PRESIDENT'S MESSAGE

Dear SBBA Members:

I hope everyone is having a great summer. Lynne Klinkenberg has volunteered for the December Holiday Party committee, but we need a couple more volunteers to help her out. Remember to RSVP for this month’s meeting along with your guest’s name to jen.loren@cox.net by Sunday, August 15^th. I’m looking forward to seeing all of you on Tuesday.

Sincerely,
Jennifer Loren

SECRETARY'S MINUTES

The regular monthly meeting of the Santa Barbara Bookkeepers' Association was held on Tuesday, July 20, 2004, at Mulligan's Cafe. Treasurer Vicki St. Martin opened the meeting, since both President Jennifer Loren and Vice President Karen Mora were out of town.

There were three guests who attended, and they introduced themselves.

Dawn Hampton was the winner of the free lunch next time.

The meeting was Social, which meant that participants were able to network among themselves.

A special dessert was offered; ice cream sundaes to be concocted by each person with a variety of toppings.

Paula A. Mauro
SBBA Secretary

don’t forget to rsvp if you’re coming to August meeting

E-mail to Jennifer Loren jen.loren@cox.net - be sure to put RSVP in the subject line of your e-mail. She must receive your response no later than the Friday before the meeting. For August that means August 13th.

August’s luncheon – Bring a cpa to lunch

NOMINATING COMMITTEE

We, the nominating committee, hereby nominate the following slate of Officers & Directors for the 2004/2005 term, beginning October 01, 2004:

President:                      Jennifer Loren
Vice President:              Karen Mora
Treasurer:                     Vicki St. Martin
Secretary:                     Paula Mauro
Director:                        Patti Karr
Director:                        Sue Starlin
Director:                        Maureen Turk
Director:                        Roxanne Russell
Founding Director:          Pam Allman

Please plan to attend and vote at the September meeting. (Remember to RSVP, which I'm sure is mentioned elsewhere in this newsletter.)

Jo Rogers, Sandy Stites, and Kathy Rem have graciously agreed to serve another term on the Newsletter Committee. Thanks to all of them for their outstanding contributions in the past and for their willingness to continue to keep us informed, each in her own excellent way. Monica Dittrich is resigning from the Newsletter Committee this month. We're fairly certain that she'll continue to be a contributor, though . . . Thank you, Monica, your newsletters were always informative and very well done! The Board will present a gift certificate to Monica in its appreciation of her contributions. (With Monica's resignation, we have a slot to fill on the Newsletter Committee . . . If you're interested, please contact one of the Board Members or speak up at the next meeting. Thanks.)

Vicki St. Martin, Maureen Turk and Pam Allman have agreed to continue as the Speaker Committee. We thank them for their continued dedication to the Association. We understand the challenge of finding informative and interesting speakers and providing great table topics while striving to keep true to the SBBA focus of networking and education.

Caron Garliepp will continue as Website and List server Administrator.

Respectfully submitted by the Nominating Committee
Roxanne Russell and Caron Garliepp

ANNOUNCEMENTS

Managing Human Resources

Eric Swenson from Paychex will be presenting a seminar on Managing Human Resource Issues. Class size is limited. If you have any questions please email Vicki at vickistmartin@cox.net.

When: Saturday, September 18^th

Where: Boardroom at the Peppertree Inn,

Time: 8:30 a.m. to 12:30 p.m.

Cost: $5.00 for SBBA Members. Please make your checks payable to SBBA and bring to the August meeting or mail by September 10^th to Vicki St. Martin, 282 Calle Esperanza, Santa Barbara, CA 93105.

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DO THE MATH
By Brenda Richter, CPA

We’ve all seen the headlines – houses in the Santa Barbara area cost $1,000.000.00.

That means that a couple buying a house in Santa Barbara needs a joint income of close to $200,000.00 or more. This assumes that the couple finances 75% - 80% of the purchase price and still wants to eat, stay warm, save for college, save for retirement, pay taxes and take a nice vacation. Given that, each would need to make $100,000.00 per year.

So, what does it take for a bookkeeper to make $100,000.00?

First let’s assume the bookkeeper will have the following expenses each year:

            Office supplies                                                2,400.00
            QuickBooks                                                     200.00
           SBBA                                                             250.00
         Internet, cell phone & fax                                  1,800.00
            Other expenses                                              2,400.00
            Total                                                               7.050.00

That means that this bookkeeper would need to bill $107,050.00 each year.

If the bookkeeper bills out at the mode rate of $35.00/hour then she needs to bill 3,059 hours per year or 59 hours per week. That’s a lot of work!

What if the bookkeeper wants to work 40 hours per week? 35 hours of that spent providing client services and 5 hours performing administrative tasks. The bookkeeper takes 2 weeks off for vacation and makes another week allowance for holidays. Therefore, the bookkeeper would have 1,715 billable hours each year. To achieve the target gross income, the bookkeeper would need to bill $62.42/hour. That clearly puts the bookkeeper on the high end of the hourly rate scale. If the bookkeeper doesn’t have advanced skills or hasn’t developed a unique value proposition to sell bookkeeping services for such a rate, then the target income won’t be achieved.

Bookkeepers charging fixed rates can use the following matrix:

            1 client                            Monthly fees =             8,920.00
            5 clients                           Monthly fees =            1,784.00
            8 clients                          Monthly fees =             1,115.00
            10 clients                         Monthly fees =               892.00
            12 clients                         Monthly fees =               743.00

Internal Controls Procedures for QuickBooks users
Submitted by Sandra O’Meara

Internal controls are financial checks and balances designed to protect assets. They are intended to make sure money is being spent as planned. Controls also provide some assurance that money or valuable assets do not disappear and that mistakes do not occur. Some internal control procedures are designed to discourage errors or irregularities before they happen. The most effective internal control procedures require that no one person handle all aspects of a financial transaction. This is not always possible in a small company. Here are some other internal controls procedures:

Bank Reconciliations should balance and be done timely. Unreconciled differences will appear in a QuickBooks equity account “opening balance equity”. Check this account regularly. Except for QuickBooks set-up transactions, this account should not hold any transactions.
Print every reconciliation report – summary and detail - and file with the original bank statement.
Bank balance adjustment should require approval from an employee other than the individual entering the transactions.
Periodic review of the checking account register by the owner/controller will deter problems. Create and memorize reports in QuickBooks to make this easy.
Keep blank checks locked up, account for missing numbers and periodically inventory the remaining stock.
Have an Employee Handbook that includes a policy that all cases of fraud will be prosecuted, with zero tolerance.
Make sure bookkeepers take regular vacations. If fraud activity exists it is likely to be detected when someone else assumes the job temporarily.
Perform background checks.
Password protect your QuickBooks file.
Backup data files and keep the backup off premises.

Fraud occurs because a person believes they will not be caught. Opportunity along with poor internal controls is a set-up for problems. I encourage everyone to think about internal control procedures you can put into place today!

NOTE FROM THE EDITOR: Monica Dittrich prepared this month’s newsletter. Thank you as always for all your submissions! Next months newsletter will be prepared by Kathy Rem.