Category Archives: POS – Point of Sale

Education, POS - Point of Sale, QuickBooks Software, Software, Tips

Make Next Year Better: Tips for Managing the Change from QB Desktop to Online

May 6, 2024 Nancy McClelland Leave a comment

A person and person giving each other a high five

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Tax season is over. Take a deep breath – whether you’re a bookkeeper or tax preparer, you’ve endured plenty of stress these past months, and now you’re in the perfect space between vacation and conference season to look back and figure out how to make it go better next year.

That’s what we do in our firm, anyway; I learned an amazing lesson from one of my favorite instructors, Tom Gorczynski, to plan for next tax season while the pain is still fresh in your mind! We schedule a company-wide zoom meeting, and everyone fills out a survey beforehand that asks about what worked, what didn’t, what they’d like to see go differently, who their favorite and least-favorite clients are, and why. This helps us incrementally improve year-over-year, and makes sure everyone has a voice. Then we send out cocktail kits and snacks to everyone, we celebrate, and we brainstorm. We even vote clients “off the island” together.

One of the themes that comes up every year is the need to move more clients off QuickBooks Desktop and onto QuickBooks Online. I know, groan… yet another talking head telling you to make the shift! At this point you’ve been bombarded with information on all the benefits of moving to QBO, so I won’t bore you with those. I’ll just share my own experience.

It was becoming more and more of a drag to coordinate with Desktop clients to review their books, and the new subscription structure made it confusing and frustrating to know who was on which version and how to make the most of what they were paying for. And of course, there were constant client fears around Intuit’s messaging, worrying they were going to stop supporting their product. But the biggest stressor for us was that it was actually getting hard to find junior bookkeepers who had ever worked with the Desktop program. (No joke. How about that for making a certain dancing accountant feel old?)

I assure you, I absolutely *hated* QBO for years; it was a clunky beast that didn’t have some of the most basic functionality that Desktop did – and I’m not just talking about the early days; this went on far too long and alienated many users. And while I held out for ages in moving to QBO, especially for certain types of clients that really benefited from what QBDT had to offer, I finally realized that it’s gotten to the point where the features I love about the Online version far outweigh its negatives. Between the concerted effort that Ted Callahan, Jessica McCracken and their team have made to actually listen to our community and implement some of the most-loved features; the fact that most third-party apps and tools no longer work with Desktop; and the advent of RightTool, an amazing browser extension by industry superstar Hector Garcia that supercharges what QBO has to offer… it’s time. It’s really time. QBO is now light-years ahead of almost anything that QBDT can do.

The point of outlining all this isn’t to convince you that you should migrate your remaining Desktop clients to QBO. It’s to suggest that when you do – follow my lead, and use exactly these reasons in your messaging. This became our mantra for communicating the value of converting, and it worked; at this point we only have one client left who needs to make the shift.

Think about it: your clients and your team members trust you, more than anyone else, to make smart and thoughtful decisions with everyone’s well-being in mind. If you convey the messaging that QBO is listening to us and responding to our requests, that RightTool will make you more efficient, and third-party apps will serve your clients’ needs better than the previous solutions, they will believe you, you’ll get buy-in, and in our experience, we found that clients were overwhelmingly positive and enthusiastic (though understandably still nervous) about the change.

Once you’ve got buy-in, it’s a simple matter of following some practical tips and advice to make sure the execution is done well.

A diagram of a migration plan

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Understand the Conversion Process
Intuit came out with a free conversion tool a few years ago that they keep tweaking to make it better; the most recent improvements announced at last year’s QB Connect blew me away – you can now batch migrate clients, meaning “do a ton at once and be done with it”. To be honest, it kind of made me wish I had waited to convert some of ours! However, as straightforward as they make it to migrate data from QBD to QBO, you do have to ensure your QBDT file is ready for the transition. This means backing up, running a verification on the file, ensuring it’s under the maximum target limit, and cleaning up any weirdo issues that have been hiding or buried for years, especially if you don’t regularly do a verification and rebuild. And most importantly, reviewing your “all dates” financial statements beforehand, exporting them, and comparing the same reports afterwards is essential.
Technical Resources for Conversion

I mentioned Intuit’s Conversion Tool, which guides you through the process step-by-step; they also have a QuickBooks Conversion Toolkit with checklists, webinar links, guides, client materials, and even a link to book a call to have Intuit do the conversion for you – just head here and then click on the “How to migrate” button to download the toolkit or set up a call. If you prefer your info from a third-party source, Hector Garcia does a short walkthrough on his YouTube channel, and Alicia Katz-Pollock is offering an Earmark webinar on May 21st. And if you have any concerns whatsoever about the process, consider outsourcing the job. We worked with CMB Hero and had a good experience, and I know DL & Associates does migrations as well; there are probably hundreds of companies or even trusted colleagues who’ve gone through the process before and can help you make sure it goes smoothly.

Research Third-Party Apps Before Converting

There are some super-fabulous apps out there that we love to use for syncing daily Point of Sale data, such as Synder, Bookkeep, and Shogo. But you need to look at the client’s needs and determine how they’ll be met in the new QBO world before making the shift – not all sync programs work with all POS platforms. Do demos, consult with colleagues, and figure out the timeline for implementing – in other words, not only the migration of QBDT data to QBO, but setting up the new system to work with the POS and get it all running. Our experience has been that some up-front planning saves loads of effort on the far end (which is when you’re pressed for time so the client can get back up-and-running).

Prepare Desktop Clients For The Change

And sticking with the theme of up-front planning… a little client hand-holding goes a long way. What they’re looking for is to follow your lead as their trusted advisor. The more you can compare and contrast their existing workflows and procedures with the new system, the more comfortable they’ll be with your proposal to move to QBO. Ideally, you already have Standard Operating Procedures in place for each of your clients. I wince as I type this, because I get that this is the “ideal” and not necessarily your reality – in all honesty, we’re still in the process of making sure each client has clear and detailed SOPs for every scenario. But this is a golden opportunity. Your instructions – in Word, an Excel checklist, Loom videos, or a project management app like Keeper, Financial Cents, or Asana – will build trust, making it much easier for you to illustrate to the client that this is a manageable change and that you’ve anticipated their needs. Side bonus: way less stress when a client (or your firm) loses a trusted team member and a new one needs to be trained ASAP.

To illustrate: in going through all the steps that a client’s office manager would complete each month as part of her billing process, and reproducing/ rewriting them using QBO, I noticed that she would no longer be able to run a particular report – at this point I had to decide whether we would come up with a different way for her to perform the same task, or whether we would track the data with a different feature in QBO so that she could run the report she was used to. Both approaches were fair; but the point is that I wouldn’t have noticed this change without walking through the process of retooling the procedures. This built trust with the client and made them more open-minded about making the change, because they knew we were actively anticipating and removing any stumbling blocks.

Client & Staff Training and Familiarization

As you know, transitioning to QBO doesn’t just involve moving data; it’s also about adapting to a new user environment. You’ll want to invest time in training sessions provided by Intuit or certified trainers like Royalwise (my personal favorite – I’ve been studying from Alicia for as long as I can remember). Intuit also offers an ongoing monthly session called QBO In The Know, which I encourage all my team members to attend as part of their paid training hours – this ensures that you don’t just get up-to-date, but that you stay that way, as the QBO ecosystem is constantly improving and new features are released every month. Hector Garcia’s YouTube channel is an endless wealth of information (I once hired a senior accountant with no degree and no certification based on the fact that she learned QBO by watching every single one of his videos. She’s now our Senior Accountant). Lastly, remember that QBO has a demo company! It’s a sandbox – have at it, and let your team practice without the risk of affecting real data.

Start by getting your client and team members’ buy-in. Take advantage of the available resources, and invest in training. With communication and planning, both your firm’s and your clients’ bookkeeping experience will end up better than it was with Desktop – we don’t have a single client that regrets having migrated, despite the fact that we all miss this-or-that feature (everyone’s got their favorite). But I promise it will be replaced by a new favorite. Remember, the goal is not just to convert data, but to enhance the overall efficiency and effectiveness of your accounting practices and those of your clients.

So… take that deep breath, plan for the future, and enjoy the heck out of that moment next tax season when you hear someone go, “oh wow, this really is so much better than it used to be!”

Note! As my readers know, I am downright fanatical about transparency and full disclosure (often to my detriment, as you may have noticed that I have a wildly popular award-winning blog that is non-monetized). Though this particular post is a paid partnership with Intuit, I want you to know that a) I wanted to write an article on QBDT–>QBO conversions anyway, but couldn’t find the time; getting paid allowed me the break from client work I needed to make it happen; and b) they didn’t delete a single thing when I presented it. In fact, they were totally cool with all my Intuit-bashing… which made me pretty impressed with them, to be honest. That’s twice now — let’s see if they go for a three-fer!

Education, Illinois, POS - Point of Sale, Tips

Illinois Small Businesses: Upcoming Aug 5-14 Sales Tax “Holiday” Is Anything But One

July 22, 2022 Nancy McClelland Leave a comment

On June 27th I woke to find dozens of notifications from MyTax Illinois in my email inbox — one for each and every client of ours who files sales taxes.

Just in case you got one or more of these yourself and haven’t logged in to check it out yet, here’s what it looks like —

It doesn’t give you much to go on — just a sort of “hey we saw you’re registered to file sales taxes, so you should read these four bulletins which may or may not apply and you’re unlikely to understand anyway” note.

But, if you dig through the bulletins you’ll find two in particular that could be important to a small business owner. One of them I covered in a recent blog post — Illinois Grocery Sales Tax Reduced by 1% For The Next 12 Months — it’s only likely to apply if you sell groceries that qualify for the low-tax food rate.

The other — FY 2022-24 State Sales Tax Holiday August 5, 2022, through August 14, 2022 (illinois.gov) — which I’ll discuss here, is a notice basically saying that all retailers have to reduce their sales tax rate on certain clothing and supplies by 5 percentage points for a 10-day (Aug 5-14) period, to give consumers a break during back-to-school time.

If you want to skip my rant and go to the section on what a small business owner should do next, scroll down to the next line in bold.

While I’m super-supportive about giving working families a break on prices — this is a terrible way to do it! It costs small businesses more in accounting and bookkeeping work than it could possibly save anyone.

It requires a small business owner — already overworked and without sufficient staff, and having in most cases barely survived the pandemic and still scraping to get by — to paw through every item in their Point of Sale system and change sales tax on an item-by-item basis. It’s hard enough to change sales tax amounts on a department-by-department basis… but item-by-item? Honestly, it will cost them so much more to figure this out than anyone will ever save on this “holiday”. And worse are the folks who don’t keep inventory in an automated system. They are stabbing in the dark and have no way to implement it at all. I just have to hope they don’t get audited by IDOR.

To make matters worse, the guidance says that the retail selling price per clothing item must be less than $125, and that supplies must be used by students in the course of study, in order to qualify. It’s simply impossible to program any Point of Sale system to create a sales tax discount on certain dollar-amounts of products and not others, or to change the sales tax rate on an individual item for some sales but not others (i.e., only after finding out that it will be used in the course of study at school). If small business owners are going to be able to comply with any of these rules, it will have to apply to all sales of a certain product — not just some sales.

This type of well-intentioned law — like the bag tax, carbonated beverage tax, and ill-fated sweetened beverage tax — has my full support from a social perspective. But they are so poorly-worded, difficult-to-enact, and misguided, that no small business could ever properly implement any of them cost-effectively.

This is just like that. Well-intentioned but completely out of touch and indicative that our representatives don’t have a clue what’s going on “on the ground”.

I received a hilarious text from a client when she read the IDOR notice:

Texts from a client when she read the IDOR notice.

As an aside, I wrote my state rep and begged him not to support this kind of thing in the future, and to work with other elected officials to find more reasonable, sustainable ways to provide relief to hard-working families, without crushing small business owners along the way. His response was truly wonderful, and he apologized profusely for not involving stakeholders in the last-minute rush to get it passed.

“Looks like we really did a terrible job here. You’re absolutely right that this was an example of government decision making at its worst. I think in the abstract these are largely good ideas, but looking at that guidance, it’s clear that implementation is going to be a nightmare. You have my word that I’ll try to do a better job of asking questions like “yes but is this feasible?” or “how much of an administrative burden is it placing on our small business owners?” when we’re contemplating things like this in the future.”

What does this mean for you, the small business owner? What are your next steps?

Follow these steps, in order, to determine what actions to take:

Step 1 – Check this list to see if you sell any products on it:

The great news is, that if you don’t sell any of these products, then you do not need to make any changes or do any extra work. However, I’d recommend rehearsing the phrase, “the sales tax holiday is only for back-to-school clothing and supplies, and as we don’t sell any items that would qualify, we aren’t able to offer you the 5% sales tax discount.” Because for sure there are going to be people who think that anything they buy during the 10-day period will be at a lower sales tax rate.

If you do sell products on the list above, then move on to the next step.

Step 2 – Identify all the products you sell that are on the list above. If any of the clothing items are priced at $125 or more, cross them off. Then make sure none of the remaining products you just identified are on this list of non-qualifying items:

Step 3 – Look at the items that made it onto your “qualified” list, and ask yourself who your clients generally are that buy these items — are they likely to be used for school? If the answer is definitely no, then again — no worries. You do not need to make any changes or do any additional work. (Except rehearsing that phrase from above and teaching it to your staff.)

However, if the answer is maybe or likely, then we’ve got some work to do.

Step 4 – If the answer is maybe, then you have to decide whether it’s worth your effort to go through your Point of Sale system and change the tax rate on each product that qualifies (and then change it back 10 days later) — or if you don’t have a POS system, if it’s worth it to figure out how to manually change the tax rate on each sale of one of these items, and to track how many were sold during the period of Aug 5-14. Because an alternative might be to just leave everything at the higher sales tax rate unless a customer specifically states that they are buying it for school use (you could even ask each customer who buys one of these items during that period if it’s for school use or not) — and then just give them a discount and write down the sale somewhere so that later on when you file your ST-1, you know how much to enter onto the Schedule GT so you get your money credited back to you — yes, I know that this means your cash drawer and your Sales Tax Payable accounts will be off. You can just have your accountant book an adjustment after the correct amount of tax is paid to the state. Or, in all honesty, you could even give them the discount out of the business’ own pocket and it would still be cheaper than reassigning tax rates in your POS system.

Step 5 – On the other hand, if the answer is likely, then you need to:

Create a new tax rate in your POS system called “holiday rate” that is 5 points lower than the current sales tax rate (in Chicago, 10.25% — so the new rate will be 5.25%). Hopefully your system allows enough rate slots to accommodate this. If not, maybe consider the approach outlined in Step 4.
After close of business on August 4th, assign that new rate to all the items that qualify.
Make a note to reassign the old rate to all those items after the close of business on August 14th.
Be sure you can run a report of all the items that sold at this rate, since you’ll need to declare that total on a separate tax form (Schedule GT) when you prepare your monthly sales tax return (ST-1).

If you do not have inventory or non-inventory sales-taxable items stored in your POS system — or if you have a cash register instead of a POS — then you’ll need to look at how you charge sales taxes to each item and come up with a plan that mimics the approach I just outlined. For example, if your system allows you to manually edit the sales tax rate on a sale-by-sale basis, you could keep a list of all the qualifying items by the register, and simply adjust for each qualifying sale. The problem is that only some of the items get the discounted rate, so if this is how your system works, you’d have to run a separate sale for all the qualifying items and then one for the non-qualifying items. You also will need to keep a list of all the sales made at the lower rate, since as mentioned above, you’ll have to note those on a separate schedule when you prepare your sales tax return. And if your system doesn’t allow you to manually edit the sales tax rate, you’ll have to take the approach I mentioned earlier, whereby you just give the customer a discount and adjust the inaccurate books later, hoping it all comes out in the wash.

Step 6 – Once the time comes to file your monthly (or quarterly) ST-1 sales tax return, you’ll notice there is an additional form– Schedule GT, Sales and Use Tax Holiday and Grocery Tax Suspension Schedule. This was created for retailers to report sales of qualifying items sold during the sales tax holiday. Per IDOR:

Form ST-1 has not changed. Retailers should continue to report their normal taxable sales, including sales of qualifying items, on Lines 4a and 4b, Lines 6a and 6b, or Lines 12a and 12b, of Form ST-1 and will then use Lines 2a and 2b, Lines 3a and 3b, or Lines 4a and 4b on Schedule GT to calculate a credit against the tax reported on those lines for the tax they are not collecting during the state sales tax holiday.

So you’ll report the sales of these items, on which you charged the lower tax amount, on Schedule GT and it will flow onto your ST-1 as a credit so that you’re not remitting more to the IDOR than you collected.

Whichever approach you take, make sure to rehearse the phrase, “the sales tax holiday is only for back-to-school clothing and supplies, and as we don’t sell any items that would qualify, we aren’t able to offer you the 5% sales tax discount.” Lots of folks read the headlines, but not the small print.

Hopefully this was all clearer to read than it felt to write it! And please make sure your state representative knows how you feel about having had to think about it in the first place. Small businesses have enough to deal with these days!

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Illinois, POS - Point of Sale, Tips

Illinois Grocery Sales Tax Reduced by 1% For The Next 12 Months

July 9, 2022 Nancy McClelland Leave a comment

Illinois’ 1% sales tax on groceries will be suspended for the state’s fiscal year, from June 1, 2022 through June 30, 2023. This sales tax reprieve is predicted to net approximately $400 million in consumer savings.

State and county taxes are still in place, meaning that in the City of Chicago, the tax on groceries went from 2.25% down to 1.25%.

Interestingly, medical products and devices — which are usually taxed at the same low rate as groceries — will remain taxable at their usual rate instead of getting the additional 1% suspension.

For retailers, this means that all “grocery low-tax” departments will need to have the tax reduced in Point of Sale systems, but not in medical/drug departments or grocery high-tax (alcoholic beverages, food consisting of or infused with adult use cannabis, soft drinks, candy, and food that has been prepared for immediate consumption).

There are also signage requirements for retailers. Per the IDOR’s May bulletin:

Retailers, to the extent feasible, shall include the following statement on any cash register tape, receipt, invoice, or sales ticket issued to Retailers, to the extent feasible, shall include the following statement on any cash register tape, receipt, invoice, or sales ticket issued to customers: “From July 1, 2022, through June 30, 2023, the State of Illinois sales tax on groceries is 0%.” If it is not feasible for the retailer to include the statement on any cash register tape, receipt, invoice, or sales ticket issued to customers, then the retailer shall post the statement on a sign that is clearly visible to customers. The sign shall be no smaller than 4 inches by 8 inches. A printable sign will be available on our website at tax.illinois.gov.

In related tax news, the same state budget also provides automatic $50 income tax rebates for individuals who made less than $200,000 in 2021, $100 for couples filing jointly who made less than $400,000, and $100 per dependent claimed in 2021, up to three. Additionally, the Illinois state earned income credit will increase from 18% to 20% of the federal credit, and eligible homeowners will receive property tax rebates equal to their 2021 property tax credit, up to $300.

COVID-19 Financial Relief, Education, POS - Point of Sale, Tips

Restaurant Revitalization Fund: Are You Ready?

May 2, 2021 Nancy McClelland Leave a comment

It’s almost here! The SBA Restaurant Relief Fund will begin accepting applications on Monday, May 3 at 11 am Central Time. Are you ready? What should you be doing to prepare?

To our surprise, the SBA announced last week that all eligible restaurants should apply the moment the portal opens on Day One, regardless of whether they are in the priority groups or not. Those not eligible for review in the first 21 days will be time-stamped and reviewed first-come-first-served in the following period. Therefore, if you are a restaurant owner of any type, make sure to take these steps between now and Monday morning if you haven’t already. Don’t wait until the portal opens to get started — be prepared in advance!

First, calculate your potential grant amount to make sure you are eligible. Do not include state and local Covid-19 grants, or PPP funding, in “gross receipts”. For my clients, I recommend you use “gross receipts minus returns and allowances” on Line 1c (Line 3 for Schedule C filers) of your business tax return. The financial relief, by contrast, should either be on the “Other Income” line (state & local grants), or not entered at all (in the case of PPP), as they are considered non-operating income. Ask your tax preparer if you are unsure.

Follow the instructions in this chart to estimate your RRF grant amount. If you were in business prior to 2019, use Calculation #1 — this will be the vast majority of restaurants.

If the amount is less than $1000 (or negative), you are not eligible. Although it’s frustrating that funding will not be available, at least you don’t have to go through the rest of the steps — silver lining!

Presuming your result is $1000 or more, please take the next steps seriously. Funding for this program is not sufficient for the number of applicants. This is your chance to be ahead of the game.

Watch a recent SBA webinar that walks you through the registration and application process.
Review this short, handy step-by-step guide.
Download and review screenshots from the portal.
Register for an SBA RRF Portal account (unless you are applying through your Square/Toast POS). Do not wait until the program opens to register — the system opened up for registration this past Friday at 8 am Central.
- Note: you will need a cell phone to get a Two-Factor Authentication code; this is required when setting up an account.
- This registration is independent of any other SBA account you might have — the RRF portal is a separate website/login.
- Bookmark this site and make sure you have everything you need to easily log in when the program goes live.
If applying through your Square or Toast Point of Sale (POS) system, familiarize yourself with their guidelines. We recommend you only use this option if 1) nearly all of your gross receipts run through the POS; or, 2) your 2020 tax return is not available.
Read the SBA RRF Program Guide.
Read the definitions for “priority groups” (women-owned, veteran-owned, socially-or-economically-disadvantaged individual-owned) — especially for those with more than one owner — to determine if you can self-certify or not.
Download and fill out the sample application.
- You will need to know things like your business entity type, tax ID #, PPP Draw 1 & 2 loan numbers, bank ACH info, owner percentages and tax ID #s, and your very first day of sales.
- As mentioned above, if you were in business prior to 2019, you should use Table 1 and ignore Tables 2 and 3.
- Use this filled-out application as your cheat-sheet when filling out the online application when the system goes live.
Make sure you have all your supporting documentation saved to a single, easily-accessible folder on your computer, and that you have clearly named each file. Acceptable file formats are: PDF, JPG, GIF, TIFF or PNG.
- Preferred proof of gross receipts decline will be your 2019 and 2020 tax returns (unless you are applying through Square/Toast).
  Your 2019 tax return and your 2019 & 2020 POS reports are also acceptable, though they may not include all your gross receipts, so we recommend using tax returns if you have them.
- In addition, you may need the most recent three months of bank statements for the account that will be receiving the grant money, if the “auto-connect your bank” option does not work for some reason.
- Clarity, precision, and organization is what’s important — not volume. Remember that a real human being will review the application at some point. Feel free to include a cover page that explains how you have organized things and what is where, the naming structure, etc.

If you have everything ready-to-go, it should only take 20-25 minutes to complete the application online when the system goes live.

Tips and notes:

Use the most modern browser possible — the current version of Chrome, Edge or Safari.
There are hover-tips practically everywhere on the portal that are really helpful, as well as an excellent searchable “KnowledgeBase” in the lower-right-hand corner of the website.
The SBA recommends you use the “auto-connect your bank” option instead of manually entering your ACH info — it will move through the process much faster and you will not need to upload three months of bank statements. You will be asked to select which of the bank accounts (if you have more than one) to link.
When signing, make sure your Title fits the entity type. (e.g., “Owner” rather than “CEO” for a sole proprietor).
Digital signature via Docusign at the end — if it doesn’t work, make sure your antivirus is disabled or try another browser.
There’s going to be personally-identifying info (PII) during registration and/or signing to make sure you are the person you say you are, so make sure to fill this return out yourself, rather than have your CPA or anyone else do it. Feel free to have them help you prepare the application that you will use for reference ahead-of-time instead if you need assistance.
You will get a confirmation ID. Please take a screenshot of this page.
If you realize afterwards that you made a mistake, call the call center and they will delete your application and you will have to start over.
The SBA will send a message through the portal’s message center if there are follow-up questions. You will receive an email each time there is a message; you do not need to log back in until you get a status notification, but it might be a safe thing to do in case something gets stuck in spam.
You can reach the SBA RRF call-center at 1-844-279-8898 for any issues or questions.

And finally… a few words to set expectations: I have every confidence that the SBA RRF portal servers will go down at some point. Instead of asking non-priority applicants to wait three weeks, they are asking literally every eligible restaurant in the country to apply at the same moment. The SVOG site went down on the first day and it took weeks for them to re-open it — and there are far more restaurants out there than performance venues. Obviously the SBA learned from that experience, so I am hopeful they are addressing these concerns… but it seems a staggered, time-stamped approach would have been safer. All that said, just do what the SBA recommends and apply in the first few minutes, but do not be surprised if you have to click “refresh” all day long. Maybe don’t make any other plans for the day just in case. For up-to-the-minute info, check twitter — either search for RRF or #RRF — this was an amazing community for the SVOG folks to come together for information and support when their issue occurred.

Good luck, everyone!

COVID-19 Financial Relief, Education, Illinois, POS - Point of Sale, Tips

Restaurant Revitalization Fund: SBA Portal Opens 4/30/21 & Goes Live 5/3/21

April 27, 2021 Nancy McClelland Leave a comment

Big news from the SBA that was summarized very well by both the Independent Restaurant Coalition and the National Restaurant Association.

Today, the Small Business Administration announced that Restaurant Revitalization Fund applications will open at 11 am Central Time on Monday, May 3, 2021.

To prepare to apply, please visit restaurants.sba.gov this Friday, April 30th after 8 am Central Time to create your account. We encourage you to register on Friday and submit your application on Monday.

The portal website will be restaurants.sba.gov. We suggest bookmarking this page now for use on Friday and Monday.

Please watch the 90-Second Advocacy Update with Sean Kennedy for a great overview of what’s next. (Spoiler alert: it’s closer to three minutes long.)

The SBA has provided many resources to help you prepare — links for training, recordings, a sample application, and more. Please see below (some info is from the national office and some is from Illinois; mind the time zones).

In preparation, qualifying applicants should familiarize themselves with the application process in advance to ensure a smooth and efficient application. Follow the steps below.

Register for an account in advance at restaurants.sba.gov starting Friday, April 30 at 9 a.m. EDT. If you are working with Square or Toast, you do not need to register beforehand on the application portal.
Review the sample application, program guide and cross-program eligibility chart on SBA COVID-19 relief options.
Attend one of the webinar trainings listed below. These will be recorded and later posted on SBA’s YouTube channel. We will share the recording links via email and on SBA’s social media channels.
- Wednesday, April 28 | 1 p.m. EDT | Register here
- Wednesday, April 28 | 2:30 p.m. EDT | Register here

For more information, visit sba.gov/restaurants.

COVID-19 Financial Relief, Education, POS - Point of Sale, Tips

Restaurant Revitalization Fund: Free Webinar 4/27 – Walk-Through SBA Application

April 20, 2021 Nancy McClelland Leave a comment

Cafe Mustache, Logan Square, Chicago, IL

Restaurant Revitalization Fund (RRF) Update:

A trusted colleague’s firm released an excellent blog post on recent SBA guidance for the Restaurant Revitalization Fund that I encourage you all to read and share.

They are also offering a free webinar the morning of Tuesday, April 27th to walk through the draft application. I recommend registering if you are available at that time.

Apparently, certain Point of Sale systems will be working with the SBA to create online portals to help their restaurant-customers apply with existing POS data. Keep an eye out for anything from your POS provider on the topic.

We continue to prioritize finalizing ERC/PPP calculations for restaurant clients and will be reaching out soon to each of our clients with this information.

COVID-19 Financial Relief, Education, POS - Point of Sale, QuickBooks Software, Tips

Important Updates On Restaurant Revitalization Fund From 4/6/21 IRC Webinar

April 6, 2021 Nancy McClelland Leave a comment

Spinning J Bakery & Soda Fountain, Chicago, IL – photo credit Clayton Hauck

(For an overview of the new Restaurant Revitalization Fund (RRF), please see my recent blog post.)

Today I attended an excellent zoom “roundtable” hosted by the Independent Restaurant Coalition. Erika Polmar did a great job presenting, and Devita Davison monitored chat — they covered a lot of ground and answered many questions.

It was not recorded, as it was designed for participants to ask specific questions that may have revealed personal info. But there is a second session happening tomorrow (Wednesday 4/7) that I strongly encourage you to attend. Type your question in the chat and they will address it, or email questions@restaurantcoalition.com — they also have an FAQ at saverestaurants.com/resources that you can also download here.

There are still outstanding questions — see my notes below — but my main takeaway is that as a CPA firm, we are going to be pivoting to try to prepare draft 2020 tax returns for all restaurant clients before the program opens in the next two weeks. This will be a challenge, as we are simultaneously working on Employee Retention Credit calculations, 1Q 2021 estimates, and corporate tax returns; but we’re doing everything we can to make sure our clients have both 2019 & 2020 tax returns — at least in draft format — in time to apply for this grant the day it opens.

Please remember to sign up for the session tomorrow. It will be worth your hour of attendance.

My notes from today’s session:

They are expecting guidance at the end of this week (4/9) and a draft application at the beginning of next week (4/12).
– They think the process will open end of next week (4/16) or beginning of the following week (4/19).
There are funds set aside for 60 days for businesses with <$500k in receipts.
– Also funds set aside for women-owned, veteran-owned, and “disadvantaged” groups and first 21 days of the application period are specific for them.
– We don’t know if they will change the 51% ownership rule to 50% or not yet, but it is under consideration.
If you opened before 2019, take 2019 revenue minus 2020 revenue, minus PPP loan. That’s the grant amount.
– If you opened in 2019, take average monthly revenue from 2019 and divide by 12, then do the same as above.
– If you opened in 2020, funding amount is equal to eligible costs incurred minus revenue received.
You may use the grant for expenses incurred during the period of 2/15/2020-12/31/2021 for: payroll capped at $100k per EE, benefits, mortgage, rent, utilities, maintenance, build-out for outdoor/indoor safe dining, supplies, food & beverage inventory, operating expenses.
– May be extending it through 12/31/23 soon; hopefully before application goes live.
– Cannot double-dip and use funds for anything you paid for with PPP, EIDL or other federal funds.
– Very likely but not confirmed that Owner’s Draw will be considered an eligible operating expense.
Documents needed to prove revenue loss — must be able to show revenue loss between the two years (or alternatively as above if opened after 1/1/19):
– Preferably 2019 & 2020 tax returns – may use certified P/L statement or documentation from Point of Sale system for 2020 instead, if tax return is not done.
– Acceptable documents would be as follows (keeping in mind that if you use anything other than a tax return, a human being will have to review your application (rather than a computer) and that will slow it down:
* Business tax returns (IRS Form 1120 or IRS 1120-S);
* IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F;
* For a partnership: partnership’s IRS Form 1065 (including K-1s);
* Bank statements;
* Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements;
* Point of sale report(s), including IRS Form 1099-K.
For hybrid businesses like bowling alleys, RRF revenue replacement will only be for food/beverage portion of business (not wholesale or entertainment).
– F+B revenue has to be 33% or greater to qualify as a “restaurant”.
You may not use the RRF to pay off any other federal program, like the EIDL or PPP. (This might change.)
– You CAN use it to pay off other debt, just not federal debt.
They are looking into payments to related parties like self-rental to see whether they will qualify or not.
If you close your doors temporarily, you can get RRF — if you closed permanently, you are not eligible. If you close permanently while using RRF money, you will have to repay it.
This money is very likely to run out quickly. Apply the moment it goes live on Day One.
– The SBA will then hopefully go back to Congress to say “here’s how many applications for $X we have in the queue; please replenish the fund so we can continue funding the requests.” So even if you apply “too late”, there’s hope.

Questions I still have:

Will the Employee Retention Credit (ERC) and FFCRA Emergency Leave Credits count as gross receipts? Or will they be exempted like the PPP funds? If treated like PPP funds, will they have to be subtracted from the RRF grant amount?
Is other financial relief — local and industry grants — considered as part of revenue?
For a restaurant that has no outdoor space to build out for safe dining; could they use RRF money to buy/outfit a food truck so they could use it in place of outdoor dining?

Illinois, POS - Point of Sale, Tips

Increase in Chicago Restaurant Tax as of January 1, 2020

February 20, 2020 Nancy McClelland Leave a comment

It recently came to my attention that apparently restaurants in Chicago were not notified by the city of an important change to local taxes they are required to collect.

The Chicago City Council recently doubled the city’s 0.25% restaurant tax, which means that starting January 1, 2020, the city of Chicago’s restaurant tax rate is 0.50%.

Therefore, the total sales tax for restaurants in the city of Chicago is now supposed to be 10.75% instead of 10.50% — this includes state and local sales taxes as well as the city’s 0.50% restaurant tax.

(For restaurants located within the MPEA Food and Beverage Tax zone, the total sales tax will be 11.75% — made up of sales taxes + 0.50% restaurant tax + the 1.00% MPEA food and beverage tax).

Unfortunately, it doesn’t appear that this change was communicated widely to restaurant owners, so many of them did not update their Point of Sale systems to increase the tax charged to customers. This means they probably underpaid their monthly restaurant tax and will owe when they file their annual restaurant tax returns.

I suggest the following steps:

Update your Point of Sale software to reflect the 10.75% tax immediately, so you can begin collecting it from customers.
Calculate the approximate underpayment for January and February (0.25% of sales) and add it to your restaurant tax payment for March.
It will all come out in the wash when you file your annual restaurant tax return in August.

For more information on state and local changes to legislation, rulings and ordinances that affect restaurants, check out this briefing from the Illinois Restaurant Association: News Laws in Effect as of January 1, 2020 – Illinois Restaurant Association

And for information on this and other consumer taxes in Illinois, check out this recent article by The Civic Federation.

Education, Illinois, IRS, POS - Point of Sale, QuickBooks Software, Site News, Software, Tips

Come See Me Speak at “Drink & Think”: Wednesday June 26th

June 21, 2019 Nancy McClelland Leave a comment

I’ll be giving a presentation this Wednesday, June 26th at 5:30 pm at Ampersand Cowork in Logan Square (Chicago) for their series Drink & Think: Entrepreneurship @ Ampersand! The topic is, “Thinking About Starting a Small Business – Side Business – Freelance Gig? Here’s What You Need To Know First.”

Come out and enjoy some drinks & snacks on their gorgeous rooftop deck and learn what you need to know before starting a small business. Tickets are only $5 — get them here:
https://www.eventbrite.com/e/drink-think-entrepreneurship-tickets-63579032598

You’ll learn:
– Why NOT to run a small business… and why bother if it’s that hard?

– When to start it (and what that even means)

– What will you need? Bank accounts, EINs, Business Plans and more

– Technology tips – bookkeeping, payroll, data entry, paperwork

– What’s deductible?

– Choice of entity

– Employees or independent contractors?

– And plenty more fascinating and essential tips.

See you there!

Education, IRS, POS - Point of Sale, QuickBooks Software, Site News, Software, Tips

My Three Top Accounting Tips

July 16, 2018 Nancy McClelland Leave a comment

I recently received the honor of being named one of the Top Accounting Influencers of 2018 by Fit Small Business. As part of the interview process, they asked me for a list of three “top accounting tips” — and they picked one for their article. I figured in announcing the award, I should share all of the tips I provided in a related post, so here you go!

1) Involving an accountant in your business should be one of the first steps a business-owner takes, well before taxes are due. (I’m not saying this just because I’m a CPA; I’m saying it because I see the results of this oversight regularly.) This doesn’t mean you can’t file your own taxes… but if you take the time to consult with an expert first, you’ll make way fewer mistakes when you do. A qualified accountant who specializes in your industry can help you with so many of the key issues that otherwise might come back to haunt you at tax-time — from entity choice to software selection to funding your business.

2) Selecting the right type of entity (sole proprietor, LLC, partnership, S-Corp, etc.) can make a huge difference in both liability and taxation issues. It’s important to understand the rules of the entity type you choose — for example, if you’re an S-Corp, pay yourself “reasonable compensation” via payroll; it’s the law. With the changes in the new tax law, this piece of the puzzle has become even more complex and more important.

3) Technology should play a role in every aspect of your business — accounting, tax and bookkeeping are no exception. Find a CPA who understands and embraces the ways in which tasks can be automated, with an eye toward improving efficiency, accuracy, and audit-proofing your company. The right technology stack can improve inventory and ordering, point of sale, collections, payroll, workflow, forecasting and cash-flow. Almost every system can be leveraged such that the books become a daily source of information for making real-time management decisions… not just a requirement for tax compliance.

Follow these three tips, and in my opinion — the rest will follow.

Source: Accounting Software Reviews You Can Trust: Top Accounting Influencers

The Dancing Accountant