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Why Outsourced Accounting is the Best Solution for Social Distancing

The current Coronavirus pandemic has changed the way we do business. While there are often times when face-to-face meetings are preferred, in many situations it makes sense to handle business dealings via technology. Outsourced accounting is a great option to consider if you want to stay current with your business finances while maintaining social distancing at the same time.

Why Social Distancing is Key for COVID-19

The main concern about COVID-19 is the concern about how fast the virus moves through the population. Most people experience minor or moderate symptoms and then recover at home. Older generations and people with pre-existing health conditions are at higher risk for serious complications from the illness. Thousands of patients worldwide have died from this upper respiratory illness. Not only is it important to prevent the sickness for yourself and your family, but you also need to consider how you could potentially pass it on to other at-risk people that you know.

In-person interactions increase the likelihood that you could be infected by Coronavirus. The virus can be spread through droplets in the air, which can remain airbound for several hours after a person coughs. If you breathe those droplets in, then you could be infected.

This virus can also be passed through contact with someone who has COVID-19. For example, if an infected person touches a keyboard and then you come in contact with the same surface, it’s possible that you could pick up the infection. It’s important to wash your hands and avoid touching your face since the virus can enter through the mouth, nose, and eyes.

Even if you feel fine, it is possible that you are a carrier of the virus. As such, it is important for everyone to be proactive in social distancing and isolation if they suspect they’ve come in contact with someone who has the virus. Everyone is being encouraged to work from home whenever possible, and our team at Easier Accounting is here to assist if needed for your business.

How Outsourced Accounting Works

The benefit of outsourced accounting is that you can take care of bookkeeping and accounting tasks without leaving your home. An accounting expert is always just a phone call away to answer your questions and assist with your personalized accounting strategy.

To get started, you just need to give us a call. We will discuss your needs and design the perfect service plan based on the unique requirements of your business. These services can be managed in the cloud. You always have access to view your financial information and reports, and there is no need for our team to meet with you in person. You get the benefit of full-service accounting solutions, without the concern about the potential risks of face-to-face meetings.

We specialize in small business accounting solutions and know the best systems to ensure that nothing is overlooked in your business finances. Just because we are working remotely, it doesn’t mean that you will receive subpar services. In fact, we are proud to be one of the leading providers of outsourced accounting services. Our team has helped many business owners create financial systems that are built to last.

Why the COVID-19 Pandemic is the Perfect Time to Start

If you haven’t already taken advantage of the benefits of outsourced accounting, then right now is a great time to get started. Here are a few reasons why you should consider outsourced accounting for your small business:

  1. Time at Home: Is bookkeeping often pushed to the backburner because you don’t have enough time to get everything done in the week? With the “Shelter in Place” and “Stay at Home” orders across the country (and throughout the world), many people are finding that they have more time to work on the projects that have been pushed to the backburner. Use this extra time to create systems that will help your business thrive when we are back to business-as-usual after the pandemic is over. Yes, one option is to create an accounting system from scratch – but it’s more effective to let the pros take care of the details. Set up a consultation to get the project off the ground while you have the time available right now.
  2. Save Time in the Future: Being proactive with creating outsourced accounting systems right now will pay off in the future. If you have a good financial tracking software in place, then you don’t have to tie up hours every week. Add up the time savings, and you will find that it is a great investment to free up your efforts for other tasks that need to be handled. Outsourcing is a powerful way to increase your capacity because you can focus on the tasks and responsibilities that fit your unique skill set.
  3. Overhead Costs: Many business owners are concerned about their cash flow, especially if sales have slowed or the doors have closed during this pandemic. You need help with accounting and bookkeeping, but you are probably feeling the pinch of cash flow due to the economic impacts of this pandemic. Instead of putting a bunch of cash into a full-time employee to handle the accounting, you can save thousands of dollars by hiring an outsourced accounting team. Plus, you don’t have to pay for additional costs like office equipment, desk space, benefits, and paid time off.
  4. Preparing to Scale: Anytime changes happen in the economy, it is an opportunity to grow your business if you adapt to the new market. Even though some businesses are losing money right now, there are many companies that have adapted to provide customers with the products and services that are needed. If you position right, then you can be ready to scale your business by matching the demands. But, before you can scale successfully, it is essential to ensure that you have a solid financial system in place. Developing your accounting system right now will ensure that you are ready to scale when the time is right.
  5. Employee Management: Do you have employees who have recently shifted to work from home? It will only add to your stress if you are increasing their workload with bookkeeping and accounting tasks. Any time you keep these services in-house, you will carry the responsibility of training and management. A better solution is to hire an outsourced accounting team that already has experience in the industry. Then, you don’t have to worry about the accuracy and systems followed by your employees.
  6. Risk Mitigation: Another aspect that needs to be considered in a rocky economic environment is risk mitigation within your company. Hiring on outsourced accounting firm can be an effective way to decrease the risk of embezzling or theft within your business. These accounting systems are designed with proven systems and built-in auditing to catch potential issues in the earliest stages. With the right approach for outsourced accounting, you can decrease the likelihood of issues with theft and fraud.
  7. Tax Compliance: Tax laws are always changing on both a state and federal level. It can be hard for small business owners to stay up-to-date with the moving target, especially if you don’t have a formal training in finance or accounting. There’s no reason for you to spend your free time trying to understand how tax law applies to your company. Instead, hire an outsourced accounting team so you can be sure that your annual tax filing, quarterly payments, and other tax details are in compliance with the requirements for the IRS. You can’t put a price on the peace of mind that comes from knowing that your tax filing is accurate and in compliance.
  8. On-Time Invoicing and Payroll: Another notable benefit of outsourced accounting is that your business will always be on-time with payroll processing and invoicing. A bookkeeping system can keep you current with both Accounts Payable and Accounts Receivable, which helps with cash flow. Additionally, you can avoid potential penalties that come from overdue payments.
  9. Informed Business Decisions: Finally, consider how powerful your decisions will be when you are informed about the real-time financial health of your company. When big decisions need to be addressed, it is important that you have a clear picture of the money that is coming in and how much is owed. Outsourced accounting will help you stay ahead of this information because you can run reports and know that they are accurate.

Talk to the Outsourced Accounting Experts

Are you ready to enjoy these benefits for your business? As you are exploring your options for an accounting service, consider the services available from our team here at Easier Accounting. We’ve been working with small businesses for years and offer a personalized approach for every client. Our goal is to help you feel empowered with your business financial system. We create solutions that work for your unique business needs. Learn more about available services by calling us at (888) 620-0770.

What to Know About the Delayed 2020 Tax Filing Deadline

If you’ve been watching the news headlines with the Coronavirus pandemic, then you’ve probably seen that the federal government here in the United States pushed back the tax filing deadline for this year. Many states have followed suit, giving tax payers an extra few months to take care of the tax filing and submit their payments for year 2019.

It isn’t common for the tax due dates to change, which is why it is important to stay up-to-date on the current situation. Your accounting or tax filing expert can provide advice to help you manage the correct timing and filing strategy for your small business taxes.

IRS: National Emergency Declaration

The IRS has the authority to call a National Emergency Declaration, which is the decision that has been made regarding the current Coronavirus pandemic.

It is rare for tax deadlines to be changed. But the federal task force can see how the current economic situation and emergency needs have affected the population as a whole. Many areas are under “Stay Home” orders, which impacts businesses, individuals, and typical daily activities.

There are extraordinary times, and the IRS is providing a bit of relief by pushing back the standard deadlines.

Tax Returns and Tax Payments

The IRS has offered relief for taxpayers by changing the normal deadline of April 15th to 90-days later. This year, federal tax returns need to be filed by July 15, 2020. Additionally, tax payments are also due this day.

Why was the decision made to push back the tax deadline? Here are some of the factors that played into this decision:

  • Social Distancing: Citizens have been asked to practice social distancing or to stay at home, depending on your location. For some people, social distancing makes it a challenge to get the taxes prepared and filed on time. If you usually meet with your accountant in person, then you might need a little extra time to work through the necessary details so your taxes are accurate and ready for filing by the deadline.
  • Economic Support: The economy has been impacted by the Coronavirus, and the federal government is looking for ways to put money back in the hands of taxpayers. Millions of people are out of work because businesses have been closed. Pushing back the tax payment deadline means that more people can keep money in their bank account to offset the unexpected costs of living right now. This delay in tax payments will make it a little easier for families to keep up with rent and groceries.
  • Interest Delay: Usually, a late tax payment accrues interest costs and penalties. With the current deadline delay, tax payers have an extra 90 days to pay before the interest and penalties are accrued.
  • Timing of Processing Returns: Spreading out the tax filings might also be beneficial for the IRS so the processing and accepting tax refunds can be spread out a little more. It is important to note that the IRS is still working on tax refunds in the current situation, so it might not make sense for you to wait on your filing. For example, if you are anticipating a tax refund, then it is smart to file your tax return as soon as possible so you can receive your refund check.

As you can see, the people who will benefit the most from delaying tax filings and payments are those who need to send money to the IRS for the current tax return. Also, if you need more time to complete your tax filing, then you can file for an extension which will push your filing date back to October 15, 2020.

Tax Filing Deadline: Who Can Delay Filing?

This change in tax filing deadline applies to many people across the country, including “All tax payers who file and pay their federal income taxes on April 15,” and “All individual returns, trusts, and corporations.” Basically, the changed deadline applies to every business and individual in the United States. The new tax filing deadline affects you if you fall into any of these categories:

  • Form 1040 Filers (Individuals)
  • Form 1041 Filers (Trusts)
  • Form 1120 Filers (Corporations)
  • Fiscal Year Partnerships

The new filing deadline on July 15, 2020 should be treated the same as the normal deadline on April 15, 2020. All tax returns and payments should be submitted by July 15, 2020 unless you have made other arrangements, such as a payment plan or tax extension through the IRS.

Keep in mind that this news should not affect you if you are anticipating a tax refund. If you delay your tax filing, then it will delay the time in which you receive your tax refund as well (if owed one). In fact, it is recommended that you file as soon as possible so you can receive the refund without delay. Most tax refunds are received within 21 days of filing the tax return.

Other Notable Details about the New Tax Filing Deadline

Here are a few other notable facts about the tax filing deadline for this year:

  • Tax Deferrment Limits: There are no limits on the amount of money that you can defer. The full tax payment can be pushed back by 90 days without a concern about interest and fees.
  • Estimated Payments: As a small business owner, you likely have estimated payments that need to be sent several times a year. This deferral applies to some of the estimated payments, including self-employment taxes. It is based on the deadline for the payment date. For example, the first quarter estimated payment usually needs to be sent by April 15, 2020 – but this estimated date has also been pushed back to July 15, 2020. The deferral does NOT apply to the second quarter tax payment, which is due as-usual on June 15, 2020.
  • State Tax Deadlines: Every state is different in the way the tax deadlines are handled. Usually, the state deadlines line up with the federal deadlines. But these state-to-state decisions are made on a case by cases basis. It is important to check on your state guidelines and deadlines so you don’t miss due dates that might be different between states and federal departments.
  • Interest Accural: Just because the tax deadline has been delayed, it doesn’t mean that you don’t have to pay taxes on 2019 income. Instead, you have a little more time to figure out the tax return filing and prepare the payment that needs to be sent. If the owed amount is not paid by July 15, 2020, then interest costs and penalties will start accruing beginning July 16, 2020. If you are required to file taxes, this deferral does not make you exempt or excluded from the need to file this year.
  • Is it Automatic? Yes, the new tax filing deadline is automatic. There is no need for you or your accountant to apply for an extension. You have an extra 90-day period to complete your tax return and payment.
  • Tax Extension Deadlines: If you need additional time after April 15, then you can file for an extension by using Form 7004 or Form 4868. The new tax return extension request is July 15, 2020. In the case where your request is granted, your payment still needs to be submitted by July 15, 2020. But you have until October 15, 2020 to complete your tax return. Filing for an extension might be needed if you have a complicated return that will take a little more time to complete.

Why Hire an Accountant for Tax Prep Services

When you have an expert helping with your tax preparation, you can rest assured knowing that you are avoiding some of the most common issues encountered with DIY tax filings. Missed deadlines, mistakes on the tax forms, and other issues can result in expensive fees and interest costs.

It can be hard to maintain the responsibility of running a business while still keeping up with the tax deadlines that need to be addressed throughout the year. Plus, it is a great investment to hire an accountant for professional tax services because you can maximize the potential tax writeoffs that are available for your small business.

Need More Information about Tax Filing Deadlines?

You can find plenty of information online about filing individual or business taxes, but it can be hard to sift through the information and find the details that apply to your unique situation. If you don’t have formal training in accounting and you don’t keep up with the changes in the tax industry, then the best solution is to hire an experienced accounting team to assist with your tax preparation, tax filing, and ongoing financial support.

The simplest way to get more information about the new tax filing deadlines is to pick up the phone and call our experienced team at Easier Accounting. We specialize in small business accounting services and can assist with all of your bookkeeping and accounting needs. Contact us any time at (888) 620-0770.

Starting a New Business? How to Set Up a Solid Accounting System

Can you feel the excitement in the air? Starting a new business is an adventure and a risk wrapped into one experience. The possibilities are limitless, but you need to be willing to step out of your comfort zone to create opportunities for the future.

As an entrepreneur, how are you creating the right systems to support ongoing business activities? It is common for people to be too focused on the implementation and growth of a new business that they overlook some of the foundational details that will influence the future of the company.

Getting the business off the ground is just the first step. When you are starting a new business, you need to be sure that you are prepared with the right systems that will minimize problems in the future. Financial systems are critical to tracking profitability, managing expenses, and staying ahead of the other accounting responsibilities that need to be managed over time.

Why Your Accounting System Matters

We understand how easy it is to push bookkeeping and accounting aside. When you are excited about new product development, marketing campaigns, and other details that affect your business growth, then it seems boring to crunch the numbers and run Profit and Loss reports.

But, neglecting your accounting system is a surefire way to set your business up for failure in the future. You need to know where the money is coming from, how much is coming in, and all of the expenses that are required to keep your company in business. The right accounting system provides the structure and framework so you can keep up with these details without putting in a lot of time for data entry and number crunching.

Starting a New Business: Accounting Tips

Most business owners don’t have formal accounting training. If you don’t know where to start, then you should consider the investment of hiring an experienced accounting team for assistance. DIY might seem like an effective option for reducing expenses. But it is likely that you will be losing money if there are errors or problems in your accounting system.

Here are a few things that should be a priority when you are starting a new business and creating a functional bookkeeping and accounting system:

  1. Register Your Business: It’s important that you can legally run a business from your location, which means that the first step is to obtain a business license. Once this paperwork is in place, then you can move forward with the other steps needed for your financial system.
  2. Open a Bank Account: New businesses often start in the basement or garage of your family home. These startups don’t need to be glamorous or elaborate to have the potential for future growth. But the problem is that business expenses are often mixed in with personal spending, making it hard to track expenses and profits. When you are starting a new business, it is critical that you open a new bank account so all of the finances can be separated from your personal spending.
  3. Hire an Accountant: Even though it might feel premature to bring on an accountant, it is critical that you consider this professional advice for your company. Don’t hire a full-time accountant, because it isn’t common to need 40 hours a week of accounting services. Instead, it is smart to hire an outsourced accountant who can walk you through the process of starting a new business. Make sure that your accountant of choice has experience working with small businesses and entrepreneurs.
  4. Choose an Accounting Software: There is no reason why you should be doing accounting and bookkeeping by hand. Technology enables business owners to avoid busywork by using accounting software that automates these processes. If you aren’t sure what software to use, then talk to your accountant to learn about recommendations based on your unique business needs.
  5. Track Expenses and Profits: Now that your accounting software is in place, you need to be sure that you are prepared with ongoing maintenance of the transactions that are moving through your account. If your bookkeeping and accounting reports are going to be accurate, then it is essential that you build a solid foundation of accurate transaction tracking. Not only do you need to pay attention to the money that is coming in, but you also need to be detail-oriented with the expenses that are required to keep your company running. Tracking these expenses helps you build financial statements, itemize expenses that can be deducted on your annual taxes, and ensure that you are ready when tax season rolls around.
  6. Organize Paperwork: You will have invoices and receipts coming across your desk, which is why you need a good system for organization. A filing system will enable you to pull up receipts when they are needed in the future. It might be as simple as designating a file-folder system in a cabinet next to your desk. Or, you can consider a digital filing system if you don’t want to juggle stacks of paperwork. These receipts and invoices are necessary in case the IRS decides to complete an audit of your business in the future. At that point, you will need to provide documentation that backs up any deductions claimed on your taxes.
  7. Handling Payroll: Depending on how your business is structured, you will need to evaluate how payroll will be managed. This task is another area where your accountant can assist to ensure that the money is managed efficiently. When starting a new business, you might be the only employee. Eventually, your company will grow and it will be time to hire outside help. You have the option to bring on an employee or pay the person as an independent contractor. The worker classification will influence how the person is paid. Not only do you need to ensure that timely payments are provided to your workers, but you need to be prepared for other payroll-related paperwork in the future (such as 1099 forms or W2s).
  8. Tax Systems and Procedures: The specific taxes that need to be paid vary depending on the type of company that you are running. For example, if you are selling physical products, then it is likely that sales taxes need to be collected and paid. A variety of factors influence how sales tax is managed, such as where your business is located, where the goods are shipped, and any tax exemptions that might apply. Your accountant can provide guidance to ensure that you have the right system in place for the collection and payment of sales tax. Other taxes that need to be considered include quarterly taxes, self-employment tax, income tax, employment taxes, excise taxes, and more.
  9. Assess Profitability: The goal of running a business is to bring in a profit for yourself and any investors participating. When you are starting a new business, you can see the possibility of making money. But you need to be sure that your sales are matching up. Are you earning more than you are spending? It is common for new businesses to be “in the red” for the first few years. Even if you aren’t making any money yet, you need to show that your company is moving in the right direction. Your accounting reports are key to evaluating profitability and calculating margins that are available. These numbers provide a clear picture of your current financial standing. Then, gross margins can be improved by cutting costs and optimizing sales.
  10. Funding for Growth: When you are starting a new business, you probably aren’t ready to bring on investors at this point. As your company grows, you will eventually need more capital to boost your business to higher levels of success. Even though you aren’t ready to connect with investors right now, you need to consider how you will access funding in the future. The steps that you take in the earliest stages of business growth will contribute to the possibilities that can be achieved in years to come. If you want to be able to secure funding, then you need to be sure that you are tracking financial details. If money is needed right now, then you might be able to obtain the funding through a small business loan based on your personal credit history.

Professional Accounting Services for Your New Business

The best investment that you can make is hiring an outsourced accounting team to support the growth of your new business. Don’t let yourself be distracted with the reporting and bookkeeping that needs to happen each week. Instead, you can free up your time by letting the pros handle these details.

Our staff at Easier Accounting is just a phone call away. We invite you to contact us in the earliest stages of starting a new business. We’ll help with the implementation of accounting and bookkeeping systems that will set you up for growth and success in the future. Call us at (888) 620-0770 to learn about available services.

How to Create a Growth Culture in Your Business

As you are expanding product offerings and working to connect with new customers, have you considered how you are supporting the growth culture for your business? Too often, business owners get so caught up in the day-to-day tasks that they overlook the way culture impacts current results and success in the future.

The truth is that developing a growth culture might be one of the most important things you can do for your company. This strategy can be designed to promote improved productivity, tap into new skill sets among employees, and boost overall engagement in many aspects of your business systems.

What is Growth Culture?

Every company has a business culture, regardless of how proactive you are in creating the culture that you desire. If you aren’t deliberate in designing a culture built on growth and productivity, then it is likely that your company is falling into a culture of stagnation.

The key is to develop a growth mindset that can be shared with employees and management. This mindset will naturally affect every aspect of the business, including customer interactions, product development and more.

Your growth culture should be founded in the belief that skills and systems can be improved, and the development of these growth opportunities is an important part of the work that is completed on a day to day basis. Designing a growth culture is the process of developing an environment that supports continuous improvement for all team members.

Why Your Business Culture Matters

Why does it matter if you are proactive with designing the right company culture? When you create a work environment that promotes ongoing development among team members, it boosts employee performance and engagement. This trickle-down effect impacts profits and customer satisfaction, which is the perfect recipe for helping your business grow in the future.

It’s been found that employee engagement is a critical driver for business growth. When employees are motivated, day-to-day activities have a direct impact on customer ratings, overall productivity, and profitability.

At the same time, the opposite is true: poor company culture results in unmotivated employees. As a result, team members are doing the bare minimum to get by each day in the workplace. You are either developing a cycle of success or an environment of mediocrity.

Creating Growth Opportunities in the Workplace

Employees won’t naturally seek out growth opportunities without the right support and encouragement at work. As a business owner, you can help employees engage more effectively by providing situations that help employees with continuing education, stronger certifications, and the development of new skill sets that support company needs.

This engagement with employees can help to reduce missed days at work and improve overall employee satisfaction. The positive benefit is that happy employees are willing to stay with a company long-term, which means that investing in growth culture can be an effective way to reduce turnover each year.

As a business owner, it is important to understand that investing in your employee’s professional, personal, and financial growth can potentially result in excellent returns on your investment in the future. Your staff is motivated to improve performance, which is essential if you want to help your company grow in the future.

7 Tips for Developing a Growth Culture

Setting the intention of developing a growth culture is just the first step. Implementation can be a challenging path to follow, especially if you are working to overcome a negative company culture that is currently in place. Here are a few things you might consider if you want to ensure optimal success with a change in growth for your company culture:

  1. Employee Buy-In: These positive changes will only impact your company if employees buy into the initiative. Growth will only happen if the employees are willing to engage in the process and focus on personal development. Instead of forcing specific types of development, it’s important to understand the desires and interests of each employee. Then, potential opportunities can be offered that match a wide range of preferences.
  2. Immediate Implementation: As an employee is developing a new skill set, it is essential that they have the opportunity to use these skills as soon as possible. Reducing the gap between learning and implementation is critical so they don’t lose the skills or fall back into old systems again.
  3. Start at the Beginning: The communication that happens in the hiring process and through onboarding will set the tone for the way new employees will engage in the workplace. Look for ways you can show encouragement and growth opportunities from the moment a new hire steps through the door for their new job.
  4. Mission Statement: Spell out your growth culture goals in the company mission statement. Not only does your mission statement bring in the right types of employees who fit your desired culture, but it reminds current employees that there is a strong emphasis on continuous learning and growth.
  5. Build Skills: Employees need tangible ways they can build new skills and knowledge. Create trainings and potential ways for people to learn both industry-specific skills and soft skills that can boost daily performance. For example, an employee might benefit more from learning how to manage distractions in the workplace compared to a long lecture about industry-specific laws. While it’s important to maintain current information in your industry, it is more important to help your employees develop a mindset where they are interested in learning new things.
  6. Connection and Communication: Building a strong team environment is the foundation for creating a growth culture. When people are working together, they can help each other overcome common weaknesses and issues along the way. Look for ways you can create more cohesiveness among team members. If employees don’t have a lot of face-to-face time with other people in the organization, then technology can be used to increase interaction among employees.
  7. Long Term Initiatives: Remember that your company culture won’t change overnight. While the hope is that your employees will be engaged in the process right away, it often takes time to shift mindset within an organization. Your growth culture initiatives need to be focused on the long-term goal of changing how the company moves in the future. You will start noticing benefits from the moment these changes are implemented, but the most notable benefits are still a few months (or years!) down the road.

With the right company culture, it is possible to empower employees and help them strive for their highest potential. These learning opportunities show individuals that anything is possible when they are striving for optimal levels of achievement. There is no limit to possible growth when a person is engaged and proactive in their personal development.

How to Motivate Employees in Your New Growth Culture

In most work environments, it is necessary to find the right motivation that will help employees buy into new initiatives. These are a few methods you might consider that can help employees take personal responsibility for looking at what drives their development and performance:

  • Recognition: It feels good to have a pat on the back and acknowledgment for a job well done. Design a program to recognize employees for outstanding behavior. This positive reinforcement will encourage people to continue striving for more.
  • Mentorship: Newer staff members have a lot to gain by working side-by-side with the more seasoned employees. Create a mentorship structure that enables interactions between all team members. This mentorship system needs to be built on both inclusion and diversity.
  • Money: It’s no surprise that the main reason why employees continue showing up for work is because of the paycheck. Employee growth can be incentivized monetarily by rewarding specific accomplishments. Designate a portion of your budget that allows a cash bonus system as appropriate. Gift cards, a bonus pay-out, or small gifts can go a long way in providing tangible reinforcement of the culture you want to develop within your business.
  • Modeling Behavior: Management needs to be fully engaged in the process to show their teams how they can be growing professionally. Managers can influence behavior by leading by example. When everyone is working together on growth, it is easier for individuals to do their part in contributing to the team effort.
  • Promotion Opportunities: It is important that employees see a way forward in how their careers can develop in the future. If you invest in employee growth without giving them a potential for promotion, then it will likely result in a turnover as the employees look for new opportunities with other businesses.

Implementing the Right Business Systems

Also, don’t overlook the importance of implementing business systems that support productivity. For example, a good bookkeeping and accounting system is critical for reducing financial mistakes and minimizing data entry and other busywork.

If you are looking for ways to create a growth culture and improve your business financial systems, then Easier Accounting is just a phone call away. We specialize in small business accounting services. Contact us for a consultation to learn about the available services: (888) 620-0770.

Sole Proprietor vs LLC: The Pros and Cons of Each

One of the most important decisions you can make as a small business owner is choosing the right structure for your new company. Even though the business structure seems like a minor detail, it impacts the taxes that are paid and paperwork that needs to be filed with the IRS. In this article, we are breaking down the differences so you can choose between a sole proprietor, LLC, or another type of business structure.

Types of Business Structures

Selecting the right type of business structure is key for finding the best balance of protection while optimizing available benefits. Here are some of the most common business structures used for small companies and startups:

  • Sole Proprietor: Many business ventures start as a sole proprietorship, which is the most common type of business structure. It means that one person is the sole owner and operator of the company, which is a good solution if you want to manage all of the details of the company. There is not a separate business entity, so it means that all personal income and business expenses are filed on the personal tax return.
  • Limited Liability Company: The nickname for this structure is LLC. It is a flexible structure that gives you the benefits available through both corporations and sole proprietorship. The business is structured as a separate entity, so business and personal liabilities are not mixed. LLC requirements vary in each state, so it is important to work with a professional to ensure the proper formation of this structure.
  • General Partnership: When two or more people are owners in the company, then a partnership agreement can be formed. In this situation, all partners are responsible for the business and hold ownership of the debts and liabilities of the company. The losses and profits are shared equally among partners. Similar to a sole proprietorship, profits are also taxed through personal income.
  • Limited Partnership: The minimum requirements for a limited partnership is that there must be at least one general partner and one limited partner. The general partner is involved in the day-to-day activities of the business, as well as major business decisions. On the other hand, the limited partner has no rights to the business decisions, they only act in the capacity as an investor. The general partner maintains responsibility and liabilities, which means that the limited partners hold ownership without the risk.
  • C Corporation: Commonly referred to as a C- Corp, this business structure is created as a separate entity from the owner. The business is structured as an independent legal entity. The benefit of this separation is the protection against personal liability. Specific tax requirements and regulations need to be met, including extensive reporting and recordkeeping. It is a complicated business structure but sets the business up for future expansion if desired. Double-taxation occurs with this business structure.
  • S Corporation: Commonly known as an S- Corp, this structure passes the profits and losses through the business owner’s personal income, without the cost of corporate tax rates. The corporation has a max limit of 100 shareholders. Strategies can be used to avoid double taxation, with the owners and shareholders being taxed.

Small Business: Choosing Between a Sole Proprietor vs. LLC

In most cases, it makes sense for small businesses to be structured as a sole proprietor or LLC, depending on the needs of your company. You don’t need to read the fine print to know all of the details and differences. Instead, talk to an experienced accountant and business attorney for advice in structuring your company.

Also, know that this business structure is just the starting point. Your accountant can offer recommendations in the future when it is time to grow, depending on the trajectory of your business success. Sometimes businesses need to be restructured to manage taxation and liabilities.

In the next few sections, we will break down the benefits and drawbacks of both sole proprietorships and LLCs. This information will give you a general overview of your options. Then, you can talk to your accountant and/or business attorney with a clear understanding of how the structure will impact your business.

Sole Proprietor: Pros and Cons

There are advantages and disadvantages to structuring your business as a sole proprietor:

  • Pro – Simplicity: As a sole proprietor, you don’t have to go through any paperwork or complicated systems when setting up the company. In the beginning, there is no state paperwork that needs to be filled out and filed. Additionally, you don’t need to worry about annual state filing.
  • Con – Liability: Since the business assets are in your name, you will be held personally liable if anything goes wrong. If your business is in debt, then your personal assets could be at risk. For example, a creditor could go after your car, home, or other personal property of significant value to repay outstanding debts.
  • Pro – Maximizing Business Deductions: Any time you spend money on business expenses, those costs can be written off your personal tax filing as deductions.
  • Con – Restructuring as the Business Grows: Once you reach a threshold of annual earnings, it is usually best to restructure the company to optimize tax payments. Maintaining a sole proprietorship could cost more money, in the long run, depending on how much money you are earning. Talk to an accountant for personal recommendations.
  • Pro – One Tax Filing: As a sole proprietor, there is no need to file a separate tax return for your business. If you have a corporation, then two returns need to be filed (one for your personal taxes and one for your business taxes).
  • Con – Building Busines Credit: Since the business expenses are in your name, it can be difficult to build business credit. A lack of business credit could have an impact on your ability to get financing in the future when needed. As a result, it might be hard to get funding when your business is expanding.
  • Pro – Managing Business Taxes: Since all profits and losses are passed through your personal tax return, you only need to pay federal, state, and local taxes, as well as Federal Insurance Contributions Act (FICA). Some of your personal expenses can be leveraged as business expenses, such as your home or car that is used for business activities.

LLC: Pros and Cons

Does it make sense for you to set up a Limited Liability Company (LLC) for your new business venture? Here are a few pros and cons that should be considered before moving forward with this business structure:

  • Pro – Various Benefits: The main reason why people choose an LLC is to take advantage of the benefits available as a sole proprietor, with the protections that come through a corporate structure.
  • Con – Limited Lifespan: If the business structure changes, then your LLC might be dissolved. For example, if a partner joins or leaves, then it might be necessary to restructure.
  • Pro – Flexibility: This business structure is flexible, making it easy to adjust the structure based on your individual needs.
  • Con – State Requirements: Every state is unique in the way LLCs are managed, so the tax liabilities vary depending on where your business is located. It is important to learn about state requirements before deciding whether an LLC is the right structure for your business. Sometimes industry-specific licensing is needed in addition to the state requirements.
  • Pro – Avoid Double Taxation: Double taxation occurs for most corporations, with taxes required for the business and the individual. An LLC protects you from double taxation.
  • Con – Paperwork: Not only do you have paperwork that needs to be completed for the formation of an LLC, but there are often annual state filings as well.
  • Pro – No Business Debt Liability: LLCs protect small business owners from personal liability for the business debt. If a creditor is demanding payment or your business is facing a lawsuit, it means that your personal assets (such as your home and car) are safe.

Choosing Between Sole Proprietor and LLC

Is it time for you to structure your new business venture? As you are getting started, it is helpful to talk to industry pros to learn more about the most strategic approach for your unique needs. This conversation should cover a variety of details that can impact the success and long-term profitability of your company, including:

  • Tax burden and how to minimize the amount you will be paying each year
  • Cost of setting up and maintaining the business structure
  • Legal liabilities carried by the business, yourself, and partners
  • Flexibility of the business structure and how it meets the needs of your company

Easier Accounting is Here to Help

If you need accounting and bookkeeping assistance for your small business, then our team at Easier Accounting is just a phone call away. We specialize in small business bookkeeping and can help with a variety of business structures, including a sole proprietor, LLC, and corporations. We take care of the financial details so that you can keep your focus on other business responsibilities to help your company grow. Call to learn more about how we can assist: (888) 620-0770.

Accounting Steps to Set Your New Business Up for Success

The systems and processes set up in the newest stages of your business will have a profound impact on the long-term success of your company. It is an optimal time to implant a solid foundation that you can build on for years to come. One of the most important aspects of financial success is to implement specific accounting steps so you can track income and expenses within the company.

If you don’t have a formal background in finance or business management, then these accounting steps might not seem intuitive. Too often, new business owners assume that they can maintain their focus on customer acquisition and product development, and then deal with the financial details later. Yes, you can choose to leave accounting and bookkeeping on the backburner… but you need to consider the long-term consequences that might be faced by ignoring these important elements of running a business.

At Easier Accounting, we understand the importance of following a proven financial system when starting a new company. Our team is here to assist with the essential accounting steps, helping you create an effective system that will serve the needs of your company – now and in the future. You are welcome to contact us at any time if you are interested in learning more about how these available services can have a positive impact on your new business.

New Business Idea, But Don’t Know Where to Start?

Starting a new business can be both exciting and overwhelming at the same time. You probably feel like you have a long list of to-do items: business registration, local licensing, product manufacturing, website design, accounting systems, and more.

Don’t let yourself be paralyzed by all of the things that need to be done. Instead, consider the benefits of tapping into information and support offered by experts. Finding specific skill sets to support your business needs can be an invaluable way to share the responsibility. As a result, you don’t have to navigate the rocky road without support.

Our team at Easier Accounting specializes in financial systems for startups and small businesses. We are here to guide you through the accounting steps to create a solid financial system that will support the needs of your company. Here are a few important steps to follow:

  1. Open Business Financial Accounts: Even if you are starting as a sole proprietor, it is important that you have clear boundaries between personal spending and business spending. You need to know where your income will be going and how you will be paying for business expenses. Keeping the business finances separate makes it easier to track the results of your business efforts, and it is much easier to gather applicable information for your accountant when tax time rolls around. Choose a financial institution that you would like to use and find out what is needed to set up a business bank account. Set up a business savings account, checking account, and even one or more credit cards that can be used if needed.
  2. Track All Expenses: The costs can add up, especially when you are getting the business off the ground. Implementing these accounting steps in the earliest stages of your business efforts means that you will be able to maximize available tax write-offs. If you want to claim the deductions, then you need to keep records of the money that is spent for business purposes. A good accounting system can be an invaluable asset in tracking every expense for your business. Also, hold onto any related paperwork, such as receipts, bank statements, canceled checks, bills, proof of payment, invoices, financial statements, 1099 forms, or any other documents related to income or expenses. Get in the habit right now and you will find it easier to maintain the momentum of tracking every transaction and keeping every document.
  3. Implement a Bookkeeping and Accounting System: Using proven computer software can be a valuable asset to track all of the transactions moving through your account. The easiest way to get started with a bookkeeping and accounting system is to hire an accounting expert who can help you line up the financial accounts and integrate everything with your point of sale systems. Not only should you start using accounting software as soon as possible, but it is smart to have monthly services that help you keep up with reconciliations and ongoing bookkeeping. It is a time-consuming and boring task to monitor all of the business transactions, which is why you are smart to outsource these tasks to an experienced small business accounting team.
  4. Payment Processing: Two details need to be considered when it comes to payment processing. First, you need to have a system in place to receive payments from your customers. Next, you need to consider how you will be paid and how the money will be provided for contractors, employees, and accounts payable invoices. Most businesses don’t manage only on cash. You need to have a digital system that can be used to accept payments through mobile apps and/or credit cards. These systems ensure convenience for your customers when they are ready to buy the products or services that are offered. Will you accept online payments only? Or do you need to have the option for in-person payments as well? These details will influence the type of system that is selected to match your business needs. At the same time, you also need to have a streamlined system in place to ensure that you are keeping up with payroll and other bills that are due throughout the month.
  5. Payroll Processing: Setting up a payroll system deserves a mention on its own because of the importance of taking care of your employees. Payroll processing is a bit more complicated than providing a credit card number to pay a bill. This necessary task requires withholding calculations, ongoing deposits for tax payments, benefits calculations, and more. While there are payroll processing software systems that can be used, it is best to work with an experienced payroll provider for assistance. Consider hiring an accounting team that offers both payroll processing and tax strategy so you have the convenience of all financial services from one provider.
  6. Design a Good Tax Strategy: Now is the time to hire an experienced tax accountant who can assist with your tax strategy throughout the year. There’s no need to hire a full-time accountant in your company. Most small businesses don’t have the cash or resources to pay for the accountant’s salary. Instead, consider the benefits of outsourced accounting so you can talk to a tax pro without the need to carry the overhead costs. As you are choosing accounting services, it is best to pick an accounting provider that understands your unique needs and specializes in small business services. Tax strategy varies depending on the type of company and the size of the business. A small business accountant will know proven methods that can be applied to your business, which will optimize your overall results.
  7. Systems for Monitoring Business Profits: It is essential that you monitor profits and losses throughout the year. Even though you might feel like your business is doing well, it can be a surprise to look at the numbers and discover that your margins are tighter than you thought. Implement accounting reports so you can see how much is going out and how much is coming in. This data can help you evaluate the true costs for the production and sales of your goods or services. Then, you can determine if your pricing is accurate to ensure that you are staying in a profitable space with your business efforts. Also, keep in mind that good financial reports are essential if you decide to bring in outside investors in the future. You need to show the history of the company’s success before people will be willing to invest in your business efforts.
  8. Ongoing System Upgrades: Following these accounting steps will ensure that you start in the right place with your new business venture. But you should never assume that your new accounting and financing strategies will last forever. The truth is that you should always be monitoring the effectiveness of your accounting systems. If weak points or areas of opportunity are uncovered, then you can tweak the system to ensure that you are maintaining the highest levels of performance within your company. An experienced accounting team can assist with the ongoing management and maintenance needed for your business financial systems.

These accounting steps show an overview of what you need to be doing for your new business. It is common for business owners to have questions about how the details should be implemented based on the unique needs of their company. If you are interested in learning more about your options, then our team at Easier Accounting is always just a phone call away. Contact us to discuss available accounting services and how this support can have a positive impact on your business success. Call our team at (888) 620-0770.

Small Business Owners – Don’t Believe These Business Tax Myths

Tax code can be complicated, so it’s easy to see how business tax myths spread among small business owners. You are carrying the responsibility of running your company, managing employees and working on product development. Tax regulations are not on your mind and often fall to the bottom of the priority list.

While it is important to focus on all aspects of your business, failing to keep up with the tax code can be disastrous for your company. If you run into issues with the IRS, then you will be facing fines, interest costs, and late fees. Additionally, poor bookkeeping and accounting practices can cost you a lot of money in potential business deductions.

Preparing for the Upcoming Tax Season

While April 15th is still two months away, right now is the time to get started on your tax preparation. Good bookkeeping should be happening year-round, to ensure that your reports are ready when it is time to file your paperwork.

The assistance of an experienced accountant can be invaluable in helping with accurate filing. Not only do you have a pro to guide your decisions, but an experienced accountant can minimize the risk of you getting caught in some of the most common business tax myths.

Business Tax Myths to Avoid

There is a lot of misinformation about tax loopholes, deductions, and write-offs that may or may not apply to small businesses. Just because you read someone’s advice online doesn’t mean that the information lines up with the guidelines set by the IRS. If you want to stay away from trouble with the IRS, then you need to be sure that you are thorough and accurate in your tax filing. Avoiding these common misconceptions will protect yourself and your business. Here are some of the most common business tax myths:

  • Myth #1 – Tax Filing is Optional: This myth might seem blatantly obvious to many people, but it’s surprising to see how many people mistakenly think that tax filing is an optional activity each year. There is a phrase in the instruction book for Form 1040 that uses the word “voluntary” in reference to the tax system, and some people have interpreted it to mean that individuals have no legal obligation to file taxes. The truth is that the voluntary portion is the individual’s responsibility for calculating the amount of taxes that are owed. Tax filing is legally required, and it’s up to you to ensure that your filing information is correct.
  • Myth #2 – All Start-Up Costs Should Be Immediately Deducted: The timing of your business deductions varies depending on the nature of your business and the types of purchases you are making. Certain costs should be deducted upfront, which means that you take the value of the write-off in the year the purchase was completed. But there are instances where is it more effective to take the tax benefits through depreciation, which means the write-off is calculated over a period of time. For example, costs for specific office equipment or machinery might fall into the category of Section 179 expensing. Also, you can deduct up to $5,000 of your organizational costs and $5,000 of the business start-up costs, and remaining costs might need to be amortized. The best solution is to talk to your accountant for personal recommendations to ensure optimal tax savings each year.
  • Myth #3 – I Don’t Have to Pay Taxes on Money Made Online: The internet has opened a whole new world for businesses, with a large portion of retail sales happening online. These numbers continue to grow each year. If you are doing business online, then it means that you haven’t filed a W4 with an employer – so no structure is in place to withhold taxes from your pay. But don’t assume that means you don’t have to pay taxes on the income! If you make $600 or more working as a contractor, then you must report that income to the IRS. You will be required to pay self-employment taxes, so make sure to set aside money every month to be prepared for the upcoming tax bill.
  • Myth #4 – Incorporating is the Best Way to Minimize Tax Burden: Remember that there isn’t a one-size-fits-all solution that works for all types of businesses. While there are undeniable benefits to incorporating, sometimes it makes sense for self-employed individuals to stick with a sole proprietor business setup. The truth is that incorporating too early could have a negative impact on your tax burden. For example, if you don’t make money for the first few years, then you bear the burden of minimum corporate tax payments and not enough income to pay the bill. Work with your accountant and business attorney to determine the right timing of incorporation for your small business.
  • Myth #5 – Home Office Deductions Increase the Risk of an Audit: Are you a small business owner who works from home? You might be nervous about maximizing the deductions for your home office because you are worried about the increasing risk of an audit. Years ago, a home office wasn’t as common as it is in our digital business world. At that point, it might have been true that a home-based business could potentially raise red flags for the IRS. But self-employment at home and remote employment are becoming so popular that home business write-offs are quite common. As long as your deductions are legitimate, there is no reason why you should be worried about increasing the risk of an audit. The most important thing you need to do is ensure that your workspace at home meets the regulations established by the IRS.
  • Myth #6 – Only Large Corporations are Audited: On the other hand, some small businesses assume that they don’t bring in enough profit to be audited by the IRS. The truth is that the amount of income you receive doesn’t have as much to do with the auditing process as other factors. Certain activities can send up red flags. Regardless of the amount of income you receive, it is essential to ensure that you have thorough, detailed business records to track all deductions and income. This paperwork should be kept on file for a few years so you can defend your tax filing if the IRS comes calling.
  • Myth #7 – “Audit Proof” Your Business by Overpaying on Your Taxes: There is no reason why you should send the IRS more many than what is owed. Some people assume that overpaying on their taxes means that they are protected against an audit. The truth is that the IRS doesn’t care if you pay what you owe or overpay, the excess will just be sent back to you in the form of a tax return. Their main concern is to ensure that you aren’t paying less than you owe. Your goal should be to pay what you owe as closely as possible, then all deductions need to be backed-up with solid recordkeeping.
  • Myth #8 – File an Extension if You Don’t Have Cash for the Tax Bill: Filing an extension is an option if you need more time to prepare your tax paperwork. But just because an extension is filed doesn’t mean that you are buying more time to pay your bill. This process extends the date for your filing only. It is still your responsibility to pay the money that is owed by the original due date. Failing to make a timely, accurate payment could result in additional costs for interest and penalties. If you need more time to pay taxes, then you might consider payment plans that can be arranged through the IRS. You will pay more money overall though because of the interest that is accrued on the overdue payment.
  • Myth #9 – My Accountant Holds the Responsibility if Tax Mistakes are Made: Hiring an accountant is an invaluable step for businesses of all sizes. It is important that you have someone to guide you through the tax rules and regulations. While your accountant can help you avoid common missteps in your tax filing, the ultimate responsibility still lies on you. It’s up to you to ensure that you are providing accurate numbers and information, then the accountant uses this information to prepare the tax paperwork. The quality of your tax filing is only as good as the financial details that are provided to your tax accountant.
  • Myth #10 – It’s Good to Get a Big Tax Refund: Whether you are a small business owner or an employee, it might feel like a relief to receive a big tax refund in April. Even though this check might feel like “free money,” it is important to remember that the money was yours in the first place. A big tax refund means that you overpaid on your taxes – you essentially gave the IRS a free loan. If you get a tax refund, then it means that you should talk to your accountant to adjust your withholdings or estimated payments going forward.

The simplest way to avoid common business tax myths is by partnering with an experienced accountant who can guide your financial decisions throughout the year. Easier Accounting is here to help! Call us at (888) 620-0770

10 Business Tax Deductions You Should Be Leveraging

Tax Day is still a few months away, but you shouldn’t wait until it’s time to file your taxes before thinking about the deductions that can be used for your business. Are you leveraging the business expenses correctly to take advantage of the available write-offs? One of the benefits of having a small business is that you can deduct certain expenses that are necessary for your business efforts. It can be hard to keep up with all these transactions, which is why you might consider leveraging the services of an outsourced accountant for assistance.

How Tax Deductions Work

A tax deduction, also commonly known as a business write-off, is particularly useful for small business owners and anyone self-employed. Whether you have a small side-gig at home or you are working full-time on a start-up, you can manage your tax burden by deducting expenses that are spent on business costs. Even if you are a W-2 worker and earn income from an employer, you can still write off any expenses related to business efforts outside of your employment.

This process lowers the income on paper, showing a reduced taxable income when it is time to file your taxes. As a simple example, if you collect $100,000 in a given year through the business, but you spent $20,000 on business expenses, then your taxable income for the year would be $80,000.

The IRS has a detailed tax code, which includes allowances for small business owners and self-employed workers to write-off business costs. If you are spending money that is required for your business, then it can likely be listed as a write-off. The best way to ensure that you are following the rules is by hiring an experienced tax accountant for tax preparation and filing. For example, an outsourced accountant will help you in determining the expenses that qualify as tax deductions. The goal is to maximize the write-offs as much as possible, while staying within the guidelines set by the IRS.

IRS Guidelines for Business Write-Offs

The IRS allows deductions for anything that can be categorized as a “reasonable business expense.” A few specific guidelines are in place to help you determine if your expense can qualify as a deduction:

  • The cost is related to your business directly
  • The expense is necessary and ordinary
  • The amount spent is reasonable

Examples of Tax Deductions for Your Business

Here are some of the most common tax deductions that are used by small business owners:

  1. Health Insurance Premium: Most people who are self-employed need to pay for private health insurance. Since you don’t have an employer to provide health care support, you can write off a portion of your insurance premiums.
  2. Vehicle Mileage: Track your miles throughout the year because a per-mile deduction can be used on your taxes. These driving miles need to be related to your business. For example, if you drive to the bank or you are driving to meet a client, then those miles can be included on your log for the year. Your commute to and from work does not count as deductible mileage.
  3. Home Office: Do you work from home? A portion of your rent/mortgage, utilities, and more can be written off as tax deductions. It is important that you have a dedicated space for business activities. Additionally, it needs to be the primary place where your business is operated. Then, this square footage can be calculated based on the overall size of your home and the associated monthly expenses.
  4. Professional Fees: Hiring an accountant or lawyer for assistance with your business can be a tax write-off. Any legal or professional fees that are paid for business purposes fall into this category. For example, if you hire an accountant to assist with tax preparation, then the cost of the accounting services can be included in your list of expenses for the year.
  5. Retirement Savings: Self-employment tax deductions can be used if you contribute money into a retirement savings account. The numbers vary from year to year, so the best solution is to work with your accountant and a financial advisor to determine the amount that can be deducted. Your financial team can also provide guidance regarding the most effective way to invest this money. Options include 401(k)s and IRAs.
  6. Startup Costs: Getting a business off the ground can be expensive. Not only are you putting money into product development, hiring employees, and office supplies, but the marketing and initial costs can add up over time. Keep track of all of these expenses so you can use them as tax write-offs.
  7. Bad Debt: Do you have uncollected money from customers? When accounts receivable turns into bad business debt, then it can be used as a tax deduction. In this situation, you need to have documentation proving that you took reasonable steps to collect on the invoice.
  8. Travel and Food: When you are taking a business-related trip, keep track of the expenses incurred for airline tickets, car rental, taxis, hotel fees, and more. You can’t write off personal vacations that aren’t related to business. But there are times when you can travel for business to leverage the write-offs, while still having a bit of time for entertainment or personal activities.
  9. Charitable Donations: Donating to a charity of your choice is a great way to feel good about giving back to the community. Additionally, these donations can be used as tax deductions as well. The rules change depending on the type of donation, the recipient, and the amount that is donated, so talk to your accountant for more information.
  10. Continuing Education: Most business owners need to continue learning to stay relevant in the industry. If you pay for work-related education, then those costs can be used as tax deductions. Examples include tuition, lab fees, books, supplies, transportation to the classes, and any other expenses related to your participation in the classes. For these expenses to qualify, the classes need to “maintain or improve skills needed in your present work.”

Tips to Maximize Your Tax Write-Offs

As you can see, there are many ways you can increase your tax deductions each year. But it takes work and organization to ensure that you are taking the write-offs your business is entitled to. Taking as many deductions as possible can help to lower your taxable income, which in turn reduces the amount that you will be paying in taxes each year.

Are you leveraging the write-offs for your business? Here are a few tips to follow so that you get the best results possible with your tax deductions:

  • Good Bookkeeping System: It is essential that you are keeping track of all of your business costs. In order to utilize the deductions, you need to know where the money is going. Use a bookkeeping and accounting system to record every transaction that moves through your bank accounts and credit cards. You need to have specific details about the amount of money that was spent, how it was spent, as well as documentation to back up the spending. The IRS won’t accept estimates, and you might need to verify the write-offs if you are audited in the future.
  • Check the Requirements: Talk to your accountant about specific requirements that need to be met for the deductions. For example, you should keep copies of the receipts when purchases are made. You can file these paper copies in a folder for each year. Or, consider a digital system with scans or photographs of the receipts for easy reference. Other requirements include logs or tracking information, such as a mileage log that records the odometer, purpose of the driving, and the number of miles traveled. This documentation does not need to be filed with your tax return, but you need to have it available in case there are questions about your filings in the future.
  • Simplify and Outsource: You can spend your time filing receipts and recording the transactions, but these busy-work activities are a waste of time when you can hire an outsourced accounting team to help. As a busy business owner, you shouldn’t be spending your limited hours on tasks that can be handed off to the experts. Instead, focus on your strengths and skills, and let the pros handle the number crunching and reporting for you. Outsourced bookkeeping and accounting allow you to focus on your business without getting behind on the never-ending paperwork and admin tasks.

When it is time to file your tax return, your accountant will help you claim the write-offs in the correct Schedule C section of your 1040. As this information is compiled, make sure you have open communication with your accountant regarding the rules around the deductions you are planning to take. An experienced tax accountant can provide valuable advice to help you avoid problems with the IRS in the future.

Easier Accounting is Here to Help

Are you ready to maximize your tax deductions for your upcoming tax filing? Our team at Easier Accounting is here to assist. Not only can we help with your current tax prep, but we can also create a system to ensure that you aren’t overlooking important deductions in the future. Call to learn more about available accounting services: (888) 620-0770.

New Year’s Resolutions that Will Level Up Business Results in 2020

January is a time when people are focused on new beginnings. Not only are we starting a New Year, but the beginning of 2020 is a new decade as well. Now that the holidays are over, many turn their attention to weight loss goals, home organization, budgeting, and more. What are your New Year’s resolutions for this year? As you are evaluating your personal goals, it is a great time also to consider what you should be doing to improve your business in the new year.

As an entrepreneur or small business owner, you are likely a goal-oriented person. So, setting resolutions is probably a familiar and common practice for you. As you are choosing your goals for 2020, consider the activities that will leverage your business results as much as possible. Not only do you need to consider how you can improve your profits and manage spending, but it’s also important that you identify specific areas of your business where you need better systems to support growth in the future.

Here are a few resolutions you might consider for your small business this year:

Resolution #1: Delegate and Outsource More

There’s no question that running a small business can be a time-demanding task. Many business owners feel like their attention is spread thin as they are trying to keep up with all of the responsibilities. Not only do you need to be working on product development, but other necessary tasks include marketing, customer support, employee management, taxes and accounting, invoicing, cash flow management, and more.

How often do you feel overwhelmed because you have a never-ending to-do list? If you feel like you can’t keep up, then it’s a sign that you need to invest in better support. There’s no reason why you should be flying solo on everything. A variety of resources and service providers can be valuable assets to improve your systems and give you more flexibility with time.

Make a list of the tasks that you have a hard time accomplishing, either due to time constraints or skill set. Then, identify the services that can be used to take care of these tasks. Hiring the right outsourcing team or service provider can be a valuable way to reduce your stress, optimize your results, and ensure that you aren’t spreading yourself too thin.

You might choose to hire one provider to start, such as an outsourced accounting team, so you don’t have to work on financial reports, payroll, and invoicing. Or, select a few specific providers so you can build a team that is a perfect fit for your individual needs.

Resolution #2: Optimize Business Promotion

Marketing your business is something that can’t be run on autopilot. Even if you find something that is working to bring in new customers, there are often opportunities to tweak the campaign so you can increase the number of sales while managing your costs at the same time.

The start of a New Year is a great time to evaluate the effectiveness of your marketing campaign. Did you have a positive Return on Investment (ROI) from your marketing spend in 2019? What were the most profitable campaigns?

This exercise can help you identify areas of opportunity where you should be focusing your marketing budget. Then, you can use this information to identify specific ways to adjust your efforts in 2020. Consider these details as you are choosing marketing-specific goals for the year.

Resolution #3: Weekly Business Planning

It’s easy to let the weeks pass by without deliberately evaluating how you should be growing your business. But, if you want the company to grow, then you need to be proactively engaged in this planning process. Business planning gives you a formal structure to evaluate the current success of your company and identify areas that need more support.

Start each week with a focus on what is working and what didn’t work. Then, you can set new directions for the week. This week-by-week process might seem small in the moment, but the cumulative effect of 52 planning sessions will make a big difference over the course of the year. Rather than waiting to evaluate your business success at the end of the year, implement a system that uses weekly reviews.

This process creates the structure that you need so you are always reviewing, evaluating, and adjusting for the future. Additionally, it is an effective way to identify expensive mistakes as early as possible, keeping you on track with the things that matter most of your company.

Resolution #4: Business Relationships

Building strong business relationships can be a powerful way to support your company. For example, look for networking groups where you can talk to other business people. These conversations can spark new ideas and help you look outside of the box in the systems you are creating. You might be able to find a local group that is dedicated to your specific industry or type of business. Or, if you don’t have local networking groups, then look for online groups and forums where business discussions are held.

Also, consider how other business relationships can be developed, such as communication with your vendors, marketing team, accountant, and more. Building trust with these providers is essential to ensuring that the services are the right fit for the needs of your business. Plus, two-way communication will help in determining the effectiveness of the current plan and the ongoing results that are received.

Resolution #5: Let Go of What’s Not Working

Just because you’ve had the same systems or practices in place for years, doesn’t necessarily mean that those things are still serving the needs of your business. Now is the time to consider what is working and what needs to be improved. The New Year is a great opportunity to let go of the things that are no longer serving your company.

Evaluate various aspects of your business to identify the things that you need to let go of. For example, it might not be worth the continued development and marketing of certain products that aren’t selling well. Instead of trying to make these products work, it’s best to let them go and dedicate those funds and efforts to the items that are performing great in the marketplace.

Look for anything that is making your work life harder, and let go of the old mindset that is keeping you stuck in that place. If the relationship with a vendor isn’t going well, then identify other options in the industry and be willing to let go of that old vender. If a technique isn’t supporting the overall goals of your company, then stop using it. You shouldn’t be investing time or money to try to make something work when there are more efficient and effective methods that can be implemented instead.

Resolution #6: Prioritize Self Care

One common trend among business owners is that their personal self-care often falls to the backburner. When you are juggling business priorities, it’s easy to let these tasks cut into your sleeping habits, hobbies, family time, and more. Consider setting a resolution this year to prioritize self-care, which will give you the opportunity to create more work-life balance.

Don’t underestimate the power that selfcare can bring to your business efforts. When you are healthy and have a strong, clear mind, then you will show up more effectively in your business tasks. It’s easy to rationalize and argue that your personal care doesn’t matter in business results. But, the truth is that developing your mind is one of the most effective ways that you can build a solid foundation to ensure that you are focusing on the right things within your company.

Selfcare looks different for every person. As you are structuring a system for your personal care habits, consider small, daily tasks that will support your physical health (diet, exercise, sleep, etc.), mental health (personal development, reading, etc.), and mental health (relaxation, meditation, etc.). Experiment to find the system that works best for you. Then, prioritize these tasks in the morning before you dive into work tasks for the day.

Resolution #7: Improve Financial Systems

Accounting and financial tracking are key to creating a strong foundation for your business. Do you have an effective accounting system, or are you scraping by with a DIY process? Without a good system, you are likely missing out because of gaps or holes in the tracking and recording processes.

Without accurate financial reports, every other aspect of your business will suffer. If you want to build a stronger foundation for your company, then now is the time to invest in better accounting systems. The most effective way to get started is by hiring an outsourced accounting team. Not only will a provider give you proven techniques that can be implemented in your business efforts. But these outsourced accounting services are also helpful to free up your schedule since you don’t have to spend your limited time on bookkeeping tasks.

Easier Accounting is here to help. For more information about how you can improve your accounting system this year, call us: (888) 620-0770.

9 Year-End Tips for Small Businesses

December is here, which means that the end of the year is just a few weeks away. Depending on your industry, it might be the busiest or slowest time of year for your business. Those companies in the retail space are often busy keeping up with customer demands as families are shopping for gifts to put under the tree. On the other hand, some service providers slow down during this last month, giving them a lull to enjoy the holiday season.

Regardless of your workload this month, don’t overlook the importance of preparing your business for the essential year-end tasks that need to be addressed. Most businesses are run based on the calendar year, which means that there are a few details you will need to wrap up to bring the year to a close.

It’s hard to keep track of all of the required paperwork and year-end tasks that need to be addressed. Today, we are going to share some tips to help you get started. One of the best solutions is to talk to an accountant about your situation to get personalized tips based on the unique aspects of your company.

Here are a few year-end tips you might consider adding to your to-do list:

Tip #1: Review Annual Reports

Even though the year hasn’t come to a close yet, these reports can give insight into how things went for your business in 2019. If you were consistent about keeping up with accounting and bookkeeping tasks throughout the year, then it is simple to run a report and get a snapshot of your standing for the year.

Not only will this information provide insight as you are going into the New Year, but it can also help you see if your books are accurate and up-to-date. Having an accountant can be helpful as you are running these reports and analyzing the data.

Tip #2: Set Goals for 2020

Now that you’ve had a chance to look at the numbers, December is the perfect opportunity to evaluate how you are going to improve your success in 2020. It is common for individuals to set New Year’s goals for weight loss or habits they want to develop. In the same way, you should look for potential areas of improvement within your company.

Your accounting reports will show where your business came up short. These weak points could be where you choose to place your focus for the annual goals in 2020. Additionally, look at the things that were working well in 2019. It’s smart to put more resources into the things that were already working so you can maximize the proven systems.

For example, if you can see that most of your new business came through customer referrals, then it might make sense to budget more of your market money to reach out and build stronger relationships with your current customers. Determine your ROI on these investments to find the optimal ways that you can help your business move forward.

Tip #3: Income Deferment

Every penny you receive by December 31st counts as income for 2019. If you have payments that are delayed into January, then that money will be counted as income in 2020. Depending on your earnings this year, it could make sense to push some of those payments into the New Year so that you can manage tax brackets and other factors that affect your tax burden.

Various factors should influence your tax bill, and it isn’t always the right choice to delay payments for tax purposes. If you are considering this strategy, talk to an accountant about your options and how income deferment will play a role in the amount that needs to be paid in taxes. Additionally, be ready to have conversations with customers about their payment timelines if you need to delay the income a bit.

Tip #4: Charity Donations

It’s no surprise that the holiday season is a time of year when people tend to be more charitable with their donations. If you are looking for ways to help other people during this time of year, then it might be a good time to reach out to your favorite charity or donation center.

Yes, it’s a kind thing to help others during the holidays. At the same time, there is also something in it for your business: this money can be used as a deduction on your taxes. You can donate money if that is your preferred donation of choice. Or, you can donate other goods, such as toys and clothing, with the deduction based on the fair market value of those items. Make sure to get a receipt for the items that were donated.

Tip #5: Retirement Contributions

Whether you already have a retirement plan, or you are considering your options to set up a new account, certain retirement strategies can help manage your taxable income each year. This account should be set up by December 31, although certain strategies will allow you to make 2019 deposits up until the tax deadline in April 2020.

Don’t overlook the benefits that come from maximizing your contributions. With the right type of account and a smart retirement strategy, this money can be added to the retirement plan tax-free. Talk to your accountant, as well as a financial advisor, for more information about the strategy that is a good fit for your needs.

Tip #6: Save for Upcoming Tax Payments

It is easy to procrastinate your tax preparation for the year. But, the sooner you know how the numbers are going to play out, the better prepared you will be to make the payments that will be required. When tax payments are due, it can cause cash flow challenges for many small businesses.  Even though you know that taxes roll around every year, it’s easy to forget about the necessary money until the last moment.

Dedicate time right now to ensure that you have the cash flow available for the money you are going to need for your payments. Not only do you have the annual balances that need to be paid, but you should also consider the quarterly payments due in January and April. Set aside the estimated amount of cash that will be needed so you won’t be stress about the cash flow when the payment time rolls around in April.

Tip #7: Year-End Purchases

Another tax strategy that might be considered is getting in a few big purchases before the year is over. Not only can you find great holiday prices on furniture, electronics, and office equipment, but this spending might be needed to boost your write-offs for the yar.

Don’t spend money for the sake of spending money. Instead, be strategic with your approach. If you have equipment that needs to be upgraded or office supplies that need to be restocked, then it might be a good strategy to purchase these items no later than December 31.

Tip #8: Inventory Evaluation

Two factors need to be considered for your inventory. First, if your inventory has experienced a drop in market value, then you might be able to claim the difference as a deduction on your taxes. This strategy varies depending on the type of inventory that you carry and the current/previous value of the items.

Also, consider the amount of inventory that is currently in stock, compared to what will be needed in the New Year. For example, if you are in the retail industry, then you might need to restock the shelves because of the increased sales during the holiday season. But it is common that you won’t require as much inventory in January and February since these months tend to be times when customers spend less.

On the other hand, if your business specializes in health products or weight loss services, then January might be your busiest time of year. People are motivated to maintain their goals in the New Year, which means that customers are often ready to spend money on products and services. Make sure that your inventory shelves are stocked, so you are prepared to maximize the profits as the sales start rolling in.

Tip #9: Line Up Bookkeeping and Accounting Services

Do you already have a good accounting and bookkeeping service you are using to help your small business? If you aren’t leveraging these services, then right now is an optimal time to get started. An accountant can offer year-end advice to help with your strategy as you are wrapping up in 2019. At the same time, you can leverage these services into the New Year to ensure that you are prepared for the things that are coming in 2020.

The start of a calendar year can be an ideal time to make this transition. For example, if you need to implement a new accounting software program, then it can be simple to make a move at the beginning of the year. Even though these changes can be implemented at any time, it can simplify the process when you have a clean break with a new month or year starting on the calendar.

If you need assistance with accounting and bookkeeping, then you are invited to contact us at Easier Accounting. We specialize in small business accounting services. Call today: (888) 620-0770.