Bookkeeping Best Practices

This document is meant to be used as a guide to use for the bookkeeping process. It will cover pricing bookkeeping, software and setup items RootWorks Recommends, and overall best practices.

Table of Contents

Basic Pricing Principles of Bookkeeping

Step 1 - Evaluation

Step 2 – Calculate Price

Step 3 – Pay bills on a set schedule

Software and Setup

Pick paperless solution(s)

How Rootworks uses SmartVault

How RootWorks uses Bill.com

QuickBooks (Hosted) or QuickBooks Online

Firm Setup Recommendations

Tips/Notes

Setup Users – And change the Admin Password

Set the Closing Date and other Security

Account Numbers

Be Consistent

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Basic Pricing Principles of Bookkeeping

This section is intended to provide some basic guidelines when pricing bookkeeping services. RootWorks recommends billing bookkeeping services as part of a fixed fee arrangement. As a basis for arriving at the monthly fee, you can download RootWorks Fee Calculator spreadsheet from the Resources module, under Letters, Forms, & Tools.

Note that RootWorks does not tell firms how much to bill – that is dependent on the firm, their clients, and their market.

Step 1 - Evaluation

For new clients, always evaluate the clients current software system to determine the volume of bills you may be paying (if paying bills) or the amount of time the bank reconciliation and other work may take. You will also want to take the time to estimate how much clean up work will be required.

Step 2 – Calculate Price

Begin by estimating the time it will take to process payables and deposits each month.

In our experience, a staff person in the firm can process 30 to 40 bills per hour. We also recommend paying bills for each client on a bi-weekly or weekly basis (depending on the volume of bills the client has).

At the same time that staff are paying bills for a client, they can also enter deposits. You may budget 30 minutes to an hour to enter deposit amounts.

Step 3 – Pay bills on a set schedule

To increase efficiency, we highly recommend, as mentioned above, that bills and deposits should be handled for a client on a set schedule.

Make sure to set the expectation with a client that bills are not paid every time a client sends a new bill to the office. Time spent accessing client’s accounts to only do a few minutes of work bill quickly adds up.

If a bill is late or there is an emergency, exceptions can be made. We may also recommend to the client that they pay the bill themselves and provide a copy to the firm to record the payment.

Software and Setup

RootWorks utilizes the following systems in the bookkeeping process:

  1. QuickBooks Hosted (Desktop Version) or QuickBooks Online – General Ledger
  2. Bill.com or SmartVault – Bill Pay process
  3. Accounting CS –Financial Statements
  4. FileCabinet CS and NetClient CS – electronic storage of financial statements and delivery to the client’s portal

Pick paperless solution(s)

The key to making bookkeeping efficient, paperless, and a successful business really entails having a consistent process. SmartVault and Bill.com provide the paperless part of the consistent process. RootWorks utilizes both tools and makes the decision based on volume and whether the client needs to separately approve the payments. Overall, pick a paperless tool and don’t settle for manual paper processes.

How Rootworks uses SmartVault

SmartVault is a very powerful program, RootWorks uses it in a very simple manner. If we put a client on Smartvault our bookkeeping process is as follows:

  1. Client has a SmartVault Icon (Inbox) on their desktop and they scan the invoices into Smartvault
  2. As we pay bills via QuickBooks or QuickBooks Online, we open that client’s Inbox and attach a copy of the invoice to the transaction we are entering in QB. This Transaction is either paid via paper check, online banking, or QB Payment Service.

How RootWorks uses Bill.com

Bill.com takes the paperless process one step further by not only having a paperless function, but electronic payment and receipts functions as well. RootWorks uses Bill.com in the instances that clients need separate approvals or their volume is over 30 bills per month. RootWorks uses bill.com for bookkeeping with the following process:

  1. Client either emails or faxes bills to bill.com
  2. On the clients processing date, we login and schedule all the payments out
  3. If the client requires approval, they approve either via their phone or their bill.com login on the internet
  4. If approvals were require, we then have a 2nd processing day where we pay the approved bills
  5. We sync the data with QuickBooks or QuickBooks Online

QuickBooks (Hosted) or QuickBooks Online

One consistent item you want to always consider is being in a collaborative environment with your client. This means getting away from getting backups from client. With that in mind, how do you decide if a client should be on QuickBooks (Hosted) or QuickBooks Online?

  1. Does the client need to integrate with a Point of Sale – QuickBooks Hosted (Online doesn’t integrate with POS systems)
  2. Does the client use their Debit and Credit Cards a lot? - QuickBooks Online (the banking/credit card sync is superior to QB Hosted)
  3. Does the client need a robust receivables system? Currently QuickBooks Hosted is better
  4. Do you need to export payroll data (non-direct deposit) from ACS? - QuickBooks Hosted is the only one that has the import function

Firm Setup Recommendations

There are certain things RootWorks recommends before deploying any of these solutions to clients:

  1. Setup your staff (at least 1) on QuickBooks Online Accountant
  2. Setup to pay your own bills on Bill.com to make sure you know how it works!
  3. Setup SmartVault for your own company as well. Even though you will not have a client using SmartVault and Bill.com (they would use one or the other) to make sure staff are trained, test with your own firm.
  4. Put your own books on Hosted QuickBooks. Learn the login steps to be able to walk clients through this.

Tips/Notes

The following are tips RootWorks highly recommends for the bookkeeping process.

Setup Users – And change the Admin Password

This is a best practice whether doing bookkeeping or after the fact work for a client. Setting up users and changing the Admin Password will give your firm control of the program and eliminate unnecessary cleanup of the clients records.

Set the Closing Date and other Security

One of the biggest items we recommend is setting up closing dates and requiring a password if the client is trying to adjust a transaction from a closed period. This ensures that work you have done in prior periods does not have to be re-done because a prior period has changed. This is done via the Preferences screen in QuickBooks and QuickBooks Online.

QuickBooks:

QuickBooks Online:

Account Numbers

RootWorks recommends always using account numbers in QB or QBO. It is also highly recommended to keep your numbering system consistent with the clients QB or QBO file and your internal file (ACS, etc.). This is to prevent unnecessary mapping and potential issues.

Be Consistent

Being consistent in how you handle each client is key to successful bookkeeping. Keep the following tips in mind when thinking of being consistent:

  1. Set expectations from the start of how often you will work on their data. If you make exceptions, you have now given up any expectations. Don’t be afraid to bill extra for “out of the norm” work you are doing.
  2. Use a standard chart of accounts whenever possible.
  3. Set the closing dates. If the client “needs” to change prior periods, that period is closed. Teach them how to make adjustments in the current period.
  4. Try not to support too many client applications. RootWorks uses 2 (QB and QBO), which is plenty!

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Bookkeeping Best Practices