Avoid These Common Financial Mistakes Made By Small Business Owners

Starting a small business is exciting and stressful at the same time, and some people compare it to a roller coaster ride. When you start a new venture you can expect to experience some great opportunities, but there are some common mistakes that might pop up along the way as well.

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Since the stakes are high, it is essential that you are careful to avoid these common mistakes so that you can create long-term growth for your company. Here are the 3 biggest mistakes that you can avoid:

Classifying Employees Incorrectly

Do you know the difference between an employee and a contractor? It is essential that you talk with an accountant to understand these differences, because the classification impacts the way the payments are handled. If you classify an employee incorrectly as a contractor, then it is possible that you might have to pay back wages and penalties.

Lack of Automation

Are you still trying to do everything by hand, because you don’t have a good financial system in place? It might not seem like a big deal to track payroll, invoices, and other financial information in a spreadsheet. But, these activities are eating away at your productive time each day. Instead of trying to track everything by hand, it is better to implement a good financial system from the beginning. It’s much easier to use automated systems right now, rather than wasting time with manual tracking and then trying to transition everything to an automated system later on.

Cash Flow Problems

It is common for a small business to be over-extended, making it hard to come up with the cash flow that is needed to keep the business running. If you aren’t staying up-to-date with finances, invoices, and bank account balances, then you might find yourself in a world of hurt when you need cash to restock inventory or pay your employees. Instead of making knee-jerk reactions every time you need to make a financial decision, it is better to stay current with your financial tracking systems so that you always have current financial information about your company.

The easiest way to stay current with your small business finances is to hire a professional to help. In fact, many business owners find that hiring an accountant or bookkeeper to assist with financial tracking is a way to decrease costs and boost the success of the business. Here at Easier Accounting, we offer the accounting and bookkeeping services that you need. Call us to learn more: (888) 620-0770

Is Your Company at Risk for an IRS Audit?

An audit can be a stressful and unpleasant situation to deal with, and many small business owners are worried that the IRS might audit their financial records. The likelihood of auditing varies depending on the type of business that you have and the numbers that are coming through on your tax return, and it is essential that you work closely with an accountant at all times. An experienced accountant can help you to avoid the audit in the first place, and they can assist with the required tasks if an audit occurs.

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Business Categories with a Higher Risk of Audit

The IRS does not share information about the types of companies that they audit. But, there are a few trends that have been noticed and it seems like certain categories have a higher audit risk. These are a few red flags that might potentially trigger an audit:

  • Small Companies: Generally, small companies don’t have good systems in place for financial tracking and records. It is also likely that the company doesn’t have a financial professional to help them stay in compliance with tax laws. The audit rate might be even higher if the company receives most income in the form of cash.
  • Business Travel, Entertainment and Meals: It is essential to have the paperwork to back up these expenses, and most small businesses don’t keep the proper records. If you are writing off large sums for business entertainment and meals, then the IRS might thing that you are writing off personal entertainment and calling it a business expense.
  • Schedule C Losses: Do you have a tax return that shows a high salary in conjunction with a Schedule C loss? This situation might be a red flag to the IRS. Typically, a Schedule C activity is a hobby instead of a business, especially if the activity is a personal pleasure, such as travel writing, photography, sports, etc.

IRS audits can be unexpected, and the best thing that you can do is hire a good small business accountant to ensure that you are staying within the tax laws. Prevention is the best solution, to help you avoid problems if your business is audited.

Here at Easier Accounting, we are experienced with all types of small business finance. We are here to help with anything that you need, and we invite you to contact our team to learn more about the services that are available. Call us right away: (888) 620-0770

Do You Need a Bookkeeper to Help with Payroll Processing?

Payroll processing can be a time-consuming task, and some business owners have a hard time keeping up with everything that needs to be done. It is essential that you are consistent and accurate with payroll, because paycheck distribution will have a direct impact on employee satisfaction.

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Do-It-Yourself Payroll

Some companies choose to handle payroll in-house, but it is essential that you have a solid system and the right team to help with the paychecks. Missing hours, late paychecks, or any other errors might cause employees to be frustrated with their work. These problems can lead to higher turnover, which can be damaging to your company.

If you are handling payroll on your own, then you might consider the benefits of hiring a payroll service to help instead. In fact, many business owners find that they can actually save money by using a payroll service instead of paying a high salary for an in-house bookkeeper or accountant.

Payroll Service Benefits

When you hire a bookkeeper or payroll service to help with payroll processing, you will see that there are a number of benefits that you will be able to enjoy. Outsourcing these tasks helps to increase the accuracy of the payroll distribution, especially if you are working with a trusted company with a lot of experience in bookkeeping and payroll processing.

Additionally, you will see that hiring a bookkeeper to help will be beneficial to free up your time in the office. Instead of worrying about the details of payroll calculations and distributions, you can focus on the other things that need to be done. Business owners have a lot of responsibilities, which is why it is best to outsource the busy work to the professionals instead.

When you hire a payroll service or small business bookkeeper to help with payroll processing and calculations, your stress levels will drop. Financial professionals can keep the business running by managing payroll, invoicing, and other financial services. So, you can focus on building the business and expanding for future growth.

At Easier Accounting, we are here to help with any type of bookkeeping or financial assistance that you need for your small business. We invite you to contact our experienced team today to learn more about the services that are available. We will talk with you about your goals, and put together a plan that will work best for your needs. Call us right away for more information: (888) 620-0770

Simple Strategies to Reduce Stress during Tax Season

Tax season can be a stressful time for small business owners, especially if you haven’t been consistent with financial tracking throughout the year. As we are approaching tax deadlines, it is important to consider the financial standing of your company. Don’t get stressed out by the process though! Here are a few things that you should do to minimize the stress during this time of year:

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Gather Information about Expenses and Profits

Your accountant will need help with the financial details for the year, so you need to make sure that you are ready to provide the necessary reports and numbers for the tax filing. Make sure that you have an effective system in place which will help you to stay on top of the books, making it easy to gather the information that is needed when it is tax time. Many people find it beneficial to hire the services of a small business bookkeeper to manage these details on a weekly or monthly basis.

Double Check Employee and Contractor Info

As you are preparing W2s and 1099-MISC forms, it is a good idea to double check employee information before sending out the forms. Having an old mailing address or incorrect information can result in a situation where the employee doesn’t receive the necessary tax forms, so they will contact your company requesting to have the forms re-sent.

Save your company time and money by double checking the employee information in advance, to ensure that the form is sent to the right place. It is a good idea to have each employee verify the mailing address, name, and social security number.

Evaluate Employee Benefits

How effective are the benefits that you are offering to employees? Many small business owners get the benefits setup and then they forget to maintain these details on an ongoing basis. Look at details such as paid time off, flexible spending accounts, retirement accounts, and bonuses that were paid during the year. Make sure that the benefits were administered correctly and that the benefits are entered correctly on the tax forms.

Are you looking for someone to help with your company during tax season? One of the best ways that you can lower your stress levels is by hiring the right team to assist every step of the way. Here at Easier Accounting we offer both bookkeeping and accounting services for your small business, and we would love to help with anything that you need. Call us today for more information: (888) 620-0770

3 Ways Bookkeeping Services Save You Both Time and Money

As a business owner, you should always been looking for ways that you can improve systems, increase profit, and reduce spending. One of the options that should be considered is to hire a bookkeeper, because these bookkeeping services can help you to save both time and money. Here are some of the benefits you will enjoy:

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Stay Up-to-Date on Business Spending

It can take a lot of time and effort to catch up on neglected financial reports. Do you find that it is hard to stay current with business transactions? There are quite a few small businesses with financial records that are a mess, because the business owner is too busy with other aspects of managing the company and doesn’t have time to deal with the monthly accounting.

Instead of procrastinating and letting everything pile up, it’s better to stay consistent with tracking financial information on a weekly and monthly basis. If you don’t have time to keep up with these tasks, then you should definitely consider the benefits of hiring a bookkeeper to help.

Keep Track of Business Write-Offs

When tax time rolls around every year, you need to have good documentation of expenses that fall within the category of write-offs for the business. A bookkeeper can help you keep track of these expenses, so you have information ready to hand over to your tax preparer.

Bookkeeping services don’t typically include tax preparation, but here at Easier Accounting we offer a wide range of financial services, including tax preparation. Instead of working with two different companies for bookkeeping and tax preparation services, you can simplify the financial process by working with us.

Outsource Payroll

Payroll can be an expense that really adds up, especially if you are paying the salary of an internal employee to handle payroll processing. Have you taken a look at the real cost of internal payroll management? By outsourcing payroll, you can save money and free up the time of your employee to help with other tasks within the company instead.

There are many streamlined systems that can be implemented to make it easy for you to outsource payroll. These systems can be catered to the individual needs of your company, giving you the ease of letting a professional service handle it for you.

Are you interested in learning more about accounting and bookkeeping services? Contact our team at Easier Accounting, and we will gladly help with anything that you need: (888) 620-0770