How to Leverage Financial Mistakes to Build Your Small Business

It doesn’t matter if your startup efforts are home-based in the basement or if you’ve been in business for years, money management can be a concern for all business owners. Dealing with cash flow, expenses, and billing can be a challenge. In some cases, certain financial mistakes can be enough to force a company to close its doors.

Maybe you’ve identified financial mistakes that have affected your company. Or, there is a possibility that mistakes have slipped by undetected. Either way, it is essential that you have a good accounting system to help you stay on track. Just because financial missteps happen, doesn’t mean that it will be the closing chapter for your business efforts. Instead, these mistakes can often be used to identify weak points in your system, helping you strengthen your business strategy for the future.

Transparency is Key for Success

The most important thing that you need to do is to maintain transparency with your reporting and accounting practices. If a mistake happens, it might be tempting to “brush it under the rug” because you are embarrassed that you didn’t get it right. But we are all human, which means that mistakes happen. Instead of spending your time focusing on the problem, look at the overall picture and identify areas of improvement.

Transparency is the best thing you can do to keep your company moving forward. When you are consistent with financial tracking and reporting, then you can always get a good feel for the current positioning of your company. These details can be used to influence your business decisions, helping to propel your company forward in the future.

So, every business owner needs to look at the foundation of wise financial tracking: do you have a good accounting software and system to maintain transparency with every transaction that moves through your accounts? Creating this system is essential so you can leverage your mistakes for your advantage.

Turning Financial Mistakes into Advantages

How do you put this principle into action? It can be difficult to see where you can make changes after a mistake so that the situation is a positive support for your company. Here are a few examples to help you create the mindset of learning from your mistakes:

  • Cash Flow Complications: When the overhead costs and bills come due, you need to be sure that there is enough money in the bank to cover these expenses. The truth is that most business owners experience challenges with operating capital. Regardless of the size of your business, cash flow is something that needs to be addressed and prioritized. All it takes is one big client who is late with a payment to result in a situation where you need to get creative to come up with cash for payroll or an upcoming tax bill. If you encounter cash flow issues, then it means you aren’t being careful enough in your project estimates. Rework your business plan so that you are more conservative with the monthly estimates. Also, make sure you always have at least 3 months of operating expenses in an emergency savings account.
  • Lack of Diversification: Do you have all your eggs in one basket? Without client diversification, you could be facing issues if the industry shifts. Don’t allow your cash flow to be dependent on a single client. This mistake could leave you in a pinch, but it is also a good motivation to change your processes to ensure it doesn’t happen again in the future. Going forward, be deliberate about reaching out to new, potential clients before the other contracts end. You need to be sure that you have enough in the pipeline to stay busy, even when things change with your current workload.
  • Skipping Project Milestones: When you have a lot of cash tied into one client or customer, you might make the mistake of waiting for a lump sum payment at the end of the project. Unfortunately, payment delays and schedule slippage could result in late payments, which will have a domino effect on other aspects of your business. Learn from your mistake: Instead of aiming for one big payment at the end of the project, set up projects with milestones and incremental invoicing to ensure that the cash flow is still coming through.
  • Business Growth Happens Too Quickly: It doesn’t sound like a bad thing to have your business growing so quickly that you can’t keep up. But, if important details are overlooked, then it could show your company in poor light in the industry. There is a fine balance to ensure that you are keeping up with the growth without leveraging yourself too quickly. For example, not only do you need to ensure you have the inventory to keep up with an increase in product demand, but you also need to be careful to avoid leveraging up the overhead expenses if your cash flow can’t handle it yet. Always be conservative in your forecasts and be careful to manage expansion according to the timeline that your business can carry.
  • Not Following Through on Outstanding Invoices: Consistency with follow-through is essential when it is time to collect payments from your customers. If you aren’t diligent with touching base about the outstanding payments, then it’s likely you won’t receive timely payments. Avoid these financial mistakes by committing to a good accounting system going forward. Organization, consistency, and the right software program can help you identify the outstanding payments so you can be sure that nothing slips through the cracks.
  • Competing on Price: If sales are slow, then it might be tempting to lower your prices so you can bring in more customers. Unfortunately, many business owners find that it’s a race to the bottom if you are only competing on price. Slashing the price of your products or services is only a temporary fix to bring in immediate cash flow. But this decision harms your profit margins, which means you will have less cash to work with for business growth in the future. If you’ve made this mistake, then it is time to redefine your marketing and branding strategy. It is essential you differentiate in the industry based on value for the customers. People will be willing to pay more money if they can see the benefits that will be gained from your product or service.
  • Data Entry Inaccuracies: There is always the risk of mistakes happening on the project. Whether an employee entered a few inaccuracies on the transactions in the accounting software, or someone overlooked a transaction altogether, it can have an impact on the accuracy of your reports. When inaccuracies happen, it means you are making decisions using wrong information. As a result, it could harm your cash flow, potentially resulting in late fees and legal ramifications if payments are missed. This problem can be solved by creating a system of checks and balances. In the future, you can rest assured knowing that nothing is overlooked when you are consistent with monthly reconciliations.

How to Handle the Situation When Mistakes Happen

What is your automatic response when a mistake is discovered in your business? Some people get upset; while other people want to ignore the problem. Before another mistake happens in the future, it is smart to evaluate how you will handle the situation going forward.

Failing fast is key when mistakes happen. Don’t let yourself get so caught up in the moment that you have a hard time moving forward. If money was lost, then view the situation as “tuition” for the education that you learned. Allow yourself to learn from the mistake so you can implement changes that will move your company forward in the right direction. A few small changes can be put into operation, making it possible to avoid running into the same mistake again in the future.

Tapping into Professional Services

The most common reason why financial mistakes happen is that business owners fail to utilize professional services that are available. Even though it might seem smart to save a little cash with a DIY approach, you could be facing a loss of thousands of dollars in the future with a big mistake. It’s worth the expense to bring in an industry professional so you can avoid some of the most common errors in the industry.

One great example is in the accounting industry. As a small business owner, you might try a do-it-yourself approach for tax preparation and filing. But you need to consider the hours and hours that will be required so you can figure out the tax forms and understand the best way to leverage your deductions. Plus, it is likely you could be missing out on thousands of dollars in tax write-offs because you didn’t understand the law. If a mistake is made, then you could be facing fines and fees from the IRS.

Instead, spending a little money for ongoing accounting services can be invaluable to help you avoid the common mistakes made by small business owners. If you are looking for financial support for your company, then Easier Accounting. Is here to assist. Call us at (888) 620-0770.

Why Should You Choose Outsourced Accounting Services?

Solid financial strategies are key to the success that is possible in your business efforts. Are you setting your company up for future growth and expansion by implementing an effective accounting system? Most small businesses are coming up short when it comes to financial reporting. If it is time to improve your current system or you need to implement a new financial software, then outsourced accounting services might be the right answer.

Strategic Alignment for Your Financial Goals

It’s easy to get caught up in the current responsibilities of running a company: employee management, inventory restocking, product development, and marketing campaigns. These tasks are essential to keep your business going through all of the ups and downs along the way.

Unfortunately, many business owners come up short in one important aspect: financial reporting and strategy. You might be too stressed right now trying to pay overhead expenses and keep up with current costs that you overlook the strategy needed for the future. But looking ahead is one of the best things you can do to set yourself up for success. If you don’t have experience in financial management and business strategy, then hiring an outsourced accountant can be a great solution.

Staying consistent with financial tracking and reporting will give you a clear picture of the financial health of your company. This information can influence the decisions that are made along the way, helping you optimize the current efforts to build for the future. Having a big-picture mindset ensures you will be ready to face anything that might affect your business.

Accounting and bookkeeping services can help you implement an ongoing tracking system that reports details about your spending, income, and movement of the cash through your accounts. Even if your company is profitable, you could face issues if you don’t have enough cash flow to cover overhead expenses. So, it is important you are looking at these financial reports regularly, giving you the option to make small changes and adjustments along the way as needed.

Consequences of Poor Accounting and Bookkeeping Practices

It’s easy to be lulled into a false sense of security if you have money coming into your bank accounts through the sale of products and services. But, one of the most common issues we see among small businesses owners is that they are lacking foundational principles for good bookkeeping and accounting practices.

We understand how overwhelming it can be to set up and maintain a comprehensive system that includes all accounting processes, bookkeeping tasks, and financial administrative responsibilities. You are already carrying enough responsibility in the daily management of your company. Do you feel burdened by adding more to your to-do list with bookkeeping busy work, such as bank account reconciliations?

Most startups and small businesses are facing the challenge of limited staff and no hands-on experience in process management. Your employees are already tasked with ongoing job duties. They don’t have the time or experience to take on complicated responsibilities such as accounting systems and financial reporting. As a result, implementing a good accounting and bookkeeping system often feels impossible for small business owners.

Without the right system, you will see problems start to arise. For example, if you are receiving past-due notifications on accounts payable and you don’t have a good system in place to track client payments, then there’s a pretty good chance that you’re running into cash flow issues. Seemingly small problems right now add up to major issues in the future. Eventually, poor financial reporting and planning could be the downfall of your company.

Are Poor Accounting Practices Hurting Your Company?

How do you know if your lack of accounting organization and structure is hurting your business? If you can answer “yes” to any of these questions, then it’s a sign you need to call an outsourced accounting team right away:

  • Do the accounting and bookkeeping tracking tasks fall to the back burner because you are too busy with other responsibilities throughout the day?
  • If your bookkeeping employee left the company, would you be lost trying to figure out where to pick up the pieces?
  • Have you assigned bookkeeping responsibilities to an employee who doesn’t have formal training or hands-on experience in accounting and bookkeeping?
  • Do you feel like you can never rely on financial reports since the transactions aren’t up-to-date?
  • Is it difficult to identify your exact profit margin without extensive manual work and calculations?
  • Are you using a manual entry system for tracking, such as an Excel spreadsheet?
  • Do you find it difficult to keep up with big payments, such as taxes and payroll, because cash flow is too tight?
  • Are employees using multiple software programs and computer systems without synchronization or tech integration?
  • Is it common that you are always pushing up against tax deadlines and other financial reporting dates because the work was procrastinated?
  • Is it difficult to maintain a consistent schedule with closing and reconciling the books each month?

Don’t beat yourself up or feel overly guilty if you can answer “yes” to one or more of these questions. Instead, recognize that it’s a good indication your business needs more professional support. Now that you recognize the gaps that are occurring in your bookkeeping and accounting system, the next step is to bring in an outsourced accounting pro who can help you get your business finances back on track again.

In-House Employee vs. Outsourced Accounting Services

Now that you can see the need to bring in an expert to help with your accounting systems, it’s time to act to resolve the financial issues you are facing. The most common assumption is that you need to hire an in-house accounting expert. While there is nothing wrong with bringing in another employee when needed, don’t overlook the other options that are available.

Before you hire an employee, you need to understand the burden you are taking on. Not only are you responsible for that person’s training and performance, but you also need to think about the overhead costs that will be incurred. For example, you need to pay for office space to accommodate the new employee’s desk. Additional costs add up for recruiting, hiring, and onboarding. Plus, you have other expenses for computer equipment, office supplies, employee benefits, and more. You aren’t only paying for the person’s wage; you need to carry the financial expense of bringing another fully-burdened check onto the payroll each month.

On the other hand, it is possible to save thousands of dollars every month by leveraging the services of an outsourced accounting team. Instead of paying for an expensive salary and benefits for an in-house accountant, you can only pay for the financial services that are required. Outsourced accounting is significantly cheaper than the overhead costs of an in-house employee.

Industry Experience from a Knowledgeable Team

There’s no reason for you to reinvent the wheel by starting a new accounting system from scratch. One of the biggest mistakes made by small business owners is attempting a DIY approach when it comes to financial reporting. Yes, you can find information online about setting up a bookkeeping system or how to compare various accounting software programs. But these online tutorials don’t compare to the services available from someone working “in the trenches” in the accounting industry.

Choosing outsourced accounting and bookkeeping services can be a valuable way to tap into the knowledge and experience of someone who is working with other companies. This real-world experience with small businesses and start-ups can be a great way to infuse your business with tools and strategies that work. Our accounting team has already built accounting and bookkeeping systems that work. You can rest assured knowing that your business doesn’t need to be the testing ground to find new solutions in the bookkeeping and accounting industry.

Hiring Small Business Accounting Services

Now the question at the top of mind is: where should I go to hire an outsourced accounting service? You might be able to find a local accountant that offers business services. But does that person have a wide range of experience that comes from a company who specializes in small business accounting?

We live in a digital world, which means you have access to some of the best accounting services with the click of a button. An online search can uncover options for your accounting needs, helping you tap into a proven system created for small businesses like yours.

If you are going to hire an outsourced accounting service, then it makes sense to research the company’s reputation. Learn more about the business and their experience before jumping into the services that are offered by them. For more information about quality services for bookkeeping and accounting, our team at Easier Accounting is available to help.

We are proud of the unblemished track record we’ve built with our customers. Over the years, we have worked with many small business owners, helping to create systems that address common concerns such as tax strategy and cash flow management. You can learn more about the services that are available by calling Easier Accounting at (888) 620-0770.

7 Effective Business Strategies for Reducing Bookkeeping Costs

When you are running a business, it seems like the bills are always piling up and making it hard to maximize profitability. If you want to have extra cash on hand after the expenses are paid, then you need to be looking at options to reduce your spending and increase your income at the same time. Today, we are sharing tips that you can use to reduce bookkeeping costs, which will help your profitability goals.

Tip #1: Organize Your Finances

Staying organized is the foundation for financial success. If your receipts are scattered and you can’t keep up with the payments that are due, then you will be wasting time trying to find the right paperwork. Plus, missed payments result in late fees and interest charges, which increase the overall amount that is paid each month. There’s no question that good organization can save you both time and money.

When your bookkeeper is working on your transactions and financial reports, they can only work on the documents that are provided. It doesn’t matter if you have an in-house bookkeeper or outsourced bookkeeping services… you are paying more than necessary for their time if they are spending hours sorting through a mess of paperwork.

The key is to implement a system right now so that the bookkeeper is provided with all of the necessary information for each transaction. For example, if you buy something and receive a receipt, take 10 seconds to make a note on the receipt to document the purpose of the purchase. Invoices that are paid online should be noted with the date of payment and the method that was used for payment.

If you are looking for ways to cut bookkeeping costs, then talk to your bookkeeper about the way the information should be presented. As a financial expert, your bookkeeper will offer suggestions and advice that will streamline the workflow and allow the bookkeeper to maximize the time spent on the project. The goal is to have a system in place that provides the bookkeeper with the information necessary to keep your books up to date, which requires organization at every step.

Tip #2: Use Proven Computer Software

Leveraging technology can be an effective way to organize your finances and avoid unnecessary busy work. For example, a document management system can be used to keep track of your receipts so that you no longer need to keep a shoebox full of random paperwork. Simply snap a picture of the receipt, then store the image in a cloud-based folder. This file can be shared with your bookkeeper for tracking purposes.

One other benefit of a document management system is that you can always find your receipts if needed in the future. Sometimes, it can be helpful to refer back to transactions that happened in the past to compare costs or evaluate overall spending for the day. This information is just a click away and can be accessed online, without the need to dig through piles of paperwork in the filing cabinet.

An accounting software should also be used if you are looking for ways to reduce bookkeeping costs. For example, this cloud-based software system can pull in the transactions that move through your credit cards and bank accounts. You can create categories that automatically file recurring transactions. Your bookkeeper will spend time evaluating the transactions that are coming through and auditing the system to ensure that nothing is missing.

A good accounting program saves you money because you don’t have to pay for the hours of manpower required for manual data entry. Even though you will pay a fee for the software program, it is a fraction of the cost compared to the time and money required to calculate the financial reports by hand.

Tip #3: Separate Your Business and Personal Spending

Mixing business and personal spending complicates your financial tracking, making it difficult for the bookkeeper to sort through the transactions. One way you can save money on bookkeeping costs is by creating a separate account for your business transactions.

A clear-cut system to define business spending and personal spending will simplify the reconciliation of the accounts. Additionally, it takes less time to determine the right deductions that can be tallied when it is time to do your taxes each year.

Tip #4: Build in Options to Scale in the Future

Cutting corners on your bookkeeping systems might seem like an effective way to save money right now. But you shouldn’t overlook the potential costs that will be accrued if you need to change accounting systems to scale your business in the future.

For example, it might seem like a good idea to select the cheapest accounting and bookkeeping system that will cover the basic necessities for your financial reporting. Even though this software might cover your bases right now, you will be facing bigger issues in the future if the software can’t accommodate the future growth of your company.

As a result, spending a little bit more right now could save you the cost of transitioning bookkeeping systems in the future. Instead of attempting a DIY system, bring in a team of financial experts who can offer advice about the right system designed to support your business growth in the years to come.

Tip #5: Use Technology to Improve Accuracy

Every time a mistake is made on your tracking and accounting, it costs time and money to fix the error. Even though errors are unavoidable, there are a few things you can do to reduce the potential mistakes that happen with your bookkeeping and accounting systems.

One effective solution is to leverage technology for the calculations and report generation. You can skip manual calculations and have peace of mind knowing your numbers are accurate and clear. Choose a system that delivers both financial intelligence and greater efficiency for your business systems.

Tip #6: Control Costs by Eliminating Waste

How much money is wasted each month and year due to payments and transactions that slip through unnoticed? You can offset the costs of accounting and bookkeeping services by leveraging the team’s skill set to reduce waste and unnecessary financial burden.

For example, your bookkeeper might be able to offer advice about reducing overhead expenses and improving the collection of Accounts Receivable. As a result, your income will go up and you can cut out expenses that are no longer necessary for your business systems.

Not only will you have the option to reduce the amount of money that is spent, but these in-house changes can also affect employee productivity. Your employees will understand the importance of streamlining business systems and sticking to spending goals. So, the daily decisions of the employees will support your overall business efforts.

Tip #7: Hire Outsourced Bookkeepers and Accountants

There’s no question that you need bookkeeping and accounting services. Most business owners assume that the simplest way to bring these skills into the company is by hiring an employee. But you need to think about the fact that you aren’t only bringing on the burden of paying the person’s salary, but you also need to carry additional costs of having another employee in the office.

The fully loaded costs will add up over time! Here is a quick overview of some of the expenses you will pay for a full-time accountant or bookkeeper:

  • Salary or wage
  • Benefits
  • PTO
  • IT and equipment
  • Office space and utilities
  • Overtime pay

Many businesses are choosing to outsource accounting services to avoid the fully-loaded costs of bringing on another employee. Do the math, and you might be surprised to learn that it is easy to save thousands of dollars a month by hiring an outsourced accountant as an alternative to a full-time employee.

This method is not only more cost-effective, but many business owners also find it less stressful to tap into the expertise of an outsourced team. It feels good knowing that the service provider has relevant experience working on the financial reports for other small and medium-sized businesses. Outsourced accounting services means that you don’t have to worry about employee management or training. Instead, you can hand off the financial details with confidence knowing your accounting team is taking care of the necessary tasks to track your accounts and reports.

Questions about Reducing Bookkeeping Costs?

Are you enjoying the benefits of outsourced accounting and bookkeeping services? If you don’t have a good system in place, then right now is a good time to make the changes that are needed to boost your financial strategy.

A variety of financial tracking and reporting aspects can be outsourced to our team, helping to free up your time so you can focus on business-building efforts. Common outsourced services include:

  • Accounts Payable and Receivable
  • Payroll Processing
  • Financial Reporting and Statements
  • Tax Calculations and Filings
  • Monthly Reconciliations
  • Credit Card and Bank Statement Audits

Our team of experts at Easier Accounting is here to assist with all of the bookkeeping and accounting services needed for your company. We specialize in small business accounting and would love to have a conversation with you about the options that are available: (888) 620-0770

Are You Building a Scalable Small Business?

Most small businesses start with a simple idea and hours of work in the basement or garage. It doesn’t take much to identify a potential opportunity in an industry of your interest. Some of the best inventions were born out of necessity with individuals looking for solutions to solve their problems. If you are in the position of designing a startup or running a small business, it is important that you are not only looking at your current responsibilities… but also evaluating your options for the future. A few things can be done right now to ensure that you have a scalable small business.

What Does it Mean to Be Scalable?

When investors can see that your business idea has potential, then they will be ready to offer money to help the company grow. A scalable small business is designed so you can multiply revenue for future business growth with minimal costs to expand.

If you have a scalable small business, then it means you have a proven business model and a proven product that consumers love. Once the systems are in place, the next step is to expand the business efforts to other markets and geographies. You don’t have to re-invent the wheel when you want to move to new markets. Instead, it is a “lather, rinse, and repeat” process to implement the same business systems over and over again to new customers.

For example, most business owners have significant upfront costs to develop the product or service that will be offered to the ideal demographic. You will spend time and money on the iterations to ensure that everything is perfect to meet the needs of your customers. Once these systems are designed and in place, then it requires minimal expenses to make additional products that can be sold to others.

How to Build a Scalable Small Business

Here are simple tips that can be implemented into your business plan to ensure that you have options to scale your company in the future:

  1. Attract Investors: When you are ready for business growth, you might run into the roadblock of not having enough cash to pay for the expansion. Just because you and your friends think that it is a great idea, doesn’t mean that investors will be ready to jump on board. As you are building your business plan, consider strategies that will make the opportunity attractive to investors. For example, use market research from outside experts and build documentation showing your profit margins and customer satisfaction.
  2. Continuous Improvement: Just because your business is going well right now, doesn’t mean that you are set up for success in the future. Too often, people run as far as they can with one business idea, only to find that the market fizzles out when the next trend moves in. It is essential to look for ways that you can implement continuous innovation. Instead of offering a single product, you can identify complementary services and products that will continue to solve your customer’s needs in the future.
  3. Work “On” Your Business: As the business owner, you are the point that is directing all actions and decisions made within the company. In the beginning, the business won’t continue with daily progress without the integral role that you play in the system. Ask yourself: how much time are you spending working “in” your business? If all systems come to a standstill when you are on vacation, then it might be time to rethink the way you are building the system. Instead of working “in” your business each day, look for ways you can work “on” your business to create a plan that can be scaled. You only have 24 hours in a day, which means you will be limiting your business growth depends on your involvement.
  4. Build a Good Team: Over time, you can build a team that will keep the system running, regardless of your involvement in the day-to-day responsibilities. One strategy is to bring in the right employees to oversee all aspects of business management. For example, you need front-line customer service representatives, salespeople, managers, product testers, and more. If you are worried about the overhead costs that will be accrued for in-house staffing, then you might consider the option to outsource these services instead. Outsourcing offers an effective way to reduce your spending while tapping into the experience and resources required for your business systems.
  5. Leverage Technology: Tech plays an important role in business management, so it makes sense to take advantage of every benefit available by using technology. If you are stuck using outdated systems and manual processing, then it is time to revamp your company to implement as much automation as possible. For example, it is a waste of time if you are paying employees to handle manual data entry for every transaction that moves through your company. Instead, find the right accounting and bookkeeping software that automatically pulls in the transactions that move through your credit card and bank accounts. This automation frees up your employee’s time, giving them the ability to work on other business-building activities.
  6. Always Automate When Possible: One way that technology can be used is by automating systems and redundancies. If your startup is staff intensive and labor intensive, then it is hard to scale because of the number of people that will need to be hired. The best thing that you can do is start early to identify ways that your systems can be automated. Documentation and processing can be organized and streamlined using technology. You should also evaluate ways that training can be shared to all through online videos instead of training new employees one-on-one. These systems will allow you to bring in new people consistently and quickly as needed to support your business efforts.
  7. Hire Marketing Experts: You can offer the best product in the industry, but have minimal sales if your customers don’t know about your company. Too often, business owners get stuck because they pour money into business development without leaving anything left over for marketing and advertising. As a business owner, you shouldn’t be spending your valuable time reading online internet marketing forums and testing shady marking strategies. Instead, find a marketing expert that understands your industry and can help you connect to the customers who are looking for the product or service you are offering.
  8. Accept Funding When Needed: You can only get so far with organic growth. This process means that you are reinvesting profits to help your company grow, but you will find that your progress is limited without a bigger infusion of cash. Investors can add the fuel needed to boost your rocket to higher altitudes. Even though you will give up a bit of control by accepting money from investors, you’ll find that many benefits come from the experience and expertise offered by these people. Do your due-diligence to ensure you are selecting investors that are a good match for your company. Then, find a win-win solution to leverage their money and your business ideas to bring in profits for everyone involved.
  9. Explore Options for Franchising: If you have a proven business model, then franchising is one solution that might help you expand to other markets. Instead of trying to out-market the competitors, look for ways you can bring them on-board by showing the documentation and profitability that they need to get on board with your business plan.

Do You Want a Scalable Small Business?

Not everyone wants to build a multimillion-dollar company. If you are creating a home-based business to bring in a little extra spending money each month, then you might not have the desire to get involved with investors and large-scale systems.

The most important thing you can do is evaluate your long-term goals and determine the incremental progress that will help you achieve those goals. What are your revenue goals? Are you interested in developing more products and services in the future? Asking these questions can help you decide if you want to put in the effort to scale your business efforts and help your company grow.

Whether you are happy with the current size of your company or you are looking at growth opportunities in the coming years, it can be beneficial to have the support of an experienced outsourced accounting team. Managing the financial details of your business can be both stressful and burdensome. Luckily, you can hand off these responsibilities to an accounting and bookkeeping team. These outsourced services will allow you to focus your efforts on the things that you enjoy most, giving you more time and freedom to build the type of business that you desire.

For more information about small business accounting and bookkeeping services, you are welcome to contact our team at Easier Accounting. We specialize in all the services required to keep your small business running each month. Not only can our team help with payroll processing, but we can also offer the assistance you need for tax strategy, ongoing bookkeeping, and more. Call today to see how we can help: (888) 620-0770

Small Business Owners: Why it is Essential to Track Your Miles

If you are a small business owner, then it is important to have a system in place to keep track of your write-offs and other expenses that can be used as tax deductions. Most people are pretty good at keeping track of inventory costs, employee payroll, and office supplies. But, do you track your miles? If you aren’t doing it already, then right now is the perfect time to get started with mileage tracking so you can maximize your tax deductions for the year.

Focusing on Revenue vs. Take Home Pay

One of the reasons why deductions like mileage fall through the cracks is because your focus is turned to the activities that are bringing in revenue. While it is important to be proactive about increasing your receivables, you are making a big mistake if you aren’t also thinking about your costs as well. The amount of money you spend on business line items will cut into your profitability and reduce your take-home pay.

One of the best ways to manage your profitability is to design a system so that you are maximizing your deductions. This process helps you see the money that is moving in and out of your account. You can evaluate each of the transactions to determine if it is essential for business activities and growth. Then, these transactions can be recorded to be used as deductions when it’s time to do your taxes for the year.

Personal Vehicle Deduction

Most likely, you are using a personal vehicle to get around town for business purposes. In this case, you can’t write off every penny spent on buying the vehicle, the monthly loan payments, maintenance services, or gas. But these costs add up, especially when you are driving for your business. The most effective solution is to track your mileage. Then your accountant will use this information to calculate the deduction for motor vehicle expenses.

The IRS allows you to deduct a portion of the costs of using your personal vehicle. Even though the car is used for personal activities, such as driving the kids to school or picking up groceries, some of the miles used are necessary to keep your business running. For example, if you are driving to meet a client or you need to go to the bank, then you should track your miles to use as a deduction.

It is important to note that you can’t deduct your commute between home and work. But you can deduct the miles for every trip related to your small business. Every time you get in the car, evaluate whether the trip is for business reasons. Examples might include:

  • Picking up office supplies
  • Meeting with a vendor
  • An appointment at a client’s office
  • A trip to the bank
  • Driving to a conference or expo
  • Moving between offices
  • Driving to the airport for a work trip

Even if you don’t feel like the miles are significant, you might be surprised to see how much they add up when you are keeping track. For example, if you drive an average of 10 miles per day throughout the year for your business, then it is over $2,000 in potential deductions.

How Much is Your Mileage Worth?

Is it worth the time and effort to track your miles? Some business owners don’t worry about this write-off because they feel it is too time-intensive. The truth is that the miles add up over the course of a year, and could be worth a lot in terms of deductions that are available for your tax calculations.

The IRS has a standard mileage rate deduction that changes each calendar year. The mileage rate in 2019 is $0.58 per mile, which is higher than the $0.545 in 2018. So, if you drive 10,000 business miles in 2019, then it means that it could be worth a $5,800 deduction if you track your miles. This deduction can be an effective solution if you are looking for solutions to reduce your overall taxable income.

IRS Rules for Tracking Your Miles

If you are planning to write off a portion of your personal vehicle, then you need to be sure you have documentation to back up the write-offs on your taxes. This information will be essential if you are ever audited in the future. The IRS isn’t going to take your word for the write-offs and they don’t like to calculate deductions based on ballpark figures. You need to keep a detailed record of your mileage so you can claim the mileage deduction.

This mileage log doesn’t need to be filed with your taxes. But you should hold onto the information and keep diligent records in case there are questions in the future.

Creating a Log to Track Your Miles

Once you have a good system in place, it can be easy to keep track of the miles that are driven for your business. Your mileage log should include:

  • # of miles driven on each drive
  • Date of the trip
  • Destination
  • Purpose

The simplest and cheapest option is to have a manual mileage log that is kept in your car. You can have a small notebook and pen where you record the date, mileage, and business purpose. Keep it handy, so you remember to track the information when you are driving for business errands. Then, the miles will need to be tallied and calculated at the end of the year to provide this information to your accountant.

The drawback of this manual system is that you have to remember to write it down each time. It is surprisingly easy to forget to check your odometer, especially when you are in a rush to get to a meeting. Many people forget to log the miles because they are preoccupied with other details of the day.

Mileage Tracking App

The easiest solution is to leverage technology, so you don’t have to get caught in the details of mileage tracking. For example, a mileage tracking app can be installed on your smartphone. There are a variety of app options available in the industry. These apps are designed to provide automated mileage tracking, which means you don’t need to worry about remembering to write down the odometer details each time you get in the car. Using GPS, the app can keep track of the exact mileage driven. Then, the value of the drives can be calculated, providing a report that can be given to the IRS if required in the future.

Do your research to find an app provider that you can trust. For example, some of the free apps make their money by selling your information to third-parties. As such, some business owners prefer to use a paid app to maintain privacy.

Taking Your Mileage Deduction at Tax Time

You are already carrying a load of responsibility as a small business owner, so it is smart to outsource your tax calculations and filings to a trusted accounting team. In this situation, you don’t need to waste your time crunching numbers or trying to figure out how the tax forms should be filled out. Instead, the information and documents can be provided to your tax professional, giving you more time to focus on other responsibilities within your company.

When tax time rolls around, your accountant will mark down your mileage deduction in the “expenses” section of your schedule C tax form. Depending on the situation, you might need to provide the following information:

  • Number of miles tracked during the year
  • Business miles per vehicle (if multiple vehicles were used)
  • Beginning and end odometer readings
  • Parking or toll road expenses incurred while driving

Keep in mind that you have the option to deduct the actual vehicle expenses instead of mileage if you prefer. But this accounting strategy requires more record-keeping, and most business owners find that it isn’t worth the hassle. This system could potentially result in a bigger deduction, though, so it is important to evaluate your options.

Consult with an Accountant

As with any accounting strategy, it is always best to consult with your account. You can read information online about deduction strategies, but nothing beats a conversation with a financial professional who has a clear understanding of your business finances. Most business owners don’t have formal accounting or bookkeeping training, making it invaluable to hire an accounting team for assistance.

A small business accountant is a great investment so that you can maximize more than just your miles. Your accountant will offer recommendations relating to your business spending, payroll processing, and more. Making the transition to outsource these services instead of trying to handle it yourself means you can free up your time to focus on the tasks that will help your business grow.

If you have questions about tracking your miles or you need help with accounting services, then Easier Accounting is here to assist. We invite you to contact our team at your convenience to learn about the accounting and bookkeeping services that are available for your business: (888) 620-0770

Warning Signs It’s Time to Hire an Outsourced Accountant or Bookkeeper

Are you carrying more responsibility than you need to within your small business? As a business owner, it can be hard to let go of the control of certain tasks that need to be done. Too often, business owners spend their time on busy work, resulting in a situation where there isn’t enough time left for some of the most important activities to help the business grow. Right now is a great time to consider the support available to help your company. For example, there are many benefits to hiring an outsourced accountant or bookkeeper.

Strain of Accounting and Bookkeeping on a Business Owner

You are already carrying the stress of business development, employee hiring, management, and more. Why overwhelm yourself with the added strain of accounting and bookkeeping as well? Instead of spending your free time with your head buried in the financial records, you can hire an outsourced accountant or bookkeeper for assistance. It is amazing to see how much your stress levels drop when you can lean on the services offered by an industry professional.

There’s no question that maintaining an organized set of books for your business can be both confusing and time-consuming. Not only do you need to track the numbers that are moving in an out of your accounts, but you also need a way to keep track of receivables and payables. If you don’t know much about accounting, it is likely you will waste hours of time searching the internet trying to find tutorials or information. Even with the best of systems, business accounting and bookkeeping can turn into a full-time job that is hard to manage.

Some business owners try to solve this problem by hiring an in-house accountant or bookkeeper. But you will likely encounter problems with this solution. For example, you still hold the overall responsibility to ensure the employee is doing what needs to be done. Plus, you are carrying the added burden of paying for their salary and overhead costs that come from another employee in the office.

Hiring an Outsourced Accountant or Bookkeeper

Most clients reach out to us at Easier Accounting because they are overwhelmed with everything it takes to manage bookkeeping tasks. When the business is growing, business owners don’t often have the patience or time to keep up with these bookkeeping and accounting requirements. Instead of beating yourself up because you are behind with your bookkeeping, remind yourself that this process is a normal part of business growth.

It’s a good sign because it means that your business efforts are expanding and moving forward! This overwhelm also means it is the perfect time to reach out to an outsourced accountant or bookkeeper for the assistance that is needed.

The truth is tapping into the expertise offered by a financial professional might be one of the most effective decisions you could make for your company. Your accounting team can provide recommendations that will propel your business efforts forward and help you reach higher levels of success.

Warning Signs that You Need Accounting and Bookkeeping Help

How do you know when it is time to finally hire an outsourced accountant or bookkeeper? Here are some of the warning signs that indicate you need to hire the help that is needed for your business finances:

  • Working Too Much: Do you find yourself doing bookkeeping date entry or tallying tax deductions late into the night? If your business efforts are cutting into family time or personal hobbies, then it means you need to bring in extra support. You work hard throughout the day on business development, brand strategy, client relations, and more. These daily activities should take priority, often causing the busy work to fall to the backburner. Working late to the point where it cuts into your sleep means you are on the fast-track to burnout. Instead of spending your nights trying to stay current with the bookkeeping tasks, bring in the experts so you can turn your attention to your services and customers.
  • Behind on the Paperwork: A quick glance at your desk can be revealing about your ability to keep up with the bookkeeping tasks. If you have a stack of paperwork that needs to be addressed, then you should find expert help to get ahead. Staying current with Accounts Payable and Accounts Receivable are essential so you keep the money coming into your business, and you don’t fall behind on the payments that are owed. Be realistic about your efforts and ask yourself if your books are currently at this moment. If you know that the reports would be inaccurate due to inaccuracies with the transactions, then the best thing you can do is call an accounting team right away.
  • Outdated Financial Systems: Even if you have an accounting or bookkeeping system in place, you need to evaluate whether you are keeping up with industry trends. Accounting technology can be used to simplify your processes and optimize the reports that are available. If you are still tracking your business expenses manually on a spreadsheet or notebook, then you are leaving benefits on the table. Hire an outsourced accountant to get support with setting up your new system and implementing the right technology that can support your business growth.
  • Taking Time Away from Customers: Another warning sign you need an outsourced accountant or bookkeeper is that the paperwork is taking up so much time you no longer have enough time in the day to offer to your customers. When the accounting and financial reports take precedence over your clients or customers, it is a sure sign you need expert assistance.
  • Starting a New Company: Even though you have positive expectations about a DIY approach for the first few years of your new startup, you need to consider the potential consequences of skipping professional accounting services from the beginning. The best thing you can do when starting a new company is to ensure you have a solid foundation and a good financial system in place. Starting on the right foot means you are setting yourself up for success in the future. An experienced accounting team will offer advice and suggestions to help you avoid common pitfalls and problems encountered by other business owners.
  • Lack of Compliance Understanding: When it comes to tax calculations and business write-offs, it is essential you have a clear understanding of IRS requirements, as well as state and local laws. Maintaining compliance for your business efforts is not only time consuming, but it can be stressful if you don’t understand these laws. In fact, the laws often change, which means it is more effective to lean on the services of someone who truly understands the financial industry. Making a mistake could be costly, resulting in hundreds or even thousands of dollars in fines and penalties. These issues can be easily avoided by hiring an industry professional for assistance.
  • Missing Payments from Customers: Without money coming in from your customers, your business won’t be able to keep going each month. Unfortunately, it is common for businesses to have overdue payments from customers. You need to have a system in place to follow up on these payments to ensure you have the cash flow to keep up with your business expenses. There’s no doubt outstanding payments can result in a domino effect that could topple your business in the future. If you aren’t consistent about tracking and following up with payments that are due, then it is best to let someone else handle this aspect of your business. Hire a bookkeeping or accounting professional for assistance.
  • Mixing Personal and Business Finances: It is a huge mistake to be using the same bank accounts and credit cards for both personal and business transactions. Not only is it complicated to extrapolate the transactions, but you might find yourself tapping into personal finances when business operational costs need to be covered. Using the same accounts for business and personal spending is a sign you don’t have a good tracking system in place for your business. The best thing that you can do is hire an accounting team to get your business system set up so you can create clear boundaries with your spending.

As a business owner, it can be a relief to know you don’t have to carry this financial burden without support from an experienced team. If you are ready to hire an outsourced accountant or bookkeeper, then we are here to help. Not only can we assist with the ongoing tracking and financial reports for your business, but our services can also include essential tasks such as tax calculations, payroll, and more.

You deserve to have a proven accounting system to support your business needs. So, it is time to call the experts at Easier Accounting. Contact us right away to learn about the services that are available for your business needs: (888) 620-0770

How the Right Cash Flow Strategy Can Save Your Business

Encountering cash flow issues might be one of the most stressful things that you face as a business owner. It can be hard to keep the company running if you don’t have enough money in the bank to pay overhead costs, payroll, and other ongoing expenses. Instead of waiting until money gets tight, it is essential you implement a good cash flow strategy right now so you are prepared for the future.

Profitability and Cash Flow

It’s easy to assume money isn’t going to be a problem if you have built your business to the level of profitability. But just because you are bringing in more than you are spending, doesn’t mean that the cash will be available at the times when it is needed. It is normal for a business to have ebbs and flows with payments that are due. For example, you might feel the pinch when it is time to process payroll, but you have a few outstanding Accounts Receivable invoices that haven’t been paid yet.

Too often, business owners feel like they are gasping for air… barely keeping their heads above water as they navigate the challenging aspect of bringing in enough money to keep up with expenses. Rest assured to know you are not alone in these cash flow challenges. An article on Entrepreneur stated that 82% of small companies and startups fail because of poor management of cash flow.

Just because you have good ideas for your new business, doesn’t mean you have the experience with the necessary accounting and bookkeeping practices that are needed. If you want to fix your business cash issues, then you need to tap into the expert advice from someone who can recommend a good cash flow strategy.

Lack of Cash Flow Strategy Could Bring Your Company Down

Even if you have a great product and customers who are interested in the things that you are offering, you won’t be able to continue with your business efforts if you can’t keep a roof overhead. The quality or popularity of your products doesn’t matter if you can’t keep up with the expenses required to keep you in business.

In fact, cash flow strategy should be high on your priority list. When you have sufficient cash flow, it enables you to focus on other business-building techniques, such as marketing, product development, and more.

Be Honest about Your Current Situation

Are you ready to turn things around with your cash flow management? Then you need to be brutally honest about where you are spending money and how the cash is moving through your account. Finances can be a stressful topic, causing many business owners to turn their attention to other business responsibilities such as employee management or product development. But ignoring the “elephant in the room” isn’t going to fix your cash flow. Instead, you need to evaluate your current situation and put together a proven strategy that will help to turn your business around.

Start by tallying your current cash flow situation. How much money is available in your bank accounts? Do you have room available on credit cards or a line of credit? Next, you need to evaluate the anticipated expenses and receivables in the future. This information will help you see the overall picture so you can determine the potential pitfalls that could leave you in a stressful situation.

The best solution is to have accounting software that calculates these numbers for you. Yes, you can do the calculations by hand on a spreadsheet. But it is time-consuming and quite a burden to keep up with ongoing calculations. There’s no reason for you to spend your valuable time on busy work when tools and outsourced services can easily take care of these details for your company.

Anticipate Upcoming Costs

Now that you know your current standing and the amount of money that is available, it’s time to consider the costs that are coming up. Certain expenses tend to come in cycles, such as tax payments and payroll. Look at the amount of money you need for general overhead costs each month. Also, list out quarterly and annual payments that you will need to meet. Creating a cash forecast for the next 12-months will give you the numbers that need to be met to ensure you can keep up with your payments.

It can be a challenge to see all of these details without evaluating the payment history. Look at the transactions that moved through your company last year. Note any transactions that you anticipate will be repeated this year. If you have the information, it can be helpful to review several years of business transactions so you can see the overall patterns and trends.

As a startup, you might not have the luxury of looking at historical information for your own company. But you can learn from the experts by talking to an accounting team that has worked with other startup companies. Your accountant will know the industry patterns and expectations. You can use this information to build in the cushion that you need to ensure cash is available at the right time.

Decrease Your Spending

Looking at the upcoming costs can be a powerful way to help you identify the areas where you might be wasting money. Is there anything that is taking too much cash? Look for areas where you can cut your spending to streamline your overhead costs.

While overhead expenses are unavoidable, you shouldn’t be spending on unnecessary line items. Distinguish necessary costs from the luxuries so you can cut back your spending and reduce the amount of cash that is needed to keep your business running each month.

Follow Up on Receivables

One common pitfall with cash flow strategy is that the expenses are coming in faster than the receivables. It is easy to be focused on product development, keeping up with monthly expenses and paying the taxes. If these accounts payable items are taking up all of your attention, then you might consider putting the focus on the money that should be coming in.

Create expectations with your clients regarding payment terms. You should have clear boundaries regarding when invoices need to be paid in full. At the same time, your business needs to have a follow-up system to ensure you are reaching out to customers when the payments are due. Too often, customers wait until the last minute before the invoice is due before sending the payments. Delayed payments impact the amount of money in your bank account, which means you might not have enough cash to keep up with inventory restocking or employee payroll to keep the company going.

One option is to offer a discount to customers who pay their invoices right away. For example, offer a 2% discount when payment is made on the day the services are rendered. Before you offer this discount, evaluate your profitability to ensure your price-point can bear the discount that will be given.

Evaluate Your Credit Options

Racking up loads of debt isn’t the best choice for you or your company. But credit can be a fail safe if you find yourself in a difficult situation for the month. The most important thing you need to consider is preparing ahead of time with this fallback plan before you are facing the immediacy of cash flow problems. If you are already too leveraged with your current lines of credit, then financial institutions will be hesitant to offer more credit to your business.

When you are in a good cash position, reach out to your bank and other financial providers. It will give you peace of mind knowing that a line of credit is available in case you find yourself in a challenging cash flow situation. Use this credit as an emergency-only option that will save your company from going under due to cash flow.

Talk to a Pro

You aren’t expected to know everything related to running a business. Sometimes it is important for business owners to swallow their pride and look for outside help. Enlisting the services of a bookkeeping and accounting team might be the best decision you can make to take control of your cash flow. These services will help you evaluate your current financial situation, look at forecasts for the things that are coming up, and determine the right system that will ensure that money is flowing in faster than it is flowing out.

If you don’t systematize your business spending and receivables, then you are almost guaranteed to run into financial problems in the future. You can get ahead of these issues by talking to our team to learn about the accounting services that are offered. We will help you create a strong foundation, so you don’t have to worry about cash flow issues in the future.

For more information, Easier Accounting is here to help. Call our team for information about the small business accounting services that are offered: (888) 620-0770

Accurate Financial Records Will Impact the Value of Your Company

Are you consistent with maintaining accurate financial records for your business? Many business owners are so caught up in the challenges of keeping the company running that they overlook the essential steps of financial management and tracking. It is easy to get distracted by employee management, cash flow concerns, and product development. If your attention is turned to other business priorities, then your financial records might fall to the backburner.

The truth is that we can’t place enough emphasis on the importance of business financial records. These numbers show the story of your business success and weak points. Having the right financial information available will implement the strategies that are important for your company, as well as the decisions that are made going forward. Your financial records can literally show whether your company will be increasing or decreasing in value.

Here are a few ways that your financial tracking and reporting can have a positive influence on the value of your company:

Transparency for Better Decisions

When you are making decisions about how money will be reinvested in the company, it can be a challenge to make the correct decision if you don’t have accurate information. It is essential that you maintain transparency in your financials so that your decisions will align with the reality of what is happening in your company.

You can look at reports to see the revenue that was earned over a period of time. Keep in mind that this information is only a piece of the puzzle. You should also evaluate the actual cash on hand, as well as expenses or anticipated costs that will affect your cash flow.

If anything is reported inaccurately, then it can have a domino effect on the success of your company. At the same time, these problems are easy to avoid if you implement the right system for tracking and auditing. A good accounting and bookkeeping team can help you understand the performance of your business so you can implement the strategies that will change your trajectory for the future.

How Much are You Paying in Taxes?

Tax liabilities are directly tied to the accuracy in your financial situations. As a corporation or small business owner, your tax liabilities can be high, which has a negative impact on your cash flow and profitability. How much money will you have left after paying the government? Accurate financial records will give you a clear picture so you know the funds that will be available for future business costs.

Strategies can be used to reduce your tax burden. An experienced accountant will be able to offer advice regarding the write-offs and deductions that fall within the acceptable lines for the IRS. Not only do you need to create a clear, accurate picture for the IRS. But you also need to be consistent about your financial tracking so you can back up the numbers if there are ever questions about the transactions that are moving through your company.

Reducing your tax burden comes down to the way you are managing your expenses and claiming these write-offs. Even the smallest details might seem trivial, but they can add up over time. Make sure you are recording every dollar that is spent on business expenses so this information can be used when calculating your tax burden for the year.

Good Financial Records Reduce Errors

How often have financial errors slipped through your business, causing you to lose money? If you don’t have a good system in place, then it is hard to determine where you have lost out on money that should have been collected. Your financial systems should be designed with checks-and-balances in place so you can identify any potential transactions or invoices that were overlooked.

For example, many accounting services offer monthly reconciliations. Not only does the accounting team keep up with the daily and weekly transactions, but an internal auditing system is used each month to make sure all of the accounts line up.

If a discrepancy is identified in the services that were rendered and the money that was collected, then it is a good indication that you need to turn your attention to collections on the outstanding invoices. Bringing in more money will ensure you are protecting the overall value of your company by protecting your profit margins.

Plus, the right financial system is essential to identify any potential risks for fraud. Even though you want to trust your employees and management, there is never a guarantee that illegal activity won’t happen in your office. Keeping accurate, detailed financial records will help you catch mistakes in the early stages before they turn into something that brings down your company. It is essential that you have the right system in place to identify internal wrongdoings so you can avoid major issues in the future.

Optimize Payment Trends for AP/AR

Pay attention to the cash flow trends to see if you find a cycle of cash flow issues that pop up throughout the year. If you find there is a trend or theme in the times that you are facing challenges with managing your cash flow, then it might be time to make some tweaks with your Accounts Receivable and Accounts Payable systems.

But you need to take a step back to ensure that you have accuracy in your financial statements. Inaccurate invoices can make it difficult to understand the clear picture regarding money that is flowing in and out of your business. You need to be sure you have correct information about the anticipated money that will be flowing into your company. At the same time, these financial records can help you be prepared for expenses that are coming up: wages, dividends, taxes, business development, rent, utilities, credit payments, and more.

Poorly kept financial records will make it almost impossible to keep up with these obligations because you don’t know when the payments are due. As a result, you might face late fees and interest charges, which can have a domino effect to make it even harder to keep up with your cash flow. Running proper calculations and implementing a good cash flow system is essential to help you avoid the credit issues that could be the downfall of your business in the future.

Financial Information Ensures Quality Decisions

What it all comes down to is one simple concept: you need to be sure you are making the right decisions to support the needs of your company. These decisions can influence the possibilities for your company in the future. When a business owner is always making decisions reactively, it means they are scraping enough money together to pay the immediate bills. It is a struggle to look to the future and plan for possibilities if you can’t keep up with the current requirements.

On the other hand, the right strategy for your financial records can help you evaluate the reality of the numbers for your company. You can find the areas where the business needs a little more attention. This process is a great way to fill in the gaps where you are losing money or missing out on profit potential.

Don’t underestimate how much your financials will affect all other aspects of your company. When the finances are unorganized, then it creates a huge mess that can be hard to turn around in the future. Instead of waiting for the problems to surface, you need to be proactive with implementing the right systems right now to be sure you are prepared for the future.

Choosing the Right Services to Improve Your Finances

Now that you can see the importance of improving your financial records so you can protect the value of your company, you might be wondering where you need to start to turn things around. If you don’t have accounting or bookkeeping experience, then it means you need to look to someone who understands this aspect of your business.

You have the option to hire an employee, but you will need to bear the burden of their salary and overhead costs. Instead, the smart solution is to find an outsourced accounting service that can help you build the right foundation. Our team is here to assist with the implementation of good accounting software, giving you a strong financial base that will support the future growth of your company.

Not only can we assist with the process of setting up the right system for your company, but we are also here to offer the ongoing support that you need. These services encompass everything from tax strategy to payroll management. When you let our team take care of the financial tracking and strategy, then you can turn your attention to other responsibilities that will help with the growth of your company.

Easier Accounting is just a phone call away. When you are ready to improve your business financial systems, then we invite you to call us for information about the services that are offered: (888) 620-0770

Bad Habits that are Sabotaging Your Business Finances

Even if you have the best intentions for your business, it is likely that bad habits (both big and small) are sabotaging your efforts. Have you identified habits that might be impacting your bookkeeping practices, business finances, cash flow, and more?

Small Habits are Worse Than You Think

Some of these habits might be obviously bad, but they don’t seem to be impacting your business in a terrible way. But, don’t let yourself be fooled. The smallest habits can have a compound effect over time. In fact, your daily, weekly, and monthly habits are key indicators that will affect your business success in the future.

For example, an overflowing filing cabinet with poor organization might seem like a nuisance. But the lack of organization with your paperwork could have a domino effect on your tax deductions, customer billing practices, and more. Not only will important information be overlooked along the way, but you will also spend an unnecessary amount of time sifting through papers when you need to find a specific document.

Instead of letting these small habits take away from the more important business tasks that need to be addressed, it is time to make a change that will improve your practices.

Important Bookkeeping Practices that Need to Be Fixed

Here are some of the worst bookkeeping and accounting habits that are causing problems for your company. You need to be aware of these problems, then commit to making the change that will turn things around for your business going forward:

  1. Messy Paperwork: Invoices, bills, contracts, and random paperwork can make you feel like you are buried in stacks of nonsense when you are sitting in your office. If you aren’t organized with the paperwork, then it will have a domino effect on all aspects of your business. A lack of organization with the paperwork means that you are likely missing deadlines and paying late fees because you can’t keep track of the necessary information. Put together a filing system and set aside time in your schedule to ensure that you are keeping up with the filing throughout the year. Your accountant can offer information and advice about the information that should be kept in your filing cabinet.
  2. Poor Deadline Management: Regardless of your industry, you always have deadlines and due dates that need to be managed. Failing to set these deadlines and adhere to them means that you could be missing key points along the way. For example, do you have a schedule to manage the frequency of when reports are run and analyzed for your business finances? If you are only looking at these reports once a year at tax time, then you are missing out on opportunities to improve your business strategy throughout the year.
  3. Not Saving for Taxes: One of the most stressful things that you can face as a business owner is a hefty tax bill that can’t be paid because you don’t have the cash flow when the deadline comes up. It’s no surprise that taxes need to be paid… you can count on it happening every year. Make sure that you are prepared by setting aside a specific amount of money so the cash is available when the taxes are due. Also, keep track of quarterly estimates and payroll tax deadlines to ensure that you are meeting the tax payment schedule based on the requirements of the IRS. Tax calculations and payroll management can be confusing and stressful, which is why it is important for every business owner to invest in professional financial services.
  4. DIY Financial Management: Just because you know how to balance a checkbook doesn’t mean that you have the bookkeeping and accounting skills for DIY business calculations. Working through tax laws, cash/accrual accounting systems, profit and loss reports, and other requirements for business accounting can be problematic. If you aren’t professionally trained in bookkeeping and accounting, then there is no question that you will benefit from professional support.
  5. Cutting Corners on Bookkeeping and Accounting: Yes, it is smart to save money whenever possible. But you will be making a big mistake if you cut corners by hiring a newbie instead of an industry professional. Even though you can find someone with basic secretarial skills which only costs $15/hour, it’s hard to calculate the opportunity cost of the services that come from a professional accountant. Whether you are hiring an employee or an outsourced contractor, make sure that you are paying the right amount to work with a professional. It’s worth the extra cost to ensure that things are done the right way. In fact, you will likely save money because you can avoid mistakes that could cost you in the future.
  6. Ignoring Software Solutions: There is always a learning curve when implementing a new software program for your business efforts. Even though it takes a little bit of effort to implement these systems, it is important if you want to set yourself up for the future. Talk to your accounting and bookkeeping team to determine the right software solutions that will be best for your industry. Once the software is up and running, you will benefit from the integration that simplifies your life and ensures that everything is running smoothly together. Data synchronization helps to reduce errors that pop up due to manual calculations and will improve efficiencies as well.
  7. Standardizing Business Financial Systems: Failing to have standardizations in place for your ongoing systems is a mistake that could take a toll on your success. Do you have a set schedule and standard practices in place for client billing and management? Consider the ongoing systems that affect the money that flows in and out of your business. Then, create a standardized system so that all employees, managers, and contractors are on the same page with expectations going forward.
  8. Ignoring Financial Reports: When you are busy managing employees, working on business development, and coordinating the new marketing plan, it probably feels like financial reports are low on your priority list. Don’t make the mistake of assuming that you only need to look at business finances at tax time. The most important thing you can do as a business owner is to understand key accounting metrics so you can track this information throughout the year.

Tapping into Professional Support to Change Bad Habits

Now that you’ve identified some of the bad habits that are affecting your business, it is time to make a change. But the best of intentions won’t make a difference if you aren’t willing to change ongoing actions and practices. Without the right systems, you will be facing ongoing problems in the future that will impact the success of your company.

As a business owner, the best thing you can do is tap into the professional support that is available to change your bad habits. Spend the money on services to ensure that your bookkeeping and accounting systems are set up in a way that will support your success going forward. Even though it costs a bit of money for the setup and ongoing maintenance, view this spending as an investment for all of the benefits that are available for you in the future. There’s no question that the right bookkeeping and accounting services can optimize your spending, increase profit margins, and maximize tax deductions that are available.

Let the Pros Fix Your Bad Habits

Often, the worse accounting and bookkeeping habits pop up when business owners attempt a DIY approach with their business finances. You need to be willing to let go of these habits, which means that it is time to implement the advice that comes from an industry professional. Tapping into the expertise that comes from an accounting team means you can get rid of these bad habits. Trust that your financial tracking and reports are in good hands, then turn your attention to other business responsibilities that need to be handled throughout the year.

As you are choosing an accounting team, make sure you find a contractor with experience helping small business owners. This ongoing expertise gives you the benefit of tapping into proven systems and strategies. You don’t need to reinvent the wheel when we already have formulated the best practices that can be implemented into your business.

Will You Benefit from Outsourced Accounting Services?

Right now is a great time to evaluate your business finances and determine the areas that need improvement. As you look at the weak points in your business, you will find that outsourced accounting services can be the perfect solution to fill in the gaps.

Look for experienced contractors that offer a variety of accounting services. It is essential that you find a team for ongoing accounting support, instead of only talking to your accountant at tax time.

Easier Accounting is available to offer the support that you need. Contact us any time to learn about the accounting packages and small business services that match the needs of your business. We will personalize the services based on your preferences and needs: (888) 620-0770.

Last Minute Tax Tips for Small Business Owners

If you have procrastinated your tax preparation and filing this year, then these last-minute tax tips might be just what you need as you are facing the looming deadline. Business owners often agree that tax season is the most stressful time of the year. Not only do you need to worry about paperwork, number crunching, and financial reports. But there are often cash flow concerns as you are evaluating the bills that need to be paid to the IRS.

Even though it can be a stressful experience to file taxes as a business owner, there is nothing to worry about when you have a good team to help. An experienced accounting and bookkeeping team can be an invaluable resource to ensure that your taxes are filed timely and accurately.

Tax Tips for Your Small Business

At Easier Accounting, we specialize in all of the financial services needed to keep your business running. Here are some of our best tax tips when you are facing the last-minute crunch of finishing your filing for the year.

  • Deductions to Lower Taxable Income: Even though it takes a little more work to sort through receipts and categorize spending, this extra step is essential if you want to reduce the amount that will be paid. Business owners have a variety of deductions that can be used to reduce taxable income. Just make sure that you are staying within the guidelines established by the IRS to avoid raising red flags with the write-offs.
  • Contributions for the Year: As you are finalizing the numbers on your tax return, is your taxable income still higher than you were anticipating? Other strategies can be used to lower your taxable income. For example, you might decide to contribute to an IRA, helping you save for the future and reduce the amount that will be paid for taxes this year. Even though you are filing 2018 taxes and the calendar year is technically over, you can still contribute until the tax filing deadline and have it count. Talk to your accountant for personal recommendations about the type of IRA that will work best for your needs. As a self-employed individual, you might consider opening a Simplified Employee Pension Plan (often called a SEP IRA), which allows you to contribute up to 20% of your annual income.
  • Organize Paperwork: Handing your accountant a stack of messy paperwork is the wrong way to approach tax preparation. While your accounting team can help with financial strategy and tax prep, you shouldn’t be handing off all of the responsibility. As a small business owner, you need to have a general idea about what is going on with your bank statements, financial reports, costs, profitability, and more. Do your best to organize the paperwork so your accounting team can sort through the numbers and support your strategy.
  • Electronic Filing and Payments: Now that you are down to the last few days, it makes sense that you should take advantage of the digital options for tax filing. It’s been found that paper filing increases the potential errors and could result in lost paperwork, resulting in late fees and fines. We live in a digital world, which means you should take advantage of the digital tools that are available. The simplest solution is to work through your professional tax preparer to complete the digital filing. You can also submit direct deposit payments online to avoid the need to visit a post office to mail checks for payments.
  • Filing Without Payment: One reason why business owners sometimes procrastinate their tax filings is that they are worried about how they are going to come up with the cash to pay the tax bill. Even if you don’t have the money in the bank to pay your taxes, keep in mind that financing options are available through the IRS. Remember that it is more expensive to pay the fines and fees that come from not filing than it is to pay interest costs that come with a payment plan. In fact, the penalty for not filing your tax return could be as much as 10x more compared to not paying in full. The costs can add up, resulting in a higher bill in the future. Avoid late-filing penalties by filing by the deadline, then submitting for a payment plan.
  • Filing an Extension: Sometimes it comes down to the wire, and you just aren’t ready to file your taxes by the deadline. If you need more time or you don’t have complete information, then it might make sense to file an extension. This process gives you 6 more months to file your taxes for the year. Keep in mind that even though you have more time to file your taxes, it doesn’t give you an extension to pay. You still need to send the anticipated payment by April 15th to avoid late-payment penalties. That amount can be adjusted later in the year when you finalize your tax filing. If you choose to file an extension, then Form 4868 needs to be submitted. Or, an automatic extension is available when you estimate the tax liability and make an electronic payment.
  • Report All Income: Failing to report money that was received can start a domino effect of problems that you will face with your tax filing. One problem with scrambling to complete your taxes at the last minute is that you might overlook important information that should be included on the tax return. Every time you receive a 1099 form, remember the IRS receives the same information. If you fail to report income that was received, then it could result in a stressful IRS audit. Even if you don’t receive a 1099 form for contract work that was completed, you are still obligated to report the income on your taxes. It is important to track this information throughout the year so you can be thorough with reporting accurate numbers for your income and expenses.
  • Don’t Guess on Deductions: As you are wrapping up the information for your tax paperwork, it might be tempting to guess on some of the numbers for your deductions. Even though you think that you can get close with estimates, it is essential that precise figures are provided. Estimating could be a mistake that hurts you in the future, potentially resulting in fees and fines. If you are audited, all of the numbers need to be documented with paperwork. You don’t want to face the problems that will arise if the IRS catches you in a lie. Make it a priority to spend the time needed to evaluate your expenses and income so you can provide exact numbers for your tax preparer.

Tax Tips: Make Adjustments to Prepare for the New Year

After the stress of tax filing calms down, don’t assume you don’t need to worry about tax preparation or strategy for another year. Post-tax season is the perfect time to evaluate your systems and business practices. Often, business owners identified weaknesses in their financial systems, which are good indications of areas that need improvement to prepare for the next year.

For example, did you find that your books were messy when it came time to calculate expenses and deductions? If you spent hours crunching numbers and calculating all of these details by hand, then it is a red flag you need to improve your system for the future.

It is easy to procrastinate these decisions because you won’t feel the pain of tax preparation for another year. But you will do yourself a favor by implementing the changes right now while the information is fresh in your mind. Make a commitment to improving your accounting and bookkeeping system so you can save yourself the headache and stress when tax season rolls around in the future.

Year-Round Tax Strategy and Support

It’s amazing how much of a difference it makes when you are proactive and prepared for tax season. Too often business owners only think about tax strategy when the tax deadline is looming. But the best solution is to ensure you are working with your accounting team on an ongoing basis so that you are thinking ahead and prepared for the future.

Many business owners choose to implement a digital accounting and bookkeeping system. These software programs can be used to help you stay ahead of the transactions on a daily, weekly, and monthly basis. Then you don’t have the burden of sorting through a year of transactions when it is time to file your taxes. Instead, a simple report can be run so all of the essential tax information is ready at your fingertips.

Finding Support for Tax Preparation

You don’t have to file your tax paperwork without support. The best thing you can do as a small business owner is to outsource your tax strategy to a team that understands your business needs. At Easier Accounting, we are here to help. Call today to learn about the immediate and ongoing financial support available for your company: (888) 620-0770.