FREQUENTLY ASKED QUESTIONS
WHAT GENERAL LEDGER SOFTWARE DO YOU WORK WITH?
We prefer and recommend QuickBooks Online for a number of reasons, including cost, convenience, features, and ease of use. We have a decade of experience with QuickBooks, and several of our team members are QuickBooks ProAdvisors. For our recurring monthly bookkeeping clients we prefer your GL software to be QuickBooks Online.
However, we also have experience with Xero, Intacct, Freshbooks, and NetSuite. We can provide you with consulting services if you have any of the aforementioned GL software.
HOW IS GENERAL LEDGER PARTNERS DIFFERENT FROM A BOOKKEEPER OR ACCOUNTANT?
A bookkeeper can help you keep up with your daily financial tasks such as entering expenses and vendor bills, creating and sending out customer invoices, reconciling bank and credit card accounts, and running payroll. An accountant assists with monthly financial reporting, annual tax filings, and accounting that complies with GAAP, investor and bank requirements.
General Ledger Partners is a bespoke financial consulting firm that fits in between a bookkeeper and audit/tax to help you understand your growing business's financials, particularly when you are starting to look for external funding and you need to show clean financials to potential investors, acquirers, banks, or auditors. Most of our team members are ex-auditors, know what investors and auditors will ask for and expect during a due diligence process, and have experience untangling even the most confusing financials.
WHAT IS THE DIFFERENCE BETWEEN CASH, MODIFIED CASH (OR MODIFIED ACCRUAL), AND ACCRUAL BASIS BOOKKEEPING? AND WHICH ONE DO I WANT?
Cash basis books are very basic and simple. Spent cash is recorded as an expense when spent, and received cash is recorded as income when received. Tax accounting is usually cash basis. The advantage to cash basis bookkeeping is that it's extremely easy. The disadvantage is that your financial reports may not be meaningful--you don't know who you owe or who owes you, and you can't recognize expenses evenly over a period of time.
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Modified cash / modified accrual books are not as simple to keep compared to cash basis, but are more useful to a viewer. Modified cash books will show your receivables (what is owed to you) and your payables (what you owe). You can also recognize revenue even if you haven't been paid yet, and recognize expense even if you haven't paid the bill yet.
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Accrual basis books follow very specific rules for when revenue and expense can be recognized in the books. Cash transactions are held on the balance sheet until they can be recognized as revenue or expense. Accrual basis or GAAP (Generally Accepted Accounting Principles) financials are sometimes required by investors or banks. Keeping your books in accrual or GAAP basis tends to be expensive because of the amount of effort involved.
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If you do not have investor or bank requirements to keep your books in accrual basis or GAAP compliant, we recommend modified accrual basis bookkeeping for a nice balance of utility and efficiency. General Ledger Partners prefers to keep books on a modified cash basis because financial statements will be more useful and accurate, but doesn't require the effort (and expense) of accrual basis bookeeping. We will usually get the financials as close to accrual basis as reasonable, and keep tabs on the financial areas that are not GAAP, so that, if you need GAAP financials in the future, we can make the necessary changes quickly.
DO YOU OFFER TAX SERVICES?
We aren't a tax firm, but we have contacts at several tax firms and would be happy to provide you with a referral if you don't have a tax firm yet. We have worked side by side with tax firms for many years, and not only can we fulfill tax requests from your tax preparer, we also know what tax preparers usually ask for, and can get your books and records organized so that tax time is relatively painless. We can also help you with minor filings like 1099-MISC/NEC.