Tax Deductions to Consider for the Last 3 Months of 2018

This year has flown by, leaving many people surprised that we are nearing 4th quarter. How did your business perform during the first three quarters of the year? What are the tasks that need to be addressed before you finish up 2018?

As we start into the fourth quarter, it is a great time to assess your business efforts and identify areas of improvement. The best thing that you can do is tap into the resources that are offered by business professionals who can help with your goals.

What Support Do You Need in 4th Quarter?

Here are a few ideas of outsourced professionals that can help you end the year on the right note:

  • Accountant: Evaluate the books to determine any expenses that should be covered before the year closes. Look at potential tax deductions to help with the management of your tax burden for the year. We will discuss this in more depth later in this article.
  • Lawyer: Is it time to restructure the business? Whether you are changing the way the entity is structured or you are looking for ways to improve your contracts, don’t hesitate to bring in the services of a legal team. You can find a local lawyer who can assist with your efforts. Or, look at online services such as Legal Zoom and more.
  • Business Coach: Sometimes, goals are just out of reach because you are having a hard time seeing things from a different perspective. A coach can be a valuable asset to help you identify systems that are no longer working. Changing a few of your habits and systems can make a big difference to boost your profits during the holiday season.
  • Marketing: If you want to maximize sales when consumers are shopping for the holidays, then make sure to utilize the services of an experienced marketing team. There’s no reason for you to spend time trying to figure out the best strategies. Instead, tap into the services that are offered to bring more customers to your website.

As you can see, there are many different focuses that you might choose for the last four months of the year. There’s no question that the financial health and organization of your company should be the top priority. Once you have the right financial system in place, then you will know how much cash flow is available to support the other services that are needed to help your company grow.

Why Tax Write-Offs Before the End of the Year?

It is common for business owners to procrastinate tax strategies until the tax deadlines are looming. But, the truth is that right now is the best time of year to evaluate your situation so that you can manage your spending before the year ends.

For example, if you’ve had strong sales numbers in 2018, then it means that you might be facing a higher-than-normal tax bill when Tax Day rolls around in April. While it is great to have high numbers for the year, it can be debilitating to face the expensive taxes that need to be addressed. Work with your accountant to find the right strategy that might offset the taxes that are due.

One of the best strategies is to invest money into things that are needed for the business. If that transaction goes through by December 31st, then it can be used as a deduction for 2018. You shouldn’t be spending money for no reason. But, with a good strategy, you can get access to the equipment and services that are needed for your company, while managing your tax bills at the same time.

Overview of Business Taxes

The most effective strategy to ensure that your taxes are filed correctly, and on-time is to hire an experienced accounting team to handle the work. You should be spending your time on other business activities, instead of trying to decipher tax law and crunch the numbers. Outsourcing these services can be a powerful way to boost your long-term results. The key is to make sure that you hire an experienced team who understands the most effective strategies to use for your business.

Tax planning should be an ongoing process, which means that you need to talk to your accountant more than once a year. Not only do tax laws change regularly, but it can be a burden to keep up with the rules and regulations that apply to your industry. Even though you will be spending money on the accounting services, you will actually save money in the long run by reducing your tax burden.

There isn’t one flat tax that needs to be paid by your business. Instead, a variety of taxes need to be evaluated. Your accountant can talk to you about the paperwork and calculations that are required for all of your financial needs:

  • Personal Taxes: You need to pay income tax on the money that comes into your household. If your business is structured as a sole proprietor, then your personal taxes will be completed along with the business deductions and income. Other applicable taxes include those associated with your personal property and your house. These taxes need to be considered on a local, state, and federal level.
  • Self-Employment Taxes: In addition to the income tax calculations listed above, there are a few things that need to be considered for self-employment taxes as well.
  • Business Income: If your company is structured as an entity, then there might be business taxes assessed by the federal government. Talk to your accountant and lawyer about the structure of your company and how to determine the taxes that apply to your circumstances.
  • Payroll Taxes: When you have employees on payroll, there are specific taxes that need to be managed with payroll processing. Not only do you need to calculate the right deductions from the employee paychecks, including Medicare and social security. But, you also need to calculate the company’s burden as well. Then, regular payments need to be made to the government. The timing of these payments varies on the size of your company and the number of employees.

Possible Tax Deductions for Fourth Quarter

If you experienced higher than anticipated profits this year, then an effective tax planning strategy is to speed up the timeline for purchases that are scheduled for next year. Shifting the timing of these purchases can help to offset the tax burden in the current calendar year, giving you more time to figure out your strategy for 2019.

On the other hand, if your revenue was lower than anticipated, then you might hold off on certain expenses until the New Year. Since your tax burden will be lower than normal this year, it might be beneficial to wait until January before putting money into equipment and other costs that might be needed for your company.

Keep in mind that a dollar spent rarely equates to a dollar that is saved on your tax bill. So, it doesn’t always make sense to come up with artificial expenses in an effort to reduce your tax burden.

Here are some of the expenses that might help with your deductions this year:

  • Computers, Cell Phones, and Other Electronics: Staying up-to-date with your equipment is essential so that you don’t run into problems due to outdated electronics. You might watch the Black Friday sales to find discounts on laptops or cell phones for your office staff. Everyone will be glad to have the upgrades for their equipment, and you will be glad to take advantage of the write-off before the end of the year.
  • Retirement Contributions: Certain retirement accounts allow you to set money aside tax-free. Talk to your accountant about potential retirement strategies that can be used.
  • Furniture: If your office furniture is outdated, then it might be time to invest in a new style. First-impressions matter when customers come to your office. So, you should always be sure that you are creating a good impression with interior décor that is trendy and welcoming.
  • Office Supplies: Are you running low on printer paper or pens? Put in your order at the local office supply store before the end of the year. Also, look at other expenses that might be needed, such as a new printer, filing cabinets, and more.
  • Software and Digital Subscriptions: We live in a digital world, making it hard for any business to avoid ongoing subscription services. The truth is that these tools can be helpful when you find the right services needed for your company. Don’t be shy to invest money in training courses as well as monthly subscriptions that are necessary for your business model. Examples include accounting programs, design software, stock photos, and more.
  • Insurance Coverage: A good insurance policy can go a long way to protect your company in times of emergency. Review your insurance coverage to see if anything needs to be changed to increase your coverage.
  • Travel and Entertainment: If you are thinking about attending an industry conference, then right now might be the perfect time to book the flights and hotel rooms. A portion of these expenses can be written off on your taxes.

What questions do you have about your business tax strategy? Talk to us at Easier Accounting for personalized recommendations. We are here to answer your questions: (888) 620-0770

Bookkeeping and Accounting Services: An Overview of the Available Services

“Hiring an accountant” can be a general term that seems overwhelming for some business owners. You know that you need bookkeeping and accounting services. But, are you worried that you are going to overpay for services that aren’t necessary for your company? Before you rush into the decision, it is important that you learn about your options. Then you can find the right accounting services to match the needs of your business.

Why You Need Financial Professionals

Financial professionals play an important role in business management. Not only do bookkeepers and accountants help with the ongoing transactions and organization of the books. But, these experts can offer insights that are essential for tax strategy, cash flow management, payroll and more.

Some business owners assume that the best way to save money is by taking a DIY approach with bookkeeping and accounting. But, the truth is that this strategy might cost you more money in the long run. If you don’t have experience in the financial industry, then there is a high probability that mistakes will be made along the way. Then, you could be facing expensive costs to correct the problems in the future.

Also, consider the opportunity cost of the time that you are spending on financial activities. Instead of focusing your efforts on business tasks, such as finding new clients or forming new relationships in the industry, you are spending your time with your head in the books trying to sort through the numbers. If accounting isn’t your strength, then it means that you are burning daylight hours on tasks where you don’t shine. At the same time, you are giving up opportunities to spend time on business activities that could result in real growth for your company.

In the same way, you visit a dentist when you have a cavity or an attorney when you need legal advice, you shouldn’t hesitate to outsource your accounting needs to an experienced team. This strategy frees up the time that is available for your business activities during the week. Plus, you can rest assured to know that you aren’t overlooking important details that need to be addressed in your financial strategy.

Bookkeeping and Accounting Services: What Do You Need?

It is important that you understand your options so that you can determine the services that are needed. There’s no reason to be paying for payroll services if you don’t have any employees! Often, there are options to choose individual services as needed. Or, you might be able to save money by packaging the essential bookkeeping and accounting services together.

In fact, these packaged services can simplify the process and improve the results that are available for your company. You don’t need to worry about working with a bookkeeping team and a separate accounting team. Instead, you can lean on the experience offered by a team that provides the full coverage that is required.

Here is an overview of some of the ways that your company might benefit from bookkeeping and accounting services:

  • Fixing Messy Books: If you’ve procrastinated the decision to bring on an experienced accounting team, then it is likely that there are mistakes with your books. Before the full systems can be put in place, it is essential to start by cleaning up the mess so that you have a clean slate to work with. This process often includes sorting through the transactions, completing audits on the previous months, determining current balances, identifying upcoming expenses, and then putting a complete system together that shows a full financial picture.
  • Tax Strategy: Taxes are unavoidable as a business owner. But, you don’t need to be scared of the potential bills in the future. With the right strategy, you can minimize the amount that is due and maximize the benefits that are available for your company. A good accounting team will help you design a tax strategy that is used throughout the year. You need to be working with your accountant on an ongoing basis, instead of only calling when it is time for the annual filing. Tax strategy can be used for your personal income tax as well as business deductions that can impact your tax burden each year.
  • Ongoing Audits: Auditing might seem like an unnecessary burden, but this proactive step is essential to ensure that nothing is slipping through the cracks. Regular audits ensure that details aren’t overlooked, such as tax write-offs and income that is received. It is also important to watch for potential mistakes that could be impacting the financial reports and cash flow. At the same time, your bookkeeping and accounting team might identify potential issues that indicate the risk of fraud in your company. Having a third-party auditor adds a layer of protection so that you can avoid internal theft and fraud.
  • Bank Reconciliations: In addition to the audits, monthly reconciliations are also important. For example, if a transaction is overlooked in your accounting system, then it means that the accounting program might show a different balance than what is actually in the bank account. Reconciliations ensure that accounts and records match across the board, giving you the peace of mind to know that everything agrees. If an error is identified, then the system can be corrected to avoid that problem from happening again in the future.
  • Cashflow Planning: Just because you have money in the bank right now, doesn’t mean that you will have the cash flow for the future expenses that are coming up. Cashflow can be a tricky aspect of owning a business. If you don’t have a good system for cash flow management, then it is possible that your lack of cash could sink the company. Work with your bookkeeper and accountant to create a system that evaluates current balances, incoming expenses, as well as future expenses. These reports will provide a clear financial picture that can be used when you are facing large decisions that will impact your company.
  • Payroll Processing: Timely payments for your employees are essential to maintain a healthy company culture and ensure employee satisfaction. It can be a challenge for a business owner to keep up with the payroll schedule. This process requires quite a bit of time and effort to ensure that everything is accurate before payments are remitted. Outsourcing payroll process means that you have an experienced team overlooking everything from payroll calculations to payroll taxes and direct deposits.
  • Accounts Receivable and Accounts Payable: At the same time, you also need to consider the payments that need to be sent out to contractors, utility companies, your landlord, and more. What are the balances that need to be paid this month? Are there any outstanding invoices that need to be collected from your clients? These details are important so that you have the cash flow coming in, and at the same time you are keeping up with the obligations that need to be covered to keep your company in business.
  • Record Management: Certain records need to be maintained to ensure that you have documentation for everything that is happening in your company. Each transaction needs to be recorded so that you can back up tax write-offs if there are questions from the IRS. Failure to maintain this documentation means that you could be facing the headache of audits and expensive tax penalties and fees in the future. Your financial team can help with the organization of your records so that you can avoid these issues.
  • Reporting: It is important that you have an accurate understanding regarding the financial health of your company. Your accounting and bookkeeping team can provide monthly, quarterly, and annual reports. This information will help you see where the most profitability is coming in, giving you insight and information that can be used to improve your business efforts going forward. If you don’t have these numbers, then it means that it is a “shot in the dark” every time you make an important decision that affects the financial well-being of your company. Analyze the numbers, look for trends, and rely on these reports so that you can optimize your systems and improve profit margins.

As you can see, there are many ways that you can take advantage of the services that are offered by a bookkeeping and accounting team. A small monthly fee for these services can have a significant impact on the success of your company. If you want to set your business up for future growth, then it is essential that you have the right systems in place. Hiring an experienced accounting team is one of the best decisions that you can make to help your company grow.

One thing that needs to be considered is the experience that is offered by the team that you are hiring. At Easier Accounting, we specialize in small business services. By focusing our scope of services, we can optimize the results that are available for your company. If you are an entrepreneur, you are working on a start-up, or you own a small business, then we encourage you to contact us any time to learn more about the way that we can support your business efforts. We are always here to help: (888) 620-0770

4th Quarter Financial Goals to Maximize Your Year-End Profits

September is here, which means that we are almost ready to step into the fourth quarter of 2018. How has your business performed this year? Whether you are trying to turn things around after a slow year or you want to maximize profits after a great year, it is the perfect time to take a closer look at your financial outlook. Setting a few financial goals could have an impact on the long-term performance of your company. Start working on these goals right now so that you are ready to implement the right strategies next month.

Resolutions Before the New Year

Setting the right goals for the last quarter of the year can drive your business forward. But, you need to be proactive to be sure that you are finishing 2018 in a strong position, instead of coasting through the last few months. Most likely, there are a few small things that you can do right now to ensure optimal results in the future.

There’s no reason why you need to wait until January to set new resolutions for your company. Instead, you can create those goals right now so that you are setting the foundation for a strong 2019. Procrastinating your efforts will stall the business growth that is available. As a result, you are leaving money on the table that could be contributing to the bottom line.

Common Annual Trends

Before you set these financial goals, you need to consider the common annual trends that are experienced in your company. For example, if you are in the retail business, then there is a good chance that your biggest months of the year are coming up. As shoppers gear up for the holiday season, many businesses benefit from the higher sales volumes.

In this situation, you need to be ready to amp up your marketing efforts and bring people through the door. Look for ways that you can offer holiday sales or other options to encourage people to add a few more things in their carts. Also, make sure that you offer online shopping options. Online shopping trends are growing every year because shoppers don’t want to face the crowds at the stores. If you offer your products and services on a website, then it means that you have the opportunity to tap into the online revenue that could take your company to higher levels of success.

On the other hand, some businesses find that things slow down in the fourth quarter. If your business model isn’t based around retail sales, then you need to be looking for ways to stay productive even though things are slowing down for a time. For those business owners in a service-based industry that is affected by seasonal trends, such as home contractors or landscapers, then right now is the perfect time of year to finish the season strong and start working on your strategy for next year. Use this opportunity to build more connections in the industry so that you can start stacking the pipeline for future sales.

Setting New Financial Goals

Regardless of your industry, there is wisdom in tapping into the information that is available from an experienced accounting team. You can gain insights and personal recommendations that can make a difference to help your company grow in the future.

Do you have specific financial goals in mind? Or, are you looking for insights that can make a difference for your company? Our team at Easier Accounting is always here to answer your questions and assist with anything that is needed to maximize your results in the future.

Here are a few ideas that might help you choose the financial goals to focus on this quarter:

  1. Increasing Revenue

It is obvious that you want to boost revenue to improve the results for your company. But, it can sometimes be a challenge to know where you should be focusing your efforts. Think outside the box to see how you can bring in more revenue. You might have the opportunity to increase the number of sales that occur within a specific timeframe. Or, consider the option to raise your prices so that sales stay consistent but you are bringing in more money.

Many different tools can be used to forecast your revenue. Even if you have the right tools, you also need to tap into the experience and insights offered by industry professionals. Services might include marketplace analysis, past performance, anticipated industry trends, and more.

The best solution is to be specific in your revenue goals. Instead of setting a goal to “boost 4th quarter revenue,” consider adding specific details such as “increase monthly revenue by $5,000 by December 31, 2018.” Then, break down the strategies that will be needed to hit the numbers that you are aiming to achieve. For example, you might need to have a certain number of sales calls or client meetings to ensure that enough sales are closed on a monthly basis.

  1. Decreasing Expenses

As your revenue goes up, it doesn’t guarantee profitability for your company. In fact, there are times when businesses end up in difficult financial situations because they fail to account for the money that is moving out of the company. Controlling your costs is essential to avoid failure in the future.

Remember that sales volume is not the only factor that affects profit and loss in your company. Instead, it is more important to make sure that you are spending less than what is coming into the business.

Take inventory of the ongoing costs that are being paid for overhead expenses, such as building rent and maintenance, payroll expenses, inventory management, taxes, and more. Also, consider one-time fees that come up so that you can have the cash flow on hand to pay for these things.

You will likely find areas where you can reduce waste or cut unnecessary subscriptions that are no longer being used. Plus, you might find opportunities to negotiate better contracts to maximize profit margins on each project. Look for solutions that will allow you to decrease utility costs, interest payments, or other inefficient systems that are draining your bank account. Don’t hesitate to bid out services or work that needs to be completed to see if you can find comparable solutions for a fraction of the price that you are currently paying.

  1. Maximizing Tax Deductions

Even though tax season is still a few months away, it is important to address your tax strategy throughout the year. If you spend money on products or services that are used for your business, then those costs can be used as write-offs to reduce your tax burden for the year.

You might be strategic with your purchases so that the transactions are complete before the end of the year. If you’ve enjoyed strong profits this year, then it might be time to buy new equipment that is needed in your office or restock inventory. Timing is everything when it comes to tax strategy, so it is essential that you are leaning on the experience and insight offered by an experienced accounting team. We are here to answer your questions and help you determine the best strategies that are available to manage the expenses that you are paying.

  1. Managing Debts

Business credit and debts can take a toll on your cash flow. If you are incurring high-interest costs, then it can feel impossible to get ahead of the payments that are required each month. Right now is an optimal time to put together an effective debt payoff plan so that you can control the amount of money that you are wasting in interest expenses.

What is the benefit that you are getting from your debt? Calculate the amount of annual interest that you are paying to determine if you are gaining the benefits that are needed to help your business grow. Often, the debt burden is dragging down your profitability and increasing your stress levels at the same time.

If you are carrying credit card debt, then make sure to pay down the high-interest balances first. One option is to consider a low-interest card or a balance transfer option that will stop the interest for a time. When it comes to debt management, don’t be shy to get on the phone so that you can discuss payment options with the lender. For example, a phone call to your credit card company might result in a lower interest rate or better payment terms. If it makes sense, then you might transfer your business loan to another lender to achieve the favorable payment terms that are needed to help you gain control of your business finances.

Year-End Financial Goals for Your Business

These finance goals can be addressed during any time of the year. But, right now is a perfect opportunity to step up your efforts so that you can have a strong finish to 2018. If you need assistance, then don’t miss the opportunity to work with an experienced account team. Contact us at Easier Accounting to learn more about the services that are provided. We offer a range of financial solutions, including tax strategy and filing, bookkeeping services, and other options to improve the financial results for your business. Call today to talk to an industry professional: (888) 620-0770

Business Owners: How Valuable is Your Time?

Whether you are hiring new employees or contractors or you are looking at year-end raises for your staff, it is common to assess the hourly and salary rates that are being paid out to the team. But, there is one area that often falls through the cracks when you are considering the value of time and skills that are offered for business projects. Ask yourself one important question: How valuable is YOUR time?

Wearing Many Hats as a Business Owner

Since you aren’t working for another company, it can be hard to put a price tag on what your time is worth. As you are launching the business and putting new systems in place, it is common to spend time on lower-level tasks that could be handed to others. During these start-up phases, new business owners are often looking for solutions to reduce overhead expenses, which means that they are often wearing many hats throughout the day.

It takes time for a business to become profitable, so it’s no surprise that you are willing to take on some of these entry-level tasks. But, it is essential that you consider the future growth of the company so that you aren’t dedicating a significant number of hours to tasks that should be handed to an employee or contractor. If you are undervaluing your time, then it means that you won’t maximize your Return on Investment (ROI) or the profitability of the company.

Financial Benefits from the Time You Spend on Business Building Activities

How valuable is your time? When you put in a specific number of hours in business-building activities, is there an anticipated amount of revenue that you can expect in the future? It depends on the type of activities that you are choosing to complete each day. For example, if you are spending your time taking out the garbage or organizing inventory shelves, then these activities won’t likely have a direct impact on your revenue. On the other hand, you can focus that time on improving industry connections or optimizing marketing efforts, which could have a measurable impact on your business profitability.

There are several strategies that can be used to ensure that there is a financial benefit for the time that you are spending on your business efforts:

  • Determine the value of your time. When you know that one hour of your time is worth a specific amount, then it is easy to identify the tasks that can be outsourced at a cheaper rate. For example, you can pay someone $10 or $15 per hour for custodial services such as cleaning the bathrooms and taking out the garbage. If your time is worth much more than that, then you need to focus your efforts on the tasks that bring in money, instead of wasting your efforts on things that should be assigned to other.
  • Identify the wisest use of your hours. You only have a certain number of hours available each day, which means that you need to find the tasks that are the wisest use of your time to gain the maximum results in the future. There’s always “good, better, best,” so you shouldn’t settle for good when there is more upward potential available from the best tasks that will help your business grow.

You are the foundation of your company, especially when you are setting up the systems in the beginning. It doesn’t matter if you are selling a product or a service. You need to remember that your time is valuable, which means that every hour should be spent on tasks that will have an impact on profit margins.

Strategies to Assign Value to Your Work Hours

Several considerations need to be addressed if you are going to assign a value to your work hours. The goal is to reduce the time that you are spending on low-profit activities while shifting your focus to high-value activities and business development efforts. These efforts can help with the optimization of your efficiency so that you are receiving the right compensation for your work. It can be disheartening to know that you are putting in the blood, sweat, and tears only to bring in a minimum wage.

If you want to improve your business profitability, then you can’t sell yourself short in the evaluation of your time. Understand that time is one of the most precious commodities used to help your business grow. So, you need to take advantage of opportunities to leverage your hours whenever possible.

Whether you employ others or you hire outsources to help with business tasks. You should be the highest-paid team member, with the lower-paying tasks being handed off to team other employees or contractors. Not only do you need to consider the hourly rate that is being paid to these people, but you also need to factor in other details that will affect your out-of-pocket expenses, such as overtime pay, benefits, employment taxes, and more.

Also, it can be wise to do some research so that you can see what other people are charging for similar services. What are the price points of your biggest competitors? It is possible that you are charging an hourly rate that is much lower than the competition, which means that it might be time to notch up your prices so help with the optimization of your profit margins.

Value vs. Price

Keep in mind that the price that you are paid for the products and services that are offered isn’t an exact measurement of the value of services that are offered. Some business owners make the mistake of trying to compete based on price alone, which means that it is a race to the bottom to outperform the competition. If you are always dropping prices in an effort to bring in more business, then it becomes harder and harder to increase your profit margins.

On the other hand, you need to be sure that you are delivering value for the services that are offered to others. If you are overcharging for your time without delivering the perceived value, then it is hard to maintain the consistency of returning customers. There is a “sweet spot” that you need to identify for your industry. It often takes a little bit of trial and error to find the right place that will support your business growth.

Why Delegation is Essential If You Value Your Time

If you truly value your time, then it is necessary to implement a good delegation system to improve your efforts. Not only do you need to hand off the lower-paying tasks as mentioned earlier in this article, but you also need to look for ways to tap into different skill sets that can be used to help your company grow.

For example, if you know that your business finances need to be improved, then you have the option to learn more about the industry or hire someone who is an expert in accounting. It can take countless hours and many years of education to master a good accounting practice. There’s no reason why you should waste your time reading through tax laws and accounting software manuals when you can hire someone to handle these tasks for you.

Hiring a good accounting team means that you can bring in the expertise that is needed without spending your precious time learning an education that is peripheral to your main business efforts. In fact, you are likely leaving money on the table if you are diverting your attention to the side tasks instead of focusing on the efforts that will help your business grow. So, don’t enroll in an accounting class at the local college. Instead, look for a team that provides the services that you need so that you can maintain focused efforts on the tasks that you are good at, such as the things that will bring more sales into your company.

Yes, it can be difficult to rely on others when you are unsure about the performance that will be offered. But, as you understand the importance of delegation, it will help you see the best ways to improve your business efforts going forward. Micromanaging every aspect of your business process is a practice that will inhibit business growth and stop you from reaching the highest levels of success that are available.

As you hand over these responsibilities, you will undoubtedly have more time for higher value activities, helping to increase your income potential. It can result in a snowball effect that results in great results for your company overall.

Our experienced team at Easier Accounting is here to assist with your business financial goals. We invite you to consider the question: how valuable is your time? Then, bring in a team of experts that can assist with maximizing the overall results that can be achieved in your company. We are here to help with all of your accounting and bookkeeping needs. If you own a small business, then we invite you to contact us so that you can learn more about the various services that are offered: (888) 620-0770

How-To Guide: Tips to Improve Your Business Bookkeeping and Accounting

If you want to improve the results for your company, then you need to take it back to the basics by upgrading the systems that influence every aspect of business management. By creating the right foundation with good business bookkeeping and accounting practices, then you can make a difference with the long-term success that is possible. The key is to pay attention to the details and hire the right team to assist with the implementation.

Many business owners have good intentions to improve critical systems, such as financial reporting and accounting details. But, it is common for these activities to fall to the backburner because the attention is focused on immediate needs. It is easy to ignore the stack of paperwork that needs to be addressed when you are spending your time talking to potential customers and business contacts. Instead of procrastinating these efforts, you need to understand the importance of good systems so that these things are pushed to the top of your priority list.

Common Options to Improve Business Bookkeeping and Accounting

Even though you know that your business bookkeeping and accounting systems need to be improved, where should you start? You need to think about the overall system as well as the ongoing tasks that should be addressed on a daily, weekly, and monthly schedule.

Here are a few common practices that need to be considered if you are looking for ways to improve your accounting and bookkeeping:

Practice #1: Common Understanding with Vendors and Business Contacts

It can be a challenge to juggle the invoices that are coming and going when you have different systems in place for business contacts and vendors. For example, are some of your vendors stuck in the old process by sending invoices through the mail? We live in a digital age, which means that hard copies are no longer necessary. There’s no reason why you need to hold onto the paperwork.

Talk to your vendors to see if they offer digital invoicing. Then, make sure that you have the right system in place to keep the files sorted when they come through. For example, all of the invoices should be sent to the same email address. Next, the attachments need to be imported into the accounting system or saved in a cloud storage folder for future reference if needed.

Creating the same system and understanding with all of your business contacts can help to simplify the work that needs to be done in your office. It takes a little bit of effort to systematize this process, but it is worth the long-term benefits that are available.

Practice #2: Identify Bad Practices

Are there any bad habits that are dragging down efficiency or impacting profit margins? You need to evaluate the things that should be changed so that you can work on optimizing processes for the future. Sometimes, it is easy to overlook these bad practices when they become a normal part of your business activities.

The best solution to find the bad practices is to bring in an outside perspective to evaluate the way you are handling your regular activities. For example, important tasks might be falling through the cracks if you aren’t tracking the progress of various projects or invoices. Or an accounting team might help you find unnecessary costs that can be dropped so that you can minimize your overhead expenses.

Even though the changes might seem small, they can have a significant impact on the success of your company in the future. If you want to improve your results, then you need to improve the way you are managing all of the details in your company.

Practice #3: Be Clear about Bookkeeping Duties and Responsibilities

One of the most common reasons why important tasks are overlooked is that people don’t take responsibility for the things that might be handled by another employee. Don’t wait for employees to step up and take ownership for essential tasks, such as reconciling the books or sending invoices. Instead, you need to choose the people who should oversee the task and ensure that everyone takes personal responsibility for the areas where they are assigned.

You might have in-house employees who can help with bookkeeping, invoicing, and more. Or, you might choose to outsource these services so that a professional company takes responsibility for the tasks that need to be completed. It’s up to you to choose the system that will work best for your business. At the same time, be clear about expectations so that employees or contractors take the lead on their responsibilities.

Practice #4: Use the Latest Automation Features

Automation can have a transformational impact on your accounting and bookkeeping practices. If you are stuck in old habits and systems, then right now is the perfect opportunity to make the changes that are long overdue.

We live in a world of technology, which means that you need to be looking for options that fit your industry. There is no reason why your employees should be spending time on tasks that can be automated. For example, some businesses still practice data entry for every transaction that moves through the office. But, often these transactions can be automated by syncing the bank accounts and credit cards with the bookkeeping system.

A good bookkeeping system will pull in the transactions and even set up categories based on your predefined parameters. This automation reduces the need to spend valuable time on busy work. Instead, you can let the system handle the details so that you can focus on other aspects of growing your company.

Practice #5: Managing Inventory and Spending

It is common for businesses to get caught in the trap of overspending and poor management of cash flow. If you are spending too much on inventory and business management, then you will be able to see the trends in the reports. But, if you don’t have a good reporting system in place, then it means that these important details are probably slipping by without the attention they deserve.

Make sure that you always have the right amount of inventory on hand. Even though you want to bring in a large amount of inventory so that you never run out of products that can be sold, you might accidentally burn up your cash flow with products that won’t be sold for a while. So, it is important that you manage your spending by being careful with the amount of inventory that is purchased.

Also, look for other areas where you can reduce overall spending. Can you identify spending patterns that aren’t essential for business growth and management? There are often simple solutions that can be used to reduce overhead costs so that you can minimize your spending and maximize profit margins simultaneously.

Practice #6: Plan for Big Expenses

Even though business might be good right now, you never know when an unexpected expense will pop up. You can’t predict when an emergency might happen. But, you can always expect that something will happen eventually. So, you need to be sure that you are ready with money in the bank when these details need to be addressed.

Upcoming big expenses might be accrued for a variety of reasons, such as tax responsibilities, inventory purchasing, equipment and computers, employee payroll, and more. It takes money to run a business, so you need to think ahead to ensure that you always have the cash flow to keep things rolling. It is wise to have a few months of business expenses set aside as an emergency fund.

This emergency fund can be used for one-time costs that might come along. At the same time, the emergency money can also be helpful to get you through the lean times if things slow down in your industry.

Practice #7: Hire the Industry Experts

There’s no reason why you should reinvent the wheel when industry experts have already created and improved the systems that can be used for business bookkeeping and accounting. If you are looking for the right solutions to improve your company, then you need to turn your attention to the advice offered by the experts.

We’ve been offering these services for many years, giving us the experience and education to know the best ways to maximize the results from accounting and bookkeeping. When you choose our experienced team, you can tap into the knowledge that we will share about the options that are available for your company. As we have helped other small businesses, we’ve gained the knowledge and information required to ensure the long-term results that you deserve.

Why Easier Accounting?

Why should you enlist the services that are offered by our team at Easier Accounting? We know that you have many options for accounting and bookkeeping services. But, our team is working hard to provide the custom results that are best for small businesses and startups. If you are looking for assistance with payroll processing, bookkeeping, tax preparation, and more, then you need to contact us as soon as possible. We are here to help so that you have the best options available for your industry: (888) 620-0770

Essential Factors to Consider When Choosing an Outsourced Accounting Team

If you need accounting support, then the most common approach is to find an accountant in your local area. There is nothing wrong with working with a team that is close to home. But, you shouldn’t overlook the other options that are available in the industry. Before you rush into this decision, the best thing that you can do is learn more about the benefits of outsourced accounting.

Employee, Local, or Outsourced Accounting Services

There’s no question that you need accounting support, especially if you don’t have much experience with financial reporting and bookkeeping. Don’t waste your time on tasks that could be assigned to an industry expert. Instead, you need to look for the right services that will match the needs of your business.

One of the most common mistakes made by new homeowners is that they hang onto many of the responsibilities that could be outsourced. You don’t need to manage control over the busy work. Instead, find the right team to support your efforts so that you can focus on the business building tasks that are required. There’s no reason why you should be sending invoices or managing the bookkeeping transactions that are moving through your company. A better solution is to create the right system to outsource these tasks so that you have the necessary support for the overall efforts and vision of the company.

Bookkeeping and accounting should be the first thing that should be handed off to an experienced team. Here are a few options if you are looking for assistance with your financial tracking and reporting:

  • Employee: You have the option to hire an employee with a background in finance. If you want to have someone in-house, then make sure to choose an employee with experience in the industry. You need to hire someone who can take responsibility for the tasks and ensure the quality of work that is completed. But, you need to understand the drawbacks that come from hiring an employee. If you hire someone, you need to pay the salary as well as the cost of benefits that are required. Plus, employment taxes can add up over time. Most businesses find that an employee is more expensive compared to outsourced accounting services.
  • Local Contractor: You can see that hiring an employee isn’t always the best solution. So, you might turn to the local business results to see if you can find an accountant to help with the services that you need. A local contractor can be helpful in many ways, and some business owners like the comfort of meeting with someone face-to-face. But, if you limit your options to local services, then you might miss out on the benefits available from working with a team in a different location. There’s no reason to limit your choices, especially when the local services are more expensive compared to the outsourced options that are offered
  • Outsourced Accounting Team: Finally, the most popular choice is to choose an outsourced accounting team to assist with your books. Looking online will open up many windows of opportunity. This process allows you to choose a team the provides more than basic accounting services. You can find a company that specializes in small business accounting services to match the needs of your company.

Hiring an outsourced accounting team is one of the best ways to keep your costs low and maximize the benefits that are available. These services are catered to match the needs of your company while ensuring the long-term results that you deserve. We live in a digital world, which means that there is no reason why you need to have someone in your office or down the street. Instead, you can tap into the automation and cloud-based accounting that can improve your business systems with the support of a team offering these services online. If you are interested in learning more, then you need to talk to our experienced team at Easier Accounting for the full details about the ways our services will support your business goals.

Hiring an Accounting Team? Consider These Factors

Now that you can see the benefits of hiring help for bookkeeping and accounting, it is time to hire the experts who are a good fit for your business goals. Here are a few factors that should always be considered before you move forward with the decision:

  • Size of Your Business: It is essential that you consider the size of your business and the volume of transactions that are moving through the company. It is probably unnecessary to hire a full-time employee if you only have a few or a moderate number of transactions that are recorded in the books. This work won’t be enough to keep a full-time employee busy. At the same time, the size of your company should influence the team that you hire. If you are a startup or small business, then you need to pick a team that specializes in small business services (and skip a company that offers big corporate services).
  • Needs for Your Financial Goals: Identify the areas where you need the most support for your business goals. Are you looking for an accountant who only talks to you once a year to complete your annual taxes? Or, do you want a team that will take a proactive approach throughout the year to ensure the long-term results for your company? A variety of accounting services are available, including payroll processing, tax preparation and filing, long-term tax strategy, bookkeeping, invoicing, and more. Find a company that can support your goals with all of the work that needs to be completed throughout the year.
  • Qualifications of the Team: Your financial details contain sensitive information, which is why you need to be cautious about hiring an accounting team that you can trust. Learn about the qualifications, education, and experience of the accountant so that you understand the quality of services that are available. It might seem like a good idea to hire your niece to take care of the bookkeeping at a low hourly rate. But, many potential issues will arise if mistakes are made with the books. Never cut corners on the quality of bookkeeping and accounting services that are used for your business efforts! Instead, choose an accounting team that has hands-on experience with the services that are required for your business.
  • Cost of the Accounting Services: Finally, don’t overlook the price of the services that are available. The goal of outsourcing these services is that you can improve your profit margins, decrease spending, and maximize revenue as much as possible. Consider the cost of the accounting services to be an investment for your company. You need to understand the scope of work that will be provided as well as the cost that you will need to pay for the services. Then, compare this price with the expenses that would be required to support a full-time employee. You will see that it is usually more affordable to outsource these services instead of bringing on another employee.

Remember, that a big price tag doesn’t mean that you will receive the best accounting services. It is important that you hire an accounting team based on reputation, experience, and the scope of work that is provided to support your company. Evaluate the needs of your business and then find an accounting team to match.

You’ll Love the Services from Easier Accounting

At Easier Accounting, we understand that you have many options when it is time to hire the services of a company in the industry. We are here to support your goals and offer the advice that you need, without making you feel pressured into the services that we provide.

The best thing that you can do is have a conversation with our team. We invite you to discuss your needs with us so that we can determine if these services are a good fit for your company. If we discover that we can support your needs, then we can work together to design a custom plan that will ensure the long-term results that you desire.

We are striving to show you how affordable and easy it can be to hire an outsourced accounting team. We offer the full range of accounting services that are required, without the expensive price tag that is usually associated with hiring an accounting. By keeping our business online, we can minimize the overhead expenses so that these savings are passed onto our customers.

Are you interested in learning more about the ways that your company will benefit from outsourced accounting services? Then it is a great time to reach out to our team so that you can have a conversation. We offer information about the accounting packages that are available, so you can take some time to read through our website. Then, call us at your convenience when you are ready to learn more about the ways that our accounting services are transforming the industry. Easier Accounting is always here to help! Call today so that you can see if our services are a good fit for your company: (888) 620-0770

Taking Control of Small Business Finances: Payroll, Invoicing, Bookkeeping, and More

Have you strapped into the seat for the roller coaster ride of running a small business? As a business owner, there are many ups and downs that will be faced along the way. It can be a challenge to keep up with everything that is going on. Not only do you need to manage your workforce, but you also need to oversee the paperwork and finances that happen behind the scenes to keep the company running. If you don’t already have the systems in place, then right now is the time to take control of small business finances.

Why You Need to Be in Control

Why does it matter if you are keeping up with the boring paperwork and reports? It is exciting to work on product development and creative marketing campaigns. But, these activities aren’t possible if you don’t have the cash flow to support the daily business activities.

Taking control of your business finances is essential if you want to set your company up for success in the future. As you manage the cashflow, invoicing, and other systems that affect your business activities, you will be in a position to make the decisions that will have a positive impact on your company in the future. A few small actions right now will go a long way to ensure that you are positioned for growth in the future.

Too often, financial details fall to the back burner because business owners are focused on other development activities. For example, it is easy to neglect the bookkeeping tasks if you are busy preparing for an upcoming sale in your store. The immediate needs take priority, and then you are left to clean up the financial details later on.

Procrastinating on these financial reports and management can result in situations where you are facing financial problems that could have been avoided. For example, if you are current with your expense tracking and profit analysis, then you can anticipate potential tax bills in the future. As a result, you will have time to set the money aside so that you aren’t caught in a difficult situation where you are unable to pay the bills when they are due.

Managing Money for Your Small Business

Every business has the money management concerns. Cash is king in your business practices. Without financial management, you could find yourself stuck in a debt hole where you can’t recover. It is essential to design a financial structure that will help you maximize profit margins and stay ahead of the cash flow that is needed to keep your company running every month.

These systems need to be in place for every financial aspect of business management:

  • Payroll: Ensure that payroll processing is accurate and timely, helping to maintain employee satisfaction. Not only do you need accuracy with the payment calculations, but you also need to stay current with tax withholdings, benefits calculations, and more. Additionally, you need to be sure that enough money is in the bank so that the checks clear.
  • Invoicing: There are two sides of invoicing that need to be addressed. First, you need to make sure that you have the cash flow to pay the invoices that are due for products and services that are used to keep your company running. Second, you need to stay current with sending invoices to your customers when balances are due.
  • Bookkeeping: Do you have a system in place to track every transaction that moves through your company? Not only do these transactions need to be recorded, but it is also important to categorize the spending and pay attention to the cash flow.
  • Financial Reports: You don’t need to look at financial reports on a daily basis. But, this information can be helpful several times during the year, especially when you are making big decisions that impact the future of your company. Have a system in place so that it is easy to run financial reports that might be needed, such as profit before taxes or a Profit & Loss report.

These are just a few of the financial details that need to be handled on a regular basis. Many business owners don’t have the experience or time to handle these tasks. Instead of stretching yourself thin with the busy work, it is better to lean on the experience offered by an outsourced accounting team.

Financial Management Tips for Your Small Business

Resources are available to make it easy to set up the right financial management system for your small business. Keep in mind that you don’t need to start from scratch when setting up these systems. Instead, it is more effective to tap into the services that are offered by an experienced financial team. When the accounting team has worked on other similar projects, then insight can be offered to help you avoid some of the common pitfalls that are encountered along the way.

Here are a few financial management tips that every small business owner needs to keep in mind:

  1. Learn about Your Options: Educating yourself is one of the first things that you need to do so that you have the right information to support the decisions. Evaluate services that are offered, financial information that needs to be tracked, and where you should turn for the help that is needed. Also, you need to be educated about the current financial health of your company. If you don’t know where you are starting, then it can be hard to determine the changes that need to be made for the future. When the finances are a mess, then it might be tempting to look the other way. But, this information is important so that you can get a feel for the severity of the situation, and then decisions can be made to change the trajectory of the company.
  2. Business and Personal Finances Should Be Separated: It is easy for the finances to get mixed up when you are running a startup or home-based business. Even though the business is in your name, you need to be careful to keep the finances separated so that there isn’t a mix up when it is time to track spending or look at transactions. Get a business credit card and checking account so that all of the expenses are in a different account than your personal The separation takes a little work in the beginning, but it is essential so that you can stay in control of the way the money moves through your accounts.
  3. Manage Large and Small Expenses: You might have a false sense of security if the profits are rolling in. But, don’t assume that a big bank account means that you have money to spend. If you aren’t managing your expenses, then the incoming money will quickly be eaten up by nickel-and-dime costs that are required to keep the company running. Watch out for the cash-suckers, such as monthly subscriptions, inventory purchases, or a slush fund that is hard to keep track of. You need to be consistent about tracking every penny that is spent. At the same time, determine whether the expenses are essential so that you can find areas where you can cut back the spending.
  4. Use Good Accounting Software: A cloud-based accounting software is the best solution in our modern business world. This system makes it easy to track your inflow and outflow. At the same time, your accounting team will be able to access the information even when they are located far away. Additionally, there are many conveniences to having the accounting reports at your fingertips from any place in the world. If you don’t already have a good accounting system in place, then this step should be at the top of your priority list. Our team at Easier Accounting can assist with the implementation of a system that will work for your business needs.
  5. Measure Performance and Progress: Ongoing measurement will help you see the progress that is being made with the money that is coming in and the being spent. It is important that you evaluate progress on a regular basis to determine the trends. For example, you might see that this year is trending with a stronger profit margin compared to last year. As a result, this information can be used if you are looking at options to reinvest the profits in business development or extra marketing campaigns.

You don’t have the time or expertise to manage the business finances without support. So, it makes sense to invest your money in a good accounting service. Outsourcing these tasks will free up your time and improve the systems that are being used in your company. At the same time, you can rest assured to know that you are tapping into the expertise offered by an experienced team that you can trust.

If you are looking for ways to take control of small business finances, then Easier Accounting is here to assist. We invite you to call our company so that you can learn more about the services that are available: (888) 620-0770

How Outsourcing Will Reduce the Stress of Starting a Business

Are you feeling the thrill of starting a business? Whether you are working in the basement or setting up a local startup, there are a few things that you need to consider to reduce your stress during this experience. Putting the right systems in place will streamline your systems going forward, making it easy to grow the company when demand increases.

At Easier Accounting, we’ve worked with small businesses in all stages. As we’ve managed the books for growing companies, it is easy to see the trends that impact the success and potential growth. Our goal is to help you reach higher levels of success with your business efforts. So, we want to pass this information onto you, helping you avoid some of the common issues that are faced by startups and entrepreneurs.

One of the most important things that you can do is evaluate the way that outsourcing can be incorporated into your business plan. Here are a few thoughts so that you can see the value of offloading some of the responsibilities that you are carrying.

Don’t Be a Jack-of-All-Trades

Even though you are bootstrapping with your business efforts, it doesn’t mean that you need to carry all of the responsibilities by yourself. There is a term that is commonly used: Jack-of-All-Trades. This phrase refers to someone who tries to complete many different responsibilities. But, when the efforts are spread thin, it has a negative impact on the quality of the work that is completed.

For example, if you are starting a company in the tech industry, don’t assume that you need to single-handedly manage the website design, branding efforts, coding, app development, marketing and more. Instead of juggling so many responsibilities at the same time, it is better to identify your strengths and then offload the other tasks to specialists in the industry.

Not only will your stress go down, but your daily activities will be more productive when you aren’t searching the internet trying to solve problems that could be easily addressed by an expert. It is worth spending the money to bring in an experienced contractor so that you don’t have to waste your time trying to reinvent the wheel.

Tap into Various Skillsets

You can build a team that will support your business goals by tapping into the various skillsets that are available in the industry. It is amazing to see the synergy that is possible when you hire people who are offering their best skills. You can’t be skilled at everything that will be needed to run your company, so it makes sense that you should bring in an experienced team to oversee all of the details that need to be addressed.

As you are assembling this team, you have the option to hire employees if needed. But, it is important to understand the overhead costs that will be carried. You will need to pay the cost of the salary, as well as overhead expenses for office space, equipment, benefits and more. A cheaper solution is to find outsourced services that you don’t need to maintain the monthly burden of an employee.

A contractor is available to complete the work as needed. If you require five hours a week of services, then it is nice to pay for those services without the requirement to find tasks to fill the other hours that would be required for a full-time employee. For example, hiring an outsourced accounting team when you are starting a business means that you don’t need to bring on a full-time employee to manage the books and financial transactions. Most startups don’t have enough work to keep an employee busy throughout the week. So, it doesn’t make sense to pay an expensive salary if there isn’t enough work available for that person.

Get a Different Perspective for Your Business Efforts

Another reason why outsourcing can be beneficial is to tap into the experience and perspective that comes from someone who has worked on other similar projects. For example, our team has many years of experience supporting small businesses with their accounting and bookkeeping needs. As we’ve offered these services to various companies, we’ve optimized the system to ensure the best results for every customer.

This process increases the satisfaction for our clients. At the same time, we’ve improved our skillset and gained confidence in the services that are offered. If you hire us for the outsourced accounting services that are required, then you won’t be starting from scratch. We will implement the proven systems that can be used for your financial tracking, giving you the peace of mind to know that we’ve already worked through the potential problems.

In addition to the foundational services that are provided, it can also be helpful to see a bigger perspective. If you are a homebased freelancer bringing in $50,000 a year, then it can be valuable to tap into the advice that might help you double or triple your receivables in just a few years. When you are working with a team that understands the best processes for business growth, so that you can speed up your results and reach higher levels of success.

What Should You Outsource?

How do you choose the services that should be outsourced? When new tasks and responsibilities come online, you have three options:

  1. Maintain responsibility so that you handle the task
  2. Assign the responsibility to an employee
  3. Hire an outsourcing company to handle the responsibility

As a business owner, there are certain things that you should maintain control over. For example, you aren’t going to hand off hiring decisions or business development tasks to an entry-level employee. At the same time, there are other tasks that should always be off-loaded to an employee or outsourced service. You should be working on the bigger-picture decisions instead of spending your day sorting through paperwork.

Here are some of the tasks that should always be outsourced if you want your business to be successful:

  • Accounting and Bookkeeping: Don’t waste your time with payroll processing or invoicing. These are easy tasks that can be handed off to an experienced team. Not only will you rest assured to know that the finances are handled by a pro, but you don’t need to be stressed by the number crunching.
  • Marketing: A quick search on Google will make your head spin if you are trying to learn more about online marketing. While the internet is a powerful resource to connect with potential customers, it can be impossible to keep up with the trends in the industry. The internet changes fast, which is why you should hire a company that specializes in results-based marketing.
  • Payroll: One of the fastest ways to put a damper on employee satisfaction is by making mistakes on their paychecks. Payroll processing can be complicated because you need to keep up with details such as overtime pay, federal and state tax rates, benefits calculations, and more. When these mistakes happen, it could cost your company a lot of money in fines from the IRS. Avoid these costs by outsourcing payroll services.
  • Administrative Activities: How many small tasks eat up your time each day? If you have a hard time keeping up with your calendar or reaching out to business contacts, then a secretary or administrative assistant can be a valuable asset. Hiring a virtual assistant is a great way to handle various repetitive tasks, such as email management and appointment setting.
  • Tax Calculations and Filing: Many business owners agree that stress levels go up when tax time rolls around. It can be complicated to navigate the ever-changing tax laws, especially when you own a business. Instead of facing the challenge of tax calculations (and potential fines and penalties for mistakes), it is better to let an accounting professional manage the paperwork each year. Not only can you tap into services for the annual filing, but an accounting team can help with quarterly payments and other ongoing tax responsibilities.

There are other things that you might outsource as well, depending on your business needs and the industry. If you have a local store, then it is nice to hire a custodial company to take care of the office cleaning every day. Or, you might find a landscaping company that can handle the snow removal if you live in a cold climate.

When you are starting a business, it is a valuable lesson to learn about the importance of outsourcing. These strategies will set you up for future success because you aren’t trying to manage all of the responsibilities without support.

If you would like more information, then you can talk to our experienced team at Easier Accounting. We offer a variety of outsourced accounting services that can be catered to match the needs of your company. These packages are more than general accounting services, because we focus on the accounting requirements of small businesses and entrepreneurs. Call today to see how we can help with your business efforts: (888) 620-0770

Why Good Financial Record Keeping is Essential for Business Success

As you are building your business, there are important factors that need to be addressed so that you are set up for a successful future. Putting these systems in place in the early years of the business practices can ensure that you have a strong foundation to build on going forward. Good record keeping should be a focus when you are designing these systems.

Keeping the records organized and sorted ensures that you can retrieve information when it is needed the most. Even though you don’t often refer back to invoices from several years ago, situations might come up that require referencing to the paperwork. For example, if you are audited by the IRS, then you need to be sure that you know where to gather the requested information.

It can be a mess to sort through the information if you don’t have a good system in place. As a result, you could be facing fines or penalties because you can’t show documentation for the tax filings. Additionally, these details are essential so that you can understand the growth and progress of your company. If you don’t measure the financial progress, then it can be hard to determine the systematic changes that need to happen to help your business reach higher levels of success.

Here are a few reasons why you need to be proactive with your record keeping practices:

Measure Your Business Progress

How is your company performing this year compared to the results of previous years? Good records will help you evaluate the way the financial picture is changing. You can see whether the financial health of the company is declining or improving, resulting in insights that can be used to adjust your results going forward.

When you have good records, you can see which products are selling better than others so that you can know where to place your business development resources in the future. Where are your biggest profit margins? Can you identify any areas where you are losing money? These details might seem insignificant, but small changes can have a lasting effect on the long-term results that are achieved.

Accurate Financial Records (P&L, Cash Flow, and More)

If you don’t have good records, then it can be impossible to prepare accurate financial statements. These details will help with the decisions that are made for business management purposes. Gathering and recording the ongoing information of your business activities will ensure that you have the details that support the decisions that are made over the years.

Big decisions can be detrimental to your company if you don’t have accurate information to influence those decisions. For example, you might choose to invest money into new product development, only to find out later that the money was needed for tax payments. It is important that you have detailed records that will affect the decisions that are being made:

  • Profit & Loss (Income Statement)
  • Balance Sheet
  • Cash Flow Statements
  • Payroll Processing Reports

These are just a few examples of financial information that might be needed for your company. The requirements vary depending on the size of the business and your industry. So, the most effective solution is to talk to an experienced accounting team for personalized recommendations.

Not only will these reports be helpful for your decisions, but it is common for creditors and banks to ask for this information as well. So, it is important that the systems are put in place, and accurate books are maintained, giving you the option to provide the reports on-demand as needed.

Track Business Write-Offs

Missing potential write-offs means that you might be paying more taxes than necessary. There is no reason to overpay the IRS! Instead, you need to keep track of the expenses that move through your company. These details will help you maximize the write-offs so that you can reduce your tax burden as much as possible.

Without good record keeping, it is easy to forget expenses that might have been spent throughout the year. Don’t wait until it is time for tax preparation before you begin collecting this information. Instead, you need to have a good system in place right now to ensure that everything is ready to give to your accountant when it is tax season.

If you are going to write something off as a business expense, then you need to keep records of the transactions. For example, you can keep the credit card receipts, cash register slips, petty cash records, and more to document the transaction. Keep these records for anything that was purchased for business purposes.

There are options to write off entertainment and meals if they are business-related expenses. But, you need to prove that the costs were associated with business activities. For example, if you are writing off a meal, then it is best to make a quick note on the receipt about who was in attendance and the reason for the business meal.

Categorize Receipt Sources

In addition to tracking the money that is spent, you also need to keep records of the money that is coming into your company. There are several ways that you might be receiving income, such as sales, interest, property transactions, or business operations.

When it is time to report this information on your tax returns, then you need to be able to categorize the income for accurate tax calculations. Know where the incoming money is coming from so that you can structure the records accordingly. At the same time, you also need to maintain documentation for these transactions. Here are a few examples of applicable documentation:

  • Credit card slips
  • Receipts
  • Cash register tapes
  • Invoices
  • Copies of checks
  • Bank deposit records

Keep Records for Business Assets

In addition to the ongoing transactions that move through your company each day, you also need to keep detailed information about your business assets. These assets might include equipment, furniture, bank accounts, cash, real estate, and more.

Your accountant can help with the right tracking of these assets. In some situations, it might make sense to write-off the total amount of the asset in the year it was purchased. But, there are other times when it is better to calculate depreciation, which will be factored into your taxes for the year.

Filing Tax Paperwork and Returns

Even though your accountant will handle the tax filing, you should still have an independent system to keep these records on hand. Set up a filing method to keep tax documentation and filing paperwork so that it is easy to reference if the information is needed in the future.

Not only do you need the documents that were filed with the IRS, but you also need documentation to support the filing. These documents should include anything related to expenses, credits, and income that was included on the tax return. In the case where the tax return is audited by the IRS, you will be able to find the documentation to support the details, helping you avoid potential fees and taxes.

How Long Do I Need to Keep These Records?

When you move to a digital filing system, it doesn’t hurt to keep the records on file for many years. Since the paperwork isn’t taking up space in your office, it is easy to let the information stay on the cloud.

The length of time to keep the records varies depending on the type of document that you are filing. Certain things need to be kept permanently:

  • Audit reports
  • General ledgers
  • Asset purchases
  • Payroll information
  • Year-end financial reports
  • Trademarks and patents
  • Tax returns and documentation
  • Shareholder records and articles of incorporation

This list is just an overview of the documents that you need to hold indefinitely. If you ever have questions about the length of time that paperwork needs to stay on file, then you can talk to an accounting expert for more details. Our team can offer advice to help with the optimization of your filing system.

Other paperwork can be kept anywhere from 3 to 10 years, depending on the type of document. For example, it is best to keep invoices and AR/AP documents for at least 10 years. But, employment applications only need to be maintained on file for 3 years.

Implementing the Right Record Keeping System

Where should you start if you need to implement a good record keeping system? You might be able to modify your current system to meet the requirements that are suggested by your accountant. But, sometimes it makes sense to start from scratch to ensure that you have a quality system that will last for many years.

One of the biggest mistakes that you can make is setting up the financial records system without consulting with an industry professional. It is important that you tap into the experience and knowledge that comes from a team that understands the nuances of the industry.

Our team at Easier Accounting offers many years of experience helping small businesses set up proven financial systems. Not only will these systems help you maintain compliance and optimize tax results, but they are also beneficial to improve your business success in the future. Call today to learn more about how our services can be used for your company: (888) 620-0770

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