IAM2212 – Getting Your Business Organized from Day 1: Proper Bookkeeping and Accounting

Lakshmi Gupta discusses the need to understand compliance and legal requirements.

She advises on the benefits of integrating bookkeeping and accounting services.

Lakshmi addresses the gaps in traditional CPA services by offering a complete solution.

Lakshmi explains the importance of a holistic service approach to meet all accounting and financial needs of business owners.

Business Pillar: Financial

Episode Link: getting-your-business-organized-from-day-1

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Transcription:

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Intro 00:29

Hello. Hello. Hello. This is Gresh from the I AM CEO Podcast and formerly the CEO Chat Podcast.

So doing something a little bit different as we ease into the fall from the summer and everybody's traveling a lot more. Life is obviously a lot different than it has been in the last four years, definitely since I started this let alone the last two years or so.

But I had a podcast called the CEO Chat Podcast, which is a lot more of a long form podcast. I didn't really reach the 1400 plus episodes that we did with the I AM CEO Podcast.

So there's a lot more long flowing, a lot more conversational, but might be dusting off the CEO Chat Podcast and bringing that back out.

So with that being said, while considering that, what I wanted to do is go through some of the interviews that I had that were some of my favorites and share those.

It's not gonna obviously be the full entire interview. We're gonna have links in the show notes so that you can go and listen to the full interview.

But I wanted to do some snippets that you can get. You're gonna hear, of course the visibility, either the resources or the connections in each of these different snippets.

So it's gonna be one of those things that's really gonna help you to hopefully learn more about the guest that's on the show, what they do, how they do, why they do it, but also get that opportunity to really learn about some resources that can make you more effective and efficient.

So sit back and enjoy this special throwback CEO chat episode.

Gresham Harkless 01:56

What type of products and services do you guys actually provide for businesses or organizations or start ups?

Lakshmi Gupta 02:04

Well, we are not a typical CPA firm. So most CPA firms would stick to probably the top to the top functions like tax preparation and some accounting.

What we do is more of a full service spectrum. And when we say that, we think about a business owner who would, need an accountant and might think of hiring an in house accountant.

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And what are the functions that accountant would be doing for that business? That is really what we provide to business owners in specific.

We do individual tax preparation as well and tax planning for them. But for the most part, our client base is business owners, small to medium sized business owners, and we provide them anywhere starting from when they are thinking of a business idea.

That's where we come in. So we talk to them about their business idea, see what kind of entity structure would work for their industry, and we set the company up for them.

So we do provide incorporation services, and then we help with accounting, bookkeeping, budgeting, forecasting.

We do payroll, any internal audits, tax preparation, of course. We also provide QuickBooks training sessions to clients who would like to do their own books.

When business owners are just starting out, more than likely, they should not be hiring an accounting firm and add on to the cost.

So that's the kind of advice we give business owners that take it slow. You would know when you need more services from us, but till then, do things yourself, and we train them how to take care of their business accounts.

So it's really a full spectrum. We also service businesses where they have a full accounting department on-site.

These are larger companies, and we provide internal audit services where they would like an external company to come in and just double check on the books just to make sure their staff are doing what they're supposed to do.

There's no fraud or anything like that going on. So we have helped some clients with that as well.

And really, that's what we tell our clients. If you think it falls under the accounting and tax definition, ask us, and more than likely, we will be able to serve that.

Gresham Harkless 04:18

That's awesome. That's awesome. Yeah. And I hear, like one of the the biggest pieces of advice I always hear is to make sure you get an accountant or a CPA.

And make sure your books are in order and things like that just because it's so important down the line, as a business, to make sure you're in order from day one.

So it's great that you steer people in the right direction.

Lakshmi Gupta 04:39

Correct. And I feel that giving a service like bookkeeping or accounting is not just about keeping the books together.

It's also about educating the business owner what they are required to do, what are the compliances, how many times like, what are the property tax filing due dates and the annual report due dates because people miss on that, and they're just busy doing their own business.

And this is what causes them to be not in a good standing anymore when they're out for getting any contracts or things like that.

Educate them to inform them that besides what they do in their business, there are other aspects for it.

And even though we are helping them, we try to educate them, and provide them services as they need us to. But for the most part, educate them to help themselves.

Gresham Harkless 05:31

Okay. That's awesome. That's awesome. And I know like, maybe one of the educational questions I had is, what exactly is, like, the term, like, CPA or what does that mean?

What is accounting? What is bookkeeping? For somebody that might not even be aware of what those pieces are and how they actually fit together, how would you define that, so it could be clear for what a business owner should do and how they should take those steps to make sure that's in order?

Lakshmi Gupta 06:01

Well, the first thing that I would like to touch is the difference between bookkeeping and accounting.

When you hire a bookkeeper, what they really do is they put your books together, which means they enter all the transactions that you've had in a month from the bank statements, from the credit card statements, and they make sure the book's balanced.

Now what an accountant does, when we talk about the accounting piece of it is that they come in and they make sure that the the books are actually balanced and it's making more sense.

And there are any capital accounts which are not tallying up, or is there any highlight items that the business owner should be aware of?

Those kind of things, is what accounting piece does. Now what a CPA does, really, CPA is a certified public accountant, and what they really help with is to bring those two pieces together.

The tax preparation is another. For my clients, I've heard this a lot, especially clients who have had bookkeepers, accountants, and tax preparers.

Three different people, three different companies. When they merge everything into one, they felt that their life got easier because a CPA firm is where you would find all expertises, and then a CPA, would have the knowledge to review all of these aspects and be able to combine everything into one.

So if you have your tax preparer, someone who has actually prepared your book, there's really nothing for a business owner to do.

For example, the clients we serve year round as bookkeeping services, and then we do their tax returns.

The only question we have during the tax return time is, do you want us to file your tax returns now?

And if they say yes, that's all they have to do. I mean, they have no information that they need to provide us with because we have their books.

We know what we need, and we know they are clean for the most part. The problem is sometimes books come to us, and we have no idea what has been done in the last year.

So it just makes sense to hire a CPA rather than a bookkeeper to do your books just because it just combines and fills the whole picture rather than a piece of it.

Gresham Harkless 08:19

Awesome. Awesome. Yeah. That definitely makes sense. Especially, it's like having a one stop shop where you're able to go and get all those questions answered.<

And you're able to help arm people not just for that year when they're doing their taxes, but years down the line when their business continues to grow and kind of expand and things like that.

So that's awesome that you you're able to help business owners do that because I can say it's definitely vital.

Absolutely. If for instance, there's a new business that's getting started, it can, I guess, be any type of business?

But say they come and they you meet them at a networking event or you get their information, could you take us through like, what you do for a typical client or general client from beginning to end, like, when they first said I know you said you start out with incorporation.

What do you do from that point going forward?

Lakshmi Gupta 09:11

Sure. So what we do is if someone the first consultation that we give to business owners is at no charge.

We usually do a thirty minute to a one hour consultation where we sit down with business owners and really understand what they're going through.

If someone is really planning to start a business as a sole proprietor, we again, inform them, educate them on why they should incorporate, how is that gonna be helpful for them.

Once they understand that, then we explain them different entity structures and how that's gonna have different tax implications on them, legal implications, liability, differences.

So we make sure we don't just pick and choose an entity structure. We make sure the business owners understands it as well.

Because, it's good to trust your CPA or accountant, but I think the comfort feeling in a business owner is much, much higher when they understand what's going on, why we are doing what we are doing.

So our first consultation is really to help them understand what's going on, what are the pieces they need to put together to get started, which would be, for example, registering with the state, pretty much most business owners would know that's a piece they have to take care of, get a federal ID number.

But what we have seen is that most businesses do not know that they need to register with the county as well.

So, that's one piece we tell them that you have to because the county, does not realize that a business has opened up until sometimes a few years down the line.

And they would put penalties on all the previous years for the taxes because you need to get a license to operate in a county.

And be it any county, any kind of business, you need a business license to actually open up a business.

So those are the kind of things we start with. We make sure that the business owner understands.

And then from there, we look at the books, how many bank accounts, credit card accounts they might have.

We make sure that they understand that they need to keep their business and personal accounts separate and how to use that, how to what kind of expenses they can incur in their industry that they can write off against the business, what they cannot, to make them understand the limits there and the reasonable expense limits that IRS has in place.

So little things, minute things like that is what we talked to the business owner about. So when they walk out of our office after this first consultation, the feedback we always get is I feel much lighter.

I feel much better. And I think that's the biggest satisfaction. And making the clients, getting books done is not our focus.

Our focus is really the long picture, the long term relationship that we're trying to build. With the idea is that I always tell my clients that if your business grows, we will grow.

So we are here to help you grow your business because if you grow big, you would need us more.

And the more you need us, we will grow. So it's not really a partnership rather than just a client and a CPA relationship. We take it really beyond that.

Gresham Harkless 12:22

Yeah. It definitely sounds like I mean, just from the way that you kind of, I guess, to educate the audience educate business owners and let them know exactly what it is and how they can be successful.

It definitely sounds like you actually really care about the businesses. And like you said, it's a partnership and not just, let me just do your books and then get out my get out of the office.

If you were to maybe have a crystal ball and you'd be able to look maybe three to five years down the line, where do you see, your business going?

Where are you guys at now? And where do you guys where do you see your business going in the next three or five years?

Lakshmi Gupta 12:58

Well, at this point, we have been in business for about five years now, and we have grown a lot.

Our growth rate has been tremendous. And one of the reasons is that, we listen to our clients, and we take the feedback, and we apply that towards the business.

We have I have nine people on staff right now. Not everyone is a full time employee, but that's another thing that I would like to continue to give to my employees is the flexibility and the work life balance.

We have most of the part I mean, we have people who have, retired from the CPA industry after thirty years of experience, I'm looking for part time work.

We have mothers who need flexible schedules, but are highly educated and skilled, but, just cannot take up a full time job.

So I would like to definitely continue with that format and giving out the employment to people who do not like a conventional nine to five job because we can work with people on their schedules just because we deal with different clients.

And we really check with our employees how much work they can take. Because I think that keeps the productivity very high, when the employees are satisfied.

Another thing we would like to keep adding on is community service. Even at this point, we do file some tax returns at no charge for some underprivileged families.

So I would definitely like to see that growing, in the future as we grow bigger and we have more time to accommodate more tax returns.

We would definitely like to add on to those and, and really serve the business community. I think there's been a lot of gap in how, accounting services work with businesses.

And that's the type of gap I would like to fill up. I would like to make sure that we are a complete solution for a business owner rather than a piece by piece CPA firm.

So I would like to continue work towards that and, reach to a point where our business really fulfills that goal or that mission of achieving the satisfaction that a business owner needs to get from a CPA firm and feel that they are responsive, they are affordable, and they're a complete solution for them.

Gresham Harkless 15:15

Yeah. That definitely makes sense. And do you feel like, I guess, being like a one stop shop has helped fulfill those gaps? Is that why?

Because usually, I guess, when someone does your books and then you pass it on to maybe a different company that does payroll, that some stuff falls through the cracks?

Lakshmi Gupta 15:30

I think so. And as I when I opened my business, this was the first thing that came to my mind that we're just another CPA firm.

How are we gonna be different from the industry? There are tons of CPA firms out there.

And this is the biggest, I would say service that I felt was lacking out there that most CPA firms do not provide a complete solution.

They are bits and pieces. In fact, I work with other CPA firms as well to fill in those gaps for them.

Outro 15:57

Hello. Hello. Hello. This is Gresh from the I AM CEO Podcast and formerly the CEO Chat Podcast, which we might be dusting off and bring it back that we, the sunset.<

So I hope you enjoy that episode. Like I mentioned, the goal is really just to give you some visibility around the guests, where it is around, what it is that they do, and how they do it, and what makes it unique, or get some resources that can help you level up within your business or within your organization as an enterprising individual that you are.

And then, of course, you might even get a different perspective on what it means to be a CEO and have that opportunity to connect with the person.

So I hope you enjoyed that episode. You can, of course, go to CEOChat.co to hear more of that episode.

Also, go to the show notes to actually hear the see the direct link to that episode. But I think it's something phenomenal that we have the opportunity to take the snippets from the longer form podcast and get some really valuable information that can help us love our organizations and our businesses.

So definitely take care, and look forward to talking to you soon.

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