episode 188 – transcript – Rea CPA

episode 188 – transcript

Dave Cain:          Welcome to unsuitable on Rea Radio, the award-winning financial services and business advisory podcast that challenges your old school business practices and their traditional business suit culture. Our guests are industry professionals and experts who will challenge you to think beyond the suit and tie while offering you meaningful modern solutions to help enhance your company’s growth. I’m your host, Dave Cain. Today’s guest is well-known for being an advocate for clean bookkeeping practices. In fact, while preparing for our interview today, I learned that she may or may not have spent hours meditating on the ways business owners might achieve bookkeeping bliss and the many benefits such a state of Zen can achieve. I didn’t write this, folks, I just didn’t write this.

Amy Smith:        I love it.

Dave:                    Since joining the firm Klein Education and Development Liaison Amy Smith has developed a solid reputation for bookkeeping expertise, particularly with regard to QuickBooks. Today, she will share with us the benefits of consistent and current bookkeeping while offering up some tips to help us achieve our own state of bookkeeping bliss.

Amy:                     Wait, wait.

Dave:                    Welcome back to unsuitable, Amy. Now you’ve got the mic.

Amy:                     Let’s fix something. It’s correct bookkeeping, not current.

Dave:                    Correct. Correct.

Amy:                     You could say current and correct.

Dave:                    Well, you gotta be current.

Amy:                     That’s true.

Dave:                    You know the rule number one in podcast, never override the host. Never. You’ve done this. This is your third time on.

Amy:                     I know, I know. I guess I’m not the chief in the saddle am I?

Dave:                    No, but you can be. There are a couple things I want, I want to kind of change the way we approach bookkeeping today in our discussion.

Amy:                     Okay.

Dave:                    We were going to go through the old boring debits credits. I guess you don’t do debits and credits in QuickBooks anymore.

Amy:                     No, I don’t really know the difference between a debit and credit.

Dave:                    Yeah. Well you did at one time.

Amy:                     I still do.

Dave:                    So have you gotten any more awards or designations for QuickBooks? The last time I checked, I think you had them all.

Amy:                     Yeah, I’m getting ready to renew my advanced certification and next month I’m headed out to Utah for the big Scaling New Heights Conference so I’m excited about that. It’s a five day conference and learn all the new things and … The big buzz is AI.

Dave:                    Sure.

Amy:                     So yeah.

Dave:                    Congratulations for staying ahead of the curve and being a leader within Rea & Associates and with your clients with good bookkeeping practices.

Amy:                     Thanks. It was a good tax year. It was a good tax season.

Dave:                    So, let’s talk about that. We’re already almost to the end of the second quarter. What kind of numbers did you see at the end for 2018 and again, as we start, maybe we’ll start the third quarter here shortly at 2019 but what do you see going on? See some good numbers?

Amy:                     I did. The clients that I’ve worked with that I’ve put back on the right train track, the ones that came to me in a train wreck, we were good. We had all their taxes all wrapped up and tidied up by the end of January so that felt good. And then the real train wrecks come in.

Dave:                    The real ones.

Amy:                     The ones that you don’t see all year. But it was great for me that I am now able to go back and help people that came to us that were in a mess and offering good solid solutions for them, helping them develop new processes because really at the end, it’s kind of selfish on our part because we want to make them easy clients for us. And so that way we can avoid all those messes going into March, beginning of April.

Dave:                    Sure. Kind of a QuickBooks triage, if you will.

Amy:                     Yeah, it really truly was. And it was amazing. Some of the clients that I had never worked with that I got to work with, and they would bring their books in and we would wave our magic wand and it was completely opposite of what they thought when they brought it to us, so it was kind of a surprise for everybody. And I don’t like surprises when it comes to tax. I don’t think you do either.

Dave:                    And we’ve talked about on previous podcasts, it’s hard to do any planning.

Amy:                     Yeah, exactly.

Dave:                    It’s hard to do any investing. It’s hard to do any financing. It’s hard to run a business.

Amy:                     Exactly. And you know, it’s funny because now that I’ve been with Rea for, oh gosh, this year it’ll be two years. Time flies. But my biggest referral source is banks. Bankers love me because I just, you know, and I’ve had a few bankers that says, You know, I’ll, basically as much as legally as I can make it contingent that they work with you.

Dave:                    Sure, sure. And again, I can see why that is because you know how to get this done into the final process. One of the things that I like and when we had the conversation about bookkeeping and QuickBooks specifically is, it’s more than just a conversation about bookkeeping. You put it in practice in your personal life. You and your husband have a business-

Amy:                     Yes.

Dave:                    And I think you shared with us other family members have a business. So you’re using those same tools personally-

Amy:                     Right.

Dave:                    … as you would with with clients.

Amy:                     When I talked at events and trainings I always tell people I practice what I preach. I couldn’t be effective in my job at Rea if I didn’t practice what I preach. And the reality of it is it allows me to do my job at Rea, which is pretty much full time and it allows me to do my job at home, which is pretty much full time by having those practices and processes. And, you know when you talked about bookkeeping bliss, bookkeeping is this, I have a gauge or a litmus test I guess is when you start feeling anxious, you start feeling like things are chaotic, then it calls for a process. And bookkeeping as the same way. When you don’t know what your numbers are, when you don’t know what your payables are, when you don’t know how much money you have coming in, your inventory is totally out of control, all that chaos just needs a process.

Dave:                    You know, off mic we were talking about the mental aspect of bookkeeping and I think you’re on to something. You just hit it. And there is a strong mental aspect.

Amy:                     There is, I mean I know for me, if I don’t get into our shop at least every couple of days to look at bills because, I mean, you fall out of sync and I do, I get a little anxious. I get a little, you know, like where are we standing at cashflow wise? Are we going to have enough money to pay the bills that are due this week? It is. It’s the mental aspect of it and that you have to be in the right head space. Everybody starts a business because they’re doing something that they love. Really.

Dave:                    Sure, yeah. Without a doubt.

Amy:                     We all have a dream. We all have a dream. My dream was hydraulics. Can you believe that?

Dave:                    Hydraulics?

Amy:                     That’s what we do. Hydraulic repair. That was my dream. No, It just came. That was my husband’s dream and I’m supportive of that dream. But everybody starts out with a dream. But does anybody really start with the books? Do they think about that? That’s always the last thing.

Dave:                    Probably not.

Amy:                     No, heck no.

Dave:                    You know that. I mean the business plan, as far as the business plan, how are we going to get revenue in the door? It’s not about what’s our balance going to look like?

Amy:                     No, no, and that’s the other thing.

Dave:                    And that’s fine.

Amy:                     And part of that head space and that Zen is understanding those reports, understanding what that balance sheet is. I mean, I am surprised every day. The business centers that I talk to that are in business, have been in business for years, and they want me to sit down and have a conversation with them and explain to them about the balance sheet because they don’t understand their balance sheet. And that saddens me because the other take of that is reports are great for goals, reports are great to celebrate the wins. And I know for our business right now, I am excited because I have two year’s worth of data and we’re into the busy season and I can go back and I can show my husband how proud he needs to be because I can show him what he did last year versus what he did today and how much farther ahead of the game he is. And that’s what bookkeeping gives you. It told you it was Zen like, didn’t I?

Dave:                    It was Zen like. I’m just curious on this question. Do you and your husband ever have a disagreement about an accounting entry or the bookkeeping?

Amy:                     I love the calls when I get from him. He’ll call me and I’ll say, Honey, he says, QuickBooks is doing this thing now. Well, it’s never QuickBooks, it’s always the user. But we do, we have, and I don’t think it’s disagreements. They might be heated conversations-

Dave:                    Yes, suggestions.

Amy:                     … suggestions, and he’s always wrong because I have to remind him he’s married to the expert.

Dave:                    Yeah. … make a note to send a copy of this podcast to Amy’s husband, which I think he’d want to hear that last comment. But I want to go back to the balance sheet because you and I grew up kind of understanding the balance sheet, being trained on the balance sheet, that that balance sheet was probably the most important financial part of the financial package that you could put together. And I think we’re seeing that slip away again and that, hey, what’s the income statement look like? And little do we know if that balance sheet’s messed up that income statement’s messed up.

Amy:                     And I think that comes from lack of being educated. For me, especially now that we’re in training season and events season, and as you know I do a lot of speaking on this topic, people don’t know what they don’t know and the majority of the people don’t know what a balance sheet is and they could have been in business for 20, 30 years. That’s sad because just like a P&L to celebrate the wins, the balance sheet, there’s a lot of winning information on there too.

Dave:                    It’s not as sexy as the P&L.

Amy:                     It’s not as sexy, I know, but it’s true. You know, you’re looking at your debt, you’ve paid down debt. Look at the equity. I mean equity’s sexy. If you have money, if you have equity. But your payables and your receivables are on there. That’s sexy.

Dave:                    It is. Are you doing a lot of training on the Point of Sale part of QuickBooks? Is that catching on more than it has in the last couple of years?

Amy:                     Not really.

Dave:                    No?

Amy:                     I’m actually getting ready to start a new project in July with a marina that we’re going to be using the point of sale system. We personally do not use a point of sale system because we’re based more like a manufacturer the way we do assemblies and things of that nature. I personally don’t do a lot in the, I guess you could say the retail sector. I kind of have a little bit more of the bigger boys.

Dave:                    Yeah, okay.

Amy:                     And a lot of the restaurants that I do work with, they have their own proprietary point of sale system and then we just entry in.

Dave:                    How would you respond if a business owner, you were talking about point of sale and he said, Hey Amy, let’s go get a drink and talk about point of sale. How would you respond to that?

Amy:                     Wow. I’d be open to it.

Dave:                    Open to the conversation.

Amy:                     Yeah.

Dave:                    I think he’s hitting on your probably.

Amy:                     It possibly could be. It’s those little cue words, you know, point of sale.

Dave:                    Point of sale, that just got you going on.

Amy:                     Yeah. Yeah. I am so going to get fired. Sorry, …

Dave:                    Oh well, we can find you a spot somewhere.

Amy:                     Okay. Thanks, thanks.

Dave:                    Yeah. You know, you can be a guest host on unsuitable on Rea Radio.

Amy:                     Yeah.

Dave:                    You could do that. You could do a podcast. You mentioned you’re doing some teaching. I mean seminars coming up in the July, August, September timeframe?

Amy:                     September, actually we have some in June coming up. We’re doing Muskingum Zanesville Chamber, Marietta Chamber, I believe I have an event in May at the Columbus Arts Center, and July and August I try to scale back a little bit because everybody’s busy.

Dave:                    No vacation.

Amy:                     When your cell phone …, there is no such word as vacation.

Dave:                    Well there you go. That’s a good comment there and that’s true. How true is that?

Amy:                     It is. It is true. Especially for what we do. Yeah. Especially in the summer.

Dave:                    Well talk to me a little bit about that. If you don’t get a vacation, everybody gets a vacation. How do you just get away from it all? You talked about the mental aspect of this thing-

Amy:                     You do. You have to-

Dave:                    How do you get away?

Amy:                     Once a quarter we try to take a weekend and go away. We are finding that we have one week in September when it’s fair week in the county that are business is in and it’s pretty slow that we’re going to try to close the shop for a few days. And then the other time is between Christmas and New Year’s but you know it’s really expensive to take a vacation during that time of the year. That’s the accountant in me.

Dave:                    It’s expensive any time, I got news for you, since you haven’t been in a while, no matter when you go.

Amy:                     But you do have to, you do have to just try to walk away and that’s hard for people that have businesses because we’re not wired that way.

Dave:                    Right, right. You know, we talked about, certainly today and in a previous episode, bookkeeping is all about tracking the details and I think you’ve covered that a number of times. You know, another takeaway that I want to pick your brain about, and this is a comment from you, a quote, You don’t have to know it all, but you do have to know a little.

Amy:                     You do.

Dave:                    Talk to me about that. Where are you going with this?

Amy:                     I have a lot of drive time, especially if I’m commuting just from our office in Zanesville to …, I have about a 45 to an hour drive time and I listen to a lot of podcasts, and listen to yours.

Dave:                    All right. Here’s a prize. Right here. …

Amy:                     I was listening to one when, I don’t remember, because I listen to about four or five different ones, but they had said on there that in today’s world there is absolutely, absolutely no reason why somebody does not know how to do something. Because of the Internet. Google it.

Dave:                    YouTube.

Amy:                     YouTube. I Google. I Google all the time. I love Googling. If I have a client that I haven’t done something for a while, I Google it or I look for a YouTube video. I know Abby, our marketing guru here, she’s, you know, we’ve talked about doing videos. I’m like, We don’t need to do videos. Trust me. There is a slew of videos out there on how to do things in QuickBooks. I send links to clients all the time-

Dave:                    Right, right.

Amy:                     … to show them how to do something. And the same thing applies to accounting language and lingo and basic accounting, debit and credit entry. There’s no reason why you don’t understand it. And if you say that you don’t understand it, then you probably shouldn’t be in business or you might be a little bit on the lazy side.

Dave:                    Sure. You can read, you can ask questions.

Amy:                     Ask questions.

Dave:                    You certainly are available, make yourself available to your clients and also the team members of Rea around the firm. So you’re quite famous in this area. But you know, I guess is if I’m a client looking to use you, I think I want to use you to train my staff, my accounting staff, and I also want you to kind of button up the numbers every now and then, change the oil, take a look behind the scenes to make sure that even though my bookkeeper may not know it all, she knows enough to get or he knows enough to get the books in order. But you can kind of put a seal of approval on it.

Amy:                     Yeah, and that’s kind of how my role has matured and we actually have … I actually have a role now, Dave.

Dave:                    Yeah. You have a role.

Amy:                     I do.

Dave:                    Yes.

Amy:                     I do. We have a kind of a game plan, you know.

Dave:                    Good for you, good for you. I want to just, again, pick your brain about certain difficult-

Amy:                     My brain’s starting to hurt-

Dave:                    … You do need to get some personality training. I know you’re a little bit backward and been very hard to interview.

Amy:                     I’m sorry. I’ll work on that. Oh, wait a minute. There won’t be no next time with you.

Dave:                    No. You’ll be a with a new host at that point in time.

Amy:                     Yeah. Mr. Doug. Yeah.

Dave:                    Inventory in QuickBooks. Is that the toughest? Toughest to crack, a tough area?

Amy:                     Yeah. It can be. Just from … you do have to do some studying for that.

Dave:                    That’s the tough part.

Amy:                     That is the tough part. I know with our business, because we are heavily inventory based, it’s hardcore processes and procedures and if you skip a process and a procedure, you’re going to have a mess.

Dave:                    Again, there’s the mental aspect and the stress and when that creeps in, we need a process.

Amy:                     That’s right, and I will tell you that I have my husband really well trained in that.

Dave:                    Let’s get him on the line to see if that’s … that might be fake news. Let’s verify that. What about payroll? I’ve seen some QuickBooks reports where the payroll’s got a negative number and that seems to be a difficult one. And maybe that shouldn’t be.

Amy:                     I’m a very big advocate for outsourcing payroll. Why? Why bring that mess in? The laws change frequently. We have expert people. We charge very little to do that service.

Dave:                    Instead of trying to do it yourself within-

Amy:                     Instead of trying to do yourself because 95% of the bookkeepers that are out there working on a small business are a bookkeeper by chance. That’s it.

Dave:                    Right. Inherited.

Amy:                     I can not tell you how many times people will call me and say, Hey, I just hired Sally. She’s going to be your bookkeeper. I said, Oh, does she know how to use QuickBooks? No, she’s never ever touched it before. Why would you hire her? Because she’s at the right price.

Dave:                    Right price.

Amy:                     Available.

Dave:                    Has some bookkeeping knowledge, but limited.

Amy:                     Limited, right.

Dave:                    So again, that’s a good piece of advice. Even though you’re in the business, you can teach it, probably hiring out to third party is a good idea.

Amy:                     And if you don’t hire all of it out, maybe they cut the checks but you hire us, Rea, or whoever to at least do the monthly reports, the quarterly reports from the year and that way it all ties out.

Dave:                    You know, under the new tax law changes, the switching from accrual-based to cash basis has been a real tax strategy for a lot of businesses. And again, in QuickBooks, as long as it’s set up, there’s a way we could convert relatively quickly. Maybe I’m looking for you for confirmation. Maybe it’s not as big as I think. Let’s put it this way. If I put you, the old hound dog on this thing, you can get this fixed for me.

Amy:                     Yeah. What happens is I use that as a test for a new client.

Dave:                    A test.

Amy:                     I use it as a test to see how bad their books are. And that was negative, wasn’t it? How good their books are.

Dave:                    Yes.

Amy:                     So when you run a report, let’s say we’re going to run a balance sheet, and typically in QuickBooks that’s always ran on accrual. So if you convert it to cash, in theory, what happens when you convert a balance sheet to cash? What should happen?

Dave:                    You no longer have any receivables? You may have certain payables and accruals. Is this a test?

Amy:                     Yes, it is, and he just passed. Yay. …

Dave:                    Thank you. Do I get a prize?

Amy:                     Gosh, and he’s retiring. We should keep him. Sorry.

Dave:                    That wasn’t too diff-

Amy:                     So that should happen. So your accounts receivable should drop off and your accounts … Okay. What happens is if their accounts receivable and payable isn’t correct, it stays on.

Dave:                    When you’re messed up.

Amy:                     And you’re messed up and you need some cleaning.

Dave:                    Good. So in the next few minutes, let’s kind of wrap up what we talked about. We went totally off script but that’s okay. A mental aspect-

Amy:                     Mental aspect.

Dave:                    … you know, if you feel stressed, something’s going on, maybe take a look at a process.

Amy:                     Look at our process. Good books is like losing weight. It truly is.

Dave:                    You got to work at it.

Amy:                     It’s a head space. You got to work at it.

Dave:                    And if somebody asked you if for point of sale advice, go get a drink, we’ve talked about that. Certainly inventory, that’s going to be very difficult, just certainly understand that that’s just the way it is no matter what bookkeeping platform you use, that’s a very difficult area.

Amy:                     You have to understand it, especially if you’re doing unit of measure conversions.

Dave:                    And payroll, outsource, and we haven’t even talked about reconciling cash, but I can direct our listeners back to prior episodes where your cash has to be reconciled or you ain’t touching it.

Amy:                     Oh, I got a new client yesterday.

Dave:                    Uh oh.

Amy:                     Cash has never been reconciled. The balance sheet on the tax return was out of balance. It was great.

Dave:                    And certainly I think a message to our listeners that Amy will be, this fall, having several training sessions. Go onto our website, I believe those will be on our website. I think it would be well worth your while for certainly the knowledge and I think you’ll find and you see today that Amy’s pretty entertaining to talk to and talk with and listen, she’s got a great idea, great personality. Thanks again for joining us today, Amy.

Amy:                     Thanks. We’re going to miss you.

Dave:                    Thank you. I’ll miss you guys, but I feel pretty good with our clients in your hands with the bookkeeping.

Amy:                     Thanks.

Dave:                    Never felt better. Our guest again has been Amy Smith from Zanesville, Ohio. Actually she resides in our Zanesville office but is seldom there because she’s always out at our clients, all throughout southeast Ohio and central Ohio, so always on the go. Always fun to have you as a guest. Thanks so much. You’ve been a very special guest for us over the last couple of years. Much appreciated.

Amy:                     Thanks.

Dave:                    Listeners, would you like to learn more about what to do to achieve bookkeeping bliss in your own business? Visit www.reacpa.com to access a wealth of bookkeeping insight and while you’re there, sign up for our monthly bookkeeping newsletter called Quick Tips, Tips and Tricks for Bookkeeping Success. Again, that’s Quick Tips, Tips and Tricks for Bookkeeping Success. Finally, don’t forget to subscribe to unsuitable on your favorite media player or subscribe to Rea and Associate’s YouTube channel for a closer look at what’s going on behind the mic during each of these episodes.

Dave:                    Until next time, I’m Dave Cain encouraging you to loosen up your tie and think outside the box.

Disclaimer:         The views expressed on unsuitable on Rea Radio are our own and do not necessarily reflect the views of Rea & Associates. The podcast is for informational and educational purposes only and is not intended to replace the professional advice you would receive elsewhere. Consult with a trusted advisor about your unique situation so they can expertly guide you to the best solution for your specific circumstance.