What to Expect from Accounting or Bookkeeping Services

Hiring accounting or bookkeeping services for your small business might be one of the most effective investments in your company. These financial professionals can be critical to help you set up for financial success in the future.

The services that are offered by an accountant or bookkeeper depend on the size of your business, your industry, and the specific areas where you need help. Instead of cookie-cutter solutions for every company, the financial team will cater the services to match your individual needs.

As a business owner, where are you encountering problems with your financial systems? If you are having a hard time keeping up with the books, then it might be time to hire a professional team. There are also benefits to hiring a financial professional if you are encountering problems with your financial reports, you need assistance with tax filing, or you are anticipating significant business growth in the future.

What is the Difference Between a Bookkeeper and Accountant?

Generally, a bookkeeper takes responsibility for ongoing financial information for a company. The bookkeeper oversees the collection, classification, and record keeping activities that involve any outgoing or incoming transactions.

Other services offered by a bookkeeper might include report management, payroll processing, and anything else that needs to be addressed on a day-to-day basis. The bookkeeper oversees close tracking of the cash flow and expenses, ensuring that your finances are handled, so nothing gets in the way of the growth of your company.

Even though bookkeeping and accounting services might seem similar, there are some notable differences in the services that are offered. To keep it simple, you need to understand that bookkeeping services oversee the day-to-day information that moves through your company, while an accountant uses that information to verify data, process tax paperwork, and analyze the information. Accounting services are helpful for the big-picture things such as tax management and profitability going forward.

An accountant can analyze the information to generate reports, complete tax filings, look at business trends, and forecast possibilities for the future. These services are critical to ensuring that your company has the right opportunities for growth. At the same time, you can identify potential potholes in the road going forward and ensure that you have the right cash flow to make it through the slower months. Accountants look at everything that might impact the big picture, helping you make educated decisions regarding the way your company is managed.

Adding Financial Structure to Your Business

There is no question that both bookkeeping and accounting services can be beneficial to help your company grow. If you aren’t already utilizing these services, then it is time to make the commitment to hire a financial professional to assist with your efforts.

These are some of the accounting and bookkeeping services that might be implemented to help with the organization and financial structure of your company:

  • Creating a Chart of Accounts: This structure shows the different accounts that are needed for the operations of the business. As transactions move through your bank account, the details can be classified so that you have accurate details about spending trends and income opportunities. It can be time consuming to maintain these accounts on a daily basis, which is where a bookkeeper comes in to play to help with your business activities.
  • Restructure the Books: If you have loose paperwork and random notes about transactions, then it can be hard to sort through the information in your books. A financial professional can step in to rehabilitate current bookkeeping or record keeping information to help you get back on track. Even though it might be a painful process to complete the restructuring, it is worth the efforts due to the long-term benefits that are available for your company. For example, your accountant can help you make the transition from a manual tracking system to an automated software, helping to cut down on the busy work that needs to be addressed each day.
  • Account Reconciliations: Just because you are consistent with ongoing financial tracking, doesn’t mean that mistakes won’t be made along the way. Regular reconciliations are essential to make sure that all of the accounts are in agreement. For example, bank deposits can be compared with the bank statements to identify any possible discrepancies that need to be addressed. If substantial differences are identified, then the bookkeeper or accountant can find the source of the problem and potentially fix the issue. Not only will this step help to catch mistakes, but it can also be helpful to reduce the risk of fraud at the same time.
  • Report Maintenance: One of the benefits of ongoing financial services is that you can tap into the real-time reports that show the financial health of your company. These records can be compiled by the bookkeepers and analyzed by your accounting team. Most business owners don’t know what to do with the raw numbers. But, financial professionals can offer insights and suggestions to assist with the future growth of the company.
  • Payroll Process: Calculating payroll and processing the payments can be a time-intensive activity if you don’t have a good system in place. There is no reason why you need to do these calculations manually. In fact, manual calculations are discouraged because of the potential for mistakes and errors. Instead, a software program can be used along with bookkeeping services to calculate the wages that are due, benefits payments and information, deduction calculations, tax details, and more. Good payroll processing services ensure that your employees are paid on time, helping to boost company culture and employee satisfaction.
  • Accounts Receivable and Accounts Payable (AR/AP): Bills need to be paid, and it can sometimes be a trick for business owners to keep up with the expenses that are due. These Accounts Payable details need to be recorded and tracked, with a system in place to ensure that everything is paid on time. Additionally, it is important to watch the Accounts Receivable transactions so that you can follow up on payments that are due from customers. As a business owner, you don’t need to worry about this busy work. Instead, it is best to hire the right services that will be required for your financial accounts.

Do You Need to Hire a Bookkeeper or Accountant?

How do you know which financial professional is needed for your company? The simple answer is that most small businesses need both bookkeeping and accounting services. Hiring a bookkeeper without an accountant means that you miss out on the benefits of tax preparation services and the big-picture strategy that is needed. On the other hand, if you hire an accountant without a bookkeeper, then it is possible that the accountant might not have accurate information regarding the ongoing activities within your company.

So, the best solution is to make sure that you choose both bookkeeping and accounting services. This approach will give you complete access to all of the financial details that will be needed to ensure the success of your company.

Instead of hiring an independent bookkeeper and a separate accountant, you might consider combined services to ensure optimal results. Make sure that you find a team that specializes in small business financial services so that the previous experience can be used to improve your results.

Advice When Hiring Financial Professionals

Don’t take it lightly that you will be providing your financial information to a service provider. If you are going to hand over the bank information, then you need to make sure that you are working with a team that you can trust. So, do a little research to find a company that has built a solid reputation in the industry, ensuring that you receive the optimal results that are possible for your company.

Keep in mind that you aren’t limited to the services in your local area. It might seem obvious that you should hire an accountant or bookkeeper that is close to home. But, all financial information can be managed online now. So, there is no reason why you need to limit your options based on a geographical area.

Instead, it is best to look for the optimal services that are offered for small business accounting and bookkeeping services. Then, hire the most experienced team regardless of location. Not only will you have more options for the services that are offered. But, you might also be able to save a little money on the cost of these services.

Call the Experts at Easier Accounting

Are you looking for the right services that match the needs of your business? If you are ready to upgrade your financial systems, then you need to discuss your options with our experienced team at Easier Accounting. We’ve specialized our focus to ensure the best results for small businesses, start-ups, and entrepreneurs. You can rest assured to know that you are choosing a team that understands the common pitfalls that come up for small companies.

We are here to help with the full-service account and bookkeeping solutions that you need. Call us today at Easier Accounting: (888) 620-0770

Red Flags that Might Increase the Risk of a Small Business Audit

Every small business owner dreads the idea of being audited by the IRS. Even if you have a good bookkeeping and accounting system in place and you are careful to follow the guidelines set by the IRS, there is a chance that you might face a business audit at some point.

It is challenging enough to run a small business and manage cash flow. Adding the stress of an audit on top of your current responsibilities can feel overwhelming. Luckily, you don’t need to handle the situation without support. The most important thing that you can do is hire a good accounting team to help with the auditing process.

Preventing a Business Audit in the Future

There is nothing that you can do to eliminate the risk of an audit completely. But, you should be proactive to minimize the risk so that you can prevent the possibility in the future. As with many other aspects of life, prevention is more valuable than dealing with a problem after the fact.

Talk to your accountant for recommendations about things that you can do to lower your odds of an IRS audit. Certain actions might raise a few red flags, resulting in a situation where the government takes a closer look at your business practices and transactions.

Red Flag #1: You Aren’t Turning a Profit

If you are writing off business deductions, then you need to show that you are working to bring in a sustainable profit. Tax deductions aren’t designed to cover hobby activities. So, a trend of non-profitability could make the IRS suspicious.

Your accountant can help you determine the right strategy to avoid this red flag. As a general rule of thumb, you need to be profitable for at least two out of five years.

Just because your business isn’t profitable, doesn’t mean that you shouldn’t take the deductions that are available. Most accounting professionals will recommend that you maximize your deductions as much as possible to leverage the tax benefits that are available. But, you need to be sure that you are managing good records to document the transactions in case any questions arise.

One or two years of business losses won’t be enough to raise a red flag for the IRS. Instead, they are looking for a pattern of loss that might indicate unusual activity. The IRS wants to be sure that you are taking deductions for a viable business.

Also, consider a new business strategy and cash flow management if you are spending in the red every year. Your accounting team will help you find the right solutions to minimize overhead expenses and maximize the money that you are bringing in. Sometimes a few small adjustments can go a long way to improve your profitability.

Red Flag #2: Most Transactions are Cash-Based

There is nothing wrong with accepting cash payments. But, it could cause a red flag if every transaction happens with cash. We live in a digital world, which means that many businesses are moving towards credit card and digital transactions.

The IRS might scrutinize your company a little more if everything is done in cash. This method of doing business increases the likelihood that business owners or employees could be taking a little off the top tax-free. It’s easier to hide money or adjust the numbers if the transactions are handed over in cash.

It might be tempting to avoid some of your tax obligations by sheltering some of the money that comes in. But, it isn’t worth the risk that you will be facing for penalties and fines if you are audited. Protect yourself and your company by keeping careful records of your cash transactions and the way the money is flowing in and out of your business.

Red Flag #3: Failing to Report All Your Income

The digital age in which we live has made it possible for the IRS to scrutinize the transactions a little more than before. Remember that you aren’t the only one sending the IRS information about your income. Other businesses are required to submit tax forms and paperwork regarding the transactions and payments that were made.

For example, if you offer a services-based company and you worked as a contractor for another business, then that company will provide tax information about the amount of money that was paid to you in a calendar year. Then, the IRS has a computer system known as the “automated underreporter” that compares various types of income reports with the tax returns that are filed. This IRS computer ensures that the numbers match with things like mortgage interest costs, W2 wages, and 1099 freelance income.

So, if you receive income, then make sure that everything is reported on the forms and tax filing. It isn’t worth the risk of withholding some of the information. If the numbers don’t match up, then it could trigger an audit, which in turn increases the likelihood that you will pay back-taxes and additional money for fees.

Red Flag #4: Unusual Deduction Activity

Are you inflating deductions? Some business owners are looking for ways to maximize deductions, so they work the numbers when it comes to things like cash contributions, unreimbursed business expenses, medical expenses, and more.

You should always claim every deduction for the costs that are incurred for business-related activities and purchases. But, if your deductions seem out of line for your industry, or you are claiming a lot more compared to other people in the same income range, then it could be a cause for concern.

Red Flag #5: High Home Office Deduction

If you work from home, then you need to be specific about the amount of space that is being dedicated for business use. This calculation needs to be based on the overall square footage of your home, as well as the amount of space that is needed for the business activities.

In the situation where a business audit is completed, the IRS wants to see that the home office deduction is legitimate. Is that space only used for business activities? Or, is it a place where the business and personal activities are mixed?

As you are calculating your home office deduction, your accountant will also help you look at details for the other home-related expenses, such as utility costs, HOA fees, and more.

Red Flag #6: Using Cryptocurrencies

Cryptocurrencies are relatively new in the financial world. But, it doesn’t mean that you don’t need to report income that comes from these sources. If you have any transactions that are done using cryptocurrency, then the income always needs to be reported.

Failing to report your income from these currencies means that you could be facing prison time and as much as $250,000 in fines. The punishment varies depending on the situation. But, it’s always best to report the income so that you don’t face any of these fines or jail time.

Red Flag #7: Expensive Costs for Business Travel, Meals, and Entertainment

Expenses should be deducted when you are on the road for business. But, it will raise a red flag if you are writing off high costs for lavish restaurants, entertainment, and more.

If you are going to use these costs as deductions for your business efforts, then you need to make sure that you always have good documentation about why you needed to travel. At the same time, be reasonable with the frequency of the travel compared to the needs of the industry.

Of course, these details change depending on your business and ongoing activities. Just be smart about the way you are writing off the meals, transportation, and entertainment. Any time you have questions about legitimate write-offs, it is a good idea to talk to your accountant for custom recommendations.

Red Flag #8: Claiming Vehicle Use is 100% for Business Activities

It’s hard to prove that the vehicle was only used for business, because it is natural to use a car for personal activities as well. So, it isn’t a good move to write off 100% of the vehicle costs. Instead, keep a log in the car of the number of miles that were driven and the purpose of the trip. Then, you can take a standard deduction based on the mileage rate.

This tracking can be as simple as a notebook and pen in the car. Or, there are apps that are available now that make it simple to punch in the mileage numbers so that you can keep a digital log.

Enlisting the Help of an Experienced Accounting Team

Whether you are facing an IRS audit or you are being proactive to minimize the risk of an audit, you need to be sure that you have a trusted accounting team to help with your business finances. These services offer a valuable way to protect your company and minimize tax burden at the same time. Learn more by calling our experienced team at Easier Accounting. We specialize in small business accounting services and offer year-round bookkeeping, tax preparation, payroll processing, and more. Call today to learn more: (888) 620-0770

Why it is Always Best to Outsource Bookkeeping Services

It’s no surprise that a lot of work goes into bookkeeping and accounting for a company. If you are a small business owner and you are working on financial systems for your ongoing transactions, then you might think that the best option is to hire an in-house employee to handle the work. While there are a few benefits to an on-site employee, don’t overlook the benefits of choosing to outsource bookkeeping services. Once you see how easy and affordable it is to outsource this work, you will wonder why you didn’t choose this option long ago.

How are You Spending Your Time?

If you want your business to grow, then you need to be spending your time on activities that will boost your results in the future. Business owners need to be looking at product development, relationship building, employee management, marketing, and other activities that will bring in more income.

The problem is that too many small business owners try to wear multiple hats throughout the day. Instead of focusing on the most important business building strategies, it is easy to get caught up in the paperwork and busy work that needs to be addressed to keep the company running.

If you are spending your time calculating payroll or preparing customer invoices, then you are missing out on potential chances to grow your company. It’s hard to calculate these opportunity costs. But, you need to know that you are leaving money on the table if you are spending your time on low-level work.

It is time to change things so that you can boost your success in the future. Which means that you need to evaluate the benefits of outsourced services. Ultimately every business owner reaches the realization that ongoing tasks need to be outsourced and delegated. Instead of procrastinating a new system, it is best to implement these changes right away so that you can enjoy the benefits as soon as possible.

Benefit #1: Reducing Costs

There’s no doubt that you will save money by not hiring another full-time employee. There are times when employees need to be brought into the company. But, you need to understand the full picture of the costs that will be incurred every month to keep this employee in-house.

The person’s salary is just the beginning of the expenses that you need to carry. Additionally, you also need to pay for benefits, office space, computer equipment, employment taxes, and more. Compare these costs with the amount that you will pay for ongoing accounting services. You will see that outsourced accounting and bookkeeping is a fraction of the cost compared with hiring an employee.

Benefit #2: Decreasing Tax Burden

At the same time, you can also reduce the amount of money that you are spending on taxes. When you have a good bookkeeping and accounting team, you can rest assured to know that you are maximizing tax write-offs as much as possible.

It is important that you have a support team that understands how the tax law applies to your business efforts. As a business owner, you don’t have the time or energy to read the fine print in the tax law. It’s too much information to cover! Instead of trying to decode the information, it is better to hire an expert team who knows the tax law inside-out. Personalized recommendations can be formed to help you optimize your write-offs.

Additionally, you also need to think about the potential cost if a tax filing is submitted incorrectly. For example, it might be tempting to take a DIY approach with your filing this year to save a little money on the accounting preparation fees. Yes, you might save a little cash. But, you could be facing thousands of dollars in penalties and fines if something is wrong on the paperwork.

The IRS takes it seriously when incorrect tax returns are filed. Don’t put your company at risk by filing the return without an experienced team to help. Instead, you can outsource the ongoing bookkeeping services to make sure that you are ready for the annual tax filing. This complete financial package is a great way to help you save money and be ready when tax time rolls around.

Benefit #3: Maximize Your Hours Each Day

How are you doing with your time management each day? If you are focusing on the busy work, then it is probably hard to keep up with all of the other tasks that need to be addressed throughout the week. Outsourcing your bookkeeping responsibilities will free up your time so that you can focus more on the operational aspects of running a company and managing employees.

As you free up your time, you will find that you have more opportunities to be aggressive with your business efforts. You know the best ways to sell the products and services that you are offering your customers. Why not turn your focus to these efforts instead of wasting your time with the paperwork?

Staying at the front of all business activities is the best thing that you can do for future success. Lead by example and work side-by-side with management and employees. Don’t keep yourself stuck behind a desk because you need to go through the never-ending paperwork and bookkeeping tasks. In addition to having more time for the necessary business management, you can also free up your personal time to spend more quality time with your family and friends.

Benefit #4: An Outside Perspective

Too often, business owners get tunnel-vision when it comes to the way the company is run. It is easy to get stuck in the same habits and patterns, especially when you are trying to keep up with everything that is going on. Instead of assuming that everything is fine, it can be helpful to bring in an outside perspective to improve your systems.

When you have an outsourced bookkeeping and account team helping with your business efforts, it means that you have the opportunity to tap into a team of experts who know the best strategies to help your company grow. These finance professionals will bring years of experience to the table. You can tap into that knowledge based on the strategies that are applicable to your company.

Bookkeeping and accounting services are more than basic paperwork services. You can lean on the experience of your outsourced team to gain insights into tax strategy, cash flow, and other financial concerns relating to your company. Take advantage of the strategic planning to increase the likelihood that your business will grow in the future. The insights that are offered can only come with experience. Since you don’t have the same financial experience, it makes sense that you should implement a proven system instead of trying to reinvent the wheel.

Benefit #5: Improve Cash Flow

There are various ways that bookkeeping and accounting services can be used to improve your cash flow. This cash flow is the lifeblood of your company. If you don’t have money to pay the bills, then you can’t keep up with the overhead costs that are required to keep your company in business.

An accounting team can help you look for ways to reduce interest costs, overhead expenses, payroll expenses, and more. Plus, you can also evaluate possibilities to optimize inventory management so that you don’t have a bunch of cash tied up in the warehouse. The goal is to keep more money in your business so that the cash is always available when you have expenses that need to be paid.

Benefit #6: Options to Scale in the Future

Keeping certain tasks in-house will limit your scalability in the future. If you are anticipating large growth, then you need to be sure that your financial system can accommodate the changing needs of the company. When you outsource bookkeeping services, you can rest assured to know that your team knows the best adjustments that need to be addressed to keep up with the growing requirements for your company.

Then, your business can grow naturally and organically, without the requirement to hire more employees or train staff on the paperwork that needs to be handled. It is easy to minimize the growing pains when you have an experienced team that is already in place.

Should You Outsource Bookkeeping Services?

As you consider the option to outsource bookkeeping services, you will see that this step might be the key that is needed to create the business success that you desire. It’s no secret that you need to manage the finances for your company. So, it makes sense that you should bring in an experienced team to help with the ongoing tasks that need to be addressed.

If you need help with your small business finances, then right now is a great opportunity to talk to us at Easier Accounting. We focus on small business services. This specialty enables us to provide better solutions for our customers because of the ongoing, hands-on experience that we can offer. Learn more about the services that are available by calling our team for more information: (888) 620-0770

Are Payroll Services Worth the Expense?

Payroll processing is an unavoidable part of managing a workforce. Whether you have a small or large company, it is essential to have the paychecks ready to go on payday. Even though it might seem simple to hand out these checks to employees, there is a lot of work that goes into payroll processing. So, you might consider the benefits of hiring a team to help with payroll services.

How Much Should You Pay for Payroll Services?

The monthly cost for these services will vary depending on the size of your company and the complexity of the payroll system. It’s hard to put a set price on payroll processing without understanding the specific needs of your business. So, the best thing that you can do is talk to a payroll processing team, like Easier Accounting, to learn about the services that will suit the needs of your company.

Even though outsourced payroll services might seem expensive, these costs are typically cheaper than the prices that would be paid for an employee to manage the tasks. When you are paying an employee to handle payroll processing, you need to cover their salary as well as the overhead expenses for office space, benefits, and more. The costs can add up!

Instead of jumping to the conclusion that you need another employee to handle payroll processing, consider the benefits of using an outsourced team. These payroll services can be catered to match the needs of your company. You can rest assured to know that you will receive top-notch services at affordable prices.

What is Covered By a Payroll Processing Company?

When you choose payroll processing for your small business, the payroll company handles more than just printing the checks. Generally, this company should oversee all of the behind-the-scenes details that affect the payment calculations, taxes and more.

These are the most common offerings in payroll services:

  • Schedule: It is important that the schedules are managed so that employees always have a paycheck in hand on the right day. Missing the scheduled payroll can have horrible consequences on employee morale and company culture. Your employees come to work each day trusting that they will receive a paycheck on the right day of the month. Any delays with payroll availability will result in a domino effect that has a negative impact on the productivity of the workforce.
  • Pay Calculations: Did you know that there are different payment rates that need to be provided based on the number of hours that are worked by an employee? Not only do you need to know the person’s wage and the hours that are logged each week, but you also need to be aware of the adjustments that are required for time and a half, double pay, holiday pay. There are federal and state laws that manage these payments. Your payroll service will help you stay ahead of the legal requirements for your workforce.
  • Benefits Deductions: Most companies have calculations for benefits deductions and human resources services. For example, if health insurance is provided as a benefit and the employee needs to pay for the monthly premium, then that amount will need to be deducted from their check. Additionally, the money that is deducted, along with the employer contribution, needs to be sent to the insurance company to ensure uninterrupted insurance coverage.
  • Tax Administration: Taxes also need to be calculated for every paycheck. It is important that you keep up with any tax rate changes each year. There are several categories of employment and unemployment taxes that need to be deducted, and your payroll service can help you stay current with these rates.
  • Federal and State Laws: With the tax calculations, it is essential that both federal and state laws are factored into the withholdings. An experienced financial company will help you identify the laws that need to be managed for your business location.
  • Tax Paperwork and Filing: In addition to the withholdings for taxes, there are other forms and paperwork that need to be filled out and filed. For example, employment taxes need to be paid on a regular basis, and this schedule changes based on the size of your company. Employees also need to receive their W2 forms by January 31st each year.
  • Other Deductions: Sometimes there are additional deductions that need to be calculated for individual circumstances. Garnishments might be required and shouldn’t be overlooked if you have received a garnishment request for an employee.
  • Checks and Deposits: The final part of payroll processing is printing the checks and issuing direct deposit transfers as needed. This step is the time when employees receive the money that they worked so hard for. Your payroll processing service will take care of these details so that you don’t have to worry about the bank transfers or paperwork.

As you can see, there is a lot of information that needs to be addressed before the paychecks are cut. It is important that you have an experienced team to help with the process. Creating a good system will improve accuracy and help you avoid fines and fees for improper payroll calculation. If you need assistance, then you can talk to our team at Easier Accounting for more information about the services that we provide.

Financial Consequences of Skipping Payroll Services

As mentioned above, outsourced payroll processing is often cheaper compared to hiring an employee to manage these tasks. But, did you know that there are other potential financial issues that you might be facing if you don’t have a good payroll processing company?

One of the biggest concerns is the potential for fees or fines based on improper payroll calculations. You are required by law to provide accurate payments to employees based on their agreed wages and the number of hours that are worked. Failing to abide by these legal requirements could result in harsh consequences for your company.

Hiring a payroll processing service is one of the best things that you can do to avoid these potential issues. Our company will evaluate your situation and offer recommendations based on the services that suit the needs of your workforce. We ensure that everything will be handled with the highest level of care and support that is needed.

Free Up Your Time for Other Business Responsibilities

Another benefit of outsourced payroll services is that you don’t need to waste your valuable time on busy work. Even if you have the knowledge and ability to manage payroll processing, there is an opportunity cost to the hours that are spent on the work. Just because you are capable of handling the work, doesn’t mean that you need to manage the task by yourself. You are probably capable of scrubbing a toilet, but you choose to hire a custodial staff to help instead. In the same way, you might be capable of calculating payroll, but you should let an accounting team handle the work.

Freeing up your time is one of the best things that you can do to ensure the future success of your company. You shouldn’t get caught in the busy work that distracts you from other important tasks that need to be addressed for your company. When you outsource tasks like bookkeeping and payroll processing, then you can focus your time on more important things like business development, customer satisfaction, product ordering, employee management and more.

These other responsibilities make up the foundation of your company. You need to use your time wisely by making sure that you are spending your days on the services that will be best for the needs of your company.

Choosing a Payroll Processing Company

Now that you can see the benefits of payroll services, it is time to choose a payroll processing company. Don’t limit yourself to local providers when there are so many great resources available online. The internet has made the business world smaller, giving you access to professionals located in any part of the country.

The best thing that you can do is choose a company that offers personalized services. There is no reason for you to stick with generic payroll processing when there are quality services that can be catered to the needs of your company. You can work with an experienced team to identify the right system that will be good for your workforce.

If you need payroll processing services, then you can contact our team to learn more about the customized services that we provide. Not only are we here to help with your payroll processing, but we also offer the support that you need for bookkeeping, tax administration, tax filing, and more. You are invited to contact us any time when you are ready for more information.

At Easier Accounting, we specialize in payroll and bookkeeping services for small businesses. Our company has many years of experience in the industry, offering the best solutions for business owners and entrepreneurs. You might be surprised to see how much of a difference it can make when you choose to hire an experienced payroll and accounting team. Call today for custom recommendations that match the needs of your company: (888) 620-0770

Guide for Business Owners: When to Hire an Accountant

As your business grows, how do you know the right timing to hire an accountant? Many business owners struggle with the commitment to outsourcing. It makes sense that you need the additional help. But, the cost of the service is often the reason the decision is delayed.

As we interact with small business owners, the answers to this question vary depending on the size of the company, the recent growth, and anticipated trends in the future. Often, some specific events or situations triggered the idea to hire an accountant. So, it is important that you talk to a finance professional to see if the services are needed for your company right now.

Why Business Owners Delay Accounting Services

Finances and cash flow are a foundational aspect of the future success of your company. So, why do many business owners delay accounting services? Here are some of the common reasons why people procrastinate this service:

  • Costs: Many startups require bootstrapping, which means that business owners wear many hats throughout the day. Instead of hiring professionals for the services, it might make sense to handle everything in-house in the beginning. It isn’t unusual to find a start-up founder staying after hours to pay the bills or process invoices that need to be sent. These strategies help to minimize startup costs. But, eventually you will need to take the leap to bring in the professionals to help with the services that are needed.
  • Cashflow: Another concern lies in the amount of money that will be spent on the accounting services. Can you afford to spend the cash on these services? The real question is whether you can afford NOT to hire an accountant. Even though you will pay for the services, there are many financial benefits that are available for your company: better financial decisions, tax deductions, and more. In fact, it might be costing you money if you delay the decision to start with outsourced accounting services.
  • Control: If a business owner has a micro-managing personality, then they might want to oversee the way the transactions are entered. Even though there are limited hours in the day, you might have a hard time delegating some of the busy work. Just because you did the books when the business started, doesn’t mean that you need to continue these tasks as the company grows. Look for ways that you can outsource tasks that are taking up your time. By handing off these tasks, you can free up your day to focus on other activities and responsibilities that are more important.

What is your excuse for not hiring an accountant? If you don’t already have someone to help with the finances of your small business, then right now is the perfect time to change your mind and implement a new financial system.

Opportunity Cost of NOT Hiring an Accountant

It is easy to see why business owners get stuck on the amount of money that will need to be spent on accounting services. But, these costs are minimal compared to the potential financial benefits that are available from an accountant. Bringing in a financial professional might be one of the best things that you can do to help your company grow.

An accountant will be able to optimize your financial system, helping to eliminate redundancies or things that are costing you money. This process can be essential to tighten down the overhead expenses, resulting in lower costs that need to be paid each month.

Accounting services can also be beneficial to ensure payments from your clients. It is easy for overdue invoices to slip through the cracks. You need a team that can watch the transactions to make sure that you receive timely payments from your customers.

Additionally, these services are essential to help you maximize the write-offs that are available for your company. Are you leveraging all of the tax breaks that apply to your industry? Only an experienced accountant will know the right places to look to find other options to minimize tax burden. It is common for business owners to find that the accounting fees are recovered in the tax savings alone.

Finally, you need to consider the opportunity cost that you are missing when you are spending your limited time on bookkeeping and accounting tasks. Instead of looking at product development or employee management, you are dedicating your time to busy work. If you keep your head in the books, then you will miss out on potential opportunities to help your company grow. It makes sense to outsource these services so that you are setting your company up for success.

Signs that You Need to Hire an Accountant

Here are a few sure signs that it is time to hire an outsourced accountant:

  1. You Don’t Have Experience with Accounting: If you are sick, then you schedule an appointment with an experienced medical professional. In the same way, it is important that you find someone with hands-on experience to help with your business books. If you are confused by financial reports and you have a hard time keeping up with the transactions, then it is time to hire an accountant. A small business accountant will sift through the information and provide the information in an easy-to-understand format to help you make better decisions for your company.
  2. You are Too Busy to Keep the Books Current: Is there a stack of invoices and transactions sitting on your desk? If you can’t keep up with the paperwork, then it is a sign that you need to outsource these tasks. Even if you can carve out a few hours a week to handle the bookkeeping, consider the other tasks that are neglected within your company. It doesn’t make sense for you to waste your time managing the books. Instead, dedicate that time to connect with new clients or work on your marketing strategy.
  3. You Don’t Know the US Tax Code: Do you stay up-to-date with the changes that happen each year with the tax code? If you aren’t working in the tax industry, then it is likely that you will miss changes that are applicable to your company. Failing to pay the right amount of taxes can result in fines and penalties for your company. An accountant is helpful to identify the right tax strategy, ensuring that you can maximize deductions while staying within the guidelines of the law.
  4. Your Company is Going Through a Rapid Growth Phase: You might have been able to keep up with the bookkeeping when the business started. But, if you are experiencing rapid growth, then the accounting tasks will grow as well. Not only are you facing more paperwork and reports that need to be analyzed, but the increased income can also affect your tax strategy. Make sure that you hire an accountant who can help you move through the growth patterns with ease.
  5. You are Struggling to Maximize Profits: Some companies find that their revenue is increasing, but they are having a hard time keeping money in the bank. If you don’t see that the profits are going up, then it is time to hire a financial expert to analyze your cash flow, expenses, and more. Your accountant will help you identify areas where you can reduce expenses, helping to increase your profit margins.
  6. You are Being Audited: A notification from the IRS about an upcoming audit can be one of the most stressful things that a business owner might face. There’s no way around the messy process that is required for an audit. If you want to protect your company, then don’t make the mistake of trying to navigate the audit without professional accounting services. An accountant can save you time and money, guiding you through this experience.
  7. You are Preparing to Merge or Sell the Company: Whether you are looking at an acquisition or you are preparing to retire from the industry, you need to make sure that you have an accountant to help with strategy. These efforts will maximize the price that you can get for the company. At the same time, your accountant can offer recommendations to decrease the amount of taxes that you will pay from the proceeds of the sale.

As you can see, there are many reasons why you need to hire an accountant. If you aren’t already using professional accounting services, then right now is a great time to learn more about the benefits. For more information, you need to talk to an accounting team that specializes in small business accounting.

There’s no doubt that accounting services are essential for every small business. Instead of risking the future of your business, we invite you to call us at Easier Accounting. We will discuss your needs and determine if our services are a good fit for your company. Our team understands the unique challenges that are faced by small business owners. So, we are always looking for ways to improve our services to match your needs. Call for more information: (888) 620-0770

8 Steps to Boost Profit Margins for Your Company

While it is important to focus on increasing your gross receivables each year, you won’t experience a real boost in profits without also assessing the amount of money that you are spending. It is common for business owners to feel like they are successful with their company because of the large amounts of cash that are coming into the bank account. But, these numbers can be deceiving if you aren’t looking at the overall financial picture.

The main goal is to increase your profitability as much as possible. Extra income can be used for business development, marketing, and other efforts that will improve future success. At the same time, higher profit margins mean that you can enjoy the fruit of your labors.

You can find a million tips online that suggest the best methods to improve profit margins. But, the truth is that business finances can be complicated. In fact, there isn’t one set strategy that works for every company. The best thing that you can do is talk to a financial professional who can assess your business, assets, products, and sales patterns. Make sure that you are utilizing the services of an experienced accounting team who can offer recommendations about the way you are managing your cash flow.

Today, we are sharing some of the most common strategies that can be used to increase business profit margins. If you are interested in learning more information, then we encourage you to talk to our team for personalized recommendations.

1. Maximize Tax Strategy

If you don’t have a good tax plan, then it probably means that you are spending more than necessary on taxes each year. Yes, you are required to pay various taxes on the money that comes in for your company. But, there’s no reason why you shouldn’t take advantage of the tax breaks and write-offs that are available for your company.

The right tax strategy could save you thousands of dollars or more on the money that you send to the IRS. Reducing these tax liabilities will increase the profit margins that are left after you have paid the expenses for your company. Make sure that you are following the tax laws and working with an experienced accountant for help.

2. Watch Invoices and Transactions

It can be easy to get caught up in the daily responsibilities so that you overlook the invoices that are moving through the office. You need to be paying attention to the invoices that are sent by your suppliers. A quick check is essential to ensure that you aren’t being overcharged.

An accounting team can help with the management of your invoices. For example, if there is a pattern set with a particular vendor, then your accountant can bring an invoice to your attention if it is higher than normal. Always pay attention to the details so that you aren’t billed at the wrong rates or charged for products or services that aren’t received.

As a business owner, you can’t keep up with financial records and accounting by yourself. It is essential that you enlist the help of a professional accounting service. Then, it will be easier to identify potential discrepancies or errors in the invoices that are sent to your company.

3. Offer Add-On Services

Do your customers have an opportunity to buy an extra product or service when they are purchasing from your company? When someone has their credit card out to make a purchase, it is an opportune time to increase the amount that they are spending. They’ve already made up their mind that they want to buy from your company, so the hard work is already complete. Now, you just need to show them the services or products that best match their needs.

You don’t have to be overbearing with the add-on services. Instead, provide small suggestions or hints about complementary services that might be considered. You can see an example of this strategy the website of one of the biggest online retailers: Amazon. Every time you are looking at a product, there is a small section that shows other related items that customers selected after viewing the same product that you are ready to buy.

4. Increase Your Prices

Don’t be fooled into thinking that you need to race your competitors to the bottom with the prices that are offered. If customers see the quality of your products or services, then they won’t be too concerned about the price that you are charging. So, don’t waste your time trying to cut costs to bring more people through the door. Competing on price is one of the biggest mistakes that you can make! Instead, look for ways that you can increase the value perception to help customers see why they should be buying your products.

It is interesting to note that sometimes a price increase can actually raise conversion rates. If a customer thinks that your price is too low, then it could send a message that you are offering lower quality products or services. On the other hand, a higher price could be an indication that the customer can trust the quality that is offered by your company.

Find a balance to ensure that you are communicating value without racing your competitors to the bottom of the barrel. You deserve to get paid a fair price for the products and services that are offered. At the same time, your customers deserve to receive the quality products that they are interested in buying.

5. Increase Conversion Rates

How often are you losing customers when they are moving through your sales cycle? You might bring customers to your website or bring them through the door, but are they actually buying something when they arrive? Lead generation is important, but finding new customers won’t be effective if you can’t close the sale. In fact, there is a strong argument that you shouldn’t focus on lead generation until you have optimized close rates.

For website sales, you need to work with an experienced team that understands online conversions. If you are closing the sales in person, then you need to know the right strategies to share information with the potential client that will help to seal the deal. Even small increases in conversion rates can have a big impact on the profit margins.

6. Decrease Overhead Expenses

It is common for businesses to get pulled into recurring expenses. Even though the transactions might seem small, they can add up over time. Calculate the amount of money that you are spending on overhead costs, then look for ways that you might be able to reduce your spending.

For example, are you using two software programs that are redundant in the reporting? If it is possible to combine your efforts into one software system, then you might be able to reduce the amount of money that you are paying to use the software. Additionally, you can also save money on the manpower that is needed for the data entry and information management.

7. Assess Inventory Management

How are you managing the inventory that is moving through your business? Buying inventory is a big expense, so you need to be careful to evaluate sales trends and manage the amount of money that you are spending on inventory. It can be a challenge to find the right balance, but it is possible to improve the process with a little bit of practice.

There are several reasons why you need to manage your inventory. First, you need to be sure that you aren’t tying too much cash up into the inventory that is on site. Next, inventory management reduces the risk that employees or contractors will steal products from your company. If there is an issue with theft, then an investigation can be completed to find the culprit.

Finally, inventory management is important so that you can always have products on hand when customers are ready to buy. If a customer wants to purchase from your company, then you will lose out on the potential sale if you don’t have the right inventory available for the transaction. Not only will the customer go somewhere else to find the product, but you might be losing that person to the competition for future transactions.

8. Personalized Accounting Services

Cashflow and profit margins can be hard to manage if you aren’t watching the financial reports and paying attention to the way the money is moving through your company. Most business owners don’t have the experience to handle these financial tasks without support. If you want to increase your profit margins, then hiring an accounting team might be the best thing that you can do.

For more information about personalized accounting services, you should talk to our team here at Easier Accounting. We specialize in small business accounting, and our team is here to assist with anything that you need. Call today to see if our services match the needs of your company. We are always here to help with your business goals: (888) 620-0770

9 Common Scams Targeted at Small Businesses

Everyone needs to be cautious about potential scams… unfortunately, scammers are always finding new ways to exploit businesses and individuals. There are often warnings about scammers that target individuals and families, especially senior citizens. But, there isn’t a lot of conversation about scams that target business owners. Just because it isn’t often discussed, doesn’t mean that your business isn’t at risk of being scammed.

In fact, business accounting scams are becoming more common. Not only are these scams annoying, but they could be threatening the financial security of your company. If you fall into a trap that is set by a scammer, then you will not only lose out on the money. But, it is likely that you will need to dedicate many hours of time to clean up the mess.

Be careful about the management of your company so that you can avoid these potential issues! The best solution is to learn the strategies that need to be used to protect your company. Proactive management of your business is the best solution so that you can avoid some of the most common scams in the industry.

Here are a few common scams that you might encounter and tips to avoid them:

1. Fake Invoices

Truckloads of paperwork can move through the office each month, making it simple to slip in an extra invoice that seems unassuming and harmless. There are scammers out there who send invoices to local companies, with the hope that the invoice will be paid without any questions.

If the business owner is too busy to review the details of every invoice, then it is possible that a check will be sent for the fake invoice. These invoices might show line items for equipment or office supplies or services that are related to your industry. Sometimes, these fake invoices are requesting money for annual renewal or membership.

Avoid this issue by hiring an experienced accounting team to oversee the invoices and payments. Your accountant will watch for potential issues that might indicate the risk of a fake invoice. Good accounting services is an important step to protect your company.

2. False IRS Inquiry

Whether you receive a phone call or email from the IRS, a red flag should go up that something is not right. Usually, these inquiries are threatening and time-sensitive, making people think that they are being audited or in trouble from the IRS.

If the IRS needs to contact you, then they will always send an official letter in the mail. Any time there is a question about communication from the IRS, the best thing that you can do is talk to your accountant for assistance.

Your accounting team will be able to tell if it is a scam or if action needs to be taken with the IRS. In most situations, the request is coming from a scammer who is trying to get access to your personal information. Never send details such as bank account information or your social security number.

3. Robotic Phone Calls

How often do you receive a phone call with a recorded message on the other line? Robocalls are increasing in frequency, and these machines can even leave a message if you don’t answer the phone.

Often, the system finds your business phone number online. Then, you receive automated calls in an attempt to gather information or trick you into sending money. These autodialers are cheap and easy to use, making it nearly impossible to avoid the calls. Most individuals and businesses receive these spam calls on a regular basis.

4. Online Marketing or Directory Placement Scams

Business owners know that they need to create an online presence for their company, which is why so many people fall into traps of paying for fake services or over-inflated prices for marketing. For example, a scammer might contact your company and offer a service that is designed to update your business information in online directories.

Even if the business owner doesn’t agree to the services, the conversation might be recorded. Then, the company will be billed for services that they didn’t agree to. The phone call records can be doctored and used as “evidence,” with a threat from the scammer that they will take legal action if they don’t receive the payment. More often than not, the victim company will send the payment to avoid legal problems.

5. Customer Complaint Letters

One recent scam preys on a business owner’s fear of a bad online reputation. Fake emails are sent impersonating the Better Business Bureau. The letter claims that a customer complaint has been filed and the business owner needs to take action to protect their reputation.

Even though the email might seem legitimate, clicking on the link can lead to a download of malware. If the scammer can get access to your computer, then it means that they are trying to find sensitive information such as bank accounts or customer details.

6. Overpayments from a Customer

With this form of fraud, the scammer shows interest in high-ticket products or services that you are selling. The person requests to send a check for payment, intentionally writing the check for an amount that is higher than the price of the product.

Then, the scammer will request a wire transfer to refund the payment difference. The business owner will send a direct deposit or wire transfer. But, the check will bounce later, resulting in a loss of the money that was wired.

If you encounter this situation, then it is best to hold onto the product and request a new payment from the customer for the amount that is due. Also, be sure that you are cautious in gathering as much information as possible when processing digital transactions: full name, telephone number, address, etc.

7. Business Opportunity Scams

Whether someone approaches you with a pyramid scheme or they are offering a “blue sky” opportunity, it is possible that the scammer is trying to take advantage of your entrepreneurial mindset. Too often, business owners are approached by other people, even friends and family, offering a money-making service or investment opportunities. The person tries to convince you to spend money to join the program, but the promised results never come through.

Usually, these business opportunities are packaged in quick-start systems. If something seems too good to be true, then it probably is something that you should avoid.

8. Time Sensitive Emails

Everyone knows that it is a scam if they get an email from a Nigerian prince who wants to send money. But, did you know that other time-sensitive emails could be potentially dangerous to your company? If a scammer gets access to your email address, then they could send business requests or fake inquiries.

The email could be as simple as an offer to help with search engine rankings, or as complex as a proposal for a business opportunity. The goal of the scammer is to gain more information about you or your company that can be exploited or sold for money.

Any time you receive an email from someone that you don’t know, use caution about what you do with the email. Never, ever click on the link provided in the email or open any attachments. If you suspect that the email might be legitimate, then it is best to research the company through search engine inquiries rather than clicking on the provided links.

Even if the link in the email looks legit, it is possible that the scammer could use the click as a way to access your email account. Or, you might be following a seemingly harmless link to a page that places a virus or malware on your computer or phone.

9. Unusual Emails from Friends or Business Associates

While we are on the subject of email scamming, it is important to note that you could receive a scam email from someone that you know. If their account is hacked or they accidentally had malware downloaded on their computer, then it is possible that their email account could be used to send spam messages to your email account.

Often, the email will seem harmless, with a subject line that sounds personal. For example, the email subject line might say “What do you think about this idea?” or “You might like this.” Don’t click on the link in the email! Most likely, it will lead to the risk of your identity being stolen or adware that is downloaded on your computer.

When you receive an email from someone that you know, compare the subject line and content with communication that you’ve received in the past from that person. If anything seems unusual or different, then use caution before clicking on the link. It might be worth a phone call to ensure that the email came from a legitimate source.

Protecting Your Business

As a business owner, you need to enlist the help of industry professionals who can reduce the risk for your business. A good accounting team can help you avoid some of the common scams that target small businesses. If you need a reputable accounting and bookkeeping service, then you need to talk to us at Easier Accounting. We are here to help: (888) 620-0770

Seasonal Employees: Small Business Advice for Temporary Hiring

Starting a company is an exciting experience, but it is common for business owners to encounter situations that they don’t know how to handle. For example, it might seem simple to hire seasonal employees. But, you shouldn’t overlook important tax and accounting strategies that need to be used if you are bringing in temporary help.

Summer is a season when many companies need to hire seasonal employees. It is common for companies to have business plans that are busier during the summer months, resulting in the need for a bigger workforce. Do you run a restaurant in a tourist area that gets busier in the summer months? Or, maybe you have a company that caters to school-age kids when they are off for the summer.

There are a variety of business models that need more employee support during this time of year. You need to be sure that you are prepared with the right strategies for the beginning and end of the season.

Benefits of Temporary Workers

You need to keep the business moving forward, which means that you need the manpower to help with all of the tasks that should be addressed throughout the year. There are times when you might be short-handed. But, are you nervous about hiring full-time employees because you don’t need ongoing support later in the year? If you only need help for a few months, then temporary or seasonal hiring is the right solution.

Here are a few benefits you can expect if you are hiring summer employees:

  • Save Money: Your accountant is always looking for ways to help you save money, which is why they might suggest temporary hiring. Instead of paying money for a full-time employee and all of the overhead costs and expenses, you can choose a temporary option to reduce the amount that you will spend.
  • Flexibility: How long do you need help from the new employees? Temporary employees can be great if you are filling in the space while someone is out on maternity leave or you need a few months of help during the busiest times of the year. If you don’t want to hire someone permanently, then temp employees are a great option to try.
  • Find the Right Fit: Are you hiring someone on a temporary basis, with the possibility that you might want to extend for the future? Starting employees on a seasonal status can help you determine if the person is going to be a good fit for your team. Then, you can transition that person from temporary to full-time status in the future if you desire.

Circumstances vary, so you need to consider the needs of your company and the options that are available. It never hurts to hire seasonal employees, but make sure that you talk to your accountant and HR specialists to ensure that the situation will be right for your business needs.

Labor Laws and Temporary Employees

All of the state and federal labor laws still apply for your temporary workforce. Just because someone is not a permanent employee, it doesn’t mean that you don’t have to maintain the regular rules for breaks, meals, overtime payment and more. In fact, a seasonal employee should be treated in the same way as a long-term employee. The main difference between the two employees lies in the length of time that the person works for the company.

Familiarize yourself with the federal and local labor laws. Also, make sure that you are working closely with industry experts to guide the way you are handling payroll and employee management. A payroll company can help you navigate the pay schedule, pay rate, overtime pay, tax withholdings and more. These accounting services are valuable to ensure that your seasonal employees are paid in a timely manner. At the same time, you will stay ahead of the financial details that need to be addressed for the employees who are hired.

If you don’t want to manage the accounting and payroll side of things, another option is to hire seasonal employees through a temporary placement agency. Many times, the temp agency handles payroll and the HR side of employment. You simply need to pay an invoice for the work hours that are completed. But, choosing to hire employees through a temp agency often increases the amount of money that you will spend since you need to cover the fees that go to the agency.

Overtime and Minimum Wage for Seasonal Employees

How many hours will the seasonal employee be working each day and week? Familiarize yourself with the labor laws in your state to ensure that you are paying the correct rates for the hours that are worked. You need to make sure that the person is paid enough to meet minimum wage requirements as well as overtime if applicable.

The U.S. Department of Labor has published unique overtime laws for seasonal employees. For example, if you own a business in the recreation or amusement industry, then it might not be necessary to pay overtime if the operations are only happening fewer than seven months each year. Talk to your accountant when you are discussing payroll so that you can decide whether your company matches the criteria for these laws.

Contract Workers or Seasonal Employees

Why not consider the option to hire a contractor instead of a seasonal employee? This option might be a better solution depending on your industry and the tasks that need to be completed. Talk to your accountant to determine if the scope of work can fit the guidelines for contract workers.

When you are hiring a contractor, you don’t have full control over their schedule or the tasks that are completed each day. Instead, a scope of work needs to be determined. Then, it’s up to the contractor to determine the time and manner in which the work is completed. Hiring a contractor means that you don’t need to pay payroll taxes and the costs of benefits. Plus, you can choose the amount of work that is needed, without having an obligation to pay a part-time or full-time salary for a specific number of hours.

On the other hand, there are times when it is better to hire seasonal employees instead of contractors. For example, if you need someone to be in the office at certain times of the day, then that person will probably fall under the seasonal employee category. If you need to oversee the ongoing tasks that are completed by the worker, then you should choose a seasonal employee instead of a contractor.

Trained Employees Set Your Company Up for Success

Hiring the right talent can have a major impact on the future success of your company. Instead of spending your time on busy work and entry-level tasks, bring in the staff that is needed to handle these projects. Seasonal employees can free up your time so that you can focus efforts on higher-level business strategies. These steps will increase profit margins and increase the likelihood that you will have a need to maintain a working relationship with the seasonal employees.

But, you should be sure that you are hiring employees who are qualified to complete the work. At the same time, these people must receive proper training on the tasks they will be assigned to. Even though an employee has related skills and experience, it doesn’t mean that they understand how to handle your unique business tasks. In-house training will ensure that you have a cohesive team that is optimizing the results for the company.

Additionally, seasonal employees with the right training are often interested in returning to work for future seasons. If you create a good relationship with these employees, then it increases the likelihood that they will want to come back when more work opportunities are available. You will have the workforce that is needed during the busy season, and your seasonal employees will enjoy another opportunity for income again. The training that is completed each season can build on the skill sets that will be required for future projects.

Guidance for Payroll and Employee Hiring

Regardless of the number of employees that you have, it is essential that you have a good accounting team to help you keep up with payroll processing, bookkeeping, tax strategy, and other financial tasks that need to be addressed. These accounting services will make it easy for you to stay ahead of the cash flow. You can rest assured to know that your business is in good hands.

Our team at Easier Accounting is here to assist with the financial tasks for your small business. We focus our services on startups and entrepreneurs, ensuring that we have the specialized skill set that is needed to improve your results. As a business owner, you shouldn’t take a DIY approach to accounting and bookkeeping. Instead, you need to lean on the experience that we can offer for your company. Call us today if you would like to learn about our accounting team and see if our services are a good fit for your needs: (888) 620-0770

What Financial Records Need to be Kept for Your Small Business

Do you feel like you are drowning in paperwork? It can be hard to keep up with the requirements of running a small business, especially when you feel like you need a secretary dedicated to bookkeeping and filing. Even though these financial records can feel like a burden, it is essential that you have a good system in place so that you can locate the paperwork if it is needed in the future.

Why Record Keeping is So Important

Why does it matter if you keep the paperwork with details about your business finances? No matter your industry, bookkeeping and accounting need to be a priority for your company. Not only do you need the paperwork for your own records, but there are requirements from federal and state taxing authorities to maintain documentation of your income and expenses.

Here are a few reasons why you need to keep financial records:

  • What is Your Financial Situation? If you don’t have a good financial system, then you are running your business in the dark. The best way to make good decisions for your company is to know where the business stands every day, week, month, quarter, and year. Is your business profitable? Or are you losing money? Will there be enough cash in the bank to cover the overhead costs this month? These details give you more control over your business practices, helping to set your company up for success in the future. As a result, you can improve your efficiency and productivity, which helps to maximize the possibilities that can be achieved.
  • Documentation for Tax Obligations: Taxes are a necessary part of business ownership, and many people agree that their stress goes up when it is time to talk about taxes. You need to keep documentation of your business records to ensure that you have the right numbers for your tax filings and payments. These records need to show the money that is coming in from your clients and customers, as well as the expenses that you are using as deductions. If money changed hands and the transaction was related to your business activities, then you need to have documentation of that transaction.
  • Potential Business Investors: When your company is expanding, there are times when it makes sense to bring in investors. But, it is hard to convince people to invest in your company if you can’t show the history. You need reports and paperwork that outline the history of the business, as well as anticipated sales reports for the future. Additionally, investors often want to view details regarding assets and bank accounts.

Keeping good financial records is one of the best things that you can do to maintain order in your company. If you know the numbers, then there won’t be big surprises in the future about the costs that are due for taxes or inventory expenses.

Even though it can be a lot of work to keep up with these financial records, it is one of the most important things that you can do to set your company up for success. Don’t assume that you need to manage the business records by yourself. Instead, find a trusted company that offers bookkeeping and accounting services so that you can outsource the busy work.

What Documents Need to Be Kept?

The legal requirements vary depending on your business and industry. So, the best thing that you can do is get personalized recommendations from an accounting team. Your accountant can provide a list of the paperwork that needs to be kept, ensuring that you are maintaining everything that might be needed in the future.

If there is a question about whether a financial document needs to be kept, then it is best to err on the side of filing the document for a while. Keep in mind that you don’t have to keep all of the paperwork indefinitely. Instead, you can hold onto some documents for a few years before shredding the paperwork.

Follow this overview of paperwork that you need to hang on to:

  1. Business Documents: If you have paperwork that shows the legality of your company, that it needs to be filed in a safe place. Hold onto records that show your right to be in business, such as a business license, certifications, and more. Also, keep copies of the by-laws for your company, articles of incorporation, and other applicable paperwork.
  2. Business Contracts: Do you have signed agreements with clients or subcontractors? Signed copies of these files need to be kept on record. If a dispute or question comes up in the future, then you can always pull up the contract to ensure that all parties share the same understanding. These business agreements might also include documentation for employees, suppliers, vendors, and more.
  3. Financial Records: Anything that shows money changing hands needs to be documented and filed. This category includes accounts receivable, which is the money that you receive from your clients or customers. Additionally, you need to keep records of any business expenses that are being used as deductions. Other applicable paperwork includes tax filings, payroll details, and more.
  4. Executive Meetings: If you have a board of directors or an investors meeting, then it is a good idea to keep records of the minutes of the meeting. These details might include major business decisions that could impact the future of the company.
  5. Business Assets: Whether you have company-owned computer equipment or you bought the building where the business is located, you need to hang on to the paperwork that details the assets for your company. Your accountant can help with the purchase, sale, and depreciation details. You need to hold onto the paperwork that shows any transactions related to these assets. Keep in mind that financial gains or losses in assets can have an impact on your tax filings, so you might need to keep the details for potential audits in the future.
  6. Employment Taxes: In addition to income taxes and other business taxes, you are also responsible for the records and filings of employment taxes. These records need to show the details of every employee, including their legal status for working in the United States. You also need to track paychecks, dates of employment, tax withholdings, tax payments, and more. The IRS has requested that businesses hold these records for a minimum of four years.

Do You Need Hard Copies or Electronic Files?

We live in a digital world, and there are many times when you can keep digital files to avoid the mess of a full filing cabinet. If you want to simplify your business records, then it is best to keep a digital file where all of the documents are kept in their corresponding folders.

For example, you might have a folder for all of the invoices that are sent to clients, another folder for tax filings, and another folder where business receipts are kept. Minimizing the paperwork eliminates the need to print every page. Plus, a cloud-based storage system gives you full access to the information from anywhere in the world.

Another benefit of a digital filing system is that your accounting and bookkeeping team can access your financial records. If you want to free up your time, then you need to use an outsourced accounting service so that you don’t have to sort through the busy work of your business records. You can upload the files and let the pros handle the document filing, data tracking, reporting, taxes, and more.

If you choose an electronic filing system, then it is essential that you have a good backup service in place. Your business could be devastated if you lost all of the documents due to a computer failure. Many cloud-based storage solutions offer automated backups. You can also set up a private service that syncs your files to another cloud-based location.

Finding an Accounting Team to Help with Your Financial Records

Do you have a good accountant to help with your business files and records? There is no reason why you should be handling these details without the support of a financial professional. Outsourcing the bookkeeping and accounting for your company is one of the best things that you can do to ensure that you aren’t overloaded with busy work.

Our team can handle the financial details, freeing up your time to focus on activities that will boost the success of your company. We are experienced with small business accounting and know the best methods to help you take control of your financial records.

Are you ready to learn more about the benefits of outsourced accounting? Then you need to talk to our team at Easier Accounting. We are happy to cater your accounting services to match the needs of your company. We provide a range of services, ensuring that you get the best results to match your needs. If you have questions or you would like more information, then we invite you to call our team right away: (888) 620-0770

Accounting Advice: How to Cut Expenses for a Start-Up Business

Starting a new business is an exciting adventure. You are moving forward with big dreams and hopes for a better future, putting in the effort that is needed to build a company that will succeed for many years. Whether you are taking over a family business or moving forward on a passion project, it is essential that you have a good business plan in place to set yourself up for success. You need to consider the money that is coming in, as well as options to cut expenses.

Moving to a Positive Cash Flow

Costs are inevitable when you are pursuing business efforts. It doesn’t matter if you are building a local office or running a home-based business out of your garage; money will be needed for some up-front costs. In the beginning, you will be spending more money than you are making, especially if you need to put cash into inventory or other important setup costs.

There’s nothing wrong with spending money on these business expenses. Keep in mind that this cash is an investment to build your company for the future. There’s a saying in the business world: “It takes money to make money.” It’s true that you need to have some upfront cash to get your company off the ground.

But, just because you are burning through your cash reserves in the beginning, doesn’t mean that you shouldn’t be careful to turn things around as quickly as possible. The goal is to make your company profitable right away so that you can have extra money in the bank, instead of spending everything on your business efforts.

Once you move to a positive cash flow, meaning you are bringing in more money than you are spending, then you will have the option to re-invest and grow the company. Or, you can pull some of those profits to enjoy the benefits of your labors.

Two Ways to Manage Cashflow

There are two things that you need to consider when you are working to manage cash flow:

  1. Bring in more money
  2. Cut expenses

Business owners are always focused on bringing in the income that will keep money flowing into the bank. Even if you have strong earnings every month, your business will struggle if you don’t stay ahead of the expenses at the same time. So, you need to evaluate the money that you are spending to identify areas that can be addressed.

Yes, it is important to look for ways to increase your incoming cash. But, don’t overlook the importance of managing your expenses as well. A good accounting team can assist with these efforts.

Cost-Cutting Ideas to Reduce Small Business Spending

Start by evaluating the money that you are spending. Categorize your spending into transactions that are necessary and transactions that can be cut. You might need to change your thinking a little bit to look at your spending with new eyes.

Here are some of the easiest, most effective ways that you can cut your business costs:

  • Secondhand Furniture and Equipment: Why pay for new materials and supplies if you can save a bunch of money by choosing secondhand items? If you need a new desk for your office, you can go to the local furniture store and pay thousands of dollars for the right desk. Or, you can skip paying retail and look for deals on Craigslist or other online marketplaces. In many circumstances, you can save as much as 50 – 70% by choosing secondhand items. Use caution if you are buying electronics though… computer technology is moving fast, and you might be able to avoid a lot of problems by buying new.
  • Rent or Mortgage Costs: A rent payment can be one of the most expensive bills for small businesses. Do you have a local office in a high traffic area, but most of your business is completed online? There’s no reason to pay the surcharge for a premium office space. Consider moving to a different part of town where the rent costs are lower. Yes, it will cost money to move and it takes a lot of effort. But, the rent savings can add up over time. Better yet, look for options to buy a building and rent out a portion of the space to other businesses. These rent payments can help you pay off the mortgage, creating a valuable asset for your company.
  • Utility Expenses: Ongoing utility expenses offer another potential area where you could be saving money. Get creative to see if there are ways that you can reduce utility costs. For example, you might be able to drop your landline and use a VOIP phone number instead. Invest in energy-efficient appliances and switch out the lightbulbs. Install a smart thermostat that will manage climate control throughout the day. Call the internet provider to see if there are options to reduce the amount of money that you are spending on your business package. Sometimes, a few questions to a utility provider can go a long way to bring the ongoing costs back down.
  • Assess Inventory: Are you storing a lot of inventory that won’t be needed for a while? Not only does extra inventory cost money because of the expense of buying the products. But, you also need to spend cash on the warehouse space that is needed to hold everything. Look for lean business options to minimize your inventory while ensuring that you always have product on hand when your customers are ready to buy.
  • Bid Out New Projects: Instead of assuming that you need to hire more employees, consider the option to talk to multiple contractors to get the best price on services that are needed. This bidding process will help you minimize costs and maximize the services that are available. Seeking out multiple bids is essential so that you can see if your preferred contractors are overcharging for the services.
  • Offer Telecommuting Options: As the business grows, it can be hard to maintain the office space that is needed for the expanding team of employees. Instead of moving into a bigger office, look for options to share the office space more efficiently. You can invite employees to telecommute, helping to reduce the number of people that you are managing in the office each day. This option allows the desks to be shared and reduces the amount of space that is required for employee housing. At the same time, employees will be happy that they can avoid commuting costs.
  • Go Paperless: Paper waste can cost your company a lot of money. Not only do you need to pay for the cost of the paper reams, but you also have expenses for the printing as well. You will spend money on the cost of buying a printer, paying for ink cartridges, and ongoing maintenance as needed. Plus, many companies spend money on recycling and shredding services for old paperwork. These expenses can be reduced by keeping digital records instead of filing printed paperwork.
  • Pay Off Business Debt: Business debt can make it hard for you to keep up with cash flow. Not only do you need to make the payments on the costs that are due, but you are also taking on a lot of expenses for the interest costs. How much are you paying every year in credit card interest? If unexpected costs pop up, then it is common to put those expenses on a credit card. Unfortunately, the interest expenses will really add up, potentially costing your company thousands of dollars a year in avoidable costs.
  • Save for a Rainy Day: It is essential that you set aside cash for the future. This emergency savings account will help you pay for taxes and anything else that might come up unexpectedly. There are always times when you need to dip into the bank account. Make sure that you have money set aside so that you can avoid running up the business credit cards.
  • Maximize Tax Write-Offs: As a small business owner, many things can be used as a business write-off to minimize tax burden. You could save hundreds or even thousands of dollars by using the right tax strategy. Maximize these tax write-offs so that you can minimize the amount of money you need to pay at tax time. The best thing that you can do is hire the services of an experienced accounting team who can help with your tax strategy.

As you can see, there are many ways that you can be creative with your business spending to reduce expenses. If you need assistance, then make sure that you have the services of an experienced accounting team. We can assess your spending habits and provide recommendations that will help to minimize expenses in the future. Financial expertise can offer a valuable way for you to level-up your business efforts and reach higher levels of success.

For more information about small business accounting services, you need to talk to our team at Easier Accounting. We understand the financial requirements that are needed to run a small business. Our team is here to assist with anything that you need: (888) 620-0770