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How to Give a Small Business a Refresh

This year has been a whirlwind year for small businesses. Many companies have had to completely redesign their business plans in order to survive during a pandemic and an economic crisis. Flexibility in small business is vital. What can you do to pivot your company to fit the current small business climate better?

Steps to Refresh Your Business

Consider a few options to give your business a refresh. You can take these steps to get started:

Brainstorm Ideas

Write it all down. Don’t leave anything out. Every idea that comes to mind that could remotely fit into your brand, add it to the list. This is no time to be critical but to let the ideas flow. Make a long list full of different things that you can do with your small business. The possibilities are endless.

Find Natural Extensions

Next, go through the list and find things that are going to naturally flow with your business plan. Do you have an art school that you could move lessons online? Do you own a boutique that may need to move to online sales during this time? Be creative with how to set yourself apart. Maybe your boutique can have 1-hour delivery options for loyal customers.

Another example, take a restaurant that rarely used takeout. During this time, they pivot entirely to takeout, changing their menus to better fit to-go meals. And then they go a step further. The pickup line is decked out in colorful drinks in beautiful display cases. Along their pickup line, they sell local jams and sauces, jewelry from a local artist, signs to decorate your home, and bring the atmosphere of your favorite restaurant with you.

This restaurant did more than move to takeout. They took it a step further as a love note to their customers. They also made an effort to support local small businesses that may also be suffering.

Think Digital

Have you been thinking you should probably move your business online anyway? Now is a better time than any. Small businesses everywhere have changed their formats to move online. A dance studio teaches all of their classes virtually. A bakery offers cooking classes on their Facebook page with a baking kit that can be picked up. A bookstore will offer a read-aloud in which you or your kids can listen in.

All of these ideas are perfect for the state that we’re in right now. The best part is, they will continue to be great for your business even as life eventually goes back to normal. The flexibility of online options will always be something that people want.

Try It Out

Depending on the idea, you can try out your plan on a small scale first to ensure it will work. If you need to invest some money into launching your new idea, be sure to break it down with your accountant and see where you have the flex room in your budget. Some ideas can have little consequence if they don’t work out. And then some are risky. If your business is struggling, it is definitely worth the try to save it.

Small Ways to Refresh

Even if your ideas aren’t big and company-changing, what are some things you could do to spruce up your business and give it a new purpose? You can do simple things to reach a new audience and have your current demographic see your small business in a new light.

  1. Revamp the Website: Now is as good of a time as any to redesign your website. Think about the extra time people spend on the internet. What is the purpose of your website? Does it have a good flow to get people to see your vision? Pick light colors that are welcoming and warm. Choose clean lines, being sure that it doesn’t look too busy. Add ongoing content to your website. Contemplate adding a blog where customers can engage and learn more about the company’s origin. Share your processes and open up about your business growth and new ideas that you want to test out. This will also serve as a way to bring new users to your website as continual new content with the right keywords will help get your company toward the top of a Google search.

 

  1. Build a Social Media Campaign: Whether you like it or not, social media platforms are the way to bring in new business. Think about the millions of users that use Facebook each day. If they are already there, then make the details of your company easily accessible to people. Build a Facebook page or Instagram account. Present a giveaway to get page awareness out there and show what you have to offer. Think about what you want out of a business when you are scrolling through Instagram. How many posts feel like too many that you want to hit unfollow? Find a happy medium with your amount of posts and mix in light and quick posts with thoughtful, wordier posts. Make sure you post a variety of pictures, some with an inside scoop of who you are as a small business owner.

 

  1. Make Your Business Image More Modern: Along the lines of redesigning your website, think about that on your social media pages and advertisements. Is your image modern? Are you following the trends and keeping up with changing times? If this isn’t your wheelhouse, consider taking on an image consultant for your business. You will be surprised how many people pass on by if the look of a small business doesn’t fit their aesthetic.

 

  1. Update All Pictures Representing Your Small Business: Are your pictures of high quality? Remember that you are representing your business in every picture you post on your website or to social media. Is the lighting natural and open? Are your images sharp? Do you have clutter in the background or old furniture? People can make snap judgments on how trustworthy a business is by finding clues in their pictures. Be sure you present professional photos on every platform, whether social media, flyers, advertisements, mailing lists or your website.

 

  1. Create Engaging Digital Content: The algorithm on social media platforms is calculated by how much the users interact with your account. The likes and comments, even how long they hover over your post before scrolling by, are taken into account. You want to create content where your customers stop and feel inspired. Maybe you can ask for their input by continually posting polls or “This or That” questions. Your customers will feel more valued if they know their opinion is important to you. If your business is very small, you can choose to highlight each customer periodically with their review of your service. Posting reviews is a powerful way to bring new business to your company. People always read reviews before trying out a new service or brand. By posting the reviews along with a small customer bio, they can see themselves in other customers and relate. You will create a community that people will want to come back and visit.

 

  1. Implement New Employee Training: Do your employees need a revitalization? Any job can get stale when you are focused on day-to-day mundanity. Inspire your employees with a fun training where they can invest in themselves by investing in your company. Help them to see the big picture. Maybe you can have a contest on who provides the best Covid-19 solution or improvement. You can play games and reinstate a company culture of positivity and encouragement. It is never too late to overhaul the atmosphere of your small business.

 

  1. Set Updated Goals for the Company: Every small business out there has been challenged through this pandemic. What are some short-term goals you can set for your business? Maybe it is something that will give you the motivation to make it through this challenging economic time. It could be something as small as making your company more takeout-friendly to meeting with an accountant and getting your books in order. You always want to be prepared for any obstacle that will come your way.

Start Fresh with Your Small Business

It’s important to stay inspired as a small business owner, no matter if your company is 200 years old or 2 years old. It is never too late to implement new ideas and to grow. Times are changing quickly, and the digital world has only been magnified more during these times, where many people are at home more. Social media and websites help people feel less isolated as they are social distancing from friends, family, and co-workers. Be the business that reaches out and helps people to be connected.

Contact Us Today

Are you ready for a refresh? First, be sure that your books are in order and seek advice about how much to invest in a new idea. Our team at Easier Accounting can answer any questions you might have. We want your small business to succeed. We want to help you find the way to take those next steps toward your business revitalization. Schedule an appointment today: (888) 620-0770.

Accounting Basics: The General Ledger

One of the most important components of accounting and bookkeeping for small businesses is the general ledger. Even if you aren’t handling the day-to-day responsibilities of your business, it’s important that you know what the general ledger is and how it works. This is the basis of good bookkeeping practices, helping you manage the financial picture for your company.

Types of Ledges in Bookkeeping and Accounting

A ledger is a book where a summary of all ledger accounts is maintained. Before the computer age, ledgers were literal books where business owners had hand-written entries of their transactions. Now, the digital business world mainly uses databases where the transactions are tracked and stored. It’s important for each business to have a place where they can group individual accounts. In addition to tracking the transaction amount, the ledgers also contain other important information such as how the payment is received, the date of the transaction, and anything else that applies to the purchase.

In bookkeeping and accounting, there are three types of ledgers used:

  1. Sales Ledger: This ledger is also sometimes known as a “debtor’s ledger” or “accounts receivable.” This is the place where all transactions are grouped where the customers received services or goods on credit. The sales ledger shows the total of all money owed by the customers to the business.
  2. Purchase Ledger: Next, you need a place to group the accounts related to sellers that you’ve purchased goods or services from using credit. This ledger summarizes the total money owed by your business to other businesses or sellers – also known as “accounts payable.”
  3. General Ledger: Finally, the general ledger is a single place that centralizes all the ledger accounts in a business. The general ledger includes both the sales ledger and the purchase ledger, as well as any other applicable subledgers, such as a private ledger or nominal ledger. All types of accounts within a business are included on the general ledger, including liabilities, assets, revenues, expenses, equity, and capital.

Having separate ledgers helps to reduce complicated aspects within bookkeeping and accounting. At the same time, it’s essential to have a centralized location where you can access all applicable information.

General Ledger History

The use of a general ledger has been around for a long time. Luca Pacioli was a Franciscan monk who is known as the father of accounting – he created the first known accounting text. Even though Pacioli has received much of the credit in the history of accounting, his practices were actually based on existing practices that trace back to Benedikt Kotruljevic.

In the 1400’s, Kotruljevic started using a double-entry accounting system. This method of double-entry uses multiple accounts with two columns: debit and credit. As a result, it’s possible to see an accurate view at all times, showing how each transaction affects the various accounts.

What You Need to Know about the General Ledger

If you want to know all the financial information about your business, then the general ledger is the place to look. It is the foundation or backbone of every reporting system. Any time you have a business account and subledgers, these transactions are reflected in the general ledger.

The data for each account is recorded when the transaction occurs, with points listed in chronological order. Not only is the data posted to the individual accounts, but it is also reflected in the general ledger. As a result, the general ledger always shows the history and most recent financial data for the business.

Information You Get from the General Ledger

What can you learn by looking at the general ledger? These transaction details can be valuable for a business owner to understand. Everything is summarized and compiled in one location, helping you access a variety of financial reports and other things that are applicable to your business.

Not only can you use this information as a business owner, but this information is also essential for business management, accounting, investors, analysts, and other stakeholders. Anyone who needs to see the company’s performance will be looking at information that comes from the general ledger.

One example of how the general ledger is used is if you see that costs and expenses are increasing during a certain time of the year. You can look at specific financial reports, as well as other information from the general ledger to see the whole story.

Additionally, it’s essential to identify certain accounting errors that can be located through the general ledger. Each transaction can be reviewed to find the source of the problem. Then, transactions can be updated and you can implement new systems to avoid the same errors again in the future.

 Benefits of a General Ledger

Even if you aren’t trained in bookkeeping and accounting, a general ledger system is always used in your software program. You don’t have to be aware of the general ledger to be gaining benefits from this part of your financial system.

Here are a few benefits that your general ledger adds to your business financial tracking:

  • Accurate Tracking: When you are looking at financial reports, you need to have the confidence in knowing that the reporting is accurate. The general ledger makes it easier to ensure accuracy in your reporting. Everything is entered in sub accounts first, making it simple for the accounting system to pull the balances across for reports that you might need. For example, if you run a profit and loss report, then this income statement pulls information from the general ledger. Maintaining a consistent bookkeeping system is essential to give you correct financial information at all times. Then, you can use these reports when you are making important financial decisions for your business.
  • Budgeting: Setting a budget is a step that helps you manage spending and look at future costs. Too often, businesses lean on incorrect information or fail to set a budget at all, resulting in unexpected expenses that can cut into profit margins. A general ledger is a great tool to identify trends and see where budgetary adjustments need to be made, helping to strengthen the financial health of the company.
  • Auditing: Whether you are conducting an internal audit, or you are going through an external audit, the general ledger is the focus of this inspection. Since the general ledger shows all business accounts, the auditor needs to be sure that everything is recorded and accurately classified. Reviewing general ledger information in an audit is an important step for identifying potential errors and improving the overall system.
  • Analysis: Can you find areas of opportunity to improve your spending and business activities? If you want to analyze trends and look for points that can be improved, then it all comes down to what is happening on the general ledger. In-depth financial analysis usually focuses on specific subledgers. But you can see the overall picture by looking at the trends that are happening on the general ledger.

Set Yourself Up for Business Success

Your accounting and bookkeeping system makes a significant difference in the success of your business in the future. If you are good at selling products, but you neglect your financial reports, then you are building the company on a weak foundation. It’s essential that you always have accurate financial information at all times, giving you a way to move forward in a productive, effective manner.

Even if the reports aren’t showing the profit margins that you want, this financial information is critical so you can implement the right systems to support your business. Looking at financial data regularly is key to empowering you in making correct decisions that lead your company to success in the future. When you know the numbers are accurate at any given time, then you can make decisions with confidence that you are choosing the right solutions for your business.

The only way to ensure that your general ledger is correct is by proactively updating your records regularly. It takes time and effort to stay consistent with the bookkeeping, but it’s an important process to keep you ahead of the ongoing transactions that move through your business.

Professional Accounting Services for Small Businesses

Often, the biggest barrier to an effective bookkeeping and accounting system is staying consistent with the ongoing tasks that need to be addressed. Not only do you need to stay current with the transactions, but you need to have a good system of checks and balances to identify potential errors or issues in the earliest stages.

As a business owner, you are juggling a lot of responsibilities throughout the day. You don’t have the time or expertise to dedicate your hours to bookkeeping and accounting. Instead, let the pros take care of your books so you can focus on other responsibilities in your business.

If you are looking for a pro accounting team that can help with your general ledger and more, then call us at Easier Accounting. We’d love to talk to you about the ways your business will benefit from the services we offer. Contact us to learn more about the individual services you can choose: (888) 620-0770.

9 Small Business Tips to Maintain Your Budget

If you’re like many individuals and business owners, the topic of budgeting makes you squirm. Budgeting can be a challenge for families and businesses alike, but the process of setting financial goals and sticking within the numbers is important. Not only do you need to identify your financial structure, but it’s also important to maintain your budget going forward.

Every Business Needs a Budget

Why does it matter if you set a budget for your small business? The financial picture looks rosy when the profits are rolling in, but then things quickly go downhill if revenue is affected for some reason. Budgeting can feel like a burden, especially if you are confined to tight numbers. But it is an absolute essential if you want to protect the future of your business.

Regardless of your opinion about budgeting, when you set and maintain a budget you are creating a foundation of financial security for the future. Creating and honoring your business budget means that you have guidelines for spending. When difficult decisions come related to cost and cash flow, you can look to the numbers to determine the right choices based on the current needs of your company.

Here are a few reasons why budgeting should not be optional for businesses:

  • Know Your Goals: When you are throwing a dart, you don’t toss it without having a clear idea of where you want it to land. The target has colors and marks to indicate the accuracy of the throw. In the same way, a budget acts as the target for your company, giving you short-term and long-term financial goals that you should be aiming for at all times.
  • Determine Your Priorities: Another reason you need to maintain your budget is to keep business priorities at the top of mind. Every decision you make should have a purpose or meaning, which is why it is important to evaluate priorities when determining the right way to move forward. Budgeting keeps you focused on “true north,” outlining the decisions that should be made – and eliminating potential issues along the way.
  • Team Effort: At the same time, budgeting keeps all team members on the same page. When managers and staff members know the spending limits in specific categories, then they will work to honor the boundaries. As a result, detailed planning can be used to manage the funds available for each category, helping to leverage ROI and increase the overall outcome of the spending.
  • Measuring Your Progress: You can’t determine the true measure of your business success without measuring where you came from and where you are now. In addition to implementing good bookkeeping and accounting practices in your ongoing systems, it’s also smart to have checkpoints throughout the year to measure progress along the way. For example, audits need to be done to evaluate cash flow while also checking monthly and quarterly spending.
  • Protecting Profits: Even if sales are high and you are bringing in a lot of money, it can be hard to hold onto the cash if your spending is high. Good business management needs to focus on both AR and AP. Budgeting ensures that you are always spending less than you are bringing in.

If you are having a hard time seeing the reasons why it is essential to maintain your budget, then talk to an accountant about your concerns. Any financial professional will tell you that budgeting is one of the most important aspects of protecting your business profits. Without a strategic budget, you are setting your company up for failure in the future. Even though designing a budget and sticking to it can be difficult, it is a necessary step as a business owner.

Tips to Maintain Your Budget

Here are a few things that every business owner needs to keep in mind when it comes to bookkeeping and budgeting:

  1. Know Where You are Starting: As hard as it can be to look at the current situation, it is essential that you know your starting point. How much money are you spending in various categories right now? What are your current cash flow requirements? Getting a clear picture of your current situation, then creating a plan to fix potential problems, is one of the most valuable things that you can do to protect your business interests in the future.
  2. Identify Your Goals: Now that you know your starting point, what are your goals? When you maintain a budget, there is room to set immediate goals and long-term goals as well. Having these targets creates motivation to help you stay on track, even when things get rocky. Sit down with your accountant to map out a plan so you have a clear idea about the goals you should be reaching for.
  3. Be Realistic with the Numbers: How many times have you attempted a new budget, only to find that it’s hard to maintain because you were overly optimistic about your goals? If you don’t have realistic numbers, then it is nearly impossible to maintain your budget. When it comes to accounting and bookkeeping, slow and steady wins the race. Look for incremental changes that can be made to stay on track without putting undue pressure on the business. It’s always best to stick with conservative projections for both your income and expenses.
  4. Be Flexible When Needed: Just because you’ve set a budget, doesn’t mean there is no room for adjustments in the future. Sometimes, needs arise that require a bit of flexibility. If you don’t build in a bit of wiggle room, then it could result in potential failure when hard times come in the future. One option to maintain your budget while keeping a bit of flexibility is by having an extra fund to cover the gaps. Leaving a certain amount unallocated will allow you to see where the money is needed as you move forward with your new plan.
  5. Break Spending into Cost Categories: Find the most applicable categories that should be included in your budget, then look for ways that you can streamline spending and transactions in these categories. Some of the costs are fixed (such as your rent or insurance premiums), while others are variable costs that might change based on the current pricing of material and labor. It’s a good idea to build in a bit of flexibility for the variable categories.
  6. Create Responsibility and Accountability: Creating the best budget on paper doesn’t mean a thing if your team isn’t willing to stick to the plan. Not only do you need to assign responsibility for managing the numbers and spending, but it is also essential to build in systems of accountability for the future. People often have good intentions in the beginning, but things start to change through the day-to-day activities and stressors that come up. A critical step for ensuring the success of your new budget is to make sure that all individuals are held accountable for their part in the plan. This process needs to be a top-down approach, with managers who hold their teams accountable.
  7. Access Professional Services: Even though you have great business ideas or have a good knack for marketing, it doesn’t mean that your business savvy gives you the necessary experience needed to maintain your budget. More often than not, business owners have no formal history or experience with accounting or bookkeeping, which means a DIY approach can be disastrous. Investing in an accounting and bookkeeping team can be one of the best decisions you will make to manage your cash flow and stay on track with budgeting.
  8. Ongoing Consistency and Systems: How do you plan to check in your budgeting progress in the future? It is important to invest in the right budgeting and accounting software programs. These plug-and-play solutions are proven to keep the numbers organized, so you can stay on track with everything that is going on. But you need to be committed to creating the systems that will work best for your company – then maintain the consistency required for everything that is happening from one week to the next. When it comes to budgeting, accounting, and bookkeeping, the reports don’t mean anything if you don’t maintain consistency.
  9. Assess Ongoing Needs: Smart business owners reassess their budgets regularly. While the budgeting system can be a set-it-and-forget-it approach for a short time, it’s important to check in to determine how the systems are working. Often, a range of variables are impacting your spending and cash flow, so regular check-ins ensure that you are staying on track as things are shifting. Ideally, revisit the budget monthly to see where things are going well, and where you can identify areas of improvement.

Are you looking for ways to improve your current budget? Or do you need to start at the beginning to create a new budget for your business? One important aspect to maintain your budget is to ensure that you have a trusted accounting team to assist. For more information, talk to our experienced team at Easier Accounting. Call for a discussion about your business needs: (888) 620-0770.

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.

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.

The Pros and Cons of Small Business Loans

Cashflow can be a challenging detail to manage in your business, which is why it can be helpful to have credit cards and/or a line of credit available to get you through the lean months. The way you structure the credit should depend on the needs of your company and the financing options that are available. For example, small business loans might work for some people, but others prefer to use credit cards.

Small Business Loans: Getting Started and Business Growth

There are two points when a small business loan can be quite valuable to your business:

  • Getting Started: When you are trying to get the company off the ground, cash is needed to help you get things rolling. Some people have personal funds that are put into the business, but this money will only get you so far. Not only do you need money for marketing, website design, inventory, and more, but you need to be sure there is enough cash to keep you going in the beginning. Small business loans can be used upfront so that you can get your company launched. The bank that provides the loan will use your personal credit score and reputation in determining the amount of money that is available and the terms of the loan.
  • Future Growth: If you have an established business, you might face cashflow issues when it is time to grow. Expansion requires money, which can make it a tricky situation to navigate if you don’t have the cash in the bank. Future growth is much easier if you have a loan to tap into for the funds that are needed. This money can be used for business development, marketing, inventory expansion, and more.

Sometimes, the loan is structured as a set dollar amount that is paid to your business, and then you can use the money as you see fit. Another common option is to use a small business line of credit. This solution works similar to a credit card with a balance that can go up and down over time. The difference is that cash is available to ensure that you have the money when it’s needed.

What Do Lenders Want?

Small business loans aren’t automatically handed out to every person who has a business idea. When you talk to the bank, they will determine the risk of the loan and how much money will be available. The goal is to ensure that you will be able to pay the loan back in full. So, the lenders will be looking for a few key points to ensure that you are a safe and reliable customer.

Since the primary concern of the lender is that the loan is paid back in full, they are going to look at your personal credit history and track record. If you want to qualify for a business loan, then it is helpful to have a good personal credit score to show that you have a track record of paying back the money.

Additionally, the bank will ask for your business plan and other details about your company. You might need to show how the money will be coming in from customers, and potential details that you should anticipate in the future.

Each lender will set the terms of the loan based on your risk and qualifications, which means that there are various possibilities for interest rates, loan caps, and repayment schedules. If you are a high-risk borrower, then it is likely that you will have a high interest rate and a lower amount for the loan. One option is to shop around with various banks and credit unions to find the best terms that you can qualify for.

Also, don’t feel disheartened if one lender rejects your application. If you receive a rejection, then talk to the lender to learn why the loan wasn’t approved. This information can be valuable so you can change your future applications to increase the likelihood that you will be approved. Some lenders will let you reapply after the concern has been fixed. Or, you can use the feedback to improve your application with other lenders.

Paperwork to Provide with Your Business Loan Application

What are the specific requirements that will be requested by your lender? You need to be prepared with paperwork and other information when you are completing the loan application. These are some of the most common requirements that lenders might request:

  • Purpose of the loan
  • Desired amount for the loan
  • Personal credit score
  • Business credit score
  • Business plan
  • Time in business
  • Type of entity
  • Industry
  • Business permits and licenses
  • Bank statements
  • Accounting reports
  • Tax returns (both personal and business returns)
  • Rent or lease agreements
  • Business ownership information
  • Disclosure of current debt
  • Proof of collateral
  • Legal agreements or contracts currently in place

The best thing you can do is put yourself in the lender’s shoes. What are they looking for? How can you show that you are a reliable borrower? The more information you provide, the better you can show that you are a great customer for their lending business.

Pros and Cons of Small Business Loans

Is a small business loan the right solution for your situation? Here are a few pros and cons to help you decide if you should move forward with the loan:

  • Pro – Additional Capital: What could you do if you had access to additional capital for your business? This financing can be essential to help you stay afloat during the lean months and build your business when things are going well. Many business owners have trouble with cash flow, which is why a loan or line of credit can be essential in the hard times. The money can be used for business costs as needed.
  • Con – Interest Accrual: Whenever you are borrowing money, it is going to cost you in the form of interest expenses. The lender is offering the money with the purpose of making a profit on the deal. Interest expenses aren’t always a bad thing if you can leverage the cash to help your business grow. But if you aren’t careful with money management, then these interest costs could start eating into your profit margins.
  • Pro – Cashflow Management: It is common for small businesses to have ups and downs. For example, companies in the retail business refer to “Black Friday” as the turning point of the year when the real profits start to flow. Then, sales often start to slow down in January. If you are worried about cash flow management in the future, then a business loan can give you the peace of mind for those difficult months.
  • Con – Money Management: Just because money is available through your small business loan, don’t let that be a reason that you make poor money management decisions. Some business owners find that they are more risky with their money because they have a credit line to tap into. If you put your cash into a questionable business investment that falls through, then you might find yourself between a rock and a hard place when you can’t get access to the cash that is needed for paying the bills.
  • Pro – Build Business Credit: Did you know that your business can build a credit history, just like your personal credit score? Borrowing money through your business can help you establish a reputation that opens up options for more loans in the future when needed. Even if you don’t need access to the cash right now, it is smart to build your business credit so you are ready with the money when things get lean during your slower months.

Can You Get a Loan if You Have Bad Credit?

Just because you have no credit history or a bad credit score, it doesn’t mean that you won’t be able to qualify for a loan. But it might be necessary to offer collateral – giving the bank something to fall back on if you miss the payments.

Collateral can be offered in the form of property. For example, if you own an office building and hold equity because the mortgage has been paid down, then the building could be offered as collateral. You need to know the consequence if the loan isn’t repaid. Often, the lender will place a lien on the building, so the repayment will occur when the building is sold in the future.

Also, consider alternative lenders if you can’t get a loan through the bank. Sometimes, angel investors are willing to put up the money for a share in the business profits. Connect into some of the business networking groups in your area to see if you can find people who are interested in investing.

Manage Your Business Finances

Staying ahead of your financial tracking and management is key to protect your cash flow and help you position for a small business loan if needed. When you have accurate bookkeeping and accounting records, it shows the bank that you are responsible with your money, which increases the likelihood that they will be willing to lend the cash to you.

Our team at Easier Accounting is here to help with your financial management. If you are interested in learning more about the bookkeeping and accounting services that are offered, then you are invited to contact us today: (888) 620-0770.

Accurate Financial Records Will Impact the Value of Your Company

Are you consistent with maintaining accurate financial records for your business? Many business owners are so caught up in the challenges of keeping the company running that they overlook the essential steps of financial management and tracking. It is easy to get distracted by employee management, cash flow concerns, and product development. If your attention is turned to other business priorities, then your financial records might fall to the backburner.

The truth is that we can’t place enough emphasis on the importance of business financial records. These numbers show the story of your business success and weak points. Having the right financial information available will implement the strategies that are important for your company, as well as the decisions that are made going forward. Your financial records can literally show whether your company will be increasing or decreasing in value.

Here are a few ways that your financial tracking and reporting can have a positive influence on the value of your company:

Transparency for Better Decisions

When you are making decisions about how money will be reinvested in the company, it can be a challenge to make the correct decision if you don’t have accurate information. It is essential that you maintain transparency in your financials so that your decisions will align with the reality of what is happening in your company.

You can look at reports to see the revenue that was earned over a period of time. Keep in mind that this information is only a piece of the puzzle. You should also evaluate the actual cash on hand, as well as expenses or anticipated costs that will affect your cash flow.

If anything is reported inaccurately, then it can have a domino effect on the success of your company. At the same time, these problems are easy to avoid if you implement the right system for tracking and auditing. A good accounting and bookkeeping team can help you understand the performance of your business so you can implement the strategies that will change your trajectory for the future.

How Much are You Paying in Taxes?

Tax liabilities are directly tied to the accuracy in your financial situations. As a corporation or small business owner, your tax liabilities can be high, which has a negative impact on your cash flow and profitability. How much money will you have left after paying the government? Accurate financial records will give you a clear picture so you know the funds that will be available for future business costs.

Strategies can be used to reduce your tax burden. An experienced accountant will be able to offer advice regarding the write-offs and deductions that fall within the acceptable lines for the IRS. Not only do you need to create a clear, accurate picture for the IRS. But you also need to be consistent about your financial tracking so you can back up the numbers if there are ever questions about the transactions that are moving through your company.

Reducing your tax burden comes down to the way you are managing your expenses and claiming these write-offs. Even the smallest details might seem trivial, but they can add up over time. Make sure you are recording every dollar that is spent on business expenses so this information can be used when calculating your tax burden for the year.

Good Financial Records Reduce Errors

How often have financial errors slipped through your business, causing you to lose money? If you don’t have a good system in place, then it is hard to determine where you have lost out on money that should have been collected. Your financial systems should be designed with checks-and-balances in place so you can identify any potential transactions or invoices that were overlooked.

For example, many accounting services offer monthly reconciliations. Not only does the accounting team keep up with the daily and weekly transactions, but an internal auditing system is used each month to make sure all of the accounts line up.

If a discrepancy is identified in the services that were rendered and the money that was collected, then it is a good indication that you need to turn your attention to collections on the outstanding invoices. Bringing in more money will ensure you are protecting the overall value of your company by protecting your profit margins.

Plus, the right financial system is essential to identify any potential risks for fraud. Even though you want to trust your employees and management, there is never a guarantee that illegal activity won’t happen in your office. Keeping accurate, detailed financial records will help you catch mistakes in the early stages before they turn into something that brings down your company. It is essential that you have the right system in place to identify internal wrongdoings so you can avoid major issues in the future.

Optimize Payment Trends for AP/AR

Pay attention to the cash flow trends to see if you find a cycle of cash flow issues that pop up throughout the year. If you find there is a trend or theme in the times that you are facing challenges with managing your cash flow, then it might be time to make some tweaks with your Accounts Receivable and Accounts Payable systems.

But you need to take a step back to ensure that you have accuracy in your financial statements. Inaccurate invoices can make it difficult to understand the clear picture regarding money that is flowing in and out of your business. You need to be sure you have correct information about the anticipated money that will be flowing into your company. At the same time, these financial records can help you be prepared for expenses that are coming up: wages, dividends, taxes, business development, rent, utilities, credit payments, and more.

Poorly kept financial records will make it almost impossible to keep up with these obligations because you don’t know when the payments are due. As a result, you might face late fees and interest charges, which can have a domino effect to make it even harder to keep up with your cash flow. Running proper calculations and implementing a good cash flow system is essential to help you avoid the credit issues that could be the downfall of your business in the future.

Financial Information Ensures Quality Decisions

What it all comes down to is one simple concept: you need to be sure you are making the right decisions to support the needs of your company. These decisions can influence the possibilities for your company in the future. When a business owner is always making decisions reactively, it means they are scraping enough money together to pay the immediate bills. It is a struggle to look to the future and plan for possibilities if you can’t keep up with the current requirements.

On the other hand, the right strategy for your financial records can help you evaluate the reality of the numbers for your company. You can find the areas where the business needs a little more attention. This process is a great way to fill in the gaps where you are losing money or missing out on profit potential.

Don’t underestimate how much your financials will affect all other aspects of your company. When the finances are unorganized, then it creates a huge mess that can be hard to turn around in the future. Instead of waiting for the problems to surface, you need to be proactive with implementing the right systems right now to be sure you are prepared for the future.

Choosing the Right Services to Improve Your Finances

Now that you can see the importance of improving your financial records so you can protect the value of your company, you might be wondering where you need to start to turn things around. If you don’t have accounting or bookkeeping experience, then it means you need to look to someone who understands this aspect of your business.

You have the option to hire an employee, but you will need to bear the burden of their salary and overhead costs. Instead, the smart solution is to find an outsourced accounting service that can help you build the right foundation. Our team is here to assist with the implementation of good accounting software, giving you a strong financial base that will support the future growth of your company.

Not only can we assist with the process of setting up the right system for your company, but we are also here to offer the ongoing support that you need. These services encompass everything from tax strategy to payroll management. When you let our team take care of the financial tracking and strategy, then you can turn your attention to other responsibilities that will help with the growth of your company.

Easier Accounting is just a phone call away. When you are ready to improve your business financial systems, then we invite you to call us for information about the services that are offered: (888) 620-0770

What You Need to Know about Accounting and Tax Preparation for Start-Ups

Starting a business means that you are juggling many tasks and responsibilities: setting up bank accounts, creating accounting systems, designing a website, building out customer service platforms, tax preparation strategies, business development, and more. Even though it is a lot of work to launch the business, it is worth the efforts because of the long-term benefits you will enjoy.

The truth is that the solid foundation created right now will have a lasting effect on the success of your company. In the beginning stages, it might be tempting to skip a few steps and rationalize that you will work on those systems or processes after the business is up and running. But you could be hindering growth and opportunities by procrastinating the most important aspects that affect the financial health of your company.

The best thing you can do is get it right the first time. Commit to putting in the time and effort to creating systems that are built to last. A few months or years down the road you will be grateful that you didn’t skip these important elements.

Today, we are going to focus on tax preparation and strategy for small businesses. This topic is one that is often procrastinated. Since tax season only rolls around once a year, it’s easy to assume that you can wait until April to work on taxes. It’s time to change your mindset on this topic. Implementing a good tax strategy right now will save an incredible amount of money due to the decreased tax burden. Plus, you will have the processes in place to support bigger tax responsibilities that will come in the future when your business expands.

Tax Preparation Can Feel Like a Chore

Most small business owners will agree that taxes can feel like a chore. Do you get a headache just thinking about the stacks of paperwork and accounting calculations that need to be done? Not only do you need to crunch the numbers, but you also need to stay current with the latest changes in tax laws and other applicable industry regulations.

It is common to feel stressed or worried about the requirements that need to be met for tax preparation. As a small business owner, you don’t need to carry this responsibility without support. You are already focused on product development, marketing, and more. Instead of spending your free time with your head buried in numbers, it makes sense to outsource these services to the pros. A good accounting team is key to help you develop the right tax strategy and transform the results that are available in the future.

Your accounting team will make start-up and small business taxes transparent and clear. Tax preparation doesn’t have to be difficult when you are working with the right team. You’ll find that our staff at Easier Accounting understands the best practices for every industry, helping to take the stress out of tax time. We’ve worked with many small businesses over the years, giving us the hands-on experience to know the optimal way to structure your tax preparation, paperwork, and filing.

Assessing your Current Situation

If you are going to improve your tax strategy, it is important first to assess your current situation. Are you preparing to launch a new company? Are you structured as a sole proprietorship? Did you form a corporation for your business efforts? Do you have a partnership that needs to be included?

These details might seem simple, but they will impact the way the tax strategy is designed. It is essential that you offer as much information as possible to your accounting team, ensuring that nothing is overlooked in your tax preparation.

Basic Steps for Tax Preparation

Whether you are just getting started with your business efforts or you are looking for ways to improve the financial health of your existing company, there are a few basic steps that should always be followed for tax preparation:

  1. Choose a Tax Preparation Provider: The best solution is to choose an accounting team that will work with your company throughout the year. You can find financial experts that offer one-time tax services. But these short-term services don’t create a long-term mindset that is necessary to maximize tax strategy. Pick an accounting team, such as Easier Accounting, that offers ongoing support to ensure your company is on track during every season of the year.
  2. Gather Records and Information: Maintaining documentation of all transactions that move through your company is essential so that you can track every penny that is earned and spent for business purposes. Exact records vary depending on the type of company that you are running. Examples of income records include sales transactions, gross receipts, allowances, cost of sold goods, tax refunds or credits, interest earned from bank accounts, and more. Expense information should include costs for vehicles, marketing, employee payroll, contract labor, office expenses, utilities and rent, maintenance and repairs, depletion, professional services, insurance, inventory purchases, fees and commissions, and anything else that required you to spend money for business purposes.
  3. Organizing the System: It can be a hassle to sort through a year’s worth of receipts when it is time to do your taxes each spring. Instead of spending hours on the paperwork once a year, it is better to have a proven system in place that makes it easy to track and categorize expenses throughout the year. When these transactions are organized and managed on an ongoing basis, then you can simply run a report that shows the information that is necessary for tax preparation.
  4. Filling Out Tax Paperwork: The IRS has paperwork for everything, so you need to make sure that you are filling out the right forms that apply to your company. Most companies don’t need to use the majority of the forms that are out there. Depending on the structure of your company, you may need Form 1040, Form 1040-ES, Form W-2 and W-3 for employees, Form 1099 for contractors, Form 941, Form 943, Form 944, Form 1120S, Form 1065, and more. Do you feel like your head is spinning just reading through all of those options? You don’t need to get into the fine print to figure out which forms apply to your situation. Instead, lean on the knowledge offered by your accounting team. Not only will your accountant provide guidelines regarding the forms that are required for tax preparation. But your accounting team can also handle the information that is entered on these forms.
  5. Submitting Tax Forms: Now that all of the work has gone into the information needed for income and expense categorization and filling out the applicable tax forms, it’s time to submit the paperwork. These submissions need to be sent to the IRS. Additionally, there are deadlines to send specific tax forms to employees and contractors each year. Not only are you responsible for annual tax filings, but other deadlines need to be met throughout the year for employment taxes, estimated tax payments, and more. Your accountant can help you keep track of these deadlines and oversee submission through an e-filing process. The documents can be filed on printed paper as well, although the e-filing is becoming more popular due to the immediacy of the filing results.

Using a Professional for Small Business Tax Services

One of the biggest mistakes you can make is attempting a DIY tax filing when you don’t know much about accounting processes for the IRS paperwork. If you want to set your company up for success, then you need to be sure that you are working with a small business accountant who will oversee every step of this process.

Certified tax preparers help by working through the calculations and information needed for the paperwork. Additionally, your accountant will ensure that the paperwork is filed with the IRS before the deadline.

Keep in mind that scammers try to take advantage of unknowing individuals and small businesses owners. Make sure that you choose a reputable accounting company. Your tax preparer should have a preparer tax identification number (PTIN) that is issued by the IRS. Always research the accounting company before handing over sensitive financial information and business details.

Quality Tax Preparation Services for Your Business

You deserve quality tax preparation services, including ongoing accounting support throughout the year. If you are searching for the right services for your small business, then we invite you to talk to our experienced team at Easier Accounting. We understand the best systems for tax strategy and preparation, and our team is just a phone call away.

Choosing our team means that you have access to a group of knowledgeable tax accountants that will offer personalized recommendations to improve the results for your company. Our goal is to streamline your financial systems while reducing the tax burden and improving overall results for your company. For details about the services that are available, you are invited to contact us at Easier Accounting. We’re just a phone call away: (888) 620-0770.