7 and 8. I will be there to present a seminar about Operating a Profitable Horse Business, a topic I know well having seen both the positive and negative sides of the issue doing the bookkeeping for our equine industry clients.

In addition to my presentation, the two day event will hold a number of informative panel discussions about marketing and networking for the equine industry. It should be a lot of fun as well, as Nashville has plenty to offer visitors in addition to the Expo. The event coordinators are planning a few special events to take advantage of the city’s attractions. Details will be released as the event draws closer.

If you are interested in attending, click for more information about the 2011 WHIA Global Networking Expo. To register for the Expo, click here. (links open in new windows)

Hope to see you there.

Jennifer

Call Now! Seriously??

Jennifer Foster — Fri, 15 Apr 2011 14:01:52 +0000

I was waiting at a stoplight on my way to a dentist appointment last week, deep in thought about whether the hygienist would be able to tell I had an Oreo for a snack when a bright yellow hand-written sign caught my eye. I assumed it would be one of the many “Cash for Gold” or “Pillowtop Mattresses – We Deliver” signs, which by the way….who thinks “Wow, great sign! I should call now!” However, this sign was a first for me; it read “Outsource Your Bookkeeping 555-5555”. REALLY??? Now don’t get me wrong, I’m all for the entrepreneurial spirit, but is this really the way to instill confidence in your potential clientele?? And furthermore what sort of individual would think this is a good way to find a bookkeeper??

Bookkeeping is one of the most essential functions of your equine business and the accuracy of which can determine your success or failure. Three characteristics that instantly come to mind (and should come to mind) when thinking of a potential bookkeeper are professionalism, experience in the equine world and a good reputation. Now these aren’t the only qualities you should look for, but if a bookkeeper doesn’t have ALL of these things, then you should cross them off the list.

Let’s review the handwritten ad at the stoplight. Professionalism? None. My daughter’s sign for a lemonade stand had more thought and effort put into it than that! Experience? They could possibly know something about bookkeeping, but they sure don’t know anything about the business and standards. Good reputation? If they had one before, they certainly don’t now!

Don’t put your equine business’s financial future in the hands of a handwritten street sign advertiser. No legitimate, qualified and experienced bookkeeper or accountant would advertise that way. Do your research and find a true professional. Same goes for mattresses…but that’s just my opinion!

WHIA Conference Calls Schedule for April & May

Jennifer Foster — Thu, 14 Apr 2011 22:10:45 +0000

Hi Everyone:

The Women’s Horse Industry Association (WHIA) has a couple of pretty neat marketing tools for our members that you might want to check out.

The first is our LIVE CONFERENCE CALLS. We have set up a ton of conference calls with our members and if you would like to participate or join in, here’s the information you need to know: Here’s a way for you to meet and talk to our members about their products and services LIVE! To participate at any of the scheduled conference calls, please use the following information to sign in. If you have FREE long distance service there is no charge to you. If you don’t, then your normal long distance charges will apply. Please use these numbers for any of the calls you wish to join in on:

We have changed the time of our calls from

9:00am to NOON

central standard time.

If you are a scheduled guest, please make sure you call in at NOON not 9:00am.

PHONE AND ACCESS NUMBERS
US CALLS
760-569-7676
PARTICIPANT AND GUEST ACCESS CODE: 869357

UK CALLS
44 (0) 784-843-2901
PARTICIPANT AND GUEST ACCESS CODE: 466532#
(Don’t forget the # sign!)

CANADIAN CALLS
43(0) 1-265-0540
PARTICIPANT AND GUEST ACCESS CODE 466532#
(Don’t forget the # sign!)

APRIL 25
SHERYL KURSAR – EXECUTIVE DIRECTOR – EQUESTRIAN AID FOUNDATION

APRIL 27
UK INFORMATIONAL CALL
9:00 AM CENTRAL STANDARD TIME

APRIL 29
NO CALLS – THE BIG WEDDING!

May 2
JACKIE ROBBINS – EQUINE PUBLISHING

MAY 3
MEET SHARON BAKER – PRESIDENT – EQUIMEDIC USA

May 4
ANKE JOHNSON – NATURAL SOLUTIONS BY ANKE

May 5
MEET CATHERINE MASTERS AND MEMBERS OF THE WHIA

May 6
MEET ANDREA FEATHERSTON-ROSSI Roanoke Design & Marketing/RDM Equestrian

MAY 9
CAROL DILLEY – THE SETTLEMENT AT THOMAS DIVIDE

MAY 10
MEET EILEEN TIGHE -WINNING WITH HORSE POWER

May 11
KRISTINA FRITZ -Author of Equineshiatsu – A Natural Therapy for Horses and also an Equineshiatsu Practitioner

May 13
STACY ADAMS – ACTIVE TRAVEL

May 16
MEET JENNIFER FOSTER – EQ BOOKKEEPING

MAY 17
MEET CATHERINE MASTERS AND MEMBERS OF THE WHIA

May 18
MEET CHARLENE PETERSON – EASY MILE LOG

May 20
MEET CHERYL PRICE – PRESIDENT OF EMERALD VALLEY NATURAL PRODUCTS

May 23
MEET NAN MARTIN, LSH, CRP – Alternative Health Solutions for Animals and Humans

May 25
MEET LAURA GRAVES – Black Stallion Foundation

May 27
MEET AUTHOR CLAIRE DOROTIK

The Women’s Horse Industry was formed on June 25, 2009 and already has over 575 members in the U.S., Canada, Australia, the UK and Germany. For information on the Women’s Horse Industry Association, please visit www.WomensHorseIndustry.com.

EMAIL DATABASES
The second cool marketing tool we have is our massive database of equine professionals. We have thousands of email addresses for all kinds of equine professionals and many of our members have asked us if we would make them available to them.

We know it’s very time consuming to get these email addresses so we are going to make them available to our members for $50.00 per 1000. Plus, we will replace any "bounce backs or bad addresses with new ones, free. Please look on our website for details. We have all of the various categories available listed with the number of email addresses for each. So, if you want to amp up your marketing efforts, this might be a very cost effective way to do it.

Cheers!
CM
WHIA GLOBAL