What We Do : The Specifics
Our services include, but are not limited to, the following:
- Bookkeeping: We maintain a comprehensive general ledger using Quickbooks Enterprise Solutions to record the history of all of your financial transactions. We err on the side of recording more rather than less detail. All credit card transactions are entered transaction-by-transaction. All significant purchases are recorded so as to retain the underlying components of the transaction. For example, on the purchase of a home every line item of the HUD-1 Settlement statement is memorialized in your general ledger.
- Account Reconciliation: We are sticklers for ticking and tying all transactions. In this regard, all of your checking, savings and credit card accounts are reconciled no less frequently than monthly. We also reconcile most other balance sheet accounts including investment accounts, partnership interests, loans and mortgages.
- One year History: We need to learn everything that we can about your personal finances. To establish a solid baseline and frame of reference we record at least the previous twelve months’ worth of historical financial activity. With this protocol we discover important information that could otherwise be overlooked if we were to disregard an analysis of your prior transactional history. We will, for example, develop a calendar for important deadlines such as the due dates for life insurance premiums, real estate taxes and other required payments.
- Monthly Transaction report: We provide a comprehensive monthly report of financial transactions. Every transaction for the month in question is reported including cleared checks, ACH payments, deposits, credit card charges and intra-bank transfers. You no longer need to review multiple bank or credit card statements. All of your monthly financial activity is consolidated into a single report. The activity can be sorted in any order you desire: in chronological order, alphabetically by vendor name or in ascending or descending order by amount. Most clients prefer to view their activity in order of magnitude, wherein big-ticket items are highlighted at the beginning of the report.
- Accounting: We prepare standard financial statements including a Statement of Income & Expense and a Statement of Assets, Liabilities and Net Worth. These reports facilitate the generation of budgets and cash flow projections.
- Property tracking: We maintain an accurate accounting of the cost of your home or other residential properties. If you someday sell your house for a profit, you don’t want to overpay the capital gains tax by understating the tax basis. Establishing the cumulative cost can be a daunting task, particularly in the absence of a disciplined historical accounting. Over the years a typical homeowner may embark on multiple home improvement projects or remodels. There is a wealth of information to track and pieces of the puzzle may be missing. Even clients who are relatively meticulous in their recordkeeping may overlook certain items that augment tax basis. The $5,000 you spent on the treehouse for your kids or the $15,000 you incurred for a new septic system might be omitted. That’s potentially $20,000 of extra capital gain on which to pay tax. As your Business Manager, we scour your accounting records to ensure that the basis in your home takes into account every conceivable expenditure that can reasonably be incorporated into the cost. We also maintain the documentation underlying these costs by scanning, indexing and organizing any and all pertinent paperwork that you can provide. Such documents would include architect, general contractor and subcontractor proposals; bids, contracts and agreements; invoices, bills and statements; change orders; preliminary and final lien releases; receipts; building permits; engineering reports; and so on.
- Tracking of other assets: You may have a collection of fine art, jewelry or other valuable assets. We track these assets in detail. When you purchase a painting we record the gross purchase price, commissions paid, discounts offered, sales tax assessed, transportation and insurance costs, framing expenses and so on. The goal is to capture all of the detail of any given transaction in your financial database.
- Tax organization: We interface with your CPA to deliver orderly tax workpapers and documents. You no longer need to worry about organizing and delivering your tax information to your accountant. Because your financial transactions are recorded in Quickbooks, we reconcile between the balances in your financial statements and amounts per the external tax reporting documents (1099s, W-2s, K-1s, etc.). With a reconciled set of books we can also detect if you are missing any tax documents.
- Tax compliance: One task we do not undertake is tax compliance and planning. Most Business Managers deliberately avoid providing certain services that are regarded as creating a conflict of interest or that are so specialized as to be beyond the scope of their expertise. That is why most business management firms do not provide legal counsel or investment management. Yet many Business Management firms have in-house tax departments or are affiliated with a related CPA firm that handles the tax work. We believe that owing to the complexity of the tax law, the tax function is worthy of being outsourced to the CPA of your choice. A Business Manager who makes a mistake on a tax return may have a vested interest in not disclosing the error. In our opinion best practices dictate that the tax function is specialized enough to warrant being handled by an independent party.
- Investment account tracking: We record both the tax basis and fair market value of your investments. We also track any interests in partnerships and LLCs and reconcile to the annual K-1. This way we ensure that all capital contributions have been recognized by the partnership and that all capital distributions have been received and deposited.
- Data filtering: You are constantly bombarded with useless promotions and other spam. Just as you routinely delete emails touting the benefits of flexible hoses, joint-pain remedies and walk-in tubs you need someone to help filter out noise that is a byproduct of your success. We ignore, on your behalf, the bogus letters imploring you to complete, with the assistance of the sender for a fee, various government-mandated filings for your loan-out corporation or LLC. Our experience enables us to distinguish the legitimate from the illegitimate correspondence.
- Document management: We do not regard the management of the paperwork of your life to be a low priority, ancillary function. To the contrary, document management is a critical component of our platform. We organize the documents of your life in a comprehensive and coherent digital document management system. All of your monthly statements for bank accounts, investments, credit cards and paid bills are either scanned into or downloaded as PDFs. In addition, we scan all available historical documents including tax returns, property files and other permanent items. We use a software called FileCenter to manage these digital files. You then have the option of shredding all of the paperwork that would otherwise clutter your life. And on any given document you no longer have to ask: “should I keep this?” The issue of deciding whether to keep or toss a given document becomes irrelevant: It will be kept forever in PDF format in an organized and indexed virtual filing system.