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© 2012 Educating Bookkeepers for Business, Inc.

Presentation 2

The Landscaper’s Story

Chapter 1: The Landscaper’s Business


What type of business entity is the business?

• LLC • LLP • S-Corp • C-Corp • Sole Proprietorship • Non-Profit

Landscaper: S-Corp

Best resources for determining the appropriate business entity, attorney and accountant.


Required Documentation

Attorney: • Articles of Incorporation (S-Corp) • Articles of Organization (LLC) • By-Laws

Accountant or Attorney: • EIN (federal employer identification number) • DUA (state department of unemployment number)

opening a company bank account: • EIN • Articles of Incorporation or Organization

Landscaper: opens a company bank account with $25,000


Additional Legal Documentation

partnerships • partnership agreements • life insurance policies naming partners as

beneficiaries • predetermined arbitration process

where applicable • operating agreements • customer contract template (with arrangements

for legal review of individual contracts)


What are the business’s assets? Are the outstanding invoices that make up accounts receivable available? Are the purchase agreements for fixed assets accessible? If you are unable to locate a purchase agreement, how will the asset be valued? Landscaper Current Assets

• cash $25,000


Landscaper Fixed Assets • 2000 Ford F150 $2,500 • 2005 Ford F150 $5,000 • Trailer #1 $2,000 • Trailer #2 $1,500 • 2 bill goat brush mowers $1,550 each • 2 lawn aerators $1,500 each • 2 lawn thatchers $1,250 each • 2 rototillers $475 each • a sod cutter $3,300 • a welder $500 • and hand tools $1,650 Total Purchase Price: $15,000 Skid Steer $11,800 Computer & Office Equipment $3,500


What are the business’s liabilities? Are the outstanding bills that make up accounts payable available? Are the amortization schedules for long term liabilities accessible? Landscaper Current Liability

• AMEX $3,600

Landscaper Long Term Liability • skid steer $11,600


How much have the owners invested in the business? How are shares of the business distributed i.e. who owns what? Landscaper Equity

• trucks & trailers • $25,000 cash


What is the business insured for? Are the policies accessible and when do they expire? Landscaper insurance policies

• bundled insurance package that covers liability, equipment and commercial vehicles: $6,000

• workers compensation policy: $2,400

Best resource for determining appropriate coverage, insurance agent.


How does the business handle payroll? Landscaper payroll

• payroll service provider • enroll the service provider with the

Department of Unemployment

• employees • landscaper • 2 full-time employees • all salaried


Employee Documentation and Files Personnel File: Required

• W-4 (payroll tax withholdings) • I-9 (eligibility for employment in the U.S.) • garnishment orders (ex. child support) • 401K (retirement) • CORI check (Criminal Offender Record Information) • industry specific license verification (ex. CDL for

drivers of commercial vehicles) Best resource for determining compliance, attorney.


Personnel File: Recommended • employment application and verification forms • acknowledgement for showing receipt of the

employee handbook • emergency contact information • job description • performance appraisals • training and development records • employee separation forms (ex. exit interview) • benefit forms (ex. medical coverage waiver or

drop, COBRA notification or election forms)

Best resource for determining the scope of employee files, attorney.


Employee Documentation and Files HIPA File: Required

• health insurance application • supplemental health insurance application • life insurance application • drug screening records • any other form of documentation that

contains private medical information Best resource for determining compliance, attorney.


Landscaper Employee Files Personnel

• W-4 • 401K (Fidelity) • job descriptions • emergency contact information

HIPA • health insurance application (Blue Cross Blue Shield)


Does the business use subcontractors? Landscaper Subcontractors

• carpenter • sprinkler installer • stonework contractor

Required Documentation • social security number • workers compensation policy

Best resources for workers compensation compliance and renewal schedule information, accountant and insurance agent.


Who are the business’s local professional advisors and consultants? Landscaper advisors and consultants

• accountant: firm is an LLP • attorney: firm is an LLP • bookkeeper: owns a bookkeeping service that’s

a S-Corp • IT specialist: business is an LLC


What methods of payment does the business accept? debit and credit card processing fee components

• interchange rate (pass through rate charged by the card issuing bank)

• service provider’s rate (added to interchange rate) • assessment fee (charged by VISA/MC) • batch fee (charged by service provider) • gateway transaction fee (charged by the software

company that provides a gateway to service provider) • PCI compliance fee (charged by credit card

processing industry entity responsible setting security standards)

Landscaper: doesn’t accept electronic payment


What other online banking services does the business use? Landscaper: banking services

• online access to the company bank account • debit card • no check scanning machine

Best resource for determining appropriate online banking products and services is the business’s bank.


Which vendor accounts are managed online? Vendor Account Management

• set up online accounts with any vendor that offers online access

• use live chat

Landscaper: • AMEX • Blue Cross Blue Shield • Fidelity • Ingersoll • Bank


Does the business pay sales tax? If so, in how many states?

• register to pay sales tax online • consult an accountant to determine what items and

which customers are subject to sales tax in your state

• non-taxable customers: non-profits, wholesalers and municipalities

• e-store: consult an accountant regarding remitting sales tax in multiple states

Landscaper: registered to pay sales tax in MA


How does the business manage paper files?

black folders: balance sheet • assets • loans • insurance policies

green folders: customer • kept open as long as the customer is active

red folders: vendor • closed at the end of the fiscal year

reconciliation notebooks • bank accounts (QB to bank statements) • credit cards (QB to credit card statements) • sales tax (QB reports to remittance confirmations) • payroll (QB to 941 quarterly reports) • closed at the end of the fiscal year


How does the business handle clouded document storage?

• PDF • date driven electronic file naming convention

ex. 120501 Meeting Minutes 120601 Meeting Minutes

• back up and recovery protocol

Landscaper: scanning and storing documents locally Best resource for determining the right clouded storage option, IT specialist.


Chapter 2: Landscaper’s Chart of Accounts


Balance Sheet: Current Asset Accounts

Name Type QB Number Operating Account bank 10000 Suspense Account bank 10100 Accounts Receivable accounts receivable 11000 Allow for Doubt Acts. other current asset 11100 Undeposited Funds other current asset 12000 Employee Advances other current asset 12100 Prepaid Expenses other current asset 12200


Balance Sheet: Fixed Asset Accounts Name Number Leasehold Improvements 13000 Trucks 13100

• 2000 Ford Pick Up 13110 • 2005 Ford Pick Up 13120

Machinery & Equipment 13200 • Landscaping Equipment 13210 • Trailers 13220 • Skid Steer 13230

Computer & Office Equipment 13300 Accumulated Depreciation 13400

• A/D Vehicles 13410 • A/D Equipment 13420


Balance Sheet: Liability Accounts

Name Type QB Number Accounts Payable accounts payable 20000 American Express credit card 21000 Line of Credit other current liability 22000 Payroll Liabilities other current liability 24000 • Wages Payable other current liability 24100 • Payroll Taxes other current liability 24200 • 401K other current liability 24300 Sales Tax other current liability 25000 Taxes Payable other current liability 26000 Skid Steer Loan long term liability 27000


Balance Sheet: Equity Accounts Name Number Opening Balance Equity 30000 Owner Equity 31000

• Contributions 31100 • Distributions 31200

Retained Earnings 32000


How does the business make money?

• Equipment Rental • Labor • Materials


Equipment Rental Equipment

• billy goat brush mower per hour • compactor per ½ day • excavator per hour • lawn aerator per hour • lawn thatcher per hour • rototiller per hour • screener screening plant per day • skid steer per hour • sod cutter per hour • welder portable welder per day

Trucks • 10 wheeler per hour • dump truck per hour


Labor

• dump fee per truck load • engraving per hour • hedge cutting per hour • hourly rate per hour • irrigation installation per zone • lawn mowing per size of yard • tiling installation per square foot (includes disposal of tile cutoffs)


Materials Categories

• carpentry • concrete • drainage • electrical • fencing • fertilizers • gravel • hard material • irrigation • lawn • metal • plants


Profit & Loss Statement: Income Accounts Landscaping Income 40000

• Labor 40100 • Materials 40200 • Equipment Rental 40300 • Discounts 40400

Finance Charges 41000 Interest 42000 Income from the Sale of Fixed Assets 43000


Profit & Loss Statement: Expense Accounts Landscaping Expenses Cost Center

Labor Cluster

Landscaping Expenses 60000 • Labor 61000

• Salaries & Wages 61100 • Payroll Taxes 61200 • Benefits 61300

• Medical 61310 • Health Care Premium 61311 • Employee Contribution 61312

• Workers Compensation 61400 • Payroll Processing Fees 61500


Profit & Loss Statement: Expense Accounts Landscaping Expenses Cost Center (continued)

• Subcontractors 62100 • Equipment Rental 62200 • Job Materials 62300 • Disposable Tools 62400 • Permits 62500 • Dump Fees 62600 • Freight 62700


Profit & Loss Statement: Expense Accounts Vehicle & Equipment Maintenance Cost Center

Vehicle & Equipment R&M 63000

• Vehicle R&M 63100 • 2000 Ford Pick Up R&M 63110 • 2005 Ford Pick Up R&M 63120

• Equipment R&M 63200 • Landscaping Equipment 63210 • Trailers 63220 • Skid Steer 63230

• Fuel 63300


Profit & Loss Statement: Expense Accounts Administration Cost Center

Administrative Expenses 64000

• Advertising 64010 • Bank Fees & Finance Charges 64020 • Charitable Contributions 64030 • Credit Card Processing Fees 64040 • Depreciation 64050

• Vehicle Depreciation 64051 • Equipment Depreciation 64052

• Dues and Subscriptions 64060 • Insurance 64070 • Interest Expense 64080 • Licenses & Permits 64090 • Meals & Entertainment 64100


Profit & Loss Statement: Expense Accounts Administration Cost Center (continued)

• Office 64110

• Office Supplies 64111 • Office Equipment 64112 • Computer Supplies 64113 • Computer R&M 64114 • Postage & Delivery 64115 • Printing & Reproduction 64116 • Building R&M 64117 • Utilities 64118 • Website 64119


Profit and Loss Statement: Expense Accounts Administration Cost Center (continued)

• Professional Fees 64120

• Accounting 64121 • Bookkeeper 64122 • IT 64123 • Legal 64124

• Rent 64130 • Telephone & Internet 64140

• Landline 64141 • Wireless 64142 • Internet 64143

• Travel 64150 • Uniforms 64160 • Uncollectible Accounts 64170


Profit & Loss Statement: Expense Accounts (continued)

Taxes 65000 Estimates 80000


End of Presentation 2


Date post:	20-Mar-2020
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