-with Cristy White of HarQuin Bookkeeping
Q4 is when your biggest sales, your deepest discounts, and your year-end deadlines all collide...
How you track them now decides whether you start 2027 with clarity or a mess to clean up.
Cristy White, Retail Team Lead at HarQuin Bookkeeping, has spent nearly a decade helping retail owners get organized, reliable numbers. Here, she joins Indie Insights Live to walk through exactly what to watch and what to get right from Black Friday through December 31: holiday cash flow and seasonal payroll, sales tax on your highest volume months, recording clearance so your margins reflect reality, and closing the books so your CPA handoff is fast and painless.
What we covered:
Black Friday and holiday sales: tracking revenue, discounts, and sales tax correctly
Holiday cash flow and seasonal payroll: staying ahead of what’s going out
End of season clearance: how markdowns show up in your books and your margins
Closing the books: reconciliations, 1099s, and a smooth handoff to your CPA
Setting up 2027: clean reports, a realistic budget, and numbers you can actually use
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Indie Insights Live - “The Year-End Money Moves You Have to Make Now”
Featuring: Dane Cohen (Management One) and Cristy White (HarQuin Bookkeeping)
Host: Management One
Aired: Oct 29, 2026
Transcript
Dane Cohen: Hello! It is Dane Cohen from Management One. We are back with another edition episode of Indie Insights Live. Every week, we talk to experts across the industry to bring you the latest and greatest, and we have a topic that you may not love to hear about, but we all gotta do it. We gotta pay our taxes. And so we're talking, with Cristy White today from HarQuin Bookkeeping, to really get the lowdown on how we can end the year strong. And really start, thinking about how we close down the year, how we close down our books, and how we walk into 2027 with strength, especially in the pocketbook. So, before I introduce Cristy, we're just gonna jump into some housekeeping. Again, this is Indie Insights Live, so you're here. Ask questions, we want to interact with you. I have the chat open. We can take questions as you go, so please interact in the chat if you want to drop in your name, where you're from, we'll give a quick shout out and say hello. We want this to be interactive. And we want you to be able to ask questions. If you're not watching this live, or if you have to jump off, we will send the recording out. So you'll be able to see the recording, and of course, it is always up on our YouTube, where it lives on our podcast playlist. So, hey, Becky from Montana, good to see you, thanks for joining.
So without further ado, I'm going to introduce Cristy. Cristy works for HarQuin Bookkeeping. Cristy has been working with retailers for the past decade plus. Working in bookkeeping services with retailers. HarQuin represents over a thousand independent businesses, so they have seen it all. Cristy, welcome to Indie Insights Live.
Cristy White: Thank you so much, Dane. Yes, it's great to be here. Like you said, talking finances is not necessarily everyone's favorite part of being a business owner, but it's definitely something that you can't let go to the wayside. So, as we come into year-end, it's something that you gotta be considerate of. You have to think through these things. I'm really glad to be here and chat with you guys today.
Dane Cohen: Alright, well, we appreciate you being here, and I'm sure we're gonna have a lot of questions today. I think this is a topic that everyone, like it or not, what is it called? We all have to… it's death and taxes, so there we go. Not to be grim, we want to be happy about this. Okay, Cristy, why don't you give us a little bit about your background, you know, what it is you do, and, you know, specifically, I think a lot of people have either used bookkeeping services, have a bookkeeper, a CFO, something of the sorts. What is your role in a retailer's day-to-day business and life?
Cristy White: Yeah, so I've been with HarQuin Bookkeeping, like you said, for about 10 years, and my role within the company is a retail team lead. So, specifically, I help oversee the retail division, which I know is a lot of our base here with this podcast. So, it definitely is a nuanced division, and something that I have been able to help basically organize all of the data, like we discussed previously. A bookkeeper's role is not necessarily to evaluate everything for you, or to make all those judgment calls for your business, and not to file taxes for you, but more on the back end, back burner stuff of getting your data organized and clear in such a way that you can take the data and then confidently make decisions that are best for your business. So, that's something that I'm able to do within HarQuin. I love being able to sort of scale the support that our businesses need. So, HarQuin does provide bookkeeping services, but also we branch into sales tax services and payroll services for our retailers and for all industries that we're able to provide that service, and apart from that, sometimes people kind of jump straight into CPA services and filing taxes, so that's not necessarily where a bookkeeper lands on the scale. They're not filing your income taxes for you, but they are helping you get all the data prepared on the back end so that you are ready to hand off to your CPA, and you guys work together on getting filed.
Dane Cohen: Okay, so that's a great distinction here, right? And listen, a lot of people on this call, they know this, but I, you know, I always like to set the table. So, you know, the bookkeeper is getting everything prepared, getting you organized, keeping up with your, you know, well, your books throughout the year, and then when it's tax time, and we just hit the October 15th tax extension deadline. So, tax season is over, right now. So, and then you're actually working and handing it over to a CPA, or if a business is filing taxes themselves, and you're basically delivering it to them in a pretty package.
Cristy White: Correct. Yeah, there… especially with retailers, there are a lot of nuances on the back end. It's not as straightforward as you may think, or as it can be with other industries, because there's this sales flow aspect, where there's this overlap of preparing data correctly and understanding the sales flow, where different platforms overlap, and then there's also the inventory aspect that is a little bit of a bigger deal and more unique with retailers. So your bookkeeper should be well-versed in your industry and should be able to understand those things, that you are having to record correctly that isn't as straightforward. It's not just, this transaction came through the bank and it goes here. This deposit came through the bank and it goes here. It's keeping all that data organized in a way that is clean and that is consumable for you as the business owner so that you can make those bigger decisions on a monthly basis, but then also so that you can file your taxes correctly. Nobody wants, you know, Big Brother IRS coming back for audits and questioning our stuff, so being able to have a team behind you that says, nope, I've got your back, I've got this organized for you, this is reality of what's going on with your business, and this is what you need to file to stay compliant.
Dane Cohen: Okay, so to touch upon that sales flow, example that you were giving.
Cristy White: Yeah.
Dane Cohen: Yeah, I'd like… I'd love for you to expand on that.
Cristy White: Yeah, so that's one of the biggest pain points of a retailer, is understanding and recording sales flow properly. So your sales flow represents… or what I mean by that term is, how the organization and flow of how your sales are made from start to finish. So, you may use a point-of-sale processor or multiple different systems. And understanding what is going through what, what is being captured in which platform, and what your sales numbers represent can kind of make or break your books. Because if you don't… if you're taking… let's use a real-life example, let's say you're using Shopify, and you have PayPal going through Shopify, but then maybe you're also selling on CommentSold, and you have PayPal coming through CommentSold. Making sure that your sales numbers are reflected appropriately in your books is going to be a matter of great importance, because you can't just go off of deposits from those platforms. Your Shopify is going to be recording cash and checks that maybe isn't being deposited right away. You're going to have Shopify payouts, you're going to have PayPal payouts, you might be spending out of your PayPal sales before they even make it to your bank account. So, understanding the different pieces of how you're making money, and then how it translates into your bank accounts, and then into your bookkeeping is going to be important. Nobody wants to overpay in taxes, right? So, you want to make sure if there's any overlap between those systems, that you and your bookkeeper are on the same page about it, and that your bookkeeper has seen it before. They have experience with your industry, so they know what can often be happening with your point of sale? Like, what is a retailer, what's likely going on with you? And then we can help you talk through the specifics of what you're doing.
Dane Cohen: Yeah, and what about, like, from the perspective of managing that… that relationship between receipts and payables, right? So… that's, I think, one of the biggest things that we, you know, from an inventory perspective, we're constantly working through with retailers is, you know, hey, you know, right now, we're at the, you know, entering into one of our biggest seasons, where sales are gonna be high, we're landing a ton of goods, but what happens come January, where I'm gonna be at my lowest sales point, potentially, and I have to start delivering, you know, receiving goods for spring, can't believe spring 2027, right? That is usually the stickiest point for a retailer, right? What's your view of that? You know, how could a bookkeeper help you in that moment?
Cristy White: So that's where having really clean books is going to be super important to you at this point in the year. Making sure that you understand what your business has done, number one, year over year. So, what sort of margins did we have last season, holiday season? Where did we land in January last year? And maybe you've got multiple years under your belt that you're able to compare and then make changes where you need to with what did or didn't work. But then also just having your financials clear for the year so far of what have we done, what have we brought in, what have we paid out, what is still to be paid out, and where… what is our actual cash flow? What do we have? What are we going into the year… the new year with, as far as being able to go to market and spend, or, you know, bulk up this or bulk up that. Your bookkeeper isn't necessarily going to get into the nitty-gritty of specific products, and how well or, you know, they sold, or what happened in that regard. That's where specialists like you guys come in and help them, you know, sort of comb through that, but we're going to be able to give you dollars, so we're going to be able to say, here's what you have going on. Maybe it looks great. Maybe, I was using this example earlier with another gal. Maybe you made a million dollars so far in this year. Great year, we're booming, but maybe it costs you $1.2 million to make that million dollars, so you're ending the year in the red, and you don't really have the cash flow that you need to start buying in January to prep for that spring launch. So. Clear books, all that to say, a simple and not, you know, glamorous or ground-shattering, answer is that you have to have clear bookkeeping. You have to know, what am I making, where is my money going, and look at it on a percentage basis. Where is my money going, and in what percent, and what benchmarks am I trying to hit to make sure that my profit margin is high enough?
Dane Cohen: We're always… there were two things that were, you know, so important there. One is we're always looking at something as a percentage of sales, right? So…
Cristy White: Wait.
Dane Cohen: You know, looking at it through that lens, and this is the biggest thing, right? Just because you are making more money does not mean you have more cash. Those are two very different things, and right, like you said, you're doing a million dollars in sales, but it took you $1.2 million to do that million in sales. Alright, we have our first question. Do you mind if I jump into a question, Cristy? And I think it's on this topic. I have a question. What is your… it's Becky from Montana, what is your best advice if you're having a great year? You're up 24% heading into November and December. Congratulations, Becky, that's awesome.
Cristy White: Yeah, that's awesome!
Dane Cohen: I have upped my tax estimates, but I would love to keep as much profit and cash in my business, or even in my pocket, not just giving it back to Uncle Sam at the end of the year. What should I do?
Cristy White: Yeah, this is definitely a common question, especially whenever you're getting to this point of the year, and you're realizing, like, hey, it's been crazy, but we're profiting, like, we're… all my hard work is paying off, we're doing well. I would recommend, if you're not paying yourself, or if you are paying yourself, but not at an industry standard rate, to definitely consider that. Look and see, are you an employee of this business, or are you pouring your heart and soul into something, and you're not getting paid for it yet. So, I would consider that, but also evaluate your goals for the business. I know, a part of being able to see where you want to be is being able to see where am I, where's the reality of where I am, and what's it going to take to get there? So, evaluating when you have this surplus, how can I get to my goal? What's something that I can take that money and invest it back in? Maybe it's more warehouse space, maybe it's upgrading your store floor, maybe it's branching out into another type of product or something, that's you haven't done before, that it may be a little bit risky, but it was a profitable year, and this is the year that I want to take the jump into this other, you know, angle of my business to market to. So definitely reinvesting back into the business, making sure that you're evaluating if you're paying yourself, are you well staffed? Is there a point that you have in your goal list? I know you guys talk through, like, different goals and meeting sales goals and such. But is there somewhere that you can reinvest back into your business and plan on that for 2027? And again, I can't say this enough, you have to have clean books to be able to see not just what's in my bank account, but, you know, how did we actually do on a percentage basis, and then start dividing out those percentages to reinvest back into the business in the different areas that are important to you.
Dane Cohen: Yeah, and this is something.
Cristy White: Dude, that's awesome.
Dane Cohen: Yeah, Becky and Steven from St. Simons Island, good to see you here. He's congratulating Becky, I think we're all very happy for Becky here, but what about… and this is something that we're intimately involved with, how much inventory you have on the books, right? So we're coming up to the end of the year, you know, let's say Becky's doing really great in sales, maybe a store is a little heavy on their inventory. What do you do moving into the end of the year? From a tax perspective. You know, what's the move there?
Cristy White: So, sometimes you can look at all the inventory that you're hanging onto at the end of the year, and because the IRS counts your inventory as an asset, so they count it the same as cash in the bank to you, and so you're responsible for filing it on… putting it on your taxes, and you… sometimes the impulse is to de-stash. We gotta get rid of it, because I don't want this giant lump sum asset on my taxes at the end of the fiscal year. But the problem that you run into is you have nothing to sell come the new year. If you de-stash everything, you're not ready for first quarter. So, I would recommend looking at your trends, again, year over year, looking at how your year is going, and making sure that you're not liquidating everything at the end of the year, but that you're holding steady with the benchmarks that you've set, especially with an inventory consultant who's saying, hey, you know, average, where we want you to be stable at is 50%, but for this next quarter, we're going to jump up to 60 or 70 or, you know, you guys know that, are well-versed in that more than me. But keeping all that in mind, and not just getting rid of everything at the end of the year.
Dane Cohen: And what about donations?
Cristy White: Yeah, donations are a totally legitimate expense. The only thing about a donation is you get the same… you get to expense the wholesale value of it, so even if you're able to make a dollar on it, that's better than zero dollars, as far as your profit margin. And you can also use it… I mean, donations are all well and fine. I also want to support charitable causes, so don't hear me say.
Dane Cohen: Don't, donate.
Cristy White: I'm not anti-charity, I promise.
Dane Cohen: Cristy, you heard it here first, Cristy, anti-charity.
Cristy White: The internet's gonna go wild. No, so… but the thing is, when you're looking at it from not a feelings basis, but a business basis, when you're looking at the reality of how the business is doing, and what strategies can I use, what are the strategic moves here, sometimes it would be better to steeply discount before you donate, or even to do some incentives, like the buy one, get one, or throwing in extra product to… as a courtesy to some of your highest buyers. You know. Using it in a strategic way and not just donating it, because at the end of the day, the donation is going to get the same expense as if you sold it, but you didn't make any money off of it. So you still get the expense, but you don't have any room for it to profit you or to be strategic for you. And sometimes that can be hard, because I feel like sometimes it can be embarrassing to, especially if you've taken a big leap on a product you were really excited about at market, and then it just kind of sat, and you're like, I can't just, you know, I just want to get rid of it, I can't look at it anymore, you know, I need to be done with it. But making sure that you're evaluating all and exhausting all your options on how you can use that product before you just swipe it out into the donate bag.
Dane Cohen: And are there any tax benefits from, you know, kind of sizable donations?
Cristy White: No, it's… an expense is an expense, so either you expense it when you sell it, and or you expense it when you donate it, and then there's also the expense of if there was damaged product, or if you, maybe you're paying people in product, that's another incentive or something that you can do that might be exciting to contractors and things, but making sure that you're recording it as pay, which is its whole other conversation. But the expense is the same no matter what. If you paid $10 for the shirt, you get to expense $10 for the shirt, whether you sold it, or donated it, or it was damaged.
Dane Cohen: Yeah, and so I'm gonna speak to it a little bit from an inventory perspective, and I think there were some really, you know, great nuggets within there. You know, what you said about the IRS views any inventory you have as an asset. Correct. From an inventory perspective, though. We view inventory as a liability once it's been on your floor for a certain amount of time. So that dynamic right there, right? The government is viewing it as an asset. You could have a blouse on your floor for 3 years, and it's sitting in your inventory, and that's an asset. But you know it's not, right? You're probably not…
Cristy White: Right.
Dane Cohen: Not selling that.
Cristy White: Right.
Dane Cohen: That's the difference between cash and margin right there, right? Margin on the books, like, you could have a strong margin on the books and not have any cash in your pocket, because margin is looking at, you know, the inventory you have on the floor that you're not selling as an asset, right? And cash doesn't care about that.
Cristy White: Right, yeah, the IRS wants to see cash and reality and anything that's basically advantageous to them. I'm also not anti-IRS, but, you know, it's just the reality of it. Whereas what you guys excel in is more the strategy, you know, how is this profiting our business, and what changes do we need to make to up our profits and meet our goals? The IRS doesn't care about your goals or your plan. Then just look at what you have. And, you know, do you owe taxes on it?
Dane Cohen: Yeah, but… and so a few other, you know, real nuggets in there is, you know, I am on the, you know, listen, you want to go into January, and you want to have stuff to sell, you don't want to wipe out all your inventory, so, you know, you kind of, you know, your sales fall through the floor. However, if you have aged merchandise. Right? And you're coming up to the end of the year. My feeling is you have some incredible opportunities right now to move that age merchandise. So, I'm just gonna talk… I'm gonna riff for a minute, Cristy. I'm gonna riff for a minute on some of the things that… incorporating some of the things that you said, which is… You know, one. Black Friday's coming up, Cyber Monday's coming up, all the Mondays, you know, all the Fridays, all the Mondays. Small Business Saturday, you name it. That is going to be some of your highest trafficked times of the year. If you have goods that have been sitting there for months upon months upon months, and you really have to understand what your inventory position is, right? How over-inventoried am I potentially going into, you know, the holiday season, and how much of that is old merchandise and aged merchandise. Well, you have this really big window of time when you're gonna get a lot of high traffic to sell that at a markdown, at a, you know, at a promotional rate, so that you can move through that old merchandise, right? That's the key here, that old merchandise. And then, Cristy, I love some of those ideas. A gift with purchase is a great way to move some of that old merchandise, and can actually help fuel sales of new merchandise, right? For every $100 you spend, you get a free earring, and those earrings have been sitting there since January of 2026, then that's a great opportunity there. So, we gotta be smart, we gotta be strategic, we don't want to put ourselves, you know, in a terrible position come January, but we also don't want to hold on to old goods and then get double taxed on it, and, you know, it's sitting there as an asset. So, I love that you had some really great nuggets there. Okay, I'm gonna… go ahead.
Cristy White: Well, no, you covered it, you covered it. It's all about strategy, and like I said, you… if you… if there's a way to be able to either incentivize your customer base, or, you know, something else that you're able to move the product for some incentive or for some profit, you know, donation would kind of be your last resort. Donation is sort of where you fall when it's like, you know what? Like you said, I've held on to this, I'm not paying taxes on it another year, we've got to move it to make room for something else. That's when… that's when donation comes in as the last card.
Dane Cohen: Yes, but we would like to just reiterate that we do support charities, and…
Cristy White: Oh, charity, yeah.
Dane Cohen: Okay, I want to take a little bit of a different, path here, and this is retail real talk, so I need you to give us some real talk here. When a new client comes to you, a new retailer starts working with you, what are some of those mistakes that you're seeing, or you know, worst practices that drive you nuts. That if you could tell a retailer, you know, stop doing this, or start doing this, because when they get to you, it's just like, you know it's a headache. What are some of those red flags?
Cristy White: So, I love all of my clients equally, but… I… so mine would be more from a bookkeeping perspective, and not necessarily a how you're running your business perspective, so I don't want to tell you how to run your business. But from a bookkeeping standpoint, because bookkeeping is all organization, a lot of the pain points that I see is a lack thereof. Either you haven't kept receipts, you're doing bank balance bookkeeping, where you're just, you know, living on a prayer over there with whatever the balance says today, and now we're gonna go start buying stuff. Or also you don't, like we touched on a little bit with your sales flow, you don't understand, what's happening with your sales flow, what money's gonna be coming in, versus what money you have to pay out. So a lot of the pain points are typically basic budgeting, understanding money coming in and out, and then letting that… because bookkeeping can be that backburner task, letting that backburner task kind of go for too long before you call in for help. So some people think, I don't really need a bookkeeper, I can kind of get by on my own until I reach this certain point. But starting out strong with a bookkeeper, starting out organized on the front end goes ahead and gives you the support that you need, so that's not on your mind, and you're not having to manage that in addition to keeping the business going, keeping up with the strategy, keeping the inventory moving out the door. Starting out small, starting with bookkeeping and organization small, rather than getting down the road, I hesitate to even say it, but I have a sweet gal who… she came to us, and she was about 8 years behind in her bookkeeping, hadn't filed taxes, she came to us with boxes of paperwork, and sweetest sugar, best intentions, but it just got away from her, because she kind of lost track of bookkeeping and what was going on with her business, and so now, you're having to pay someone who wants to help you, but we had… now we have to jump in and go 8 years back and say, you know, we're missing $10,000 in cash. Do you know what happened to that $10,000 from 2014? So, don't be that person. Stay organized on the front end. Those are typically the things that we see, is just disorganization on the front end, not understanding the importance of bookkeeping on the front end from the get-go. I also joke that I have two types of clients. I have one that probably has an accounting degree and really could run it themselves, but they just don't have time, so they bring us in for support, and then another one that just says, here's all my stuff, please keep me out of jail. You know, good luck. So, yeah, so that would be what I would say, is the… mostly just not being organized, not keeping your receipts, not sure where your money is going, you know, what you're spending on. You're not prepared for upcoming markets and you're not using any type of budgeting or projections to be able to move your inventory, you're just kind of flying… you're treating it like a hobby. You're not taking it seriously.
Dane Cohen: Yeah, so let's, let's, here's an interesting question, okay? Because we talk about this a lot, I say it a lot, you know, we're hearing it in this conversation, clean books, right? If you had to give me an elevator pitch on what clean books are, what would you say are the kind of hallmarks of clean books? What is that, you know, the gold standard there?
Cristy White: That's a good question. I'm, like, the least salesy person you know, but I, you know, clean bookkeeping would be making sure that all of your business accounts are reconciled, all of your sales are entered, sales and fees are entered, and everything that's happening with your business is captured in an organized way and a regular basis. So, most of our clients have monthly bookkeeping, and part of keeping their books clean is making sure all of their business accounts are reconciled, checking, savings, loans, credit cards, and then making sure all of their sales are entered from every platform, even with the overlap in the sales flow. And then also making sure that you're capturing those outside expenses of things maybe you bought with a personal account, or maybe you spent cash, or, you know, something else that's happening that your bookkeeper wouldn't necessarily see from your bank accounts. And all that is getting entered into your books in an organized way, where you… a consumable way, where you can have a report in front of you that will show you exactly what's going on with your business.
Dane Cohen: That… you just opened a fun door. Okay, so we know one of the perks of being a retailer is, you know, one, you know, if you're an apparel retailer, or, you know, home retailer, kitchen retailer, you know, you could use a lot of the products for yourself, so there's that ability to kind of dip into some inventory in a legal fashion, but also business expenses, right? So, you know, potentially your car. You know, market… Mileage, market trips. What are some things that you would say to a retailer, like, hey, here are some very legal ways that you can you know, maximize the benefits of being a business owner and a retail business owner.
Cristy White: Yeah, so there are a few that are the most common. Some of them are going to vary based on your entity type and what your whole tax picture is. So, like, an office expense percentage may vary for you if there are multiple businesses that are operating out of your home, or, you know, depending on whether you have a storefront or whether you're working out of your home or have a warehouse. But some common ones that people expense are mileage, of course. Of course, if you don't do mileage, then you do gas. For your vehicle? Throughout the year, travel expenses, so traveling for business, business meetings. Some of my retailers, because a lot of sales are happening in live sales now, will even go as far, and talk to your CPA about this, because I am not a CPA, I'm just telling you what I've seen with other businesses and their CPAs, but because live sales are so prevalent, some people are making sure to expense keeping their appearance up as if they were a model for their business, so that would include character.
Dane Cohen: Are you telling me I could expense Botox if I start… if that's not a reason to start live selling, I don't know what is.
Cristy White: You know, there are incentives, we're all motivated in different ways, but yeah, nails. Things like that. Talk to your CPA about it, because there's a strong argument for, I have to sell my product, a part of selling my product, like, you would pay a model to look a certain way, to advertise your product. You're, taking care of yourself in such a way to be able to sell, so…
Dane Cohen: Becky asked, Becky's on it today, can you do that for social media as well?
Cristy White: Yeah, prepare… I mean, any argument that you can make for how you're selling your product, and if you are in a lot of your, advertising and promotional materials, there is an argument to be made to be able to expense those things, yes.
Dane Cohen: Yeah, I'm pretty sure our CEO, Marc Weiss, is watching. So, Marc, you know, I'm hosting the podcast, this is live, this is promotional, I think I'm gonna have to start expensing some, beauty…
Cristy White: Expensive.
Dane Cohen: And I bet…
Cristy White: I'm in trouble. I'm in trouble now.
Dane Cohen: My monthly beauty expenses, that's a high budget, so, this may be trouble. Alright, well, that's a… Becky says, I got a whole lot richer. Becky, we hear you.
Cristy White: Don't look!
Dane Cohen: Go ahead.
Cristy White: Spending money is still spending money, so don't hear me say free-for-all.
Dane Cohen: Right, that's like that famous, Schitt's Creek episode, where it's a write-off, yeah.
Cristy White: It's a write-off, yeah.
Dane Cohen: It's a write-off. Okay, let's, let's talk a little bit about… by the way, we're in the chat, we're interacting, Becky's been great, Steven's been great. Ask questions, that's why we're here, to help answer your questions. So fire away in the chat, or maybe you just have a commentary about something that's working for you, or a bookkeeping experience that you had, but we would love to hear from you. All right, let's get to, again, this is a little bit more technical, but I want to make sure we hit on it. There's been some changes with 1099, so can you talk a little bit about how that impacts small businesses and what that means for a retailer? Because, you know, these are some of the things that, you know, can get lost in the cracks, but I think that they're super important.
Cristy White: Yeah, and I think it's important, too, as you're coming into year-end, because you may be bringing on some seasonal contract work, or you may have just some extra contract work to finish out the year, so you want to make sure that you're expensing it appropriately and filing the appropriate forms. So, any of your 1099 contractors prior to 2026, the threshold of when you actually had to tell the IRS you paid this person was $600. So if you paid a contractor over $600 to provide a service for you, you would have to submit a 1099 form for that person and send it to the IRS to say, hey, I paid them, here's how much money they made, and then they have to submit a form that says, yes, you know, this is how much money I made on their taxes. But now, since the Big Beautiful Bill in 2025, the threshold went up to $2,000. So, anyone that you paid over $2,000 to to provide a service for your business, so this is not buying product for someone, and this does not apply to big corporations or anything like that, you're not sending a 1099 to Walmart, but anybody that provided a service for you in the fiscal year of 2026, where you paid them over $2,000, that's now the threshold for submitting a 1099 to the IRS. The only exception would be the $600 is still applicable for legal services, and then there's some gray area on the IRS's website as to how they're categorizing rent. So, some people are leaning towards $600 is still the threshold for rent, some people are saying it was included and at the $2,000. I'm hoping the IRS will clear it up online before we get to 2027. And everybody starts filing their taxes. But outside of those two exceptions, everybody else, the service, so your models, somebody that is working for you, whether it's, you know, rebuilding, doing some build-out stuff, or maybe they just came in and counted inventory for you at the end of the year, anybody that you end up paying over $2,000 to needs a 1099, not just the 600 anymore.
Dane Cohen: And what's the benefit of keeping it under that $2,000 so that you don't have to do the 1099?
Cristy White: So, keeping it under, you're able to expense it without, don't hear me saying that… to do anything illegal, because I do not approve. But some people, they… if they're not held accountable to the 1099, they won't necessarily claim it as income on their own taxes. So if you paid me $1,800 to provide a service for Management One, it would be my discretion as to whether or not I include it on my taxes, even though I am supposed to, there are a request that I do, it tells me that I need to. But you're not telling the IRS that you paid me that, so that would be up to my discretion. So, from a business owner's standpoint, you want to be able to expense all true business expenses, and if they're under the threshold, you're still going to expense them. If they're over the threshold, you still want to expense them, but what happens is, if it's over the threshold, and you're ever audited, and the IRS says, I don't have a 1099 for this person that you said that you paid for this expense, so I'm throwing it out, and now you owe back taxes on whatever that difference was, and now you owe penalties and fees and everything for every day that it was behind. So it turns into this whole snowball situation whenever you don't have the documentation that you need to be able to prove the expense that was a legitimate business expense, it's just you didn't submit the proper documentation for it, and so the IRS will throw it out.
Dane Cohen: Yeah, and Susan was asking, could this apply to, like, a floater employee? So if you have a part-time, or just someone that's doing a little, like you said, inventory counting, or maybe coming in for some order entry, or maybe, you know, a lot of retailers use a high school student that they're just using, kind of, after school, or something of that sort.
Cristy White: Yeah, it could be tricky knowing the distinction between, did I bring this person on as a payroll employee, but only seasonally, or am I just contracting them for some work? So, there are definitely labor laws that distinguish the two, and you want to make sure you understand and make sure that you are under the guidelines of how you're paying someone, and if you have the proper expectations on them, essentially. They may be providing the same service for you, whether they're on payroll or whether you've got them contracted, but understanding what you are allowed to, force them to do, in other words, like, I need you to be here at a certain time, I need you to wear a certain uniform, I need you to do these certain things for the business, those will be distinguished based on whether or not they're a contractor who are… they're providing a service for you, but in their own way, in their own business, or if they are under your business as a to employee.
Dane Cohen: Gotcha. And then, listen, I think that this is one of the real benefits of working with professionals in these areas, right? Whether you're working with a bookkeeper, you're working with a CPA, you're, you know, hiring out, you know, even with us, right? People for your inventory. And this is not a direct promotion for anyone, or a direct sales for anyone, but you know, you can get yourself stuck in some hairy situations if you're not actually understanding, you know, some of these nuances, right? And that doesn't make you a bad… entrepreneur, bad business owner, it's just, there's a lot out there, and there are people who are professionalized in these areas, so they're able to really advise you and keep your business from, you know, any trouble that might arise.
Cristy White: Yeah, it can be tricky because all of us… I mean, for all of us, it's true that we don't know what we don't know, right? Especially in business, but the IRS doesn't use that as an excuse. They'll say, I'm sorry, but now you owe this many dollars in penalties and this much in fees, and hopefully that's enough of a lesson learned. But none of us wants to learn those lessons the hard way, so making sure that you understand whenever you're bringing someone on. What the distinction is, and what your responsibility is as the business owner, what your responsibility is to them, because it's appealing to hire a contractor because you're not… no taxes, you're not liable for any taxes. They are liable for all their own money, they have to file their own taxes. But, if you have expectations on them where you are expecting certain things from them at certain times and in certain ways, and you're treating them like a payroll, yeah, there's that and you could end up with more fines and more penalties for treating them like a payroll employee when you've only hired them as a 1099 contractor.
Dane Cohen: Yeah, so here's another good question from Sean. This is… this has quickly become the loophole episode.
Cristy White: Oh, no. What about that?
Dane Cohen: So, if I wanted to quietly bonus our seasonal sales force for their work, but keep that number under $2,000, could that be considered a business expense as opposed, to a 1099? Let me add, they are not my employees.
Cristy White: So, I can tell you what the IRS requires of you, and then I will let you use your judgment and what you're comfortable with outside of the IRS requirement. So, the IRS requirement is, if you have paid someone for contracted work or as an employee throughout the year, and then you also want to give them an additional bonus, even if that additional bonus doesn't go over the $2,000 threshold, it's paired with everything else you've paid them throughout the fiscal year. So if you've been paying them regularly for work, and then you want to give them a $1,500 bonus at the end of the year, that's tacked on to what you've already paid them, and that's what gets submitted on the 1099 or on the W-2 to the IRS. So it will be captured in that regard, because it's tacked on. Now, if there's an instance where it's someone that isn't really on payroll, or hasn't provided any services for you, or if what you've paid them in addition to the bonus still doesn't go under that $2,000 threshold, it is legally a business expense. The IRS wants you to record it and get that W-9 from them, and they want the person receiving the money to claim the money as income.
Dane Cohen: Gotcha. Okay, so…
Cristy White: Not enough dancing?
Dane Cohen: Yeah, that's enough dancing, you did a great job. Okay, but, you know, one of my things, and you mentioned this earlier briefly, is what I used to do, you know, when I was on the retail side of the business, is I would bonus people. Also, I would use store gift cards, right? And, I would use merchandise, right? Like, you can, you know, here's some… a kind of… allotment of merchandise that you could spend, or a $500 gift card, or something of that sort. That's… does that sit outside from a bonus perspective?
Cristy White: It does not.
Dane Cohen: Oh!
Cristy White: Yes, all gift card payments or product payment still goes towards their total paid within the fiscal year that they have to claim on their 1099 and W-2. It's taxable. I'm sorry to be the bearer of bad news.
Dane Cohen: Hopefully the IRS is not knocking on my door from 10 years ago.
Cristy White: There's only… there's only a 7-year liability to it, you know? If you're past the 7-year mark, you're good. Okay. We don't know what we don't know! This is where having a professional to support your business is helpful.
Dane Cohen: Yes, and getting this all together, right, there's a lot of, a lot of nooks and crannies. Okay, so, we're, we're almost coming up to the Q&A part, so I want to make sure, anyone in the chat, please jump in. We've got a lot of great information, a lot of great questions going on. Are there any kind of outsized forces right now. That, that, you know, we're seeing inflation right now, we're seeing the gas prices going up. With the current climate, where we're at in the economy, is there anything that you're doing differently? Is there anything that you're seeing differently? Is there anything that you're recommending to your clients be done differently? Or is it just business as usual?
Cristy White: So, for me specifically, because my role is just organizing reality, basically. I'm organizing what's actually going on with your business. There's not really anything differently that your bookkeeper is having to navigate, but we are seeing more and more retailers having to jump through some hoops in regards to, like, tariffs that we talked about earlier, and being prepared for these extra expenses as they're coming down the pipeline. I have a friend who's a retailer who ships from overseas, and she'll pay all of her fees and shipping costs, and then she'll get a phone call out of the blue that says, we're holding this until you send us, you know, $5,000 more dollars. And so, she has to wire the money over it to be able to get her product to have her drop launch on time. So, there are those things that you have to be prepared for. I think that, not to use a buzzword, but I feel like the COVID bubble has popped, where everything went online in COVID, and a lot of businesses really did boom, and, we saw a lot of great… profit from those times in regards to our retailers, but that's kind of dwindled down to where you're really having to navigate, you know, who are my people, more on a relational basis. It's not just, well, everybody's online, and you gotta buy from somewhere, so we're doing great, you know, we're putting our name out there, we're investing in marketing. It's more relational, and having to keep those organic relationships of who are my community, who am I selling to, who's my sales base, and where can I, sort of maximize my profit in that regard. So, again, from a bookkeeping standpoint, we're organizing the data. Money coming in, money coming out, making sure all the pieces are accounted for on a monthly basis, but we are seeing some differences for our retailers this year, and honestly, a lot of retailers have reported feedback of it being a productive year. They've had higher profit margins than previous years because I think people are spending again, people are getting to a groove of what their goals are and what they want for their business, and they're implementing them. So, they're looking at clear books, they're looking at clean bookkeeping, and they're making good, clean decisions, not just, what does my bank balance say today?
Dane Cohen: Alright, we love that. Walking out of here today, is there one big tip that you would like to give a retailer? We know clean books, we know we… but is there anything practical? Hey, it might be… actually, I'm gonna make this a two-part question. Are there any tools, right, besides working with a bookkeeper. You know, QuickBooks, you know, what are you kind of seeing out there? Using Claude to help out with some, organization? Is there anything that you would recommend? Hey, you should really be using X, Y, or Z to help, you know, outside of working with a bookkeeper, which we're going to recommend to everyone? Tell me a little bit about that.
Cristy White: So, I don't have a ton of advice in that regard as far as systems or subscriptions or different things to try to help boost your business. I know we use QuickBooks. I like QuickBooks, I think it's very user-friendly. We use QuickBooks Desktop and QuickBooks Online. I think it's easy for a startup to be able to jump into QuickBooks Online, start at a low entry-level subscription. We also offer QuickBooks Online training, so maybe it's not necessarily that you need somebody doing the books for you all the time, but maybe you just need help with the startup of being able to start, like, where do I put everything? What, you know, how can I manage this until it outgrows me? So yeah, I would recommend QuickBooks Online for sure. I think it's definitely the frontrunner in regards to bookkeeping software. And yeah, I would just keep in mind that you don't have to… know all of the ins and outs of your finances to still be able to make the best use of clear financial data, whether you're preparing it and organizing it yourself, or whether you're having someone else do that for you, because don't hear me say that you can't do it yourself. There are a lot of business owners who start out really strong. Either they get some training on how to do it, or they're coming in with some kind of degree. You know, they're… they're not totally… flamingo in the sand about finances. It's more just, you know, being able to know what your capacity is, and bring in support whenever you need it, and keeping on top of it, not letting it go to the wayside because you are kind of confident in it, and you're like, I'll catch it up at the end of the year. Keeping your financials up-to-date and clear throughout the year is what's going to carry you through the end of the year, and be able to meet with professionals, like with Management One, to say, here's what my numbers are, here's what my goals are, help me get there. You can't even start that process if your books aren't clean, which I know you didn't want me to harp on clean books.
Dane Cohen: No, no, but listen…
Cristy White: But that.
Dane Cohen: That is one of the first things, and we often, you know, listen, from our, you know, larger clients and the, you know, some of the bigger retailers that we're working with, this is, you know, kind of just a given, but some of our smaller retailers, and you know what? Even some of the mid-sized retailers that you may be surprised. You know, we start working, and, you know, we'll say, hey, let's look at a P&L and balance sheet, and that look of, like.
Cristy White: Mmm.
Dane Cohen: Sheer terror comes over their face, because it's been two years, I haven't done one, you know? And by the way, I'm going to give a shout out. This is a good plug for our Retail Foundations program, which really helps you start getting the fundamentals of your business together, you know, how to have clean data in your point-of-sale system, how to organize things, categorize things, so… You know, our Foundations program is a great place to start, and stresses and emphasizes the kind of idea of having those financial, you know, financial documents set. Like, you need a P&L, you need a balance sheet, you need to see what's happening in your business, because we can't set goals with you if we don't know what's up, if we don't know how much you're spending on rent, or I'll tell you this, again. A lot, you know, we start working with someone, and, you know, a month into working, they tell us, oh, by the way, we have $100,000 on debt on the books, and we forgot to tell you about that. Well, that's gonna change how we're looking at your sales projections for a year, because now we need sales to not just cover your expenses, but we need it to help starting to pay back your debt. So, this is all super important in multiple areas of your business, and that… that's why I think that there's, you know, we're so excited about this new partnership between us, because they go so hand-in-hand.
Cristy White: Right, yeah, you can't make those decisions. I mean, it's one thing for, like, your inventory to be disheveled, or a little messy, or your storefront's a little messy. It's another thing for your financials to be a little bit messy, because dollars here and dollars there make a huge difference on the grand scheme of things whenever you're doing… when you're looking into the future. You cannot plan well for the future if you don't know what's happened in the past.
Dane Cohen: Yeah. Well, Cristy, this has been such a pleasure. I'm gonna ask, if there's any last questions that anyone wants to ask, before we sign off. Please, this is your opportunity, but Cristy, can you tell our listeners where they can find you, and how they can get in touch?
Cristy White: Yes, yep, HarQuinBookkeeping.com. Dane, would you mind if I put a link in the chat?
Dane Cohen: Please do.
Cristy White: We do offer free estimates for any retailers. Like I said, you may not need full-scale bookkeeping yet. Maybe you just are looking for some, advice or some training on managing your own books, but we're able to help you no matter where you are. Maybe you're in the pre-planning stages, maybe you're 5 years deep and, you know, I need to come in and start cleanup. Like, I get it, we can help in any capacity that you need, but step one is definitely going to be to reach out and make time for it. I was talking to some shop owners just a couple hours ago in another session, and I was encouraging them to schedule time on your calendar, like you would a dentist appointment or any other appointment, to evaluate your financials. How are your books doing? Like, do you… is it clean? Do you even know what a P&L is? Do you know how to find one? Take your business seriously enough, and take your profits seriously enough that you're staying organized on the front end, and not letting it, not letting it go.
Dane Cohen: Yeah.
Cristy White: Dole.
Dane Cohen: Yeah, and I really think in just how we're speaking about this, right, there's so many links in this chain, right? And you could be a emerging retailer, you could be a hobbyist retailer that's looking to get more serious, you could be an established retailer that's been in business for 20 years. You know, this applies to so many, you know, it's not just, oh, you know, this is just for a small retailer that's never done something like this before, so… Right. And, you know, there's all types of bookkeeping services, but I think, you know, someone that under… you know, this is signing off what I would say, and why, you know, we're so excited to partner with HarQuin is because having a bookkeeper that understands retail. That…
Cristy White: Right.
Dane Cohen: Is the key here, right? You may have a bookkeeper, someone that's doing general bookkeeping, like, having someone that actually has that retail experience can make all the difference.
Cristy White: Yes, we've seen it so many times, where people… they'll have a bookkeeper that has the best intentions, right? There's no ill intent. Grandpa Joe has used the same bookkeeping team, you know, for his farm business all his life, and so…
Dane Cohen: Not Grandpa Joe. You can't be anti-Grandpa Joe!
Cristy White: I'm not, I'm pro-Grandpa Joe, pro-charity, pro-Grampa Joe, follow the IRS legal. No, but they… if they don't understand the nuances of retail, you're gonna end up in a real mess. They're not going to be able to record and keep everything organized for you in a proper way, and it ends up… it's a ripple effect, so it's going to affect not just your income taxes, but also your sales taxes, if you're… you know, that's… that's your state and the IRS, everybody is affected, your budgeting is affected, your coaches are affected, because nothing is… the foundation is not clean and clear and organized.
Dane Cohen: Yeah, well, Cristy, it's been such a pleasure. This was a great conversation as we head into holiday season and look towards the end of the year. Remember, start live selling so that you can start expensing those beauty items and that Botox. We could get those on the books, I love it!
Cristy White: Talk to your CPA! Talk to your CPA!
Dane Cohen: CPA, do not… we have to put a disclaimer on this one, but Cristy, thanks so much. Get in touch with HarQuin Bookkeeping. The links are in the chat, and as always, we will see you here Thursdays at 1 p.m. Eastern. We'll be off next week, but we'll be back the week after with some exciting new guests. Thanks as always. Thank you, Cristy. We'll see you very soon.
Cristy White: Thank you so much, thank you guys, it's great being here.