Did You Know that Outsourced Accounting Can Boost Business Revenue?

When starting a business, outsourced accounting often falls to the backburner because most entrepreneurs are focused on the logistics of getting the company off the ground: product development, customer service, storefront design, payment processing, and more. It can be easy to get caught up in these logistics, causing you to overlook some of the most important paperwork and financial systems that need to be implemented to ensure your business starts with a strong foundation.

Whether you have big goals for the future or you are starting the business to bring in a little extra cash on the side, bookkeeping and accounting should never be pushed to the bottom of the priority list. In fact, there is a strong argument that outsourced accounting and bookkeeping might be the most important factor that will affect your success in the future. Without a good financial system, you can’t keep track of cash flow, profit margins, annual trends, and other data that will influence the decisions you are making each day.

Accounting Doesn’t Need to Be a Burden

One of the reasons why many business owners don’t prioritize accounting and bookkeeping is because it feels like a burden to keep up with the transactions. If you are focused on business development, then it seems like a hassle to set aside a few hours each week to categorize transactions and reconcile the accounts. Too often, business owners let these tasks fall to the back burner and then eventually face bigger issues in the future when a financial mess occurs.

If you don’t have the time or desire or skills to work on the bookkeeping and accounting tasks for your business, then it is smart to let the pros take over. There is no reason for you to spend your limited time on tasks that aren’t within your specialized skill set. Just like you should schedule an appointment with a dentist when you have a problem with your tooth, it is smart to enlist the services of an accountant when you want to improve your financial systems.

The key is to take action as soon as possible. Don’t wait for a problem to occur before you call an outsourced accounting expert. Instead, you can be proactive in designing the right financial system that will support your bigger goals. Hiring accounting and bookkeeping experts will give you the information and skill set needed to oversee your spending and income, helping to maximize profit margins as much as possible.

Outsourced Accounting Can Boost Revenue

When most small business owners think about hiring an outsourced accountant, they only see the cost of paying for these services. Yes, you will have an expense to get the help that is needed. But instead of this cost being a liability to your company, the money spent is actually a great investment that can help to improve your results.

These are some of the financial benefits you can expect if you choose to hire an outsourced accounting team:

  • Team of Experts: Most small business owners don’t have formal training or experience with bookkeeping or accounting. As a result, a DIY attempt often results in problems and mistakes. Even a few small errors in your financial system can add up to significant problems in the future. Don’t let these issues hinder your success or progress. Hiring an experienced accounting team means that you can bring in the skillset that you need, without spending hours with your head in an accounting textbook.
  • Outsourcing is Affordable: Once you see that accounting skills are needed for your business; you might think about hiring another employee with an accounting background. There are some situations where it makes sense to bring on another full-time employee because of the massive need for skills and support needed in your company. But, more often than not, small business owners don’t require 40+ hours per week of accounting services. Instead, a few hours of outsourced accounting services will be sufficient for financial reporting and tracking. Compare the costs of hiring an outsourced accounting team vs. bringing on another employee, and you will see that it is much more affordable to skip the full-time salary and benefits.
  • Cash Flow Management: Problems with cash flow can bring a company down more quickly than you can imagine. Even if you have consistent income flowing into the bank account, you can still run into problems if there isn’t enough cash to cover the bills and expenses. Additionally, you need to think about the timing of the payments to make sure the money is available when your bills are due. An accounting team can help you in designing the right system for cash flow management. As you track, budget, and control the flow of money, you can reduce overall costs and increase profit margins at the same time.
  • Cutting Unneeded Expenses: One aspect of cash flow management is looking at the unnecessary expenses that might be cutting into your profit margins. How often do you have small (or large) bills moving through the account that aren’t worth the cost that you are paying? An accounting expert can help you evaluate your spending to identify any areas where you could potentially save money. At the same time, look at the activities and tasks that bring in the most money. Then find ways that you can expand your efforts with the things that are working best to increase revenues for your business.
  • Tax Strategy: Taxes can be a pain point for many business owners, especially when they don’t have the right strategies in place to set aside the right amount for the IRS. It can be a stressful time when tax deadlines approach, and you don’t have enough money in the bank. Not only will an outsourced accounting team help you create a system so that you have the taxes set aside in an account. But you can also create a safe, yet aggressive, tax strategy to leverage all of the write-offs and deductions that are available for your business. This strategy can be beneficial to minimize your tax burden and save you money each year.
  • Business Growth Opportunities: If you are currently spending time on bookkeeping and accounting tasks, what is the opportunity cost of those hours? Consider the way you could be using that time to boost your business efforts and increase revenue. Handing off the bookkeeping responsibilities to an accounting expert means that you can dedicate more of your week to business development, marketing, and client relationships. It’s hard to put an exact value on the potential growth that can come from these activities. But you will see how much these activities can add up over time.
  • Compliance and Regulations: Also consider the money that is saved due to compliance and legal regulations. For example, if you attempt a DIY approach for tax preparation and a mistake is made on the tax filing, then you could be facing a very expensive bill if the IRS finds the mistake. Not only do you have the pay the difference, but you will likely need to hand over the cash for late fees, interest costs, fines, and more. These unnecessary costs can easily be avoided by hiring an expert team to oversee tax preparation and anything else that might affect your company due to financial compliance, laws, and regulations.
  • Financial Reporting Accuracy: When you need to make significant decisions for your company, financial reports can be helpful so that you can see the trends, profit margins, and cash flow. For example, it is hard to know how much money can be put into business development if you don’t have a clear picture of the amount of money that is available. An outsourced accounting team will ensure that your financial reports are accurate. As a result, you can pull these reports on demand to get real-time information about the current financial health of your company. This information will improve your decisions and help with the overall management of spending, employees, and more.
  • Fraud Reduction: An in-house financial management system increases the risk of fraud, especially when you don’t have the right checks-and-balances in place. Even if you think that you can trust your team, there is always a risk that someone will try to skim a little off the top. Whether the employee tries to steal money, or they are taking some of the inventory home, it can hurt your profit margins. Hiring an outsourced accounting and bookkeeping team will give you peace of mind in knowing that you have good financial systems in place to catch fraud before it turns into a big problem.

At Easier Accounting, we offer the skills and services you need to build a solid financial system for your small business. If you are considering outsourced accounting services, then we invite you to contact our team right away to learn more about the available services. Call us at your convenience to see how these accounting and bookkeeping solutions can help to boost your business revenue: (888) 620-0770.

Business Mileage Tracking: Creating a System that Works

One of the benefits of being a business owner is the opportunity to manage your tax burden by leveraging write-offs and deductions that are available. Not only can you write off office supplies and business services, but mileage tracking can be another powerful way to maximize the deductions that are available.

These mileage deductions can be worth a lot since the write-off calculation is based on the number of miles driven in the year. The problem is that many business owners use the vehicle for both personal and business purposes, making it challenging to determine the number of miles that were used for business activities.

Two Options for Mileage Deductions

Working with an experienced small business accountant is the best solution to identify the right method for calculating your tax deductions. Every business is unique, which is why it is always smart to consult with an experienced professional who can offer personalized recommendations.

You’ll find that two methods can be used for mileage deductions:

  1. Standard Mileage Deduction: The IRS sets a certain amount each year that can be used for every mile you drive for business activities. This number changes with time; increasing to accommodate the rising costs of vehicles and maintenance. The calculation is simple because you need to multiply the number of miles driven by the standard rate for the year. You can find the published annual rate on the IRS website.
  2. Actual Expense Method: On the other hand, you can deduct the cost of repairs, gas, insurance, and all other transportation-related costs when you choose the actual expense method. This calculation can be burdensome and time-consuming because of all of the calculations that are required. Not only do you need to focus on business mileage tracking, but you also need to keep track of all applicable expenses.

Recording Business Driving

The IRS requires that your mileage is tracked by recording every mile you drive throughout the year, using a diary or logbook. Every time you get in the car, the trip needs to be recorded. Then, the business miles are pulled out and calculated to determine the write-off for the year. You must record the starting mileage on the odometer, the ending mileage on the odometer, and the reason for the trip.

The problem is that this method can be burdensome and easy to forget when you are working. Most people don’t want to take the time to record the information every time they get behind the wheel! One option is to use the sampling method. This strategy requires that you are consistent about keeping track of your business mileage for a portion of the year. Then, these figures are used to determine the mileage for the whole year by extrapolating the numbers that were calculated when you were recording the business mileage. The sample period needs to be a minimum of 90 days, or you can choose to sample one week per month.

With the sampling method, the assumption is that you are driving about the same amount for business all year long. Even though you aren’t tracking your mileage all the time, you will still need to maintain an appointment book showing the consistency of appointments throughout the year.

IRS Requirements for Business Mileage Tracking

What needs to be included if you choose business mileage tracking to leverage the available deduction? This write-off is offered to 1099 workers, such as small business owners, self-employed people, and freelancers.

W2 workers cannot deduct mileage for tax write-offs. But if a person is working a W2 job and has a business on the side, mileage can be tracked and used as a deduction when driving for the side business.

Qualifying trips include anything related to business activities. For example, you should record your mileage when driving to the bank, picking up office supplies, meeting clients, or driving between offices. Your commute can’t be deducted, but you can track your mileage if you are in the car to run business errands or attend meetings.

The IRS requires that your mileage log includes the following information:

  • Mileage details – the number of miles driven
  • Date of the trip
  • Places you drove
  • The purpose of the trip

At the end of the year, you will need to calculate the total number of miles driven, broken down into three categories: business, commuting, and personal trips. The most effective way to keep these records is by recording the information daily.

Paper or Digital Business Mileage Tracking?

You can keep a dedicated notebook and pen handy and write down the details every time you get in the car. This manual method of tracking is legitimate, but it can be a bit tedious… especially when you need to pull all the numbers together at the end of the year.

Another option is to use a mileage app. A variety of smartphone apps provide the information that the IRS needs, giving you an automated way to log, track, and calculate the mileage details for each trip. The IRS will accept either paper or digital tracking logs, as long as all of the required information (listed above) is included.

One benefit of choosing a digital tracking system is that you can keep a back-up of your records. A physical mileage book could be easily lost or damaged, resulting in problems later on if you need to show the documentation. On the other hand, a digital business mileage log can be saved to the cloud and backed up. The right digital filing system is a powerful way to ensure that your information is never lost along the way.

Tracking your mileage for a business write off is different than a gas logbook to calculate mileage efficiency. If you are keeping a gas logbook, it is still necessary to have a separate tracker for business mileage tracking.

Features of Mileage Tracking Apps

The technology and app access changes so quickly that it can be hard to stay current with the latest recommendations. If you are looking for an app that tracks your mileage, then the best solution is to ask your small business accountant for current recommendations. An online search can also be a great resource to help you compare features and options.

These are some of the features that should be considered when choosing a mileage tracking app:

  • Automated tracking using GPS to detect when and where you are driving
  • Organization of business and personal trips to calculate mileage for the year
  • Minimal drain on your phone battery
  • Documentation for all IRS requirements
  • Option to add a manual trip as needed
  • Easy data exporting to provide information to your accountant

Here are a few mileage tracking apps that you might consider, you can search for them in the app store on your cell phone (such as iTunes or Google Play):

  • MileIQ
  • Everlance
  • Hurdlr
  • Mile Expense Log
  • Stride Drive
  • TripLog

You’ll see that most of these apps are either free or require a minimal monthly fee. It’s worth a few bucks a month to have the right tool that simplifies your life by helping with mileage tracking!

Documentation for Business Deductions

Even though it is important to keep track of mileage logs and other documentation for business deductions, these documents don’t need to be provided to the IRS when it is time to file your taxes. Your business accountant can help with tax preparation and filing based on the records that were kept throughout the year. Keeping accurate and detailed records ensures that you can maximize the potential write-offs, helping to decrease the tax burden you will be carrying.

After the tax return is filed, you still need to hold onto this information in case the IRS requests documentation in the future. If you are selected for an audit, then you will need to provide full information to back up the deductions that were claimed on your tax returns. You may need this information for up to seven years after the taxes are filed.

Leveraging Deductions for Your Small Business

It is easy to let the deductions fall through the cracks when it seems like all of the expenses are small. But a few dollars here and there can add up over the year, resulting in significant tax savings. Why pay more for your taxes when you have the option to write off some of your spending?

Small business tax deductions vary depending on your business model. An experienced, outsourced accountant can offer recommendations and advice about the best ways to leverage your spending and use the deductions to your advantage. Any time you are driving your car or spending money related to business efforts and activities, it is smart to record the details so that you can use them for your taxes.

If you are looking for help with your tax preparation and deductions, then Easier Accounting is at your service. Call our team to learn more about the small business accounting services that are available: (888) 620-0770.

The Small Business Owner’s Guide to Self-Employment Taxes

Self-employment taxes are a necessary and unavoidable part of being a business owner. Building the business feels fun and glamorous, but many entrepreneurs agree that taxes can be both stressful and burdensome. The key is to plan ahead for the tax burden you will be carrying, so the costs and paperwork don’t catch you off-guard. The right financial plan can make it easy to keep up with your self-employment taxes, ensuring that you have money set aside when it is time to make the payments.

Do You Fall in the “Self-Employment” Category?

It is important to understand the IRS’s definition of self-employment to see if these taxes apply to your situation. Knowing the federal regulations and guidelines means that you won’t skip past the tax obligations by mistake.

If you have the goal of bringing in money through work that you do for yourself, then you are considered self-employed. The work that you complete falls in the category of self-employment when you are not a shareholder or an employee.

Keep in mind that your business doesn’t need to actually be profitable for you to be considered self-employed. When you have the goal of earning a profit, and you are putting in regular work towards that goal, then the IRS views your efforts as self-employment. Even if you work as an employee for another company (either full-time or part-time), you still fall under the category of self-employment if you do work outside of your regular job to earn money on the side.

It’s one thing to be paid for a one-off day of work helping a friend with manual labor. A one-time opportunity to earn a bit of extra cash isn’t regular enough to fall in the category of self-employment. But, if you are consistently putting in the effort to engage in activities that bring in a profit, then you are self-employed.

Overview of Self-Employment Taxes

The tax rates can change from one year to the next, which is why it is best to work with a financial professional who will ensure that you are paying the correct rates. Self-employment taxes are calculated by combining your requirements for both Medicare and Social Security taxes.

Both self-employed workers and employees need to pay Social Security and Medicare. When you are working as an employee, your employer pays 50% of the tax burden, and the other half is deducted from your paycheck. On the other hand, self-employed workers need to pay the full 100%.

These self-employment taxes are calculated based on the profits of your business efforts. This is the calculation that is used:

  • Gross (total) revenue – qualifying tax deductions = profit that can be taxed

Since the taxable amount is calculated without the deductions, many business owners look for ways to leverage the deductions as much as possible. It is important to stay within the legal guidelines, and your small business accountant can offer guidelines and recommendations that apply to your situation.

Classifications: When Self-Employment Taxes are Required

You tax classification plays a role in whether you are obligated to pay self-employment tax. If one or more of these classifications apply to your tax filing, then it is smart to talk to a tax accountant for information about self-employment taxes:

  • Independent contractor (freelancer)
  • Sole proprietor
  • Member of a partnership
  • Member or partner of an LLC (single, or multi-member organization) and you haven’t changed your default tax classification

Income Tax vs. Self-Employment Taxes

Don’t mistakenly think that income taxes and self-employment taxes are the same time. Even though there is a difference in the way self-employment taxes are calculated, income tax works the same for everyone.

This income tax rate is also based on the taxable profits, using the calculation listed above. Once the taxable income is determined, then tax credits and personal deductions are calculated in to determine the amount that needs to be paid.

50% of your self-employment tax can be used as a deduction, which helps to reduce the total taxable income for the income tax calculations.

The filing status and tax rates vary, depending on the tax bracket in which you fall. These federal brackets can change each year. In 2019, the progressive range of income tax rates falls between 10 – 37%.

Why You Shouldn’t Kick Taxes to the Backburner

W-2 employees don’t have much to worry about regarding ongoing tax calculations and payments, because these amounts are automatically deducted from their paychecks by their employers. On the other hand, self-employed individuals don’t have the convenience of automatic tax calculations and deductions. It’s your responsibility to ensure that you are keeping track of what you owe and staying current with paying these amounts on time.

You already have a lot to worry about with business-building efforts, marketing, employee management, and more. It might be tempting to push self-employment taxes to the back-burner. But don’t be fooled into thinking that you can deal with taxes at a later date. If you want to avoid a stressful and costly audit by the IRS, then you need to be sure that Uncle Sam is getting his share of your profitable income.

Also, consider the consequences of incorrect tax filings. If you don’t have experience with tax calculations and paperwork, there is a high risk that you might make a mistake. In the case where that mistake is discovered by the IRS in the future, it means that you could be facing expensive fines, interest costs, and penalties. Save yourself time, money, and stress by ensuring that your taxes are calculated, filed, and paid correctly the first time around.

How Often Do Self-Employment Taxes Need to Be Paid?

Most people only think about taxes once a year: in April when the tax filing deadline happens each year. But, if you owe more than $1,000 on the tax return filing, then you will be required to make quarterly tax payments. So, you need to be prepared to pay taxes four times per year.

These payments are calculated by looking at your previous year’s taxable income, then calculating the amount that will need to be paid each quarter. Of course, you can’t predict the exact amount you will earn in a given year, which is why these quarterly payments are called estimated tax payments.

This is the payment schedule for estimated tax payments. You will need to send the payment before or by the end of the day on:

  • Jan 15th
  • April 15th
  • June 15th
  • Sept 15th

Sometimes, these calendar dates fall on a weekend or federal holiday. In that situation, the due date for estimated taxes is pushed to the next day that is not a weekend or holiday. Small business accounting services makes it easy to keep up with these tax deadlines because you will receive estimated tax payment vouchers that list the specific dates for each calendar year.

Other Taxes for Business Owners, Entrepreneurs, and Start-ups

Keep in mind that the IRS only oversees the enforcement of federal taxes. It is possible that you will need to pay state and/or income tax depending on where you live. A few of the states don’t charge personal income tax, so you might consider moving your business efforts to those locations if you have the flexibility of an online income.

Other tax burdens need to be considered as well. For example, if you have employees, then you will need to pay and manage the paperwork for employer payroll taxes. Also, sales tax might need to be calculated on the products and services that are sold, depending on your location.

Be Prepared for Future Payments

With self-employment, it’s easy to make the mistake of confusing take-home pay with the gross revenue. Even though the money is coming into your bank account, it doesn’t mean that it is all yours to pocket. Too often, self-employed business owners spend the cash, then face big cash flow issues in the future when it is time to pay the IRS.

Never make the mistake of making big business decisions based on the money sitting in your bank account, without considering upcoming tax obligations. A good small business accounting software can help you stay current with financial reports and upcoming costs. Use this information to gain a clear picture of the true profits of your business efforts, helping you avoid the pitfalls of not having enough to pay the bills when tax time rolls around.

One of the best things that you can do is set aside a percentage of your money for future tax bills. Since self-employment income is often variable, you can create a system that automatically saves your tax money in a separate account.

Find an Outsourced Accounting Team to Help

Not only is it stressful to keep up with the deadlines for tax payments, but the government forms can be intimidating. Most self-employed business owners choose to hire the help of a local accountant or outsourced accounting services through a reputable provider. Our experienced team at Easier Accounting is always here to assist. If you need help designing the right financial system to keep up with your self-employment taxes and business reports, then we invite you to contact us right away: (888) 620-0770.

7 Effective Tips for Designing a Good Accounts Payable System

One of the most important things you can do as a small business owner is to design a good, organized system for managing your books. Do you feel like you have a handle on your accounts receivable and accounts payable system? Today, we are sharing a few tips to help if you are looking for ways to improve your bookkeeping and accounting practices.

While there are tons of resources online about small business finances, sometimes it can be a trick to know where the actionable points are that need to be implemented into your system. Our team at Easier Accounting has put together some of the “best practices” that will keep your systems running smoothly, giving you a good foundation to help your business grow.

Accounts Payable System: What is it?

It can be hard to understand the lingo if you aren’t familiar with the accounting industry. Your accounts payable system is the tracking method that you are using to see the outstanding bills and handle payments that need to go out to your external vendors.

There are many times when your business receives products or services, but the payment isn’t issued upfront. Instead, you are billed for the amount due; then payment is sent within a specified timeframe. For example, a vendor that provides office supplies for your office will send an invoice that shows the due date for the payment that needs to be remitted. These accounts payable invoices are basically short-term debt liabilities that need to be paid right away.

Accounts Payable vs. Accounts Receivable

Don’t be confused by the two terms used in the accounting and bookkeeping industries: accounts payable and accounts receivable. As mentioned above, accounts payable is the tracking of balances that you owe to other vendors. On the other hand, accounts receivable shows the invoices that you can collect on: the balances owed to your company from your customers.

A good bookkeeping and accounting system will include systems for both accounts payable and accounts receivable tracking. This information needs to be managed so that you can be sure that money is always in the bank when it is time to pay the bills that are due.

Why Accounts Payable Matters

It can be hard to keep track of all of the payments that are due if you don’t have a good filing and tracking system for the invoices that are coming through. Not having a good accounts payable system in place means that you could miss payment due dates, often resulting in late fees and interest charges. If payments are missed altogether, then your services could be disrupted, or the balance might be sent to a collections department.

Without the right bookkeeping and accounting system, your vendors will lose patience, and your reputation will suffer. It’s hard to keep your business running if you don’t have control over your cash flow.

7 Tips to Improve Your Accounts Payable System

As you can see, you must have a good system in place to manage your accounts payable system. Here are a few tips and benefits if you are looking for ways to implement a new system or upgrade your current system:

  1. Leverage Automation: Technology has transformed the way you can do business. It makes sense to leverage automation whenever these features are available. There’s no reason for you to spend time on busy work (like manual financial calculations). With manual calculations, you need to not only receive the invoice that comes through, but also record the information, track the payment date, and ensure that the payment is processed at the right time. This process can be tedious and time-consuming.
  2. Minimize Human Error: Unfortunately, there is always the risk of human error at every step of this process. This busy work can be skipped by using a system that uses automation to track everything. Not only will your system be streamlined, but you can avoid common problems that occur if mistakes are made. A good accounting system has built-in checks and balances, helping you catch potential errors if they occur. This proactive approach is essential for minimizing the risk of on-going fraud within your organization. We live in a time where fraud is a potential risk in any business, so you need to be diligent about protecting the interests of your company.
  3. Save Money: It might seem counterintuitive that paying bills will save you money. But, remember that staying current with those outstanding bills makes it possible for you to avoid additional costs, such as interest charges and late fees. If you are trying to manage your cash flow, then you need to be sure that you are proactive in avoiding unnecessary expenses for interest and fees. A good accounts payable system reduces the likelihood of late payments because you are always staying ahead of the balances that are due.
  4. Improve Communication: When you are using the right accounting and bookkeeping system, you can utilize built-in communication features that keep your vendors and clients updated on the status of invoices. One thing to consider: sometimes early payment discounts are offered if payment is received in a certain timeframe. Improved communication through your accounts payable system means that you might be able to leverage these discounts by paying the invoices early when money is available.
  5. Simple Financial Reports: Centralizing your accounts receivable and accounts payable systems is an effective way to have access to important financial reports. When you are making business decisions, both big and small, it is smart to have a clear picture regarding the financial health of your company. These reports can be accessed quickly and easily, giving you the information necessary to make educated decisions regarding the money that is spent.
  6. Eliminate the Paperwork: Do you feel like it’s a hassle to deal with paperwork that is always moving across your desk? In addition to the immediate management of the papers, you also need to have a filing system in place so that you can reference the documents whenever they are needed in the future. This mess of paperwork can be avoided by going digital. Choose an accounting system that offers cloud storage solutions. As a result, you can see your bookkeeping and accounting information at any time, even if you are away from the office.
  7. Built-In System for Following Up: Cash flow is an ongoing battle for many small business owners, so you need to be diligent about keeping track of the payments that clear your bank account. For example, you could potentially run into issues in the future if one of your vendors is late with the deposit of your check. As a result, the transaction might clear months later, which could throw off your cash flow if you don’t have a good system for tracking. Double down on your tracking system by using an accounting system that not only tracks the outgoing payments, but also automates the follow-up to track when the balance cleared the bank account.

Is it Time to Upgrade Your Accounting System?

Are you enjoying all of the benefits listed above? If your accounts payable system isn’t working to improve your business systems, then it is time to re-evaluate your options. There’s no reason why you should be scraping by with a poor system or limited financial tracking. Businesses with problematic accounting systems can expect to encounter serious problems in the future. In fact, a bad accounting system typically leads to cash flow issues… which might be the cause of business failure.

You can avoid these issues by staying proactive with your accounting systems. Make sure that financial tracking is a priority within your company. Be diligent about keeping these systems current and accurate, giving you the peace of mind to know that financial reports are always correct when you are looking at the numbers.

Tapping into Expert Advice

The great thing about implementing a new accounts payable system is that you don’t have to “reinvent the wheel.” Instead of wasting your time and money on unproven systems, it’s more effective to tap into the expertise offered by a team that knows the best solutions in the industry.

Your job as a small business owner is to focus on business growth, employee management, and the many other responsibilities that pop up on a daily basis. Don’t waste your limited time on busy work and bookkeeping tasks! Instead, you can use technology, expert services, and a good accounting software to optimize your processes and improve overall results for your company.

For more information, Easier Accounting is always here to help. We are working hard to offer affordable, effective accounting and bookkeeping solutions for small business owners. Our team has worked with small businesses in a variety of industries. We understand the nuances of financial management, and we’re here to help you implement an accounting system that works for your needs.

You are welcome to call us at Easier Accounting to learn about the services that are available. Reach out at your convenience to have a conversation with one of our helpful team members: (888) 620-0770.

Answers to Your 7 Most Common Bookkeeping Concerns

It’s no surprise that questions come up when you are trying to figure out the ins-and-outs of running a business. Whether you are facing bookkeeping concerns or questions about marketing strategies, it is essential that you tap into an experienced team that can guide your planning. As a small business owner, you don’t have to figure it all out by yourself. Instead, you can focus on your strengths and bring in the assistance that is required to keep your business moving forward.

It is common for small business owners to face questions and issues regarding their financial tracking systems. Where should you turn to find answers to these questions? A Google search can be overwhelming because of the vast amounts of information that comes up. Plus, it’s hard to know which resources are accurate and reliable.

The best solution is to look to a trusted expert in the industry. Our team here at Easier Accounting is just a phone call away if you need answers, advice, or information. Here are some guidelines that will help with some of the most common bookkeeping concerns that we hear from small business owners:

1. My financial reports are always inaccurate.

It can be frustrating to look at a financial report and know that the numbers don’t match up with the reality that is happening in your bank account. These financial reports aren’t worth anything if the information is incorrect. If you are going to benefit from your bookkeeping and accounting system, then you need to be sure that the transactions are correct and everything is up to date.

Two things need to be addressed to ensure that the information is accurate: use a reputable accounting software, and tap into the services of an experienced accounting team. You will have checks and balances in place with the software and the ongoing reconciliation services to ensure that your reports are always accurate.

2. I’m scared that the IRS will audit me.

While there is always a risk of auditing, a few proactive strategies can be used to reduce the risk of auditing. Too often, business owners put themselves at risk because they attempt a DIY bookkeeping and accounting system. It’s not worth the little bit of money that will be saved on tax preparation fees when you are facing expensive fines and penalties due to bookkeeping inaccuracies.

We can’t promise that bookkeeping and accounting services will eliminate your audit risk. But we can help you create a clear-cut, accurate system that ensures you are sticking with the guidelines and regulations established by the IRS. Our goal is to help you minimize your tax burden while staying within the laws that apply to your business.

3. Payroll is taking up so much time; I can’t keep up!

Managing payroll is one task that never goes away. As long as you have a business and employees coming to work, you need to be consistent with payroll processing. Timely and accurate payroll calculations support the needs of your employees because they know that they can depend on the paycheck coming through every month.

If your business is growing and you don’t have enough time to manage payroll, then it might be appropriate to enlist the services of an experienced accounting and bookkeeping team. In addition to regular payroll processing, we can also help with the common bookkeeping concerns regarding payroll tax calculations and payments. You need to be sure that you are staying consistent with the paperwork and payments required by the IRS throughout the year.

4. I don’t have the time or energy to hire and train a new bookkeeper.

Are you encountering the common bookkeeping concern that it feels like there is a revolving door on your office? Employee turnover is not only inconvenient, but it is expensive to hire someone new and get them up-to-speed on the accounting systems that are used in your business

Luckily you can avoid the responsibility of training and hiring. Instead of carrying this burden in-house, it is cheaper and more effective to enlist the services of an outsourced accounting team. When our team is on the job, you can rest assured that there will never be gaps in the services that are needed for your business financial tracking systems.

5. I know I need a new bookkeeping system, but I don’t know where to start.

What is your current bookkeeping system? Some business owners might be outdated, using manual tracking either in handwritten notebooks or with excel spreadsheets. Other business owners might have an accounting software program that is 10+ years old, missing some of the key features that are now available in the industry.

If you haven’t upgraded your bookkeeping and accounting system in a while, then it’s time to talk to an experienced team to learn about your options. Instead of fumbling your way through the software setup, let the pros handle everything for you.

6. Cash flow is a mess, making it hard to pay the bills.

Even if you have money coming in from products and services that are sold, you are still running the risk of cash flow problems if you don’t have a good accounting system. You must be tracking every transaction that moves in and out of your financial accounts. You need to know the money that will be coming in from your customers. At the same time, you need to have a clear picture of the expenses that will be coming up in the future.

The right software and ongoing accounting services ensure that you are current with transaction auditing and account reconciliation. As a result, you always know how much is in the bank and how much money you will owe in the future. This information will support you when it is time to make the difficult decisions that impact the profitability and cash flow each month.

7. We need bookkeeping help, but I can’t afford to hire a full-time bookkeeper!

Just because you need bookkeeping support, doesn’t mean that you have to hire another person to be on your payroll. The cost that comes with an employee adds up! In addition to the person’s salary, you also need to bear the burden of benefits, overhead costs, and more.

One effective way to reduce your spending without sacrificing the quality of bookkeeping services that are available is to lean on the support from an outsourced accounting and bookkeeping company. You’ll see that our full-service solutions are a fraction of the price that you would pay for an in-house employee. You can lean on the advice and information from our experienced accounting team and save money at the same time.

Choosing the Best Accounting Team

As you can see, there are many ways that your business will benefit when you enlist the services of an experienced accounting and bookkeeping team. You don’t need to carry the financial responsibility without tapping into the services and expertise offered by the pros.

Some business owners look to their local networks to find payroll and bookkeeping services in the geographical area. There’s nothing wrong with hiring a team that is close to home, but you also need to consider the cost of these services. In many situations, it is more affordable to hire a reputable online accounting service.

Outsourced accounting is becoming more popular with all business owners. Look at the numbers: there’s no question that you will save both time and money by hiring the pros to manage your small business accounting needs. As you learn about the services that are available, you’ll see that it is possible to outsource all of the stressful tasks: payroll processing, tax strategy, financial reporting, tax calculations and filing, and more.

Simply research your options and then choose the accounting and bookkeeping team that will be a good fit for your needs. You’ll see that Easier Accounting has an excellent reputation in the industry. We’ll gladly answer your questions and help you determine if our services are right for your business requirements.

Accounting Services You Can Trust

When it comes to your business finances, it is essential that you hire a team that you can trust. You are leaning on the support of an accounting team, which includes the way you manage your money and set up your tax strategy. Many business owners have said that good accounting services were the key factor in ensuring the long-term success of the company.

If you aren’t already enjoying these benefits for your small business, then our team is here to assist. The simplest way to get started is to open up a conversation to learn about the options that are available. We’d love to talk with you about the ways that we can support your business needs. We specialize in small business accounting services and can help you overcome some of the most common bookkeeping concerns faced by business owners. You can reach our team at Easier Accounting by calling us at (888) 620-0770. Call today to see how our services can improve your business financial systems.

Signs it’s Time to Invest in New Accounting Software

Gone are the days when business owners need to spend hours with a manual accounting ledger. As technology has advanced over the years, accounting software tools have been developed that can be used to automate business financial systems and improve overall results for a company.

Are you satisfied with your accounting software? If the software doesn’t perform the full functions that are needed, or if you haven’t implemented an automated system yet, then it might be time to talk to an accounting provider for assistance. Creating the right foundational systems for your company might be the most effective thing you can do to set yourself up for a successful future.

What is Accounting Software?

What does accounting software do for your company? This fundamental application is created to track and record the way money flows through the business accounts. Not only does this information need to be documented for external and internal review, but it is also necessary to have the records in case auditing is required.

Accounting software is used to determine the financial health of a company. The numbers show the inflow and outflow of income, which has an impact on the cash flow that is available. Business owners need to consider these requirements to ensure legal compliance and internal systems.

A variety of features are available through the software program. Some of these accounting features are standard throughout the industry, but there are differences in the way the computer programs manage your financial information. Common tools available through a reputable accounting software provider include accounts payable and receivable, billing, inventory, purchase orders, and the general ledger. Often, business owners can also choose software programs that include payroll processing, expense management, budgeting, timesheet tracking, electronic payments, and more.

Why Accounting Software Matters

Why does it matter if you have the right accounting software program for your business? If you want to point your company to future success, then you need to be sure that the financial information can be tracked quickly, effectively, and accurately. Your software program will be able to provide an instant snapshot that shows the overall financial health of the business. You can run reports to see profits and losses, as well as a variety of other financial transactions that might impact the success of your company.

When a business owner has access to up-to-date financial reports, it is easier to determine the real financial situation that is faced at any given moment. Too often, business owners make financial decisions in the dark. They can check the current bank accounts, but don’t know where the true standing of the company lies when it comes to cash flow. Making big decisions without accurate information could cause financial issues in the future.

For example, you might choose to invest the available money into a marketing plan or new inventory development, only to find later that you are unable to keep up with tax payments or payroll expenses that are due because the money was already spent. These issues are easier to avoid when you have a clear picture of your current and anticipated expenses, as well as reports that show the money that is coming in. Not only do you need to see the current totals in your bank accounts, but it is also important to evaluate the way your money will be flowing over the next few months.

Minimizing Labor Intensive Tasks

While accounting software can be helpful so that you can avoid legal issues and tax problems, it is also important to see the internal benefits that are available for your business. It is important that you are tracking the tax burden that will need to be paid when it is time to file annual taxes. Additionally, you need to know whether your business is profitable or not, allowing you to make changes with ongoing decisions that could impact your overall success.

Have you considered the time and labor burden that goes into a manual accounting system? Some business owners are stuck using old technology, such as manually calculating costs and revenue on spreadsheets or using a handprinted ledger. These systems worked in the past when automation wasn’t available. Now that systems can be used to automate the tracking, it doesn’t make sense to waste hours and hours of time each week on manual calculations. A better system is to implement a good accounting software, then have regular account reconciliations to ensure that nothing is slipping through the cracks.

As business owners implement the right software solutions, they can see how accounting technology brings in new opportunities for business development and growth. If you want to grow your company, then it is important that you are using all of the tools available.

Benefits of Accounting Software

We’ve already mentioned a few of the notable benefits of accounting software. Here is an overview of all of the benefits that business owners enjoy from a good software program:

  • Simplicity: Eliminate the need to spend time on complicated calculations and manual tracking.
  • Savings: Since the basic calculations are completed within the accounting software, you can save money on the labor and financial management services. Also, costs are reduced by using a digital program instead of the need to print and file documents.
  • Financial Clarity: At any given point, you can run reports and see full clarity and transparency of your business.
  • Productivity: Don’t waste your limited work hours on manual accounting calculations. Let the accounting software do the heavy lifting so you can turn your attention to other business responsibilities that need to be addressed within your company.
  • Avoid Mistakes: Manual calculations always pose the risk of mistakes that could occur. Avoid these human errors by implementing a good accounting system. You don’t need to worry about inaccurate data when an effective system and accounting service is used.
  • Future Forecasting: Not only will financial reports help with paying the current bills, but you can also look ahead to the future to determine the trends and patterns in your company.
  • Taxes: It is important that you are detailed in your accounting to determine the tax burden. Also, rest assured knowing that your software helps you maintain compliance based on requirements established by the IRS.
  • Information Security: A good accounting program will have security features that keep your information safe. No need to worry about your financial information being jeopardized when you choose a reputable service.

Upgrading Your Accounting Systems

Now that you see the benefits that are available, it’s time to evaluate whether or not you are leveraging the full advantages for your company. It might be time to upgrade your systems by investing in new accounting software. Here are a few signs that your company needs a new accounting system:

  1. Business Growth: As your company expands, you need to be sure that your accounting software will be able to keep up with the growth. Consider your current business size and anticipated growth. If you are anticipating big changes in the future, then it can be beneficial to implement a new accounting program now to minimize the growing pains in the future.
  2. Reporting Needs: Are your current financial reports sufficient to provide the information needed for your business decisions? Sometimes companies need more detailed reports showing the profitability of the company and cash flow trends. If your accounting system doesn’t have these automated reporting features, then it might be time to upgrade.
  3. Specific Features: Also consider the specific features that might be needed for your business. For example, if you have two separate systems for payroll and AP/AR, then you might consider switching your software services so that you can keep all of this information in the same accounting software. Talk to an accounting professional to determine the specific software features that are needed for your business.
  4. Transaction Details: How many transactions are moving through your company each month? Some of the startup accounting software services are designed for companies that have just a few transactions moving through here and there. If you are growing and the number of transactions is expanding, then it is probably time to implement a new software service that can handle the growth.
  5. Cloud-Based Services: Where is your accounting data stored? If the information is kept on your computer hard drive, then you face the risk of losing all of this valuable data when the computer crashes. Hardware doesn’t last forever, and it could be devastating to lose the financial history of your company. Instead of relying on a desktop system, you should make a move to a cloud-based software as soon as possible. If something goes wrong with your computer, you can still access the essential files since the information is stored in the cloud.

Learn More About the Right Accounting Services for Your Company

At Easier Accounting, we are experts in small business accounting services. If you are considering your options to improve your accounting software, then our team is here to assist. We offer full-service accounting solutions for small businesses and startups. Call today to discuss the solutions that will meet your needs: (888) 620-0770.

Choosing Business Accounting Services: Firm vs. Freelance Bookkeeper

One of the best stress-reducing decisions you can make for yourself is hiring an expert to help with business accounting services. You are already carrying enough stress as you are working through the details of employee management, marketing plans, and product development. Add the details of bookkeeping and accounting on top of your daily responsibilities, and it can be a lot to keep up with on an ongoing basis.

It’s understandable that the decision to outsource business accounting services can be a challenge. Not only do you need to hand over the keys to someone you don’t know, but some business owners aren’t sure if it is worth taking on another monthly cost. The truth is that you will receive countless benefits when you finally make the decision to work with an experienced financial pro. This one decision might be the turning point to help your business grow to higher levels of success.

Why Do You Need Business Accounting Services?

If you are getting your company off the ground, then it might seem like an unnecessary expense to hire a financial professional. Is it worth the cost when cash flow is tight? Yes! As you learn more about the benefits of working with an accountant and/or bookkeeper, you’ll see that this expense should be at the top of your priority list.

Many entrepreneurs thrive on DIY, especially when they are just getting started. While there are certain things that you can do for yourself, there are also appropriate times to bring in an expert who can assist with your needs. It can be a challenge to find the time required to keep up with ongoing bookkeeping and accounting responsibilities.

Plus, there is a good chance that you are making avoidable mistakes if you don’t have experience in the financial industry. You wouldn’t try to fill a cavity without visiting a dentist, so why would you try to analyze financial reports if you don’t have an accounting background? Failing to engage the services of a trusted accounting team means that you will be missing out on critical insights that are needed to help your business grow.

In fact, when business owners finally make the decision to hire someone to help with accounting and bookkeeping, these business owners often find that they weren’t doing nearly as well as they expected. Just because you are staying consistent with your DIY system, doesn’t mean you are covering all of the essential aspects required for your financial reporting.

It is common for a financial professional to uncover problems with transactional errors, poorly structured systems for paying bills, and even gross errors in the financial reports. If you want to make quality decisions for your business, then you need to lean on the services offered by an accounting professional.

Considerations: Bookkeeper vs. Accountant

The most important thing that should be considered as you are making this decision is regarding the type of services that are required for your company. Are you looking for someone to help with only tax strategy? Or, do you prefer a full-service approach that includes ongoing support with account reconciliation, financial report analysis, and more?

Even though the term “bookkeeper” and “accountant” are sometimes used as synonyms, there are distinct differences in the services that you will receive from these providers. You should never assume that a bookkeeper can provide all of the services available from a business accounting firm. As a result, you might be missing out on a few key services that are required to support your business needs.

A bookkeeper and accountant share common goals, and their roles often overlap. Here are a few details to help you distinguish the different types of services available:

  • Bookkeeping Services: A bookkeeper is responsible for overseeing the ongoing financial transactions, such as invoice payments, payroll, sales tracking, and more. These transactions need to be recorded, categorized, and reconciled to ensure that details aren’t overlooked in the bigger financial picture. Bookkeepers help with accurate recordkeeping, but the services don’t typically include analysis of financial reports.
  • Accounting Services: When a bookkeeper ensures the business is maintaining accurate record keeping, then the accountant can step in and build on the information that has been recorded by the bookkeeper. Accountants often help with financial statement reviews. The data is taken to the next level with detailed analysis, interpretation, and advice. The goal is to use reportable data in a way that helps with cash flow and business strategy.

So, do you need a bookkeeper or an accountant? In most cases, small business owners can benefit from both services. The benefit of choosing a bookkeeper is that the services are often less expensive, but you will be missing out on the financial analysis available from an experienced accountant. In fact, it often makes sense to spend the extra money on accounting services, because you will be able to recover those costs by reducing your tax load and maximizing your business strategy. Many business owners find the best solution is to choose a team that offers both bookkeeping and accounting services, such as the all-inclusive packages offered here at Easier Accounting.

Comparing Your Options: Firm vs. Freelancer

There’s no question that every business owner needs to tap into financial support. Most people begin with a startup idea, but they have no experience or knowledge regarding the business side of things. Just because you have a product that people are interested in buying, doesn’t mean you have the smarts to handle the books that support your business.

It is important that you understand a few distinctions between the services offered by an accounting firm vs. a freelance accountant:

  • Cost: If you are looking for the lowest price, you will often find the best value for your money by hiring a virtual team. Local accountants need to carry the expensive overhead costs of maintaining a building and other expenses. In comparison, an online team can keep prices low since these costs can be avoided.
  • Timeline: When you are working with a team, such as the services offered here at Easier Accounting, you don’t have to stress about deadlines being missed. Certain deadlines need to be met, such as payroll processing, account reconciliation, and tax payments. A single accountant will go out of town at times, which means that your deadlines might be overlooked since only one person is overseeing your financial needs. In comparison, a financial team ensures you will never miss a deadline, regardless of the personal schedules of the individuals on a team.
  • Experience: There’s no question that you are tapping into a broader range of experience when you choose to work with an accounting team. A local accountant will have knowledge about small businesses in your area, but that experience will be limited since the person is tied to a geographic location. In comparison, an online team has experience working with a full range of companies in many different locations. This spectrum of hands-on experience means they have more to bring to the table regarding the financial services needed for your company.
  • Access: One of the benefits of our digital age is the access to cloud-based software programs. Instead of the need to visit with your accountant in person, you now have the option to work with a team located anywhere in the world. Even if you are on the other side of the country, our team can offer high-quality services through digital access to your financial books. Your business can go paperless, and approved managers and financial pros can access your financial information at any time.

When to Hire Business Accounting Services

The truth is that it is never too early to bring in the experience of an accounting professional. Even if you are just getting started with your new business or you are in the early stages of growth, it is essential you have the support of a financial team that will help you get things off the ground. Business owners who make the decision to hire an accountant early in the game rarely regret their choice.

These services help to build a solid foundation that makes it easy to help your business grow in the future. When you have a solid financial system, then you can avoid common growing pains that occur when other business owners aren’t prepared.

A financial professional can help as you create a plan based on the needs of your company. This system will help you save time, which means that you will also be saving money in the process. You can hand the responsibility to an experienced business accounting service, allowing you to turn your focus to other responsibilities that are required to help your business grow.

If you are considering the option to hire business accounting services, then our team is here to assist. Easier Accounting knows what it takes to ensure financial clarity for your small business. We invite you to reach out to us any time to learn about the services that are provided by our team. We’re here to help with both bookkeeping and accounting services needed for your small business: (888) 620-0770.

Accounts Receivable Tips for Business Owners

As a small business owner, how many responsibilities are you juggling throughout the day? Some people find it hard to stay current with accounts receivable invoices when they are busy working on product development, marketing, employee management, and more. Even though you are working on many important details in your business, it is important that you are proactive with your AR strategy.

Why Your Accounts Receivable Strategy is Important

Do you find that your sales are strong, and yet you are always facing a difficult cash crunch? It can be a challenge to keep the money flowing if you don’t have a good AR system in place. Even if the numbers show that your business is prospering, you could be facing serious cash flow issues if you aren’t diligent with collecting payments from your customers.

It’s often easy to stay current with your account payable invoices, because the vendors expect payment by a certain date to avoid fees and interest costs. Do you maintain these same standards with accounts receivable? You need to be sure that money is in the bank so you can pay your bills, which means that you must be diligent about collecting the cash that is owed.

In fact, it’s easy to see that establishing an effective AR strategy should be a foundational practice for every small business. Unfortunately, too many small business owners neglect AR and face avoidable problems as a result. When you optimize your Accounts Receivable systems, you can reduce your stress and optimize the financial success of your company. As a result, healthy cash flow will have a positive impact on your sales, marketing, and all other business operations.

As you can see, it is essential to create a good AR system and also stay consistent with maintaining the system in the future. It’s worth the time to structure these processes within your company. Always look for opportunities to improve these systems if needed. Even if you don’t see the immediate benefits of optimizing your Accounts Receivable processes, these efforts will undoubtedly have a powerful effect on your future business efforts. You can reduce the possibilities of wasting existing capital, giving you the cash flow to pay down debt, fund growth, and reduce costs.

Common AR Problems Faced By Small Business Owners

There is no reason to “reinvent the wheel” when other business owners have already forged the pathway forward with good AR systems. Here are some of the common pitfalls encountered when business owners don’t have a good Accounts Receivable system:

  • Time: You might feel you don’t have time to work on AR right now. But, procrastinating this process can result in a huge time requirement in the future when you are trying to clean up the mess. It is best to be consistent and diligent with your billing in real-time. This process minimizes the work that you need to put in later on when the information is no longer fresh on your mind.
  • Cashflow: A lack of money in the bank will have a ripple effect to impact all aspects of your business. For example, if you aren’t collecting on the invoices that are due, then it means you won’t have the cash needed to invest in your marketing strategy. As a result, your business growth will slow.
  • Cash Allocation: Another issue with poor AR systems is that you will find it difficult to stay consistent with the allocation of your cash resources. When cash is tight, it means that you will always be putting out the fires instead of building your business proactively.

Tips for Improve AR Systems

Now that you can see the importance of a good AR system, it’s time to commit to the changes that will improve your business practices. What are the best tips that need to be implemented? Here are a few proven strategies that can help your business thrive:

  1. Invoice Timing: Don’t fall into the trap of procrastinating the timing of when the invoices are sent out. If your customers aren’t invoiced, then you can expect payments will not come through. Invoicing consistently means that you can receive the payments as soon as possible, helping to keep the cash coming into your bank account. The best practice is to send the invoice at the time of delivery, giving the customers an immediate reminder that the payment needs to be sent.
  2. Invoice Follow Up: Just because you send the initial invoice, doesn’t mean that the payment will be remitted automatically from your customers. Build in a follow-up system for invoices that are due. The process can be built into your accounting software with reminders that you need to reach out to customers who are past-due with their payments.
  3. Ask for Payment: You should never feel bad about following up on an overdue invoice. If you don’t ask for the payment, then it will result in invoices that are months old. The longer the invoice sits unpaid, the more likely you will never receive payment on the invoice. If your digital reminders aren’t enough to encourage the customer to send payment, then you shouldn’t hesitate to have a conversation with the person. This discussion can help you understand more about the payment delay, giving you the opportunity to find a solution that meets the needs of all parties. For example, if the payment is late because of the customer’s cash flow concerns, then you might be able to set up a payment schedule with smaller milestones.
  4. Clear Payment Terms: Make sure you are clear about payment expectations from the beginning. These terms will give your customers information about the expected timeline for the payments, helping you avoid confusion when it is time for the payment to be collected. Communicating this information gives you the structure so that you can build in late fees or interest costs as needed.
  5. Milestone Invoicing: If you are working on a big project with a client, it isn’t necessary to wait until the completion of the project to be paid. When larger projects cover a long period of time, it is best to bill based on milestones instead of completion. This milestone billing strategy ensures you have money for supplies and payroll as the project progresses, helping you avoid cash flow issues. Plus, you reduce the risk of missing out on the full amount if the customer doesn’t pay for some reason in the future.
  6. Itemizing Invoices: Don’t send a generic invoice with an unexplained amount due. Each invoice should show the breakdown of the products and services that were provided. If customers have questions or disagree with the amount, then it means that they will likely delay payment on the invoice. You can reduce the risk of this delay by showing the full amount due as well as the breakdown, helping to avoid questions about the money that is due.
  7. Provide Various Payment Options: While it’s true that “cash is king,” you will lose out on business if you don’t accept credit card payments. It is smart to accept a variety of payment options, including cash, direct deposit, credit cards, Paypal, and even checks. Giving customers several payment options increases the likelihood that they will be able to come up with a payment solution that fits their cash flow needs.

Start This Process Early

Regardless of the stage of business development you are experiencing, it is essential you are proactive with implementing a good AR system as soon as possible. Even if your business is in the start-up mode and you aren’t collecting money for products and services yet, you need to be sure that the system is in place when you are ready to move forward.

Too often, business owners are so focused on product development and marketing strategies that the important financial details get overlooked. Make the smart decision by starting this process early, so you have a good system in place when the time comes. Your AR system should include details such as the accepted forms of payment, establishing payment terms, and follow-up communication for unpaid invoices. When you are proactive with these details, it makes your business launch smooth and seamless.

Tapping into Industry Expert Knowledge

Are you running into challenges with your accounts receivable system? It can be hard to create a new system if you don’t have experience with financial tracking or accounting. Luckily, you can hire industry experts who will help you structure the right financial software to systematize your invoicing and payments. This process is invaluable to create the structure that is needed, so you don’t have to stress over your small business accounting.

You’ll find it is worth the investment to tap into the services offered by an experienced team. If you are interested in more information about how you can improve your accounts receivable and accounts payable systems, then our team is here to assist. Call Easier Accounting for information about the services that are available for your small business: (888) 620-0770.

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.