Your Bookkeeping Checklist for Year End

It's the 4th Quarter and busy season is upon us. Do you have a plan to grow your practice by taking on new clients, while still helping your existing clients wrap up their books for the year? Do have what you need to get the 1099s and W-2s done on time, and oh, yes… keep your sanity in the process? Wouldn't a bookkeeping checklist that helps you accomplish that make life easier?

That's a tall order, to be sure. But it is achievable!

This video article walks you through what you need to start taking action now to smoothly sail through the end of this year and emerge into the New Year with a stronger, more profitable bookkeeping business without all the typical year-end stress.

You can get the PDF for the Year-End Bookkeeping Checklist and get a jump start on the busy season right now! Click the button below to get a free copy of “Your Bookkeeping Checklist for Year-End Sanity” kindly provided to us by SmartVault

What's on Your Checklist?

Do you have recommendations for other key tasks that you think should be included on the year-end bookkeeping checklist? How do you typically navigate the madness we face as bookkeepers during year end? Please comment below.

Tagged As: , ,

3 Reasons to Welcome Automated Bookkeeping

Accounting software is in rapid growth, and apps are only adding more momentum to the race for truly automated bookkeeping. Human adoption, however, has been a bit slower.

Are you one to grab hold of new opportunities, or are your more cautious about potentially ‘toppling the apple cart' in your bookkeeping business?

While personally, I'm not always the quickest to adopt the latest and greatest, here are three reasons from my own experience why I believe we need to step up the pace and incorporate more automation into our workflows, despite any jitters we may feel.

Reason 1 – Save Time

The obvious reason to automate is to save time in getting the boring though necessary activities done. The trick here is consistency. And that's where automation can shine. Because it is mechanical and not affected by things like mood, weather, or attitude like we humans are, automation provides better accuracy with basic bookkeeping tasks.

Example: In QuickBooks Online, automate most of the data entry by using bank feeds and set up bank rules to automatically post repetitive transactions.

Downside: When using automated coding, you still need to review them monthly, since there may be tweaks to the system needed or missing transactions where the automation skips a beat occasionally.

Reason 2 – Save Money

When working with a lot of clients, at high volume times of the year, or if you simply want to lighten your workload, there needs to be a way to handle the capacity beyond yourself alone. Most often we think we need to hire another bookkeeper (or five). But that takes money and generally a substantial ongoing cash commitment that includes a fair amount of risk. By automating as much of your workflow as possible not only increases your current capacity (and that of any future hires), but you also make it easier to hire entry-level skill help who simply need to follow your standardized process.

Example: Using Hubdoc to pull monthly bank, credit card, and vendor bill statements

Downside: There's an investment of time to think through your workflow so you can add automation where it will have the greatest possible impact.

Reason 3 – Win-Win Value

The best opportunities automated bookkeeping gives us is the ability and freedom to truly stand out and do what most bookkeepers (and accountants) won't. That is, going beyond the nuts-and-bolts compliance-only bookkeeping work and providing the truly valuable services that clients care most about and will gladly pay premium rates for. In short, win-win value.

Just keeping the books up to date will, in the reasonably near future, be completely automated with minimal management by a bookkeeper needed. It will also become a low-cost commodity service. What small businesses will still need is for us to give them the time and attention to explain what their numbers mean, where their business is headed based on the trends that emerge in their numbers, and show them how to navigate the road ahead to reach their goals (and avert disasters).

Example: Using the time saved with automation to meet with clients monthly to deliver and discuss the most important results and trends we see based on their financial reports. We can also work with clients to set a plan to handle cash flow, forecasting, and budgets to hit key goals and more rapidly improve their business stability and growth.

Downside: Requires caring and willingness as well as upgraded skills to become more valuable to your clients. You will also need the courage to adjust how you've been operating and be willing to charge premium rates.

What's Your Path?

We can choose to be afraid of the automation that is “replacing” much of the bookkeeping work we do, or we can embrace it. Fear causes you to worry about losing what you've got. Seeing beyond the fear helps us see the exciting opportunities and high-value services that are now opening up to us that will improve our own lives and those of everyone we touch.

Which will you choose?

Getting from Where You Are Now to Next-Level Automation

Taking specific action will calm any fears and move you in the right direction.

To make it step-by-step simple, I'm hosting a free, live training webinar that focuses specifically on HOW to start automating your bookkeeping workflow and includes templates and a suggested automation process. We will focus specifically on the end-to-end processing of vendor bills.

“Workflow Automation for Bookkeepers”

Thursday, September 21, at 2:00 PM EDT (New York)

Learn more or Register here

Do Bookkeepers Need Professional Liability Insurance?

“As a bookkeeper, do I need liability insurance?”

This is a question I'm asked from time to time by professional bookkeepers who are starting their own freelance bookkeeping business. Even if you've been running your bookkeeping practice for some time, you may not have considered whether you need any kind of insurance for the type of work we do.

While I'm not a lawyer nor an insurance expert, I do have experience as a freelance bookkeeper and will answer this question based on my own research and experiences. So that means…

This article is not legal or insurance advice and for information purposes only. You should discuss this topic with your own attorney or qualified insurance professional who knows your unique circumstances before making a business decision.

Errors & Omission or Professional Liability Coverage

They are the same thing, just two different terms. Kind of like how an Income Statement and Statement of Profit & Loss are the same. Errors & Omissions (E&O) insurance is not to be confused with General Liability insurance that is related to the physical premises of your business (even if that is your home). The latter is usually part of, or added onto, your property insurance and covers liability that could occur if clients or other business-related people come to your office and are injured physically, such as from a slip and fall.

E&O covers mistakes or mishandling of financial records that you or your staff may make… or be perceived as making…which causes damage to your client or others. The key to remember here is, this problem is not if you (or your staff) actually make errors, but whether someone accuses you of doing so. Either way you will need to defend yourself legally, even if found 100% innocent.

Is it Common for Bookkeepers to be Sued?

While I don't have any statistics on this specifically for bookkeepers, in my own experience, it's rather rare for a freelance bookkeeper to be sued for actual or perceived mistakes. However, that doesn't mean that it won't happen.

We are working with sensitive information, and money is often a very emotional topic. If something goes wrong in a client's business, it's easy for him or her to look for someone to blame. Depending on the situation, that could mean the bookkeeper, either directly or indirectly.

According to Insureon, here are some of the most common reasons clients sue accounting professionals:

  • A sudden change (negative) in the client's financial situation
  • The client is subject to fraud (and has a lawyer who is looking to sue someone)
  • Bankruptcy of a client, resulting in third parties looking to recoup losses
  • Errors or miscommunication surrounding taxes (if you prepare tax returns)

Why Consider Professional Liability Insurance, How it Works and the Cost

Sometimes when you're contacted by a business owner looking for a freelance bookkeeper for the first time, or if he or she has had a bad experience with a less-than-competent bookkeeper, you will be asked if you have insurance. They often don't know how E&O works (we'll get to that in a minute), but they're trying to determine how credible you are as a professional.

So carrying professional liability insurance helps to set you apart from the freelancers who are just trying to create a part-time contract job for themselves on the side. The potential client may see uninsured bookkeepers as less professional or trustworthy.

In truth, Bookkeeper Liability Insurance is reasonably priced, as business insurance goes, usually running about $400 a year for basic coverage. These are typically “claims made” policies and will have limits per claim and per policy period, with exclusions for what's actually covered. This is where you need to get the specifics from an Insurance professional. A few sources that I'm aware of that have insurance specifically for bookkeepers are…

  • Hiscox (this is the company I have used for years and like a lot)
  • Landy (insurance agency – available through bookkeeping associations, such as ICB and AIPB)
  • Insureon

Should You Bother?

My personal opinion is yes.

As mentioned, I've rarely heard of a bookkeeper being sued (especially a freelancer), and I've never had a client even threaten it to me in my more than 27 years in business. But it's a best practice to protect yourself and your clients, since the past does not always equal the future. It's a normal cost of doing business professionally.

Of course, to protect yourself from getting into real trouble, always provide high level, truly professional services. That includes abundant communication and transparency with clients.

Don't just get the bookkeeping done, but pay attention to what's going on in the business. Notify the client if anything looks suspicious (even if you're not officially responsible to do so). Use written engagement letters that define specific responsibilities for both you and the client. Document everything you do in writing with dates (workpapers, email, software permissions, etc.). Get written approvals for handling any financial transactions on behalf of your clients (such as with Accounts Payable services).

Whatever you ultimately decide, whether to get Errors & Omissions insurance or not, always provide honest, high-quality services. Happy clients keep your risk low, even when you do make a mistake. (We're human. No one is 100% accurate 100% of the time)

Do you have questions about the risks related to running a bookkeeping business? Have you had good or bad experiences in carrying professional liability insurance in your bookkeeping practice? Please comment below.


Tagged As: , , ,

Dangerous Document Sharing Mistakes – Are You Making Them Too?

Document sharing is something we do constantly as bookkeepers and accountants. We share electronic documents with clients, vendors, our clients' customers and suppliers, and the list goes on. While document sharing is a typical activity in our world, I have been shocked time and again when seeing what ‘typical procedures' actually involve for many of us.

For example, what would you do in these scenarios?

Your client just hired a virtual assistant and you need her completed Form W-9 so you can issue the required Form 1099-MISC for your client at the end of the year.


You've just won a new client using value pricing, which includes getting pre-approved recurring monthly payments via QuickBooks Payments. So as part of your onboarding process, you need to collect the new client's bank or credit card information along with a signed authorization.

How do you go about getting these documents electronically?

What's Happening in Reality

More than a few people who SHOULD be using secure document sharing and controlled procedures aren't. Most are simply using (unencrypted) email! It's convenient, and many just use it without a second thought.

Unfortunately, that includes a lot of bookkeepers and accountants (and lawyers and financial institutions, and software companies, etc.).

  • I've had my own clients, despite being advised otherwise, send me their tax information through regular email
  • I've seen colleagues share sensitive logins and passwords through email
  • I've had financial institutions request me to send them sensitive client information, again, via email
  • Even other large accounting industry organizations for whom I've done work have asked me to provide my own sensitive payment info via email (I didn't follow their procedures)

Why This Is a Problem

Identity theft hit an all-time high in 2016, affecting an estimated 15.4 million people (one in every 16 adults in the U.S.). It caused losses totaling $16 billion, according to Javelin Strategy & Research. Likely you've been affected in some way in recent years too, maybe multiple times.

Personally, I've had to replace several credit and debit cards over the years due to security breaches or actual ID theft, and even my cell phone account was hacked this past winter. I was the one who discovered it (within 24 hours, thankfully), but it's a complete mystery how the crook got access to my information (the phone company fraud department was baffled too).

As bookkeepers and accountants, we have a moral and even a legal responsibility to protect our clients' sensitive information. That's likely why the AICPA recently said, With the rampant growth in cybercrime, it's no longer a question of if CPAs, their clients or their organization will become a victim, but when. Accordingly, they've released a white paper this year that lists the top cybercrimes that are the strongest threats to CPAs, and offer recommendations on prevention, detection and recovery strategies.

Bluntly stated, mishandling of clients' (and others') personally identifiable information (PII) can put you out of business. Not only can breaches lead to a bad reputation or loss of clients, but also to federal and state compliance audits and even being sued by the government. And that doesn't just apply to accountants, but to all businesses who handle PII.

We need to be paying attention to this!

What Can You Do About It?

Start by thinking before sending email.

Yes, it's convenient to just attach a document and hit the Send button. But as true professionals, we must stop to think about what could happen if what we are sending fell into the wrong hands. Red flags for information that should not be emailed include:

  • Documents that expose Social Security numbers
  • Bank and credit card information
  • Passwords, especially to online banking
  • Debit card PINs
  • Dates of birth
  • Health records
  • Anything that contains personally identifiable information

Use a secure online document portal or file delivery system instead. Provide instructions to your clients on how they should handle their information properly. (By the way, this is part of the advisory role that clients truly need from us and is of high value, especially to small businesses that don't realize the risks.) Consider your internal workflow and processes, and communicate them clearly to your team. If they are not standardized, this is a great reason to get started with that.

Personally, I use SmartVault for my document management almost exclusively because of the high level of protection and ease of use when sharing information with my clients. It integrates with other apps I use as well, such as for the scenarios at the beginning of this article. RightSignature can be used to securely automate the gathering of sensitive information that requires a signature. It then delivers the documents directly to SmartVault. (Just be sure you adjust the settings, so the signed documents are not automatically emailed once executed!)

If you're looking for ways to think through your workflow and see how to vet the apps you use, including considering your security requirements as an accountant or bookkeeper, join us in TFB Premium this month on “Recommended Apps for Today's Virtual Bookkeeper

By the way, because SmartVault is a key app I use in my own bookkeeping practice (and have since 2009), they are now a trusted sponsor of The Freelance Bookkeeper. Which apps do you use to protect your clients and help streamline your workflow when it comes to sharing documents?


Tagged As: , , , , , ,

5 Ways Attending Accounting Conferences Pays Off

Every year I spend thousands of dollars and lose billable time so I can travel to at least a few conferences. Some of them are huge events. Others are smaller “cozy” gatherings. However, most freelance bookkeepers won't do this. Heck, most CPAs at multi-partner firms don't either!

So this begs the question, why would I spend so much time and money, especially as a freelance bookkeeper, to attend these events? Is there something I know that the majority of accountants and bookkeepers don't?

Well, yes and no.

To state it plainly, the reason the vast majority of our colleagues don't attend these events is because they are short sighted. At least that's my experience. They focus on the “cost” and not the payoff.

What are the “Costs”?

To go to one of these national events (such as Scaling New Heights – which starts next week) you have to pay for your conference fee (several hundred dollars), airfare, hotel, and at least some meals and incidentals. Realistically, after everything is said and done, your investment adds up to a couple thousand dollars, give or take. If you attend more than one conference per year, that gets multiplied.

You also need to adjust your schedule so that your clients are taken care of or work is delayed until your return. That may mean you are taking a financial hit (if you pay someone else to handle your workload) in addition to the above costs.

But I'm glad to do it. You see, this is a wise investment in my business growth rather than a cost or expense. (Although I'm certainly glad that the IRS lets me deduct these “investments” as expenses come tax time.) Here's why I think so.

The Huge Payoff

In my experience, over many years now, attending at least one accounting technology conference each year gives you 5 or more ways to get a hefty return on your investment.

1. Current and Future Technology – Like it or not, our world is changing and bookkeeping is being automated. By knowing what's coming and the opportunities being created, we position ourselves as premium level bookkeepers who won't go obsolete. We also get direct access to the software companies and have input into what they are creating for our profession. It doesn't get more cutting edge than that!

2. Your Skills and Expertise – Conferences provide us with immersion opportunities to get certified in the core software and skills we need to take on the role of true experts and advisers to our clients. Again, that leads to premium level service and fees.

3. Your Business Management – As financial professionals we often neglect our own strategic planning and struggle with key issues such as marketing, workflow, and operations. Our professional conferences bring us case studies and best practices for what our most successful colleagues are doing, making it much easier to shortcut and model what's working for others. That saves a lot time and heartache trying to figure it all out on your own.

4. Support and Community – Many bookkeepers who attend for the first time are surprised at how welcoming our community is. It's hard to describe what it's like, but just today on Facebook, author and thought leader Dawn Fotopulos said to me, “That's why I love the ProAdvisor community so much. They're family.” And the family support continues long after the conferences end.

And that leads to…

5. Networking and New Opportunities – This is more valuable than of all the others combined! Nothing beats in-person connections. You get to meet top-notch thought leaders, celebrities and cream-of-the-crop colleagues, some of whom will become your dear friends. It's where amazing opportunities abound that can lead to very lucrative ways to grow your business. But the only way to tap into this is by connecting with the people who come to these conferences. Reach out and connect. Magic will follow…again and again.

How much of a return can you expect? I've heard it said at least THREE TIMES your investment. Using our scenario above, that would be approximately $6,000 for one event! In my own experience, the return is more like FIVE times my investment, and all the fun and excitement you experience in the process are pure gravy.

But to reap that kind of return, you have to be intentional and proactive. Rewards come to those who, upon returning home, take fast action on the plans and connections made during the conference.

So are you ready to give conferences a try?

A Few Recommended Events

Here are some of the events I have or will attend, with this first being the absolute easiest way to get at least a taste of what goes on at the larger conferences.

Scaling New Heights Live Broadcast (free) – June 4-7

It's too late to sign up for the live conference,* which is one of the main QuickBooks-centered events of the year. But you can attend the key main stage sessions with this special streaming option.

Main Stage presentations are live, and pre-recorded content is being streamed in between the live sessions.

* I'll be attending this one on location in Orlando, FL, so look for me in the audience! I'll try to wave to you. 😉

Accountex USA – Boston, MA – September 6-8

A more general large accounting technology conference (not biased toward any single bookkeeping software company). This one used to be known as SleeterCon.

Martin Bissett's – Secrets of Superior Accounting Firms

A more intimate, highly interactive event that utilizes international research and case studies for what's been most effective for the top firms in our profession surrounding marketing, profitability, growth, talent recruitment & retention, technology and succession planning. Three locations in North America this year:

* I've already signed up for this one. So let me know if you're coming too and we'll share a meal together!

ProfitCon 2017 – Profit First Professionals – Morristown, NJ – September 27-30

A medium sized event for accountants, bookkeepers and business coaches who are united in the mission to eradicate entrepreneurial poverty using the Profit First method (and beyond). This is a fun and highly interactive event run by author Mike Michalowicz and Ron Saharyan, founders of Profit First Professionals.

QuickBooks Connect – San Jose, CA – November 15-17

Another of the major QuickBooks-centered events of the year. This one brings together Accountants, Small Business Owners and Software Developers for a huge blow-out event. One of my favorites of the year (and the conference ticket is usually quite reasonably priced too).

There are many, MANY more conferences and events to choose from, literally all over the world. In fact, I'll be attending a couple events overseas this year. Whichever you prefer, whether smaller local events or the huge international events, Google is your friend. A quick search for conferences, roadshows or accounting events will give you plenty to pick from no matter where you're located.

You CAN “Afford” This!

Still worried about the amount of the investment? Don't be. When you plan ahead, it will become nearly “effortless”. First, remember that for events like these, you don't have to pay for everything all at once. You pay for your ticket first, later buy airfare, and book your hotel, but pay for that when you attend the event. It's spread out.

The simplest way to make it easy on your budget (and not go into debt) is to choose an event, and then open a dedicated online bank account like Capital One 360. Then start squirreling away money into that account over time. Make it a game. Save the “spare change” you might not realize you have. You can also set an automatic transfer to your new Conference Fund account for say $40 per week (less than ONE hour of your billable time!) to make saving for your conference investment a set-it-and-forget-it habit.

If you do this, I guarantee you will have enough money to attend at least one conference each year. All that's really needed is to make the decision to do it, and then reap the benefits.

So which conference(s) will YOU attend?


  • January 2018
    S M T W T F S
    « Dec