Accountant Felecia Dixson has answers and small business advice for the StartupNation community’s accounting questions in this installment of “The Nitty Gritty”.
Question : Our firm has some income from sales on Amazon.com. The money is direct-deposited into our company bank account. There are no invoices generated for these sales. How should we handle this in terms of revenue?
Felecia’s Answer: The money received directly deposited into your company bank account would be reported on the books as a cash sale. If you are using computerized accounting software, you would enter your transaction as follows:
- Cash in bank – Dr
- Sales – Cr
Question : Does it make sense for me to actually hire an accountant? How much should I expect to pay on a monthly basis? Is there a difference between hiring an accountant and just hiring a bookkeeper?
Felecia’s Answer: Let me start with your third question – there is indeed a difference between a bookkeeper and an accountant. Generally, an accountant has a college degree in accounting, while a bookkeeper does not necessarily. A bookkeeper is someone that handles the day-to-day accounting in your office. An accountant is the person that helps you make financial business decisions based on your tax situation. An accountant is also the one to review your books and records (either monthly or several times a year) to ensure that the day-to-day accounting activities are being completed, and to make any necessary adjustments to your account.
So, whether or not it would make sense for you to hire an accountant depends on what it is you are looking for the accountant to do for you.
In answer to your other question, monthly fees for an accountant will depend on where you are. I suggest that you set appointments with several accountants in your area and take a list of desired tasks with you so that they can give you a quote based on exactly what you want them to do, instead of making assumptions about what you want them to do. You can also keep your costs down with an accountant if you use a computerized accounting package like Microsoft Office Accounting (a StartupNation sponsor) to handle your day-to-day accounting activities. This will keep your records more organized, thus allowing the accountant to focus on the more important, bigger picture financial issues, rather than spending time on basic bookkeeping issues.
Felecia Dixson has been a partner of Alfermann Gray & Co., CPAs in Rolla , Missouri since 2002. Felecia is a degreed Accountant from Indiana University . She has been assisting in the editing and writing of the Illinois Farm Tax Manual for the University of Illinois since 1998.
Felecia has also been involved in the editing and writing of the Enrolled Agents Exam Questions for the Internal Revenue Service in Washington, D.C. , and is a past member of the Internal Revenue Service Advisory Committee to the Commissioner of the IRS in Washington, D.C .