🚨 Impact of Missing Transactions on Reports & Tax Calculations
If you're unable to send us your business transactions through personal accounts — it won't delay the completion of your onboarding.
However, we want to make sure you're aware that until you provide this information, your monthly financial reports, quarterly estimated tax payment calculations, and annual tax returns will all be inaccurate. So, we kindly ask you to gather this info and send it over as soon as you can.
Overview
While onboarding:
If you have a personal account that contains business transactions, please upload a spreadsheet that only contains the business transactions from these personal accounts. We need the date, amount, and description as they appear on your banks activity page or statements
If you are unable to complete this in time, it will not hold up the completion of your Onboarding, but your published financials statements will be incomplete, and quarterly estimated tax payment calculations will be inaccurate.
If you have a personal account that contains business transactions, do not connect it to Xero.
Instead, please upload a spreadsheet to your Collective dashboard, that only contains the business transactions from these personal accounts. Make sure to delete the personal transactions, we do not want to see them, and that you are only including business transactions from your Box E date on your form 2553 (your S Corp election date).
If you are unsure if something is a business transaction or personal transaction, please leave it in and we can discuss, or read this article.
Also, don't worry, Its perfectly normal at this stage. Maybe you just opened a business checking with your EIN. Maybe you only had one checking account that you used for both personal and personal transactions before joining Collective.
But as of this moment you need to stop using personal accounts for business transactions.
You can use Option 1, Option 2, or a combination of the two.
Spreadsheet from Template - Most Common Option
If you have less than 25 transactions, or are unable to export data from your bank, or have many different personal accounts with a few business transactions, this method might work best for you
Fill out this spreadsheet.
You can fill out it by typing transactions manually, or copy pasting them directly from the activity screen of your personal bank account, or copy pasting from a pdf bank statement of your personal bank account, or copy pasting then from an export of activity from your personal bank account.
Collect all the business transactions from all the personal accounts and copy paste them onto this spreadsheet.
Upload the completed spreadsheet to your Collective Dashboard.
Your Onboarding Accountant will add them to your Xero account and you will review the transactions with you and how they flow to your Income Statement.
Spreadsheet Downloaded from Personal Bank
Set the date range to start from the first of the month of your Box E 2553 date.
This appears slightly different on each bank or credit cards website. Some will want you to choose a date range first and then download the activity.
If you have a hard time pulling the csv. file, we can support you during your onboarding call to pull the data.
Once you have the file, delete all lines with personal data. We only want to import business income and expenses. The end sheet should only include business data you want to add.
Business expenses should contain, at least, the following information:
Date
Amount
Description - description from the bank or your own description
Customer/vendor
If you are unsure if something qualifies as a business expense, please leave it and you can review with your OA during your training call.
Upload the completed spreadsheet to your Collective Dashboard.
Repeat this for each personal account that has business transactions
Remember
If you had a previous accounting software you used, we wont be taking over your old account. We will build back your books with raw data from the bank. What Happens to my Old Bookkeeping Software
We only want you to connect business accounts to xero. Click here for instructions to connect business accounts in Xero.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.