Bookkeeping records and organizes day-to-day financial activity. Accounting uses those records to reconcile accounts, prepare financial statements, evaluate performance, support decisions, and meet reporting obligations. Reliable accounting begins with reliable bookkeeping.

Every business needs accurate records, although the level of professional support varies. Help becomes especially valuable when accounts do not reconcile, the owner is losing time to the books, payroll or sales tax is involved, reporting is unclear, deadlines are missed, or decisions are being made without dependable numbers.

Dedicated business bank and credit-card accounts make reconciliation, documentation, tax preparation, cash-flow analysis, and liability protection easier. Transfers between the owner and business should be recorded correctly as contributions, draws, distributions, reimbursements, loans, or payroll as applicable.

Cash-basis accounting generally records income when it is received and expenses when they are paid. It can be simpler, but it may not show receivables, payables, or the economic timing of activity as clearly as accrual reporting.

Accrual accounting generally records revenue when earned and expenses when incurred, even when cash moves later. It often provides a clearer view of operating performance, receivables, payables, and period-to-period results.

The choice depends on the entity, industry, inventory, reporting needs, tax rules, lender requirements, and complexity. The method used for management reporting and tax filings should be selected intentionally and applied consistently.

A chart of accounts is the organized list of categories used to classify assets, liabilities, equity, revenue, and expenses. It should be detailed enough for useful reporting without becoming so large that transactions are coded inconsistently.

Every accounting entry affects at least two accounts so the accounting equation remains balanced. This structure helps track where value came from, where it went, and whether assets equal liabilities plus equity.

Assets are resources the business owns or controls. Liabilities are obligations it owes. Equity represents the owners’ residual interest after liabilities are subtracted from assets.

Most established businesses should review reconciled financial statements monthly. Cash, receivables, urgent liabilities, and unusual activity may require more frequent attention, while quarterly reviews support broader planning.

A monthly scope may include reviewing transactions, reconciling bank and credit-card accounts, recording payroll, reviewing revenue and expenses, updating loans and fixed assets, checking receivables and payables, and preparing reports. Responsibilities and deadlines should be defined in advance.

Reconciliation compares the accounting balance and activity with an independent statement or report. Differences are investigated and corrected. A financial report can look polished while still being wrong if its underlying accounts are not reconciled.

A monthly close is the controlled process of finishing a period: recording outstanding activity, reconciling accounts, reviewing classifications, posting adjustments, investigating unusual balances, and producing reports.

Timing depends on complexity and when source documents arrive. Many businesses aim to close within the first one to three weeks of the following month. A consistent, accurate deadline is more useful than a fast close built on incomplete information.

Even one unreconciled month reduces visibility, and the risk grows as months accumulate. Delayed books can hide cash problems, missed payments, tax exposure, duplicate transactions, payroll errors, and uncollected receivables.

Cleanup is a defined project to correct incomplete, duplicated, misclassified, unreconciled, or unsupported records. The scope may include opening balances, payroll, loans, assets, receivables, payables, equity, and prior-period errors.

Often yes, but the correction depends on whether returns were filed, financial statements were issued, and the error is material. Prior periods should not be changed casually; accounting and tax effects must be evaluated together.

Common items include bank and card statements, sales summaries, bills, receipts, payroll reports, loan statements, merchant reports, financing documents, and details for unusual transactions. The exact checklist should match the business systems and scope.

Uncategorized activity makes financial statements incomplete and can misstate profit, assets, liabilities, and taxes. Questions should be resolved during the close rather than allowed to accumulate indefinitely.

Locking completed periods can prevent accidental changes after reports or returns are finalized. Access and exceptions should be controlled, documented, and coordinated with the accounting and tax team.

The profit and loss statement summarizes revenue, cost of sales, operating expenses, and profit or loss over a period. It helps evaluate performance but does not show the full cash position, debt, owner activity, or everything the company owns and owes.

The balance sheet reports assets, liabilities, and equity at a specific date. It can reveal cash, receivables, debt, tax liabilities, retained results, and the financial structure of the company.

The statement of cash flows explains changes in cash from operating, investing, and financing activity. It connects accounting profit with actual cash movement and helps explain why cash changed during the period.

Double-entry accounting requires assets to equal liabilities plus equity. If a report does not balance, the accounting data, report setup, or conversion process needs investigation.

Gross profit is generally revenue minus direct cost of sales. It shows how much remains before operating overhead, financing, taxes, and owner activity. The definition of direct cost should be consistent for useful comparisons.

Gross profit measures revenue after direct costs. Net profit reflects additional operating and other income and expenses. A business can have a healthy gross margin but still lose money because of overhead or financing costs.

Comparisons reveal trends, seasonality, unusual changes, and possible errors that a single period may hide. Useful comparisons include prior month, prior year, budget, forecast, and relevant operational units.

It lists unpaid customer balances by how long they have been outstanding. It helps prioritize collection, identify disputes, assess credit risk, and evaluate whether receivables may be uncollectible.

It lists unpaid vendor obligations by due date or age. It supports cash planning, prevents missed payments, identifies duplicates, and helps the business understand near-term commitments.

Warning signs include unreconciled accounts, negative assets or liabilities without explanation, large uncategorized balances, old receivables or payables, duplicate accounts, unexplained suspense balances, inconsistent margins, and reports that change after being finalized.

Cash may be tied up in receivables or inventory or used for loan principal, equipment, taxes, owner distributions, and growth. Timing differences and noncash accounting expenses mean profit and cash are not the same.

A cash-flow forecast estimates when money will enter and leave the business. It can identify future shortfalls, tax pressure, hiring constraints, borrowing needs, or excess cash before they become urgent.

Many businesses benefit from a detailed rolling 13-week forecast plus a higher-level annual view. The appropriate horizon depends on seasonality, payment cycles, debt, inventory, payroll, and decision timing.

A budget is an approved financial plan or target. A forecast updates expectations using current information. Comparing actual results with both helps distinguish performance gaps from changed assumptions.

Update it when actual results arrive and whenever major assumptions change. A cash forecast may be updated weekly, while a broader operating forecast may be refreshed monthly or quarterly.

A variance is the difference between actual and planned results. Useful analysis explains whether the variance came from price, volume, timing, efficiency, an accounting error, or an assumption that is no longer valid.

There is no universal amount. Consider fixed costs, payroll, seasonality, customer concentration, collection time, debt, taxes, inventory, access to credit, and the consequences of disruption.

Invoice promptly, make terms clear, verify billing details, offer convenient payment methods, monitor aging, follow up consistently, resolve disputes quickly, and evaluate deposits or milestone billing where appropriate.

Maintain an accurate due-date schedule, use agreed terms, avoid paying duplicates or too early without benefit, communicate before problems arise, and prioritize obligations based on consequences and cash availability.

Evaluate total cost, financing, payment timing, operating savings, new revenue, useful life, maintenance, taxes, insurance, implementation risk, and the effect on working capital under more than one scenario.

Tax preparation reports completed activity on required returns. Tax planning happens before transactions and deadlines, using current information to estimate obligations and evaluate available decisions.

Waiting until filing season limits the actions still available. During-year planning can address estimates, compensation, retirement contributions, major purchases, entity decisions, and unusual transactions while time remains to respond.

Estimated payments are periodic prepayments toward income and certain other taxes when withholding may not cover the obligation. Requirements depend on the taxpayer, entity, income, withholding, prior-year tax, and current rules.

A deductible business expense generally must meet applicable tax requirements and be properly documented. Personal expenses, capital purchases, meals, vehicles, home offices, travel, and mixed-use costs may have special limitations or substantiation rules.

Keep invoices, receipts, proof of payment, contracts, mileage or travel records, business purpose, attendee information when relevant, and other documents showing the amount, date, vendor, and connection to the business.

Depreciation generally allocates the cost of a qualifying asset over time. Tax law may allow or require different methods and elections. The books should track asset cost, date placed in service, disposals, financing, and accumulated depreciation.

An approved filing extension generally gives more time to submit a return, not more time to pay the expected tax. Estimated balances may still be due by the original payment deadline, with interest or penalties possible on unpaid amounts.

File required returns on time, determine the accurate balance, pay what is reasonably possible, and promptly discuss available payment or resolution options with a qualified tax professional or the taxing authority.

Do not ignore it. Note the response deadline, preserve the complete notice and envelope, verify the tax period and issue, and send it securely to the professional responsible for that tax matter.

Yes. Coordination can reduce repeated cleanup, connect planning with current results, and help ensure the accounting records support filed returns. Tax adjustments should also be reflected appropriately in the books.

Washington Business & Occupation tax is generally based on gross receipts rather than net profit. Classifications, rates, deductions, credits, and filing requirements vary, so a business may owe B&O tax even when profit is low.

Classification depends on the business activity and current state rules. A company with several revenue streams may need more than one classification, and revenue should be mapped consistently to the correct activity.

The answer depends on what is sold, where the customer receives it, exemptions, and the seller’s activities and nexus. Taxability should be determined before invoicing rather than after sales accumulate.

Nexus is the connection that can create a collection or filing obligation in a jurisdiction. Physical presence, economic activity, employees, inventory, services, and marketplace activity may matter under applicable rules.

A valid reseller permit may allow qualifying purchases for resale without paying retail sales tax at purchase. The buyer and seller must follow documentation and use requirements; it is not a general exemption for business purchases.

Collected tax is generally a liability rather than revenue. The books should reconcile taxable sales, exempt sales, tax collected, filed returns, payments, and the remaining amount owed.

Yes. Depending on location and activity, a business may face city business licenses, local B&O taxes, sales-tax sourcing, or other local requirements. Operating in multiple cities can create more than one obligation.

Late filings or payments can trigger penalties and interest. File and address the balance promptly, verify that all required periods are covered, and review whether registration or filing frequency needs correction.

Marketplace facilitators may collect certain taxes, but sellers can still have registration, reporting, reconciliation, B&O, or other obligations. Marketplace statements should be reconciled to sales and deposits.

Reconciliation helps identify omitted sales, duplicate reporting, incorrect classifications, timing differences, and unpaid liabilities. Filed revenue should be explainable against accounting and sales-system records.

Classification depends on the actual working relationship and applicable federal and state rules, not only the contract label or worker preference. Control, independence, and the nature of the work may matter.

When applicable, collect a properly completed Form W-9 before payment, plus the legal name, business name, address, tax classification, contract, and payment details. Store sensitive data securely.

Requirements depend on the payee, payment type, amount, payment method, and current rules. Review vendors before year-end. Payments through certain card or third-party networks may follow different reporting rules.

The books should reflect gross wages, employer taxes, employee withholdings, benefits, deductions, cash paid, and liabilities. Recording only the net withdrawal can materially understate expenses and obligations.

Review them with each payroll and reconcile at least monthly to payroll reports, filings, and payments. Old or negative balances may signal missing entries, duplicate payments, mapping errors, or unresolved obligations.

Gross pay is compensation before employee taxes and deductions. Net pay is what the employee receives after withholdings and deductions. Employer payroll costs can exceed gross pay because of employer taxes and benefits.

Complete required employment and tax forms, verify work authorization, report the hire as required, establish payroll and benefits, document compensation, confirm classification, and understand applicable wage and leave rules.

Confirm final-pay requirements, unused leave treatment, benefit changes, access removal, property return, payroll reporting, and documentation. Requirements vary by jurisdiction and circumstances.

Common causes include late or missing filings, payment timing, incorrect account numbers, mismatched wages or deposits, agency processing errors, and payroll-system setup problems. Reconcile the notice to filings and payments before responding.

It depends on entity type, ownership, services performed, tax treatment, and reasonable-compensation rules. Owner wages, draws, distributions, and guaranteed payments are not interchangeable and should be reviewed with a tax professional.

Entity structure can affect tax filings, owner compensation, equity accounts, payroll, distributions, legal formalities, and reporting. The correct choice depends on facts and should be evaluated with qualified tax and legal advisors.

An LLC is a legal structure under state law and can have different federal tax classifications. An S corporation is a federal tax election available to qualifying entities. They are not direct opposites, and an LLC may elect S corporation taxation.

Consider business profit, owner services, payroll, administrative cost, state taxes, benefit goals, ownership eligibility, and future plans. An election should be modeled before deadlines rather than made from a generic rule of thumb.

An owner contribution is value placed into the business by an owner. It generally increases an equity or capital account and should not automatically be recorded as revenue.

It is value taken from the business by an owner outside ordinary expense reimbursement. The accounting and tax treatment depends on the entity and the owner’s basis, capital, compensation, and distribution rules.

It may physically do so, but the payment usually should not be treated as an ordinary business expense. It may need to be recorded as a draw, distribution, compensation, loan, or reimbursement depending on the facts.

Document the amount, date, terms, interest, and repayment expectations. Record a genuine loan as a liability rather than revenue or equity, and track payments between principal and interest.

Basis is a tax concept used in several entity types to measure an owner’s investment and certain tax consequences. Contributions, income, losses, debt, and distributions may affect it differently depending on the entity.

Ownership documents, capital accounts, purchase terms, contributions, profit allocations, payroll, distributions, debt guarantees, and tax elections may need updates. The legal and tax structure should be settled before entries are posted.

Address final payroll, vendors, customers, assets, debt, licenses, tax accounts, final returns, records, and owner distributions. Closing the bank account too early can make refunds, payments, and reconciliations difficult.

Timing depends on the accounting method and when the business has earned the revenue under applicable accounting and tax rules. Customer deposits, retainers, subscriptions, refunds, and deferred obligations may require separate treatment.

A refundable deposit or payment received before earning the revenue may initially be a liability. It becomes revenue when the business satisfies the relevant obligation, depending on the facts and accounting method.

Cost of goods sold generally includes direct costs associated with products sold or services delivered. Consistent separation from operating overhead is important for gross-margin analysis.

Track quantities, cost, purchases, sales, adjustments, shrinkage, and obsolete items using a method appropriate to the business. Inventory records should be reconciled to physical counts and the general ledger.

An expense generally benefits the current period. An asset provides future benefit and may be depreciated or amortized over time. Dollar thresholds, useful life, tax elections, and accounting policy affect treatment.

Record loan proceeds as a liability, not revenue. Payments generally include principal, which reduces the liability, and interest, which is an expense. Fees and closing costs may require separate treatment.

Treatment depends on how rewards were earned and used. They may reduce an expense or asset cost or be recorded differently in some circumstances. Use a consistent policy supported by the program details.

Record them so revenue, fees, receivables, inventory, and cash are accurately reflected. Merchant deposits should be reconciled gross rather than treating only the net bank deposit as sales.

Use consistent classes, locations, departments, projects, or dimensions for both revenue and costs. Shared overhead should remain separate or be allocated using a reasonable, documented method.

Assign direct revenue, labor, materials, subcontractors, and other direct costs to the relevant unit. Then present or allocate overhead consistently. The result depends on disciplined operational data and reconciled accounting.

Use the secure portal or approved encrypted sharing method. Avoid sending taxpayer identification numbers, bank details, passwords, identity documents, or complete tax records through ordinary email.

Whenever possible, invite each professional as a separate authorized user with only needed permissions. Do not reuse personal passwords or send credentials by email. Enable multifactor authentication.

Feeds import transaction data but do not prove completeness, reconcile balances, identify every duplicate, record payroll detail, separate loan principal, or determine correct accounting treatment. Automation still requires review.

Use a consistent digital process that preserves the vendor, date, amount, business purpose, and approval. Upload documents promptly and keep business records separate from personal files.

Define the reason, conversion date, history required, account mapping, integrations, responsibilities, and testing plan. Reconcile the old system and preserve reports before migrating validated opening balances.

It requires an additional verification factor beyond a password. It reduces the risk that a stolen password alone can expose accounting, payroll, banking, tax, or document systems.

Review access periodically and whenever roles change or someone leaves. Remove unused accounts, reduce unnecessary administrator rights, confirm external users, and verify multifactor authentication.

Yes. Understand what the software provider retains, how data can be exported, what source documents exist outside the system, and how access would be restored after deletion, outage, or account compromise.

Reconcile the results. Integrations can disconnect, duplicate entries, change mappings, omit fees, or post summaries incorrectly. Assign ownership for reviewing failures and updates.

Retention depends on the record, transaction, tax period, asset life, legal requirements, and open issues. Use a documented policy confirmed with tax and legal advisors rather than deleting everything after one fixed number of years.

Count On That® is a CPA firm based in Seattle, Washington. The firm uses a cloud-based working model and serves businesses across Washington with a distributed accounting and tax team.

The managing member is a licensed CPA, and the tax advisor is an Enrolled Agent authorized to represent taxpayers before the IRS. The broader team includes professionals experienced in accounting, bookkeeping, reporting, compliance, and tax workflows.

The team learns about the business, entity, industry, systems, current records, tax responsibilities, concerns, and goals. If the services fit, Count On That® explains the recommended review, information needed, scope, responsibilities, timing, and next step.

Onboarding may include securely collecting records and system access, understanding workflows and the chart of accounts, reviewing open issues, documenting responsibilities, and establishing communication and close schedules.

Pricing depends on entity structure, transaction volume, accounts, payroll, sales channels, locations, systems, reporting needs, tax complexity, record condition, and advisory support. A defined scope follows discovery or review.

It depends on the software, access, data quality, integrations, and reporting needs. The team reviews the current systems and identifies what can remain, what should connect, and what may need to change.

The team operates during extended Pacific Time business hours. Exact availability, communication expectations, deadlines, and urgent-request procedures should be confirmed for the engagement.

Use the communication channels and secure document systems established during onboarding. Clear ownership, complete context, and agreed deadlines help the team respond accurately and efficiently.

Yes. The team can first assess the records and define the cleanup period, issues, information required, and deliverables. Historical cleanup may be scoped separately from ongoing monthly service.

Fit depends on the services needed, complexity, systems, communication expectations, readiness to provide records, and desire for ongoing financial clarity. The discovery process is intended to determine whether the working relationship makes sense for both sides.

DreamWalk® is the Count On That® framework for moving from financial foundation to informed growth and greater long-term freedom. It connects compliance and reliable accounting with insight, planning, and decisions.

Foundation emphasizes organized finances, compliance, and clarity. Growth adds planning and insight. Freedom focuses on advanced advisory support, strategy, and building a business that supports the owner’s long-term vision.

The starting point depends on record quality, compliance, systems, reporting, cash visibility, goals, complexity, and management needs. A business may need to stabilize its foundation before advanced planning becomes reliable.

Yes. A company may begin with cleanup and dependable monthly accounting, then add forecasting, performance analysis, tax planning, and strategic support as the foundation and needs mature.

It is designed primarily for independent contractors and small to midsize businesses that want more than basic compliance. Fit depends on complexity, goals, readiness, and need for structured financial support.

Reliable accounting helps evaluate margins, capacity, cash needs, pricing, hiring, debt, taxes, locations, and investments before resources are committed. Growth without visibility can increase revenue and risk simultaneously.

Review recurring cash capacity, current workload, payroll burden, taxes, benefits, recruiting cost, equipment, training time, expected productivity, and the revenue or capacity the role should support.

Model startup cost, lease obligations, staffing, local taxes, demand, cannibalization, working capital, management capacity, break-even timing, and the reporting system needed to measure the new location separately.

Understand direct cost, labor, capacity, overhead, discounts, payment fees, customer mix, and target margin. Then compare modeled prices with actual results and operational constraints.

Prepare clean financial statements, tax records, contracts, ownership documents, asset and debt schedules, customer and vendor information, operating procedures, normalized earnings analysis, and a plan for reducing owner dependence.

Complete a reconciliation from the last known correct date. Look for missing, duplicate, deleted, or uncleared transactions, incorrect opening balances, transfers, fees, and timing differences. Do not force the difference into an expense account.

Confirm the bank account, reconciliation date, duplicate payments, missing deposits, transfers, credit lines, and opening balance. Negative book cash often signals incomplete or incorrectly dated activity.

Review the aging detail for duplicate invoices, unapplied payments, old credits, incorrect opening balances, bad debt, and invoices already paid through another system. Reconcile the report to customer records and the general ledger.

Confirm whether each bill is unpaid, duplicated, disputed, paid outside the system, or no longer owed. Corrections should preserve the right expense period and any tax or vendor-reporting effect.

Reconcile each liability to payroll reports, filed returns, and payments. Investigate missing payments, duplicated entries, incorrect mappings, manual journal entries, and balances carried from a prior payroll provider.

Identify whether the difference comes from accounting method, tax adjustments, owner activity, fixed assets, timing, omitted entries, or changes made after preparation. Document reconciling items and update the books when appropriate.

Use transaction IDs, dates, amounts, vendors, bank-feed matches, and source statements to identify duplicates. Remove or reverse them carefully so reconciliations and linked records remain intact.

Preserve records, verify the approved amount and payment details, stop further incorrect payments if possible, notify appropriate management, and follow payroll, banking, legal, or recovery procedures based on the situation.

Identify which documents, approvals, integrations, reconciliations, or decisions delay the close. Assign owners and deadlines, standardize recurring entries, automate carefully, and track close completion each month.

Start with a current list of bank, card, loan, payroll, tax, receivable, and payable accounts. Preserve statements, identify the last reconciled period, prioritize immediate cash and filing risks, and define a structured review rather than making random corrections.