Business

Financial Tips

Review Your Insurance Policies
You reviewed your “asset” policies in August. This month, review your life, health, and disability insurance policies. Check with your employee benefits office as to what programs are available. Make certain you have adequate coverage. Call us to determine the appropriate amounts for your age and income.

Lower Your Utility Costs
Review your utility costs for the year. Make certain you are getting the best possible deal where multiple providers are available. For example, obtain competitive quotes for long-distance phone service. For other utilities, review your usage to see if any savings are available. Consider the use of annual “budget” plans with the utilities to even out annual payments.

Analyze Budget vs Actuals
Compare August income and expenditures with your budget. Make adjustments as appropriate to your September expenditures. Make sure you have invested your planned savings amount for August.

Six Tips for Paying Estimated Taxes

Estimated tax is a method used to pay tax on income that is not subject to withholding. Depending on what you do for a living and what type of income you receive, you may need to pay estimated taxes during the year.

These six tips from the IRS will provide you with a quick look at estimated taxes and how to pay them…

If you have income from sources such as self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, or awards, then you may have to pay estimated tax.
As a general rule, you must pay estimated taxes in 2011 if both of these statements apply: 1) you expect to owe at least $1,000 in tax after subtracting your tax withholding (if you have any) and credits, and 2) you expect your withholding and credits to be less than the smaller of 90% of your 2011 taxes or 100% of the tax on your 2010 return. There are special rules for farmers, fishermen, certain household employers, and certain higher-income taxpayers.
For sole proprietors, partners, and S Corporation shareholders, you generally have to make estimated tax payments if you expect to owe $1,000 or more in tax when you file your return.
To figure your estimated tax, include your expected gross income, taxable income, taxes, deductions, and credits for the year. Use the worksheet in Form 1040ES, Estimated Tax for Individuals, which we can send you. You want to be as accurate as possible to avoid penalties. Also, consider changes in your situation and recent tax law changes.
The year is divided into four payment periods, or due dates, for estimated tax purposes. Those dates generally are April 15, June 15, Sept. 15, and Jan. 15.
Form 1040ES, Estimated Tax for Individuals, provides all you’ll need to pay estimated taxes. This includes instructions, worksheets, schedules, and payment vouchers. The easiest way to pay estimated taxes, however, is electronically through the Electronic Federal Tax Payment System or EFTPS. You can also pay estimated taxes by check or money order using the Estimated Tax Payment Voucher or by credit or debit card.

Take our advice and don’t ignore your estimated tax payments. And please call us with any questions.

Protecting Your QuickBooks Data Against Hackers

Every month, we provide information on how to better use QuickBooks. By implementing the best methods for managing your accounting data, you can actually improve your financial bottom line.

But all of your careful work is for naught if a malicious hacker gets in to your computers, or if you experience identity theft by an employee. Social Security and credit card numbers, home phone numbers and addresses, an excruciatingly detailed profile of your company – all can be lost in the time it takes to realize that it’s gone.

Are you guarding all of that precious data? QuickBooks provides ways to help you. Some are automatic, but you have to initiate others.

Control Cyberspace

QuickBooks displays some screens using Internet Explorer (IE); the browser opens when you access certain features. It’s important that you set the security level correctly so that you’re not exposed to shady outside influences.

To check your configuration, launch IE and go to Tools | Internet Options. This window opens:

Figure 1: Be sure that your Internet zone in Internet Explorer is set to Medium.

Click on Security, then on Internet, and move the slider bar to Medium (Intuit recommends this). Click OK and close IE.

Your best defense is a good antivirus program. If you’ve hesitated to buy one because of the price or the software’s intrusiveness, consider Microsoft Security Essentials. It’s free, it’s good, it can be used in businesses that have up to ten PCs, and it guards against viruses, spyware, and other malicious software (malware).

Limit Access

If you have QuickBooks on a network, or multiple people sign in and out on the same PC, you will want to limit the access of employees to only their work areas. Go to Company | Set Up Users and Passwords | Set Up Users, and you’ll see the User List window. Click Add User, and enter a username and password in the next window (if you’ve already set up passwords but not permissions, highlight a name and click Edit User). Click Next.

Unless the person should have full access, choose Selected Areas of QuickBooks and click Next. You’ll see this:

Figure 2: As you go through each module, you’ll select an access level for the current employee.

You’ll work through a series of windows, including Inventory, Checking and Credit Cards, and Payroll and Employees, indicating in each window how much access should be granted to the user. When employees sign in, they will only see the allowed screens.

Payroll – A Special Case

Be very careful when you assign Payroll permissions. Employee Social Security numbers are stored there, and anyone granted full access can see them. If you’ve assigned Selective Access to an employee for creating and printing payroll transactions and reports, he or she will still be able to view them on printouts and in reports.

To prevent this, go to Edit | Preferences and click the Payroll & Employees tab, then Company Preferences. At the bottom of the window, you’ll see a line that reads Display employee social security numbers in headers on reports. Make sure this is checked only if you want the numbers to appear.

And, of course, you may not want Social Security numbers printed on paycheck stubs and vouchers (though you may not have a choice; the state of California, for one, requires it). In this same window, click on Pay Stub & Voucher Printing to make your wishes known. You’ll see this:

Figure 3: Do not check the box next to Employee social security number unless you want it printed on paycheck vouchers.

Intuit and You

Intuit, publisher of QuickBooks, works hard to keep your data safe. The company:

uses a data encryption technology similar to that used by major financial institutions for QuickBooks’ online banking and online vendor payment tasks
does not know your passwords
offers a subscription-based, automatic online backup service, so that your files are safe in case of loss or damage (QuickBooks 2011 only; QuickBooks Online Backup works with all versions)

Figure 4: Regular backup is more than a good idea. It could save your business someday.

But it’s important that you do your part. Use passwords wherever offered, make them complex, and change them frequently. Maintain regular backup files on your own if you don’t subscribe to Intuit’s service. Cross-train employees so that if you experience a disaster, more than one employee knows the ropes. Know a lot about who is managing your network.

To be doubly safe, ask us to evaluate your whole system’s security profile. We can help you if your business suffers a breach, but better to try to avoid it ahead of time.