Accounting

Is Bookkeeping Hard?

Is Bookkeeping Hard?

As a cloud based accounting solution we see people often asking if bookkeeping is hard to learn, what does it involve, and how does it work. Most of those asking these questions are either business owners wondering if they should do their own bookkeeping, or people considering their career options. While we'll try and address both sides of the issue, or focus will be on the business owners point of view.

So...Is Bookkeeping Hard to Learn?

You're not going to like this but the answer is both yes and no. And while this might sound confusing at best, we promise you it will all make sense after you learn what bookkeeping involves. So let's dive right into it...

Industry

Depending on your industry, the expertise and diligence required to maintain your books will vary. This is one reason that the question "Is bookkeeping hard?" is more nuanced than it might appear. 

Time

Given a lot of free time, many (not all) business owners are more than capable of doing their own bookkeeping. But business owners often wear multiple hats and need to perform a list of high level tasks for their business to run properly.

Trying to divide your time between higher level tasks and bookkeeping can create a stressful situation. Often it is the bookkeeping that gets neglected, which brings us to our next point...

Consistency

Keeping books consistently is the key to creating a smooth experience. If you don't have the time, the drive, the mindset or the know-how to stay on top of your books--you will find that bookkeeping is ten times the task it should be. 

Trying to dig through records and transactions from months past is a quick way to transform yourself into an archaeologist, only there will be no exciting temples full of treasure or new dinosaurs to name--only stale transactions.

Via  Giphy

Via Giphy

Enjoyability

Bookkeeping is not for everyone. In fact, a TD Bank survey which polled over 500 U.S. small business owners, discovered that bookkeeping is their most hated, with the next most hated task falling a whopping 24% behind. Needless to say, you are not alone if you don't enjoy categorizing transactions. And no task (even if simple) is "easy" when you not only don't like doing it, but hate it.

Via  Giphy

Via Giphy

Longevity

Bookkeeping is repetitive, and a sometimes (okay, a lot of times) mind numbing task. If you are someone who does not have patience or a marathoners attitude, you will quickly find yourself burning out on the task.

Communication

Good bookkeeping requires communication. Chron.com writes:

"Durham Technical Community College reported that the most difficult part of their job was not maintaining financial records, which accounted for 50 percent of their time. It was communicating with colleagues. Bookkeepers must maintain and balance financial records daily, including transactions from coworkers."

Whether you're looking into become a bookkeeper for employment, or your a business owner looking to manage your finances--proper bookkeeping will require you to engage with your employees to better understand the businesses's transaction history.

"But wait, all these things you've written make bookkeeping sound hard!"

That's because we haven't gotten to the crux of the matter just yet. As any good scientist will tell you, theory and practice are two completely different concepts. And while we'd venture to say that in theory many business owners are more than capable of accomplishing their own bookkeeping, in practice many fall short. 

Final Thoughts

Is being a bookkeeper hard?

No. Given the right circumstances and knowledge, bookkeeping can be as simple as categorizing things properly.

Is being a bookkeeper hard?

Yes. For the every so busy small business owner, finding the time and energy to properly maintain your books can be a taxing and arduous task.

 

 

 

How Does an LLC Work?

woman filing taxes

How many people are needed to form an LLC?

There is no rule that requires an LLC to have a certain number of members or to use specific titles such as President, Vice President, Secretary etc. However, the IRS does allow one-member LLCs (single member LLC) to qualify as a pass-through entity. 

How is an LLC managed?

An LLC may either be managed by its members (member managed) or managed by selected managers (manager managed). If the LLC is managed by its members, each member will have an equal vote in the company decision-making process based on their individual stake. If the members elect a manager or managers they will be in charge of the daily affairs of the LLC. 

If managers are not selected in the Articles of Organization the LLC will default into member management. 

What is the organizational structure of an LLC?

An LLC is owned by members. A member's ownership is represented by membership interest, which is either in a percentage or units reflected on a member certificate. 

How is a limited liability company (LLC) taxed?

After organization, by default the IRS will tax an LLC as a disregarded entity, however an LLC can elect to be taxed as an S corporation by filing Form 2553 or elect to be taxed as a C corporation by filing form 8832. 

LLCs are also subject to any franchise taxes imposed by the state. Franchise taxes are typically due annually, and the amount will vary by state. *California LLCs are subject to an annual minimum franchise tax of $800 per year. The first payment must be made within 3 months of forming your LLC. The state will send a bill to remind you to make this payment.