Best Bookkeeping Services in San Diego for Small Businesses
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Best Bookkeeping Services in San Diego for Small Businesses

August 16, 2019

Here’s another example. The name of this client
I Brian’s 24. They’re a 24-hour diner located in downtown San Diego.
Brian’s 24. Brian’s 24. Yeah. For 24 hours. So what unique
about them obviously is that they’re open 24 hours a day, which creates some challenges
because they’re always open, they’re always staffed. It’s a family-run business. They
do a fair amount of volume. Their restaurant itself is not that large but it’s just the
fact that they’re open all day makes up for it.
Where are they located? They’re in downtown San Diego in the Gaslamp
district. Alright. Now there’s a prime location.
Right. So they’re downtown. One of their traffic is from the bars. So the bars get out at 1:30
or 2. A lot of people go over there for food. Yeah, their food’s really good. Kind of higher-end
diner food, so it’s more gourmet. So it’s probably appealing to a lot of people as opposed
to a lower-end meal. They actually found that they were working with their attorney who
does taxes as well, but he’s not really a tax person and didn’t really have restaurant
experience. So that’s why they’re looking for a new relationship. And he had missed
a few things. It’s big for a lot of restaurant owners is all the fica tax to credit. It’s
called a fica. F-I-C-A tax to credit. So what that basically means is your employer’s supposed
to claim their tips that they received from the restaurants. And so when you reports these
tips to the payroll, the employer pays payroll tax, typically seven and a half percent roughly
of the wages that they pay. In order to kind of encourage restaurant owners to be compliant
with this, they provide a tax credit for the restaurant owner. And so by reporting this
and paying the tax on the tips, they actually get a tax credit back, which is actually more
advantageous to them because the tax credit is a dollar for dollar reduction of tax, instead
of just a tax deduction. Some of these numbers are quite substantial you know. Thousands
of dollars of reduction for restaurant owners. Their prior accountant wasn’t aware of that.
He was an attorney so he never filed that. So one of the things that we did was we amended
prior returns and generated thousands of dollars in fighting tax credits for her. She got refunds
back in tax. And so it was a good deal. So that was kind of a one thing that’s very specific
to restaurants to be aware of. Because a lot of people have been doing their tax returns
themselves or just working with somebody who’s not really knowledgeable about that it often
gets missed. So it’s a valuable item to be aware of. And the other big issue with restaurants
too is tip reporting. You know that’s something that they’re really trying to increase the
compliance on. There’s a new form that they came out with a few years ago. It’s called
a form 8027. And so what they’re looking for is restaurants that have 10 or more employees
will determine them to be a large establishment in terms of reporting tips. So they’ll want
to see these restaurant owners file that form on an annual basis, showing all the tips that
have come in through the business, breaking out cash tips from credit cards tips. And
they’re looking for an overall relationship with the percentage of the tips being reported.
They see, “Ok. Well, credit card tips at are 12% and cash tips are at 2%.” That’s going
to be a red flag right? That they’re not reporting all their cash tips. So essentially that form
was designed to make sure that restaurants are in compliance with tip reporting and that
tips are properly reported on the W-2s and the pay stubs of the employees. As far as
this specific client after we helped them with that issue, you know they’ve been using
QuickBooks to do their bookkeeping. It was messed up. It didn’t tie back to their tax
returns. Their balance sheet didn’t balance to the tax return. Their assets were different.
One of the first things we do with the cleanup project, we basically cleaned up the QuickBooks
file, amended prior tax returns to get it all back in line. Going forward, what we do
with is we do more of a monthly review of their QuickBooks file. They actually do all
their accounting internal. They’ll post their weekly sales. They’ll input bills in the QuickBooks
and pay bills. They have an onsite bookkeeper that does that. So we view everything every
month. We do some journal entries to make sure the payroll is being properly accrued.
And review some other month end journal entries to make sure that the financial statements
have meaning behind them. Then typically on a quarterly basis, we’ll meet with the client.
Just review the financials and go over the questions that they have relative to the business
and things that we see. So that’s kind of how we work with them. Kind of everything’s
customized right? Just kind of case by case. I did that kind of a second level service
that we provide. The first restaurant level 1 there, level 2 we’re doing more for review.
Kind of almost being like an outsourced CFO just making sure that everything’s being handled
correctly on the accounting side. What revenue category are they in?
I’d say three million.

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