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The Effects of Bad Bookkeeping on Your Small Business

As the owner of a small business, it is important for you to know that seemingly small mistakes can lead to serious financial damage in the future. Larger corporations have the big bank accounts to cover these types of mistakes. But, smaller companies might go under if the wrong accounting and bookkeeping practices are in place. If you want to increase the chances of success in the future, then you need to make sure that you are building the foundation with solid bookkeeping and accounting support.

Why Bookkeeping Matters

Why does it matter if you have a good accountant for small business to help with your business efforts? These services encompass some of the most essential tasks that need to be addressed in every company. Without a good bookkeeper, your books will be a mess, and you won’t be able to keep up with the numbers in your bank account.

Typically, bookkeeping encompasses a variety of services to ensure that all financial transactions are recorded. These services can include sales, receipts, purchases, payroll, payments, earnings, and more.

Having a bookkeeper stay current with these transactions ensures that the money continues to flow in and out of your business as needed. Not only will you have the money moving through to support business efforts and profits, but you will also account for every dollar that is spent or received.

Later, you can use the information when you are making big financial decisions that impact the future of your company. If you are putting together anything that will affect the organization of your business, then you need to be sure that you are staying ahead of these details. Then, you can lean on the financial reports knowing that the numbers are accurate.

Bookkeeping, Accounting, and Business Decisions

What will happen if you aren’t keeping up with the bookkeeping and accounting tasks that need to be addressed in a small business? Every decision that you make can have an impact on the profitability and cash flow of the company. If you make too many bad decisions, then it will lead to the downfall of the business.

At the same time, a series of wise decisions will lead to the future success that you desire. So, you need to stay apprised of the numbers to ensure that you are considering these details whenever you make a decision.

The financial reports in your company should be used when you are looking at monthly or annual revenue, considering loans or payments, calculating and paying taxes, buying new equipment, or hiring more employees.

Consider this situation: it might be a good month in your company, resulting in an influx of cash in your bank account. Even though the numbers are high, it doesn’t mean that you have extra cash to spare for new office equipment or furniture. Instead, you need to look at the reports and anticipate any potential upcoming payments for payroll or taxes.

Failing to consider these details could leave you in a situation where your bank account is overdrawn because you spent money that wasn’t really available for your business. Bad bookkeeping practices will leave you in debt, and you could potentially be in trouble with the IRS if tax payments and other details are missed.

Biggest Accounting and Bookkeeping Issues for Small Businesses

What are the biggest issues that you might face for your small business? These are some of the leading causes that can result in financial problems for your company:

  • Not being serious about your bookkeeping or accounting practices
  • Procrastinating important daily, weekly, and monthly tasks
  • Leaving the financial accounting to a low-paid, inexperienced employee
  • Overlooking small transactions
  • Failing to communicate with your accountant
  • Spending money that is needed for taxes or payroll
  • Inefficiencies in regular work systems

In addition to efficient, effective bookkeeping and accounting practices, you also need to make sure that you are implementing good management over your staff and employees. Set expectations, teach the right techniques, then ensure that everyone is following the same practices in the way they are handling sales, data entry and more.

Financial Mistakes that are Costing You Money

Many common financial mistakes will cost your company money. Not only will you lose out on cash upfront, but some of these mistakes could potentially lead to the downfall of your company. Here are some of the most common financial habits that you need to avoid:

  1. Not Hiring an Experienced Bookkeeper: It might seem like a great idea to pay your niece $15 per hour to do the books. But, a lack of experience is one of the top causes of poor record keeping. If you are handling bookkeeping and accounting in-house, then it probably means that mistakes are happening regularly. Even though you might feel like you are saving money on the cost of payroll, you will end up paying more in the future when you need to hire an accounting team to clean up the mess. Don’t trust an inexperienced employee with the important task of managing the financial records for your company. Instead, hire a professional team who can eliminate some of the common errors that occur. Outsourcing is a great solution to help you save money and reduce your stress at the same time.
  2. Procrastinating the Bookkeeping: When things get busy in the office, paperwork and bookkeeping are often the things that fall to the backburner. If a customer needs immediate attention, then you aren’t going to turn that person away so that you can focus on the data entry! So, many business owners let the bookkeeping slide until they finally make it a priority to get caught up on The problem is that procrastination can lead to serious issues in the future. Not only will you miss some of the transactions, but your business can be crippled because you are making decisions without assessing the full financial information.
  3. Skipping Tax Payments: Tax deadlines are important to ensure that you aren’t missing anything important for the IRS. There are specific deadlines that need to be met for payments, filing, paperwork and more. Don’t run the risk of facing an IRS audit in the future! Instead, work with an experienced accounting team to ensure that you are keeping up with the ongoing deadlines and requirements. If your bookkeeping is a mess, then it means that you are probably paying the wrong amount on your tax deadlines. Or, you might run into cash flow issues that make it difficult to pay the taxes when they are due. Avoid issues with the IRS by hiring a professional accounting team instead.
  4. Ignoring Cash Flow Issues: Sometimes it can be a challenge to keep up with business payments, which means that you might be facing cashflow issues throughout the year. While these problems seem small, they can have a big impact on the future of your company. Always putting things on the business credit card can lead to high-interest costs and major problems down the road.
  5. Manual Calculations: Spreadsheets can be useful for many reasons, but they shouldn’t be used for your bookkeeping or accounting system. The risk of errors increases if you are using manual data entry and other methods to manage the bookkeeping. Instead, implement an accounting software that uses automated systems and checks and balances so that you can overcome the domino effect of manual errors.

The Long-Term Issues of Bad Accounting Habits

A few small financial issues right now won’t bring down your company. But, these problems can lead to major issues in the future. If you want to create a successful business in the future, then the financial tracking and planning is a critical part of your long-term success. Failing to keep up with the numbers is one of the biggest mistakes that you can make as a business owner.

Luckily, many tools and services can be used to simplify the process. Don’t be afraid to hire help or pay for the right accounting software. These systems are important so that you can free up your time and focus on the other tasks that matter for the future growth of your company.

For example, outsourcing the bookkeeping and accounting tasks will enable you to focus on product development, customer care, and employee management. All of these factors can lead to more sales and higher revenue. Your business will continue growing, and you can enjoy the fruits of your labors.

If you need assistance with the bookkeeping and accounting systems for your company, then you need to call the best team in the industry: Easier Accounting. We offer the support that you need to keep your business running throughout the year. In addition to the daily, weekly, and monthly financial tasks, we also offer tax planning and filing. Our goal is to take care of the financial details so that you can be ready for massive growth and business success in years to come. Call us today to learn more about the services that we can provide for your company: (888) 620-0770

8 Bookkeeping Rules to Live By for Entrepreneurs and Independent Contractors

Have you finally decided to take the leap by starting your own business? Whether you are working as a contractor for other businesses or you are focused on getting a start-up off the ground, it is important that you are deliberate with the financial tracking and paperwork. These steps will set you up for success, increasing the likelihood that you will be able to stay in business for many years.

Living on Dreams, Preparing for the Future

Unfortunately, too often people start with big dreams. Then, they quickly run into problems because they weren’t willing to do the boring or difficult work, like tracking expenses, keeping up with tax payments, and saving for a rainy day.

Your big ideas will only last for so long until reality sets in. If you are going to put in the effort to start a company, then you need to be willing to take on the responsibility that comes with the American Dream. It is important that you make it a priority to keep up with accounting and bookkeeping business tasks so that you always have a clear picture about the profitably of your company.

The best thing that you can do is put together a system that will last into the future. These efforts will bring exponential benefits to your business. Not only will you rest assured to understand the financial health of your company, but you will also be preparing for future growth and expansion when you see a good opportunity.

Finding the Support that You Need

Don’t worry… you don’t have to navigate these things by yourself. The biggest mistake made by entrepreneurs or independent contractors is trying to juggle too many things at the same time. Even though you feel like you are bootstrapping to get the business off the ground, you can’t carry all the responsibility without support from others.

For example, it might be easy to think that you should handle all the invoicing and financial management in your free time. But, when does an entrepreneur have several hours to put into paperwork and transaction auditing? Your time is a valuable commodity, and you shouldn’t be spending your hours focusing on work that could be outsourced easily.

Plus, remember that you don’t have an educated background in accounting. Instead of trying to navigate the numbers and making mistakes along the way, you will be grateful that you hired the bookkeeping and accounting help that was needed to keep your company on track.

Benefits of Working as an Independent Contractor

If you must take on the bookkeeping and accounting responsibility, is it worth the effort to start a freelancing business? As you learn more about the benefits that are available from self-employment, it is easy to see why these additional responsibilities are worth their weight in gold.

These are some of the benefits that you can expect if you skip the traditional employment and choose to be an entrepreneur or independent contractor instead:

  • Manage your time, so you can choose the days and hours that you want to work
  • Shape your workload to focus on your strengths, rather than completing tasks because they are expected from your boss
  • Potential for higher income, especially when you are paid on a project basis instead of an hourly basis
  • You are your own boss, so you don’t have to report to anyone about your activities each day
  • Leverage tax breaks by writing off expenses that are related to running a business

Even though there are many benefits to self-employment, you will also experience a few disadvantages as well. For example, you don’t get employer-subsidized health insurance, paid time off, retirement matching, and other common employee benefits. Also, you will need to take on more tax and legal issues, but these things can be outsourced to a trusted team.

Bookkeeping Rules for Entrepreneurs or Independent Contractors

Whether you are already underway with your business efforts, or you are just getting started, there are a few bookkeeping rules that should be implemented into your financial system:

  • Rule #1 – Separate Personal and Business Finances: Even though you are fronting the money to get the business off the ground, you need to be careful about the way the money flows through your company. Set up a separate checking account and use a dedicated credit card for your business expenses. Some contractors find it helpful to have multiple business accounts so that they can manage overhead expenses, vendor payments, employee payroll, and more.
  • Rule #2 – Track All Expenses: Whether you are buying a new computer system or a cheap notebook, you need to keep track of every expense related to running your business. These expenses can be used as tax deductions, but you must provide the documentation showing the transaction. Keep a digital record of transactions throughout the month, and hold onto the receipts and invoices that you receive.
  • Rule #3 – Follow the Rules: Understand the laws and restrictions that impact your business activities, and make sure that you stay in compliance with these rules. For example, your accountant will provide information about quarterly tax payments, tax break strategies, and more. You should tap into their expertise and make sure that you are keeping your nose clean with the IRS.
  • Rule #4 – Keep a Backup of Your Financial Records: You never know when a hard drive will crash or paperwork will be lost. Even if you are careful about keeping records, it is a good idea to store backup information about your financial transactions. If the main records are lost, then you always have a copy as a reference in case there are questions about your business activities.
  • Rule #5 – Save for a Rainy Day: Business might be good right now, but it doesn’t mean that you can spend the money on unnecessary expenses. There is a real temptation to splurge on a new computer or office furniture when the money hits the bank account. But, you need to be prepared for future expenses, such as tax payments, payroll, inventory restocking, and more. Also, remember that many companies go through slow seasons at times. Even though you are enjoying the benefits of the busy season right now, you need to set aside some running money to keep the company going when things slow down in the future.
  • Rule #6 – Be Ready for Growth and New Opportunities: Creating a good bookkeeping system will ensure that you have the resources and systems in place to support future growth. If the right opportunity comes along, then you want to be ready to act so that you can expand your business. But, the only way to grow is to ensure that you have control over the finances at your current levels of business.
  • Rule #7 – Use a Cloud-Based Accounting Software: Ditch the paper ledger and spreadsheets. Instead of spending your time on manual accounting and bookkeeping calculations, leverage the benefits of a cloud-based accounting software. Not only will your accountant have access to the data in their office, but you can view reports and information from any location in the world. All you need is a good internet connection to check in on the financial health of your company.
  • Rule #8 – Don’t Be Afraid to Ask for Help: You don’t need to re-invent the wheel by trying to figure it out from the ground up. Instead, there is a lot of benefit to talking to other people who have gone before you. Find a mentor in the industry to learn from their experiences. Also, be open to hiring contractors and outsourced services that can support your efforts.

Talk to the Experts about a Financial Plan for Your Business

One of the best things that you can do is to stay focused on your business growth and management, instead of wasting your time with busy work and numbers crunching. When you understand the value of your time, then you will see the benefit of bringing in an outsourced accounting and bookkeeping team to help.

These services will free up your day and reduce your stress because you don’t have to worry about tracking individual transactions or figuring out how to run payroll. Plus, the experienced advice is a great way to maximize your results and prepare for future growth. We want to help you implement the best financial systems, based on years of experience helping other people who experienced the same challenges as you. By specializing in small business accounting, we can optimize our services to help entrepreneurs and independent contractors.

There are many benefits of self-employment, and you can take advantage of these benefits by tapping into the experts who can support your efforts. Here at Easier Accounting, we know the best accounting methods to support small businesses and entrepreneurs. Contact our team to learn more about the services that we offer. You can schedule a consultation to start the conversation, allowing us to cater these services to match your needs. We are here to help with all of the accounting and bookkeeping services that will support your business efforts: (888) 620-0770

A Few Important Things to Consider Before Starting a Small Business

Have you decided that it is finally time to move forward with your business idea? Many people love the possibilities of self-employment, but they are worried about the potential risks that can occur from these efforts. Right now is a great time to start chasing your dreams and get the business off the ground. But, there are a few things that you need to consider before you undertake a business venture.

Here at Easier Accounting, we have worked with many small companies in every stage of business building. We have seen the successes and failures of startups and seasoned entrepreneurs, and we are working hard to pass this experience to our customers so that they can be ready to succeed. Regardless of the industry, the same business management and accounting principles apply. So, it makes sense that you should tap into our expertise instead of trying to re-invent the wheel by starting everything from scratch.

If you are getting ready to start a new company, then we suggest that you consider these factors before you launch your efforts:

Keep Your Eye on the Prize

Entrepreneurs usually start with big dreams, but then they become disillusioned because of problems or roadblocks that are encountered along the way. Maintaining clarity about the reason you wanted to start a business is an important factor to help you keep the motivation that is needed to push forward, even when things get hard.

Start by asking yourself one question: Why do I want to start a business? Consider your goals, the things that you want to accomplish, and the lifestyle that you are trying to create. Be specific about the details, and make sure that you write down these reasons. If you have a difficult day, then you can always refer to these notes to keep you going.

Whether you are starting a business to boost your income and gain more freedom, or you are tired of having a job and reporting to a boss, it is important that you keep this focus in the front and center of your mind. As a business owner, you can’t coast through the afternoon surfing the internet like many low-paid employees. Instead, you need to be willing to look at the issues and take action to support the needs of the company.

Identifying a clear “why” can also motivate the people that you hire. Many businesses have mission statements that are shared with their staff and customers, helping everyone to capture the vision of the owner.

Set Goals and Stay Accountable

Once you identify your reason “why,” the next step is to outline the short-term and long-term goals that you have for yourself and your business. These goals need to be in writing, and you should align your attitude and thought patterns with the goals on a daily basis.

Instead of beginning the day by browsing on your favorite social media website, dedicate the first hour of the day to things that will build your attitude, mindset, and determination. This time is a great opportunity to review your goals so that you can be sure that your actions are in alignment with the things that you are trying to accomplish.

Put together a list of things that are working, as well as the things that are getting in the way of reaching your goals. Then, look for solutions so that you can overcome the problems that are hindering your success. Evaluating your progress will help you avoid some of the day-to-day tasks that might distract you from bigger efforts.

Focus on Marketing Your Product and Asking for the Sale

Regardless of your industry, all businesses are focused on sales. If you want to grow a company, then you need to be willing to put in the effort to connect with new customers, showcase the benefits that you can offer, and ask for the opportunity to provide your product or services for a fee.

Yes, it is important to keep up with back-office work and product development. But, none of these efforts will be worthwhile if you don’t have new sales coming through the door. So, be careful to avoid the trap of spending too much time behind the desk when you should be out there connecting with your network.

For example, sometimes new business owners get so caught up in the tax deductions and financial projections, that the business is only based on theory instead of action. One of the best things that you can do is find an experienced outsourced accounting team to pass off these responsibilities. Then, your time will be freed up so that you can focus on the activities that will generate more revenue for your company.

Identify the methods that can be used to build relationships with your team. Then, focus time and resources on those efforts. You might consider the benefit of activities such as:

  • Building the right company culture with employees
  • Lead generation online or at events
  • Creating the right team to support your efforts
  • Reaching out to current and past customers to invite them to come back again
  • Writing procedures that improve productivity and efficiency
  • Developing customer service and other skills that are needed for customer outreach

Remember, you won’t be in business for very long if you don’t have a strong sales strategy. So, don’t overlook the importance of sales at all points in your business efforts.

Be Willing to Get Your Hands Dirty

Starting a new business is exciting and rewarding, but it isn’t right for everyone. Be prepared to put in a lot of work and effort to get things off the ground. You need to be willing to do the difficult things that other people don’t want to do. Many new business owners agree that their weekly time commitment goes up when they transition from being an employee to an entrepreneur. But, these initial efforts will set the right foundation for future success.

There are times when business owners need to “be in the trenches” with their employees. Whether it is a busy day and someone is home sick, or you are launching a new marketing campaign to previous customers, you might find yourself in the showroom or working alongside the customer service team.

Being willing to do all types of tasks will show your employees and customers that you are committed to the effort. Your example can show great work ethic and commitment to quality, helping to raise the results of everyone around you.

Tap Into the Experience of Other People

Building a business can be a lonely experience, but you don’t have to navigate the difficulties without learning from the experiences of other people. Yes, you will carry many responsibilities while you are overseeing the daily activities of the company. But, don’t be fooled into thinking that you have to do it all by yourself without the support of other people.

There are two ways that you can get the support that is needed in your company: hire people to take care of the busy work and look to industry experts who can offer professional advice.

If you feel like you have to do everything, then your business won’t get very far. Be willing to delegate and hire the help that you need. Building the right team is a valuable way to set yourself up for success. Having employees and contractors that you can lean on when you need assistance will reduce your stress and allow you to focus on other important aspects of running a business.

Bringing in employees means that you need to train your team and take on the overhead cost burdens. On the other hand, you might consider using professional contractors who can bring the experience that you need. Look for areas where you struggle, and don’t be afraid to pay for the services that will help you overcome these weak points. Recognizing that you need help is a valuable trait in a leader, and you will set your business up for success if you are willing to look to others for the education and resources that you need.

Learn More about Small Business Accounting Services

Here at Easier Accounting, we know that you are carrying a lot of responsibilities when building a new company. Our team is focused on the financial tasks that will help you succeed. We have worked with many other small business owners, allowing us to develop the experience necessary to implement a proven system.

There is no doubt that a solid accounting and bookkeeping system will be the foundation for your business success. Whether you need help with the busy work or you are looking for someone to assist with tax preparation, we are here to offer the assistance that you need.

One of the benefits of the services that we offer is that you have the opportunity to customize the plan to match your needs. Talk to us at Easier Accounting to see how we can help: (888) 620-0770

Bookkeeping 101: The Ultimate Guide to Help Small Business Owners with Financial Tracking

What emotion do you feel when you hear the word “bookkeeping?” Many small business owners cringe in frustration and anxiety, knowing that their bookkeeping system needs a little TLC. Whether you are having problems with your current system or you haven’t put in the effort to implement a bookkeeping system, right now is a great time to get started.

A few small steps can go a long way to help you take control of your business finances. You need to make sure that you have a good bookkeeping plan in place so that you always have a clear picture of the financial health of your company. For many small business owners, bookkeeping isn’t a priority. But, these tasks can be the make-it-or-break-it factors that will influence the future success of your company.

Are You in Over Your Head?

It is common for small business owners to feel like they are in over their heads with bookkeeping. Often, the strategy is to start with a DIY bookkeeping approach. Then, you likely ran into problems because the accounts didn’t balance or you couldn’t find the time to work on the books.

Some business owners put in the effort to hire a secretary or lower level employee to manage the financial details. This solution might work in some ways, but it is common for you to face errors and discrepancies if that person doesn’t have professional training in accounting. An internal employee handling the books will work until they quit or you must fire them, then you will be facing a gap in your financial management once again.

Instead of looking the other way because the books are too overwhelming, it is essential that you talk to an experienced team for help with a solid bookkeeping system. A little bit of work right now can go a long way to ensure that you are prepared for future growth and product development.

Step #1: Get Clear on Your Goals

The best way to start any system is to know WHY you want to make these changes. If you don’t understand the motivation behind a financial system, then it will be difficult to find the desire to spend the time and money on this effort. Understanding your business goals will help you identify the tools that will boost your success.

Most business owners will agree that their goal is focused on the future expansion and growth of the company. But, this growth isn’t possible if you don’t have the cash flow to support things as they are changing. So, you need to be sure that you create a financial picture that can expand to accommodate the size of the company that you are developing.

Step #2: Talk to the Pros

Once you identify your goals, the next step is to hire a professional who can offer personalized advice to set you up for success. If you bring in an employee, then you need to be sure that the person has hands-on experience with business accounting and bookkeeping. The problem is that hiring another employee can be an expensive choice that drains your bank account. An entry-level employee won’t have the experience to manage the books properly. But, it can cost quite a bit of money to bring in an educated professional.

Instead, consider the benefits of outsourcing your bookkeeping and accounting tasks. This solution will give you the skills that are needed to improve your business finances, without the excessive costs. Not only can you skip overhead costs related to office space, equipment, and benefits, but you can also pay a smaller amount since you don’t need full-time work.

Outsourced bookkeeping and accounting is a great solution to reduce your workload. You can focus your efforts on the tasks that will help with company growth while letting the professional handle the busy work and financial details.

Consider hiring an accounting team that specializes in small business services. Having previous experience working with other companies that are similar in size to your business is a critical factor. By understanding the laws, nuances, and accounting practices for small businesses, your accounting team will be able to implement a system that is already proven in other circumstances.

Step #3: Figure Out a System that Matches Your Preferences

Now that you have an experienced team to help with your financial tasks, the next step is to put together a system that will set you up for success. Your bookkeeping and accounting team can help you compare different types of financial software programs. These tools are essential to manage the numbers and give you access to important financial reports.

It is common for small businesses to use cloud-based software problems. These solutions will allow you to see the details from anywhere in the world. Often, there are smartphone apps that can make it easy to manage transactions and invoices on the go.

Additionally, a cloud-based software will give the outsourced bookkeeping team the ability to access information from any location. So, you don’t have to worry about having the bookkeepers in your office. They will take care of the busy work such as payroll, accounts payable, accounts receivable, cash flow, reconciliations, audits, and more.

Remember that every business is different. So, it makes sense that you should have someone who can design a program to meet the needs of your company. Consider the services that are necessary, and then talk to your accounting and bookkeeping team about the way they can help.

Step #4: Maintain Consistency with Daily, Weekly, Monthly, and Annual Tasks

Once you have a great bookkeeping system in place, it can be a breeze to stick to the system. But, you need to make sure that you are proactive to keep up with the ongoing tasks that build up to future success. Slacking on the paperwork and invoices can lead to a domino effect that creates a bigger mess.

Ongoing maintenance and care are the reasons why many people need the help of an experienced accounting team. As a business owner, you are already juggling too many responsibilities to keep up with the paperwork and transactions. Instead, let a team of experts manage the daily flow of transactions so that you can focus on other responsibilities.

Common tasks that need to be maintained include tracking expenses, filing tax paperwork, sending invoices, and cutting paychecks. These tasks will influence the cash flow for your company. For example, failing to keep up with tax payments and paperwork could result in fines and interest accrual later. Also, you need to be sure that you have money in the bank when these payments are due. An experienced accounting team can offer the services that you need so that you keep up with these important tasks.

Step #5: Re-Evaluate and Change if Needed

If you already have an accounting system in place, why should you re-evaluate your practices? It is essential to make sure that the system is still meeting the needs of your company. Even if things seem to be working, you won’t know the ways that you can optimize your finances unless you are working with an accounting professional.

Ongoing evaluations can be focused on reconciliations, system optimization, and preparing for future growth. The goal is to be proactive to prepare for the future, instead of reactively working through problems as they arise. By looking forward to seeing how things might play out, you can increase the likelihood that your business can grow and expand in a healthy way.

These steps can also help you see if something isn’t working well. There might be small nuances in your system that are hindering the growth of your company. In these situations, changes can be used to overcome the issues and help you prepare for the future.

So, you need to make sure that you have the support of an experienced accounting team throughout the year. Assistance with the setup of a good system is just the first step to help you achieve the business success that you desire. Choose an accounting team that will offer the ongoing support that is necessary to propel your small business forward!

Schedule a Consultation with the Experts

Here at Easier Accounting, we are working hard to provide the full range of financial services that are necessary for your small business. If you are looking for help with bookkeeping and accounting, then we are here to answer your questions and offer the assistance that you need! You are welcome to talk to our team to learn more about the ways that we can offer support for your company.

Our team is dedicated to your success. We understand the steps that need to be followed to create the best financial system for you. We will gladly schedule a time to talk to you about your accounting needs so that we can identify the services that will match your preferences.

If you are interested in learning more about how your business will benefit from these services, then we invite you to contact us today. At Easier Accounting, we are always available to help! Call (888) 620-0770

Working Capital and Cash Flow: Understanding Both Metrics to Meet Business Financial Expectations

cash_flow
As a new small business owner, there are numerous tasks that now have to deal with on a daily basis. You have to make sure employees deliver the right services and products to customers. You also need accurate accounting services to manage business revenue, payroll, and expenses. So when people start throwing out new terms such as “working capital” and “cash flow,” you can start to become confused.

What is Working Capital and Cash Flow?

These two terms are not the same. Yet they do work together when it comes to letting you know about the current and future success or failure of your business.

Cash flow represents all the money that is flowing into and out from your business during a specified time frame. Cash flow can consist of accounts receivable, accounts payable, and inventory. So your sales transactions with customers, collection processes, invoices you have to pay to suppliers, office rent, loan payments and merchandise are considered cash flow.

Working capital refers to all the current assets as well as current liabilities in your small business. A current asset isn’t just the cash that you keep in your cash register. It also represents any assets such as equipment or inventory that can be converted into cash, which is called operating liquidity. Current liabilities are all expenses and debts that become due within a 12-month period.

What Can These Key Financial Metrics Tell You?

Both working capital and cash flow can give key indications regarding the financial health of your business now as well as in the future. By understanding both of these metrics, you can have a snapshot of how effectively your company is bringing in money and investing it back into your business operations.

Top accounting trends to consider in 2017

When you have positive working capital, this phrase means that your small business is bringing in cash flow and current assets that can cover all business liabilities. If you have negative working capital, it means that your business cannot cover the current liabilities as you have more cash flow moving out of your business than what you are moving into it.

Now, just because your business has fantastic cash flow moving into your operations doesn’t mean that you have positive working capital. Your business may have incurred large, ongoing debts or you have invested significant amounts of money into the facilities where one slow sales season could see your business in financial trouble.

Managing Working Capital and Cash Flow

The best way to manage working capital and cash flow is to have accurate financial records throughout the life of your company so you can make the right financial decisions. You need to get back to your accounting basics and optimize your accounts receivable/accounts payable tasks so that you are invoicing your customers correctly and in a timely manner to further generate cash flow.

You also need to make smarter inventory management decisions. You want your small business to have the right amount of inventory to satisfy sales orders without sinking too much money into buying products that won’t move off the shelves fast enough.

Another thing to consider is how you are investing in your company. Are you purchasing equipment and products that are essential to operations and business growth or just throwing money away on the newest innovations that won’t have a significant impact on processes? Also, consider whether it is the right time to acquire debt from bank loans for business expansion, or if you are acquiring too much long-term debt that can make it difficult for your business to eventually repay.

Having accurate bookkeeping and financial records will always allow you to keep track of your working capital and cash flow for your small business. If you are worried about the financial health of your business, hiring outside accounting services can help you audit your financial records, spot mistakes, and offer advice on how to get your business back on track when you want to improve your working capital and cash flow management.

Cash Management Tips for Small Business Owners

Every business needs a steady flow of cash to keep the operations running, but sometimes cash flow is one of the biggest challenges faced by small business owners. Without cash flow management, it is impossible for your business to survive. So, it is essential that you focus on cash flow management if you want to be successful with your business efforts.

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Anticipating Future Cash Flow

Instead of only looking at the current balance in your bank accounts, you need to anticipate the transactions that will be coming through so that you can prepare for the future. You might have a positive balance right now, but a big transaction to pay a vendor might drain your account. As a result, you could be facing problems with payroll or other essential aspects of managing your business.

But, if you plan in advance, then you can be sure to have enough money to cover all of the expenses that are needed. Look at the invoices that are coming in as well as the expenses that will be moving out of the account.

Implementing the Right System

One of the biggest problems that will impact cash flow is if a business owner doesn’t have a solid plan in place for their financial tracking. Sometimes it feels like “fire control,” simply trying to come up with the payments that are due right now. It might feel frustrating like you can never get ahead in your business.

Instead of simply bouncing from one payment to the next, it is better to take a proactive approach to planning for the future. The right type of accounting or bookkeeping software can make a big difference. These types of programs will help you see the current account balances, as well as future transactions that will be coming through. As a result, you will be able to make informed decisions about expenses to manage your cash flow more effectively.

Hire a Professional Accountant to Help

If you are having cash flow problems, then it is a sign that you need to bring in a professional to help! Bookkeeping or accounting services might be the best solution to help you keep up with monthly financial tracking so that you can manage your business finances more effectively.

Here at Easier Accounting, we have the experience that you need to help your business succeed. Call us today and we can help you implement the right financial system so that you can improve your business: (888) 620-0770

Accounting and Bookkeeping Services for Home Based Businesses

If you run a home based business, then it is likely that you are wearing many hats throughout the day: manager, customer service representative, bookkeeper, and more. It takes a lot of work to get a start-up off the ground, and many people are looking for ways to cut costs and maximize financial accounts.

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Even though you are trying to minimize costs, there are some benefits to hiring outsourcing services for certain tasks. As a business owner, you need to make sure that you are focusing on your strengths instead of wasting your time on tasks that can be easily outsourced.

Benefits of an Accountant

Most small business owners don’t have experience in accounting or bookkeeping. As a result, these types of tasks take quite a bit of time and cause a lot of frustration throughout the week. Additionally, it is common for small business owners to make mistakes with their financial records, simply because they don’t have the knowledge or experience to know how to manage the books.

Instead of feeling stressed over the financial records, it is much better to have an accountant handle these tasks. You can focus on other responsibilities within your company and pay a small fee for the services of a bookkeeper or accountant.

The experience of an accountant can be very beneficial to help your small business grow. An accountant will offer suggestions to maximize cash flow and minimize expenses. As a result, the profitability of the company can be maximized.

Leveraging Home Based Business Write-Offs

When you are running your small business from home, there are certain write-offs that can be used to minimize tax burden. If you want to leverage the maximum amount of write-offs, then you need to be sure that you are working with an experienced accountant for tax preparation each year.

An accountant can assist with annual tax filings, as well as quarterly tax payments, employee taxes, and more. These services can be catered to match the needs of your company. Your accountant can help you put together the best plans to help your business succeed.

Are you ready to learn more about how these accounting services can be beneficial for your business? Call our experienced team at Easier Accounting for more information! We offer accounting services to small businesses, and we know what works best for home based businesses. Contact us by calling: (888) 620-0770

Are Electronic Records Sufficient for Your Financial Tracking?

Most business use digital systems for tracking financial records and other information, and there are a lot of benefits to using these online accounting systems. Does your company utilize a digital software to manage financial details? Even though the transactions are recorded in the system, it is still essential that you have receipts and other records to back up the transactions.

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Why are Receipts and Records Needed?

The reason that you need to keep the receipts and records is to provide verification in case your company is audited by the IRS. If an audit occurs, then they will need more information than just the basic transactions in your accounting system. These receipts and financial documents back up the records, showing that the transactions were real and legitimate.

There are cases where the backup documentation wasn’t available, causing the company to get in trouble with the IRS. Additionally, this information allows your company to verify the transactions in the system in order to ensure that the records are maintained correctly.

Paper Records to Back Up Your Electronic Journal

When the IRS looks at your digital system, it is assumed that you have paper documentation to back up the information in the software programming. Digital transactions can be changed, but a paper record provides the verification that is needed to increase the reliability of your tracking system.

In fact, the tax court has said that it is negligent to rely on electronic entries without maintaining supporting record to validate the transactions.

Staying Consistent with Documentation

The best thing that you can do to keep your company protected is to maintain consistent documentation at all times. Many business owners don’t have the time or knowledge to maintain accurate record keeping, which is why it is beneficial to work with a professional company that offers the bookkeeping services that you need. Having a bookkeeper on your team will ensure that you are keeping track of the right information throughout the year, and you can have the peace of mind to know that a professional is staying ahead of the changes in tax law.

Here at Easier Accounting, we want to make it easy for you to manage the accounting for your business. For more information about working with a small business bookkeeper, we encourage you to contact us right away. We are always here to answer your questions so that you will have success with your accounting and bookkeeping efforts. Call us today: (888) 620-0770

Productivity Hacks for Small Business Owners

Productivity matters, especially when you are running a small business. Many business owners find that they are torn between different responsibilities, and they have a hard time keeping up with all of the tasks that need to be completed. Here are a few tips to help you improve your productivity throughout the week:

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Hire a Bookkeeper

There is no sense in spending your time on tasks such as bookkeeping and invoicing. These things can be outsourced to an online bookkeeping company, which will free up your time so that you can focus on other important things instead. In fact, it is actually more cost-effective to outsource your financial management to a professional bookkeeping service instead of handling it in-house. It can be expensive to maintain the salary and benefits for an employee, so talk with a bookkeeper instead of hiring an employee to help.

Manage Your Communication

Do you find that you are constantly interrupted throughout the day? It can be hard to get anything done if you have text messages, phone calls, and emails coming through all day long. Instead of responding to each of these messages as they come in, you might consider managing your communication so that you can have some productive time. For example, it is beneficial to put your phone on “airplane mode” so that you can’t be reached for an hour. During that time, see how much you can get accomplished when you aren’t being interrupted every few minutes.

Schedule Meetings in Advance

Instead of constantly rushing from one meeting to the next, look for ways that you can improve your meeting schedule to stay efficient with your time. As an example, it is important that you meet with your small business bookkeeper on a consistent basis to keep up with the financial details. You might choose to schedule a standing meeting once a month, and ask the bookkeeper to send the financial reports in advance so that you can read through the numbers at your convenience.

At Easier Accounting, we know that you have a lot of responsibilities when you are running a small business. We want to help by offering our bookkeeping and accounting services, which are beneficial to decrease your workload. For more information about the ways that bookkeeping can reduce your stress and improve the results of your company, we invite you to contact our team any time. We are here to answer your questions and help with anything that you need: (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