103 ⎸ [Q&A] Why DIY E-Commerce is no-go

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Hello.
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Hello.
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Welcome to our December live q and a.
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A while back, I took a social media hiatus and it did wonders for my mental health.
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So if you are struggling with, any kind of burnout or just feeling like there's a lot of noise, taking a break from social media is a really good thing as I'm talking to you on Facebook Live.
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but the reality of it is I don't really, I deleted all of the social media off of my phone for the month of October, and, I only, I think I came into the Facebook groups only on my computer.
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And.
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It was, it was amazing.
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And I still haven't really, like, I still don't really go on Facebook, on my phone anymore.
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And I don't have the Facebook Messenger app downloaded on my phone.
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So if you try to message me on Facebook to like my personal, Facebook profile, I probably haven't answered it because I don't have that app on my phone.
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I do have the business.
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So here's the other thing is Facebook.
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If you have a business page, or a business Instagram, you can download Facebook, or it's called Meta Business Manager, and it's an app that you can manage the messages, the comments, you can actually post to your stories and all that stuff without actually being in the Facebook or Instagram apps.
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And, so that's how I managed things while we were taking a hiatus.
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so just thought I'd share that with you.
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So yeah, if you have any questions about anything, please go ahead and pop it in the chat so we can get those questions answered.
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Do you still do any type of bookkeeping or biz work during the time off?
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I do.
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So what the time off the, the closure really is for, is to take a break from client meetings, giving us permission to like not answer emails and, Interact in the groups and stuff to just take like a real break from client facing and customer facing stuff.
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I personally will be doing stuff behind the scenes in my businesses and it's more like the CEO work, so like planning for next year, kind of going through my pricing and, And things like that.
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And for the team, it's kind of like if they wanna take a vacation, they're able to now so they can unplug and not be involved in anything work related since there's nothing really day to day that needs to be done since our clients and our students have all been alerted.
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But if there is a.
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Project that they're working on that they want to do, and, and whatnot, then they're, they're welcome to, but there's not the pressure of like logging in on a daily basis to get like student support taken care of and things like that.
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So I hope that helps.
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yes, sometimes it's really nice to be able to have.
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Like, no distractions while you're working and get those like projects mapped out or planning, for the future or for next year is really good to have that like, um, Space and quietness to do that.
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Without like feeling like you need to answer emails or put out fires or anything like that.
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So if you all can do something like that, I highly encourage you to, and sometimes you might like plan to have that like quiet work time, but really just you end up unplugging and that's just as valuable as a ceo honestly, to have that space and that mental capacity to think about things.
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Cuz even when you.
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take a break.
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Like you're always, you're still gonna be thinking about your businesses and like what you can do next year.
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And having that, that space to do so is really important.
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Even if you're not working or like really doing any sort of output, like deliverables or anything like that, just like hang out with your journal.
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Jot down all the ideas that you wanna do and map out your projects for next year.
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Awesome.
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Carol has a question, question on A2X for pricing on this.
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Do you have a client, the client pay this on their own or include it in your bookkeeping pricing?
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We include it in our bookkeeping pricing and pay for the subscription.
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I think it ends up being a little cheaper that way.
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So you just wanna build it into your pricing and then make sure that you're.
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Creating like wiggle room for if they have to upgrade to like the next tier of A2X.
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So probably to cover yourself, I would, I would create a cushion so that Especially if the client is growing, cuz there's different levels of subscriptions for A2X based on transaction volume.
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So if you know that the client is planning on growing, I would probably price it in to make sure that you're covered in case they go to the top tier of A2X, which I think is like $150 a month.
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So at the minimum I would charge an extra $150 a month for, the e-commerce type stuff.
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That way you're covering your A2X subscription.
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I hope that helps.
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I just liked, for me, the only subscriptions that we don't handle for the clients and, and include in our pricing is gusto.
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I let our clients handle the Gusto pricing because they, it increases for every employee that you add and it's just easier for our clients to like be able to add their own employees and they handle the fee for it and all that.
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It's, it's really hard to keep track of, especially if you have, clients that are growing quickly and hiring a lot.
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So that's the only subscription that we don't handle in house and we pass on to the client.
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Everything else, I like to keep included in the price of our accounting because it's just nicer for the client to not get like nickel and dimmed for a bunch of different stuff.
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But it does require you kind of knowing the pricing levels, knowing when it's going to need to be bumped up.
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And that's why I say like, create a cushion and just add the, the, like the top tier price to your pricing.
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That way you're cons, you're always gonna be covered for that.
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For that subscription price.
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So same for Xero.
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Like we basically build in the cost of Xero, the price of Xero at the top tier subscription, even if our clients don't use that top tier subscription, that way we have the wiggle room to upgrade them if we need to.
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yeah.
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Hey Erin.
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I'd like to create a custom budget template to offer my clients.
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Are there people I can outsource this to, i e share my ideas with and have them create this, like an Excel guru.
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maybe check on Upwork or Fiverr or something.
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The other thing too is see if there's something already created that you can kind of just tweak.
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Like for LiveFlow, they have budget templates that you can just download.
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but, there's lots of templates out there, so I'm just curious, are you trying to create like a dashboard or a budget, just like an Excel spreadsheet?
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There's probably some Excel growers in our group if you wanna post in there as well.
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What do you think about migrating a client to Xero starting December rather than January?
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I'm thinking of doing this in order to switch invoicing asap.
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Yeah.
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So if you have clients that are using like the invoicing features and you wanna make sure that January is clean and.
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Ready to go.
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That's why I'm working on a migration during December, so that, we're going to basically have everything linked and ready to go in January and there might be like a week gap where I have to like book a journal entry to pull that history Into Xero so that we have good comparatives.
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But we will be like finishing out the year in QuickBooks.
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That way the reports that get sent to their tax preparer are complete from QuickBooks, if that makes sense.
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So with any migration, there's always going to be a period of time where there's, where you're doing like a.
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What is the word where it's like mirrored where you're basically duplicating your work, so you wanna minimize that as much as possible.
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So for like, For the invoicing, you could set up like, there's a couple ways to do it.
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I prefer to, if QuickBooks is clean, I want to have history in Xero, so at least a year of comparatives.
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So I prefer to use Jet Convert to migrate, which means you have to start the migration.
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Before, before you wanna start using Xero because you don't set up the Xero file with a Jet Convert migration, they set up the Xero file.
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So, you have to kind of like work on the timing with that.
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And that's why you end up having like some duplication, I guess, where you're entering stuff in QuickBooks still, and Xero.
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But if you want someone to start invoicing as of January and you don't, aren't necessarily worried about bringing over history, you could just create a new file and then create, like bring in journal entries for the balances for each month if you wanna do comparatives that way as well.
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And it makes it kind of, it makes it kind of manual, but, that's a way to do it without having to duplicate, like doing stuff in QuickBooks and Xero at the same time.
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So yeah, from Erin budget spreadsheet template, but very customizable and just a value added component.
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Yeah.
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I feel you on this because I always feel like my spreadsheets are not that pretty when I look at other people's stuff, but there's always so pretty that you can make an Excel spreadsheet.
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But anyways, I feel you on this.
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I would probably try to outsource it to someone, like maybe on Fivrr, Upwork.
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You might be surprised at what you might find, or maybe even in our group, if someone has something that they're willing to share or sell, that would be great too.
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Yeah.
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Carol says, what are your thoughts of helping a new small e-commerce with starting with DIY?
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Do you, I'm like shaking my head before I even finish reading this, do you have or had any that are DIY?
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So I would say, DIY e-commerce is a no-go.
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I've tried that in the past and there's just so many complexities that it just never worked out.
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They never stayed on top of things and, I would rather get paid like stupid, small amounts of money knowing that I like than, rather than like having them do it.
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Obviously I wouldn't do it for free, but there's a certain point where like you're going to be in there cleaning things up and fixing things for them anyways, so it's like you have to figure out if it's really worth it for you.
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but there's so many complexities with e-commerce es, especially if they're not like, If you set them up on A2X from the beginning, that eliminates a lot of problems.
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But if they use a different mi integration software, it's gonna be a disaster.
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So, you could maybe get away with it with , but you would still want to monitor that, integration and check up on things.
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And then if you end up having clearing accounts because there's multiple, payment processors.
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That's like just too complex for most business owners to understand the clearing account and how to reconcile that and all that good stuff.
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So, I would try not to do that.
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I would try very hard to just be like, look, it's gonna be much easier if you pay me three or $400 a month to just stay on top of this for you and, call it a day, depending on what your price point is, obviously.
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But a DIY E-commerce, probably not because they're still gonna need like, education and know how to stay up on top of sales tax thresholds and all that kind of stuff.
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So, Sometimes it's not worth the amount of effort and, What do I wanna say?
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Like a lot of business owners will be like, can you just teach me how to do this?
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And it's like, not really, because I spent 10 years of my career learning all the nuances about this, and I have a degree and you don't have that same degree and the same career path, so it's gonna be a lot more difficult for you to manage it.
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It's a touchy thing.
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There's always gonna be that business owner out there that really wants to DIY it.
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But if like, You could try it if you want, Carol, but I'm just, I'm just saying like, it might not be worth your time and headache, to try and teach somebody and walk them through it in the end.
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It's just sometimes it's easier for you to just manage it yourself.
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But if they're not willing to pay for it, there's that too.
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But there's probably, yeah, there's probably someone out there that's willing to DIY it with a client and let them handle that.
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So I initially had a DIY offer, and I would do that with e-commerce and all sorts of different types of businesses, and that's when I just stopped even offering DIY because it was like, there's too many complexities, especially with e-commerce.
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So, now if someone wants to DIY, like they literally can only be selling courses and they have to use the exact same systems that I'm gonna set them up on.
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Can you teach me?
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Um, no.
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Yeah.
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Because of all the, like e-commerce is just crazy.
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The sales tax, the clearing accounts.
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Yeah.
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so any who, yeah.
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So nowadays I don't do DIY for anyone other than like a straight service-based business.
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And even, even they, like, even them sometimes it's like if they're not gonna stay on top of it, it's pointless to.
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I just feel we are charging people that aren't like utilizing things.
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But anyways, side note, Erin says, speaking of clearing accounts, is there anywhere I can go to work through what a Shopify clearing account reconciliation would look like?
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It's so hard to figure out reconciliations.
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So, basically, When you think through like what the purpose is of the Shopify Clearing account, you really only need the Shopify clearing account if Shopify has multiple payment processors linked up, so Shopify payments, PayPal, stripe, like if there's multiple.
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Avenues that people are able to pay through.
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That's the only time you really need a Shopify clearing account if you're using A2X.
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So basically what you're doing is you're booking all of your sales to Shopify Clearing, and then the journal entry that, not, sorry, not all of your sales.
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You're booking all of the money that comes in the bank to Shopify Clearing, and then all of the journal entries that get created to book the sales entry.
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they're debiting Shopify clearing and crediting the sales, various sales accounts.
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Sometimes it's just straight up sales.
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Sometimes you have it broken down by, department.
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It depends on how you set your A2X up.
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So, the way you would reconcile that is anything that's left in the Shopify clearing account should be a deposit in transit.
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So you should, in theory, be able to tie it back to a deposit that Shopify is holding onto that they haven't actually deposited into the bank accounts yet.
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I think, is that correct?
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That might be, I might be saying it backwards.
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I have to think through that.
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But like real talk, our Shopify clearing accounts like rarely ever reconcile to the penny.
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There's always some weird shit going on because returns, discounts, sales tax, all sorts of weird stuff that goes on.
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So you have to kind of decide at what point.
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You're okay with there being a small balance and then making sure that the balance doesn't like grow too much and that it's always about the same.
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And it's not too much like I would say under, well it depends on the volume of the client honestly.
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But we have a client that does about six or $700,000 a year in revenue and Their clearing account usually hovers around one to $2,000 every month.
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And yeah.
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And it is literally not worth our time and effort to go through and figure out Penny by Penny.
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basically what you wanna do is you wanna run the clearing account and just kind of like eyeball it to see if like the total deposits match.
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The total sales, like for the most part should be like an in and out.
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So, in Xero, there's a really cool feature that you can like, kind of collapse the GL detail by day.
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That way like, It just sums everything up by the date, and we're able to kind of pinpoint where there's an issue really easily that way.
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But yeah, there's always a balance in there and, it generally has to do with like the deposits in transit.
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So your, goal there is to not have it.
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It's never gonna be zero, that's the thing.
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But when you do a reconciliation, the purpose of that is to say, okay, there is a balance.
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Have we validated that this is a legitimate balance, or is this something that we need to dig into?
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So that's always the purpose of the reconciliation.
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It doesn't mean that it's gonna be zero every time.
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It's just that we've pinpointed why there's a balance and it's valid.
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And then, You just go from there and hope that it doesn't keep growing month over month.
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And if it does keep growing, then, then there's a disconnect somewhere and you have to look into, part of like, maybe the integration isn't set up properly, maybe the sales tax entry isn't getting booked or whatever, right?
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So I hope that helps with the clearing account situation.
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I had a client that was considering doing DIY with, they wanted to go into QuickBooks and classify their uncategorized directly in QuickBooks.
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I thought this might be a good way of seeing how it might go.
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Now I'm having to clean up their mistakes.
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uh, makes me realize they aren't a good fit for DIY.
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Yeah, I just prefer when our clients don't touch their Xero file.
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Like, the only thing our clients are allowed to do is create invoices.
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And, one of our clients like will go in there and, accept, like apply a payment to an invoice when he receives a check.
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And that also is kind of messed up.
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Like, so it's just better when our clients just stay out of.
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the bookkeeping completely.
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I map the pending payments to a Shopify pending balance account, and that way I can see if it's something pending or an error.
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That's a good, that's a good idea too.
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That's a really good idea.
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Awesome.
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Yeah.
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And I know probably the next question's coming is like, when are you gonna do an e-commerce course?
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Like never.
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Just kidding.
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I did do the, the e-commerce workshop because I felt like there needed, so what's in that workshop basically is, it kind of gives an overview of What are the things you need to watch out for if you're thinking of offering e-commerce, because there's a lot of newer bookkeepers that come into this space and they see that the opportunity, right?
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There's a huge opportunity to serve e-commerce clients because like our world is like a hundred percent e-commerce now.
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However, like it is complex and, I wanted to make sure that people understood the complexities before they start agreeing to doing these types of engagements.
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Because I've worked with a lot of bookkeepers that come to me and they're like, I feel like I'm in way over my head, and sometimes they are , in over their head.
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And so that workshop is really meant to make sure that you don't get yourself in over your head.
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I do share an SOP like I said, that we use internally for the A2X setup and managing the A2X integrations and things like that.
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But even our e-commerce clients are fairly simple.
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like the one that I told you that has, they're making about six or $700,000 a year in revenue.
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Only half of that is e-commerce.
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The other half is digital courses.
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So even they have a relatively, and they're probably the most complex that we work with.
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They have sales tax in probably eight or nine different states now.
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So that's another thing that you can start to realize is like every state has a revenue threshold, but a lot of states also have a transaction threshold, and that is why this client is in so many different states because they have so many tiny transactions and it like really sucks for them because they're selling like little tiny things that are like 10 or $15 each, but all those little transactions add up.
00:21:40.454 --> 00:21:45.434
And so they end up with Nexus in a lot of different states, even though their revenue is not that high.
00:21:45.555 --> 00:21:57.240
So, yeah, so there's the sales tax thing that you also need to be very well-versed in if you're going to offer e-commerce services, because you can't do e-commerce without offering sales tax.
00:21:57.240 --> 00:22:05.675
I mean, you can to a certain extent, but they would have to be like micro e-commerce and you would still need to keep an eye on it for them.
00:22:05.887 --> 00:22:16.613
and that's the area that, like once a client reaches a sales tax nexus, we have a process for hooking them up to tax Jar and then Tax Jar handles the filings going forward.
00:22:16.883 --> 00:22:32.202
But there's always the monitoring that needs to be done and making sure that someone's looking at the reports to see when they're gonna hit Nexus, and then making sure that that, The sales tax payments are being booked correctly and all those little, tiny things that machines still can't do for us.
00:22:34.002 --> 00:22:35.593
Um, yeah, question.
00:22:35.593 --> 00:22:41.502
I have a client that their main income is tutoring, but they now have an online course and also subscription to use their platform.
00:22:41.502 --> 00:22:43.063
Will that be considered digital goods?
00:22:43.063 --> 00:22:44.053
In some states, yes.
00:22:44.533 --> 00:22:47.413
I'm not sure how to research for it to see if it's taxable or not.
00:22:47.442 --> 00:22:48.313
It depends on the state.
00:22:48.883 --> 00:22:56.982
So The way that I would do that is the same way I would do a sales tax nexus analysis for a product based client.
00:22:57.283 --> 00:23:12.839
So an e-commerce client, you have to get access to the report that shows where all those sales are happening, and there's a good possibility that they don't even have that data unless you look in their credit card processing platform.
00:23:13.140 --> 00:23:18.640
So, like for instance, Since I'm a course creator, I use Kajabi.
00:23:18.730 --> 00:23:20.620
And a lot of our clients use Kajabi too.
00:23:20.620 --> 00:23:23.650
But Kajabi doesn't actually collect addresses.
00:23:24.049 --> 00:23:25.910
It's the payment processor that does.
00:23:25.970 --> 00:23:32.180
So, PayPal, I know they have the information, but it's not very, Easy to get.
00:23:32.210 --> 00:23:34.610
I mean, there's reports to get it, but it's kind of clunky.
00:23:34.950 --> 00:23:39.660
And then Stripe tracks any, basically any credit card processor has to have the address.
00:23:39.660 --> 00:23:44.093
So that's how you know where they're servicing the clients and where their customers are buying from.
00:23:44.523 --> 00:23:47.373
So it's the same process that you would use for a product based business.
00:23:47.373 --> 00:23:52.413
You need to get the reports of their payment processors, kind of combine them.
00:23:52.817 --> 00:23:58.218
And see how many transactions are happening in each state and what revenue thresholds are happening in each state.
00:23:58.218 --> 00:24:02.898
So I basically end up doing like however many payment processors or there are.
00:24:02.903 --> 00:24:05.178
So say there's Stripe and there's PayPal.
00:24:05.748 --> 00:24:09.000
So there's two payment processors that they're pulling in money for.
00:24:09.020 --> 00:24:10.371
they're courses.
00:24:11.211 --> 00:24:13.260
We would start with one.
00:24:13.432 --> 00:24:24.107
Export all the activity for an entire 12 months, the previous 12 months, not just the calendar year, but like a previous 12 month history of all their transactions from Stripe.
00:24:24.557 --> 00:24:31.597
And then I would put it into like a pivot table to analyze the data, to see like, hopefully there's a state field.
00:24:31.597 --> 00:24:36.077
So I would, do a pivot on each state and then the number of transactions and then the revenue.
00:24:36.528 --> 00:24:37.067
So.
00:24:38.057 --> 00:24:44.623
They're mostly doing this in Texas schools, so most of their customers are in Texas, that's great.
00:24:44.923 --> 00:24:55.563
So I would go to the Texas Department of Revenue, or whatever the comptroller website and, search their little, taxable goods database or whatever for digital goods.
00:24:55.563 --> 00:24:58.309
And then c I don't know if, I don't.
00:24:58.700 --> 00:25:03.190
I don't think Texas actually taxes digital goods, but you could do like a quick, Google search.
00:25:03.789 --> 00:25:11.535
Make sure you're looking at their actual comptroller's website for whichever search results you get, and see if digital goods are even taxable.
00:25:11.535 --> 00:25:13.065
If not, it's a moot point.
00:25:13.394 --> 00:25:16.908
but you wanna make sure that whatever services they have are not also taxable.
00:25:16.908 --> 00:25:22.419
So, cuz Texas, when I just Googled it, The little quick search I did says some services are taxable.
00:25:22.419 --> 00:25:38.084
So you wanna make sure that you read into the services definitions, on their comptroller's website and figure out if what they're doing is taxable and then, the other thing if for digital goods, each state has their own definitions of digital goods and some of them are very vague.
00:25:38.564 --> 00:25:40.688
And, so whatever.
00:25:40.776 --> 00:25:44.023
You end up doing, this is where it gets into a gray area.
00:25:44.262 --> 00:26:00.823
So you still have to talk with the business owner and give them what the rules are and say, okay, if these are the rules, like if the rules say anything live is not digital, but if it's like a PDF or an ebook or whatever, then those are considered taxable goods.
00:26:01.273 --> 00:26:04.813
And then you kind of talk to the business owner and see how they want to handle it.
00:26:04.962 --> 00:26:06.583
It's still ultimately up to them.
00:26:06.583 --> 00:26:11.893
Sometimes it's not worth the, and this is the work that I do with clients too.
00:26:11.893 --> 00:26:14.053
Like we have clients that.
00:26:14.518 --> 00:26:20.008
Technically have hit thresholds in certain areas, but like barely.
00:26:20.188 --> 00:26:27.028
And so they've made the executive decision to say, it is not worth our time and money to go in and register at this state.
00:26:27.327 --> 00:26:28.258
We'll just wait.
00:26:28.258 --> 00:26:30.627
And if we get penalized, we'll gladly pay the penalties.
00:26:30.627 --> 00:26:40.018
Like you can, A business owner can make that decision and so we help them come to the, either that conclusion or the conclusion of let's just register and stay on top of it.
00:26:40.198 --> 00:26:53.518
But then there's an administrative fee of that because now they have to pay us To register it, to stay on top of it, to pay maybe $20 a month in tax, or to file a zero return if there's nothing sold in the future in that, state.
00:26:53.518 --> 00:27:06.298
And so, yeah, there's a whole, like, it's definitely a gray area, but whatever you decide, you just document the conversation with the client and like kind of say like, this is the reason we're going with this route.
00:27:06.398 --> 00:27:14.893
If it's a gray area, This client has this, this and this product, and this is why we believe it falls into this category.
00:27:15.212 --> 00:27:21.831
It's just really good to document all of that stuff and for you in the future so that you can remember like, well, why didn't we register in that state?
00:27:21.885 --> 00:27:22.786
we probably should have.
00:27:22.786 --> 00:27:30.972
And then if you go back and see, oh, I had notes that we had a conversation and, the client decided that it wasn't worth the time and effort to register.
00:27:31.153 --> 00:27:33.313
They'd rather just pay the penalties if they ever get.
00:27:33.653 --> 00:27:35.393
You know, caught in the, in the future.
00:27:36.023 --> 00:27:48.393
So those are the nuances with sales tax that you have to be aware of and comfortable advising clients through if you wanna be dealing with e-commerce and courses and all that kind of stuff.
00:27:48.794 --> 00:27:50.813
I've been considering closing down my business.
00:27:50.813 --> 00:28:00.821
I have two clients who really would like to hire me as an employee to still do their books and also help with general running of their admin financial stuff all virtually hours would still be flexible.
00:28:00.821 --> 00:28:06.101
I know all the benefits of owning my own business, but I'm at the point I just don't want all the responsibility.
00:28:06.101 --> 00:28:08.137
I've worked with one guy for five years now.
00:28:08.137 --> 00:28:09.668
Any thoughts on things to consider?
00:28:10.117 --> 00:28:25.232
So it sounds like you've already done a lot of like evaluating the pros and cons and one thing that you just said was, I'm at the point I just don't want all the responsibility and that is totally okay.
00:28:26.163 --> 00:28:35.972
Like it is okay to decide, like I tried it, it was fun for a bit, but the responsibility and the anxiety it caused or whatever, like.
00:28:36.008 --> 00:28:37.958
Whatever is happening with you in your life.
00:28:37.958 --> 00:28:41.018
So like sometimes it's just not the right season, and that's okay too.
00:28:41.288 --> 00:28:46.827
I've actually had several students that have come to me later on and they're like ashamed to tell me that they shut down their business.
00:28:46.827 --> 00:28:54.268
But honestly it's like, but now you know, like, now you know the other, the, the other side of the lawn, right?
00:28:54.268 --> 00:28:57.508
Like what the other side of the grass, like is it greener?
00:28:57.508 --> 00:28:58.587
For some of us it is.
00:28:58.587 --> 00:29:00.807
Some of it's not like, it's, okay.
00:29:00.857 --> 00:29:04.158
So I just wanna give you permission to like just.
00:29:05.222 --> 00:29:15.341
I wouldn't make any brash decisions in moments of like when like there's just a lot going on and you kind of just wanna throw in the towel.
00:29:15.341 --> 00:29:20.020
Cuz I was there a little while ago, like, and I'm glad I didn't just blow everything up.
00:29:20.020 --> 00:29:20.290
Right?
00:29:20.296 --> 00:29:22.931
So take your time making the decision.
00:29:23.201 --> 00:29:29.097
You could just dwindle down your business and, go back to handling just like one or two clients and then make the decision.
00:29:29.327 --> 00:29:31.607
But honestly, like it is totally okay.
00:29:31.968 --> 00:29:39.317
Like I don't want anyone to ever feel like they have to start a business or like keep doing it when it's just like eating you alive.
00:29:39.317 --> 00:29:43.898
Like it's not for everybody, but at least you tried it and, you got a lot of.
00:29:44.432 --> 00:29:46.113
A lot of valuable experience.
00:29:46.113 --> 00:30:00.242
Like the, the thing that I think of is like if I were to ever go back to corporate at this point, I would be like an even better teammate and an even better leader because of all the things that I've learned by running a business.
00:30:00.843 --> 00:30:09.283
And I would be like, The best person for someone to hire at this point, because I've learned so freaking much by running my own business.
00:30:10.002 --> 00:30:16.962
And so you are gonna bring so much value to any employer in the future having just run your own business for a couple years.
00:30:17.273 --> 00:30:19.942
So don't discount that experience either.
00:30:20.212 --> 00:30:27.502
Make sure you get paid well like negotiate higher pay, negotiate more benefits, negotiate your schedule, your time off.
00:30:27.512 --> 00:30:29.553
Because we all know now what's possible.
00:30:29.883 --> 00:30:34.293
And yeah, so anyways, there's my, there's me and my soapbox.
00:30:34.293 --> 00:30:39.512
Don't ever feel like you can't just stop doing something if it's not lighting you up, if it's eating you alive.
00:30:39.972 --> 00:30:45.607
If it's causing you health problems and anxiety, do what you can to work through it.
00:30:45.607 --> 00:30:48.788
But sometimes the answer is to, to change directions.
00:30:49.168 --> 00:30:52.693
Yeah, I feel I can bring lots of Value to them from your experience.
00:30:52.693 --> 00:30:53.473
Absolutely.
00:30:53.504 --> 00:30:55.304
Like so much value.
00:30:55.604 --> 00:30:58.274
Like we all know now what goes into running a business.
00:30:58.814 --> 00:31:02.114
Any business owner would be ecstatic to have us on their team.
00:31:02.384 --> 00:31:10.707
So kudos to you for, working on getting that clarity and being honest with yourself and not pushing through something that's making you miserable.
00:31:13.836 --> 00:31:15.037
This was a good life.
00:31:15.606 --> 00:31:16.416
This is really good.
00:31:17.136 --> 00:31:18.007
Lots of good stuff.
00:31:18.307 --> 00:31:24.487
We're going deep today deep on e-commerce sales tax, quitting our businesses.
00:31:27.648 --> 00:31:29.893
Going back to migration, to Xero.
00:31:29.913 --> 00:31:33.363
With doing this month for January, when do you connect to the bank?
00:31:33.783 --> 00:31:41.390
So I would wait until either the very end of December, or literally like January 1st.
00:31:41.783 --> 00:31:49.103
Unless you have bank access to be able to connect to the bank yourself, I would book a time with the client to say like, I.
00:31:49.103 --> 00:31:59.913
On December 30th or December 29th, let's get on the phone, connect the bank feeds, or you could wait until after January because usually bank feeds, you can select a date to go back a couple days.
00:32:00.153 --> 00:32:01.262
So that's the other option.
00:32:01.262 --> 00:32:04.442
You could either do it a few days early or a few days after the fact.
00:32:04.448 --> 00:32:05.762
Just like inventory, right?
00:32:05.762 --> 00:32:10.143
Like a lot of businesses don't actually count inventory on the very last day of the year.
00:32:10.887 --> 00:32:16.317
They do it one or two a day before, or one or two after, and then you add in your purchases and take out your sales.
00:32:16.557 --> 00:32:17.577
So it's the same thing.
00:32:17.577 --> 00:32:24.402
You can just do it a day or two behind and then backdate the integration usually that's probably the better option.
00:32:24.924 --> 00:32:31.672
and then if, for some reason some of the transactions are missing, you can just download the Excel sheet and import them into Xero.
00:32:33.251 --> 00:32:34.812
I hope that helps.
00:32:36.041 --> 00:32:38.227
Going back to pivot tables for sales tax.
00:32:38.227 --> 00:32:39.937
I haven't revisited the course in a while.
00:32:39.937 --> 00:32:41.527
Do you cover how to do this in the course?
00:32:41.557 --> 00:33:03.595
basically you just wanna download a detailed spreadsheet of payment activity from any payment processor for whether it's Stripe or PayPal, but make sure that the activity detail has the total amount of the sale, the state and zip code probably, but at least the state of where the sale took place.
00:33:03.664 --> 00:33:06.650
And so, This is gonna be the billing address.
00:33:06.950 --> 00:33:11.960
So if they're not actually in the same state that they have the billing address, it's gonna be a little off, but it doesn't matter.
00:33:12.299 --> 00:33:20.759
And So then you do a pivot on each state, on the column of the state, sum up the totals and do a count of however many transactions.
00:33:20.759 --> 00:33:24.059
So those are the three like columns in your pivot table.
00:33:24.390 --> 00:33:26.850
And so if you don't know how to do a pivot table, Google it.
00:33:28.259 --> 00:33:31.559
There's gotta be a YouTube videos galore on how to do pivot table.
00:33:31.559 --> 00:33:32.970
They're very easy actually.
00:33:33.896 --> 00:33:49.677
Yeah, those are the three fields that you want to pull into the pivot table, the state count of transactions, and some of the totals, because you need to see for each state how many transactions happened and what the sum of the transactions have been for the last 12 months, because each state has their different thresholds.
00:33:50.007 --> 00:34:00.427
And then once you have that, go each state line by line, go to the State Department of Revenue, see what their transaction threshold is or their, dollar threshold is for sales.
00:34:00.432 --> 00:34:02.497
And then there's another level.
00:34:02.797 --> 00:34:04.916
Some states are like, once you hit.
00:34:05.684 --> 00:34:11.204
This for the previous calendar year, and then some of 'em are, say, say, in the last 12 months.
00:34:11.235 --> 00:34:13.094
So then you have to evaluate it that way too.
00:34:13.094 --> 00:34:32.025
So then each state gets its own little analysis where you have to go dig into their rules and what's up to date right now, the products, all the things, and that's why we charge a good amount for a sales tax nexus analysis, especially if the client is selling into lots of different states.
00:34:32.744 --> 00:34:33.105
So yeah.
00:34:34.139 --> 00:34:37.319
That is that, Let me see.
00:34:37.319 --> 00:34:42.089
Where are we going to take the big leap in January and leave my job.
00:34:42.420 --> 00:34:44.639
I have enough savings to float me for six months.
00:34:44.639 --> 00:34:46.710
That is incredible.
00:34:46.739 --> 00:34:47.849
Congratulations.
00:34:48.329 --> 00:34:51.342
Is it feasible to think I will have clients before I run out of funds?
00:34:51.373 --> 00:34:51.702
Yes.
00:34:52.842 --> 00:34:54.702
You will have clients before you run out of funds.
00:34:55.452 --> 00:34:56.232
I guarantee it.
00:34:56.322 --> 00:34:58.752
I mean, I can't guarantee it, but I guarantee it.
00:34:58.782 --> 00:35:01.242
Like if you do the work and you.
00:35:01.487 --> 00:35:07.248
Continue to put yourself out there, make connections, build relationships, ask for referrals.
00:35:07.248 --> 00:35:09.857
Like you no longer can be shy about things.
00:35:10.826 --> 00:35:11.696
you'll be fine though.
00:35:11.786 --> 00:35:12.567
You'll do great.
00:35:12.596 --> 00:35:17.216
So number one though, make sure your information is on our community spreadsheet.
00:35:17.496 --> 00:35:20.586
There should be like an ambitious bookkeeper community Google sheet.
00:35:20.886 --> 00:35:24.306
Please put your information in there and if you niche, niche.
00:35:24.801 --> 00:35:35.091
Have a specialty that is even better because when I receive a referral that is not a course creator and is not willing to go on Xero, I look at that spreadsheet first.
00:35:35.511 --> 00:35:36.951
To know who to send them to.
00:35:37.701 --> 00:35:41.871
So if your information is on that spreadsheet, you get first dibs at referrals.
00:35:42.397 --> 00:35:43.957
I don't give the referrals to everybody.
00:35:43.957 --> 00:35:50.167
I look to see who's the best fit for that referral, if I've already had a conversation with that client or whatever.
00:35:50.167 --> 00:35:58.987
So, Honestly, like if you specialize in a software and you have a handful of industries that you specialize, it's gonna be easier to get clients.
00:35:59.797 --> 00:36:02.399
Okeydoke, Tax jar.
00:36:02.459 --> 00:36:05.339
So, Tax jar.
00:36:05.369 --> 00:36:05.939
Yes.
00:36:05.969 --> 00:36:16.288
If you link your payments processors to tax jar, it will then give you visibility and it'll alert you when you're, or show you like you can run a report in there.
00:36:16.305 --> 00:36:17.761
that's like a Nexus analysis.
00:36:17.761 --> 00:36:26.071
So for our clients that are already on Tax Jar, we are able to just monitor that every quarter and make sure that we're registering for state some time.
00:36:26.541 --> 00:36:43.930
But it's the initial analysis that If you're not able to pull all that history into tax jar and you don't wanna start a subscription, but yeah, if you already are familiar with Tax Jar, that's another option to just link all your payment processors for the client into Tax Jar and let Tax Jar do the analysis.
00:36:44.800 --> 00:36:46.210
Do, do, do.
00:36:46.240 --> 00:36:54.340
Thank you for posting the sales tax workshop and what approximately a good amount to charge for a sales tax analysis.
00:36:54.730 --> 00:37:02.020
So while back, Avalara will do a sales tax analysis and I believe that they charge 400 and some dollars per state.
00:37:03.440 --> 00:37:11.076
Per state! So when you think about a client that's literally selling across the whole United States, that can add up quite a bit.
00:37:11.625 --> 00:37:17.835
So we, I usually charge around a thousand to 1500 for a sales tax analysis.
00:37:18.255 --> 00:37:28.455
And that's kind of arbitrary, but also like, as long as I get access to the reports I need, it just takes a few hours.
00:37:28.545 --> 00:37:29.475
So it's.
00:37:29.840 --> 00:37:30.860
It's not a bad deal.
00:37:32.760 --> 00:37:44.250
It's just a matter of, and then we have, we keep a spreadsheet of all of, like, as every time we do an analysis, like we go and update it to make sure that it has the current thresholds and everything.
00:37:44.250 --> 00:37:57.100
So like we have a, a general spreadsheet of like what most thresholds are and so we can kind of like, we have a good idea of where they're hitting Nexus, before doing like super detailed analysis.
00:37:57.100 --> 00:37:57.940
But yeah, I.
00:37:59.215 --> 00:38:00.535
Honestly, you could charge whatever you want.
00:38:01.835 --> 00:38:10.925
But it's good to anchor in the price that Avalara charges with your client saying like, Avalara would charge you $400 per state for this analysis.
00:38:11.435 --> 00:38:16.155
And we see that you're already selling into 20 states at least.
00:38:17.355 --> 00:38:21.165
So we're gonna charge you a thousand, and that seems like a deal for them, right?
00:38:21.615 --> 00:38:23.895
So price anchoring, great tool to use.
00:38:25.485 --> 00:38:30.195
No question is a stupid question, but what do you consider audit proof books?
00:38:30.225 --> 00:38:31.846
Is this covered somewhere in the course?
00:38:33.195 --> 00:38:49.562
So, I don't know if I cover this in the course or not, but audit proof books are a receipt for every transaction, which most clients are not so great at this, but we give them the tools to be able to do this better, which is Hubdoc.
00:38:50.102 --> 00:38:55.772
Reconciled bank accounts, someone looking at , their accounting and having proof for every transaction, basically.
00:38:56.012 --> 00:39:00.252
That's what audit proof books are in the terms of an IRS audit.
00:39:00.582 --> 00:39:01.032
Okay.
00:39:01.062 --> 00:39:04.692
I'm not talking about like an independent auditor, but for an IRS audit.
00:39:04.902 --> 00:39:09.062
If you look at what the requirements are for a small business for, audit for.
00:39:09.722 --> 00:39:10.862
IRS documentation.
00:39:11.132 --> 00:39:18.782
Just follow that and you could, if your client, here's the thing, is your client is ultimately responsible for keeping all of that documentation.
00:39:18.782 --> 00:39:19.442
We are not.
00:39:19.832 --> 00:39:21.182
We can help them with it.
00:39:21.182 --> 00:39:24.812
We can give them the tools and we can lead a horse to water.
00:39:25.167 --> 00:39:28.887
But you can't make your client save receipts that is on them.
00:39:29.127 --> 00:39:35.187
You can say, if you use our tools, you will have audit proof books because we're gonna reconcile your bank every month.
00:39:35.487 --> 00:39:41.567
We're gonna make sure that what's in the bank account always has proof for each transaction and and all that good stuff.
00:39:41.567 --> 00:39:43.007
But ultimately it's up to them.
00:39:43.277 --> 00:39:46.547
So it's not guaranteeing that they're never gonna get audited.
00:39:46.607 --> 00:39:55.477
That's the other thing, like being audit proof means if you were to get audited, you have all the documentation to prove your way through an audit and all that.
00:39:55.867 --> 00:39:57.367
And that's just the bookkeeping side.
00:39:57.367 --> 00:40:06.367
It's not gonna audit proof any, questionable tax positions you take or things like that, that's on the client and their tax preparer.
00:40:06.737 --> 00:40:09.707
But as far as the bookkeeping goes, that's what I would say.
00:40:09.707 --> 00:40:11.507
There's proof for every transaction.
00:40:11.507 --> 00:40:16.217
So if your client is on board with that, great, but they have to be on board with it and send you all the.
00:40:16.504 --> 00:40:17.375
Documentation.
00:40:17.600 --> 00:40:29.650
I would say like maybe two or three of our clients are actually at that level where they give us receipts for literally everything.
00:40:29.980 --> 00:40:30.701
And.
00:40:32.500 --> 00:40:36.400
One of those clients is probably me, like my own books.
00:40:36.400 --> 00:40:36.730
Right.
00:40:36.730 --> 00:40:45.312
So it's like, when I think about the, the number of clients that we do work for, I'm pretty sure like maybe three or four of our clients Submit receipts for everything.
00:40:45.312 --> 00:40:48.972
And so those are really the only clients that would be audit proof.
00:40:49.752 --> 00:40:51.102
That was a very long-winded answer.
00:40:51.102 --> 00:40:52.062
I hope that was helpful.
00:40:53.802 --> 00:40:56.712
Okay, do, do, do.
00:40:57.072 --> 00:40:57.672
All righty.
00:40:57.677 --> 00:40:58.242
Cool.
00:40:59.262 --> 00:41:01.602
That's it for our questions, All right.
00:41:01.842 --> 00:41:02.472
Thank you all.
00:41:02.477 --> 00:41:03.342
I'll talk to you soon.