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Commercial Lending: Everything You Need to Know about Business Loans

Most people agree that it is easy to get a credit card or personal loan. The consumer culture in our nation has created an environment where financing for everything from a shopping spree to real estate is easily accessible for the majority of the population. Consumer debt is rising and it is common for people to feel that debt is a normal part of living. Even though personal loans are easy to come by, it might be a bit tricky if you are looking at options for commercial lending.

There’s no question that you need to manage the cash flow for your company. As a business owner, it can be a challenge to ensure that the money is available at the right times throughout the year. If you are struggling with cash flow right now, then you might be looking at options for a business loan to help you get through a dry spell.

How Will You Use a Business Loan?

What are the reasons why you should consider a business loan? Commercial lending can be beneficial for a variety of expenses:

  • Buying a real estate property for office space
  • Investing in more inventory of the upcoming busy season
  • Purchasing equipment that is necessary for the office or storeroom
  • Preparing for the future in case the cash is needed unexpectedly
  • Construction or remodeling costs
  • Business acquisition
  • Start-up expenses for a new company

These loans can be of various sizes, depending on the needs of your company. If you find that you need a business loan, then it is essential that you choose a reputable lender and understand the financing terms before jumping into the agreement. A poor choice with your business loan could cause financial stress and strain on your company in the future.

Don’t Wait for Commercial Lending

It is common for business owners to hold off on commercial loans until they are in a critical time when the cash flow is needed. But there’s no reason to wait for the application! Cash flow ebbs and flows depending on the season and economic changes, so you need to be sure that you have the money available before you reach a critical situation.

The timeframe for commercial lending takes a little longer compared to personal loans. Additionally, you need to have a good financial profile to be approved for the loan. For example, if your business is already burdened with debt, then it might be difficult to get approval on your applications. Instead, apply for the financing when your business is in good financial health so that the credit is available in the future when it is needed.

The right financing can be the saving grace that serves your business needs in the future. It is important that you are working with a great accountant every step of the way, so there are no surprises with cash flow, future costs, and more.

A Few Things You Need to Understand about Business Loans

The best thing that you can do is learn about your options so that you can get the financing that is needed. A little bit of information can go a long way to help you avoid common problems that might arise with financing. Here are a few things that you should keep in mind:

  • Time Frame: It usually takes a little longer to receive approval for a business loan. Even though most consumers can be approved for a credit card or line of credit on-the-spot, the business loan application process is a little more involved. Be prepared so that you have plenty of time to prepare for future financing needs. Sometimes, commercial lending can take as long as 60 to 90 days until the loan is closed and the money is available. The complexity and timeframe vary depending on the type of loan that you are getting.
  • Complicated Application: This application process is a bit more complicated than filling out some paperwork and waiting for approval. Be ready for an extensive screening and piles of documentation that might be required. Common paperwork requests include several years of tax returns, AR/AP reports, financial statements, and documentation for collateral that will be offered. You might also need to show a business plan so that the lender can understand how the money will be used for business needs.
  • Payback Ability: As with all types of financing, the lender wants to see that your company will have the ability to pay back the money that is provided. Your lender will be evaluating your cash flow to determine how you will be able to handle the required payments. The Debt Service Coverage Ratio (DSCR) will be evaluated, which looks at the operating income of the company as well as the current and anticipated debt obligations that need to be paid in the future.
  • Financing Fees: Anytime commercial lending is offered, you can expect that fees will need to be paid. Ask about the fees that need to be covered up front, or if these costs will be bundled into the loan. Understanding the fee structure will help you know the amount of money that you are spending for the financing that is offered. Don’t forget to ask about pre-payment penalties in case you decide to pay off the loan early.
  • Collateral Requirements: When you are getting a personal credit card, there isn’t usually a need to offer collateral. But, the lender often requires collateral for bigger business loans. If you are providing collateral and the applicable documentation, it is common for the lender to require that the loan is 80% of the value of the collateral. So, you will need to come up with 20% cash before you can be approved for the financing. Banks calculate this Loan to Value (LTV) to minimize risk in case you default on the loan.
  • Structure of the Loan: The timeframe and payment requirements vary depending on the type of loan that is acquired. It is important that you understand your options and compare the payment details before settling on financing for your company. For example, some loans are less than 5 years and have an aggressive payment schedule. Other loans can be spread out over 20 or 25 years if needed. Additionally, you should look at options for fixed or revolving loans based on the way the money will be used.

Types of Business Loans

What type of financing is needed for your business requirements? These are a few options that you might consider:

  • Line of Credit: Small businesses often obtain a line of credit so that funds are available on an as-needed basis. Usually, there is a cap on these funds. This type of loan can be an excellent solution for managing unexpected costs and ongoing cash flow.
  • Working Capital Loan: Sometimes daily operations need to be financed, and you might consider this type of loan for these anticipated costs. These loans are ideal when you need to manage the fluctuations that occur due to seasonal changes or other variables that affect your cash flow throughout the year. This type of loan is usually unsecured.
  • Small Business Loan: Whether you are getting a start-up off the ground or you are looking at options to expand, a small business loan might be the right solution. The structure of the loan will vary depending on the lender, and might be secured or unsecured. Interest also varies depending on the terms of the loan.
  • Small Business Administration Loans: If you are searching for a low-interest loan, then don’t overlook the benefits of a Small Business Administration (SBA) loan. The SBA guarantees the amount, making it possible for the lender to offer the most favorable terms when it comes to interest rates and repayment schedules. These loans are usually between $30,000 and $5 million.
  • Accounts Receivable Financing: This money is available based on the amount of Accounts Receivables on your books. When your customers send payments, then that money goes to pay down the AR line.
  • Business Credit Cards: Sometimes the simplest solution to qualify for a loan is by getting a business credit card. But, you need to use this strategy as a short-term solution because the credit cards usually have high interest rates and can pose a liability to your company. If you are going to spend money on a small business credit card, then look for perks like cash back or 0% interest for 6 to 9 months. These bonuses will help to offset the cost of the card.

Do you have questions about your business cash flow or financing options? At Easier Accounting, we’re here to help you create the right financial strategy for your company. If you are considering commercial lending, then we can help you with the reporting and documentation that is needed so that you can qualify for the financing that is required.

Our team specializes in ongoing services for small business accounting and bookkeeping. Easier Accounting is a leader in the industry and offers flexible packages to accommodate the needs of every company. Call today to see how we can help with your business efforts: (888) 620-0770

Ready for Black Friday? Tips to Boost Small Business Sales

If you are in the retail industry, then the holiday season is the perfect time of year to boost your sales and optimize profits for the year. Shoppers have a buying mentality right now as they are searching for gifts to share with friends and family this holiday season.

Often, businesses take advantage of Black Friday and Cyber Monday as a way to lure in more shoppers with time-sensitive bargains. Whether you have a brick-and-mortar store or your business is run online, this time of year shouldn’t be overlooked. Right now is when you need to start the preparations to be sure that you are ready for the influx of sales that will come from interested customers.

Keep in mind that you don’t have to sell physical products to take advantage of Black Friday shopping. Shoppers are looking for all types of bargains, which means that it might be a great time to offer discounts or packages for your business if you provide services or digital products.

Think Outside the Box to Catch People’s Attention

While Black Friday can be hectic and busy, your company doesn’t have to get caught up in the noise of the holiday shopping season. Instead, look for ways to make your offerings stand out from the competition. Here are a few options to help you think outside the box so that you can set your company apart from the rest in the industry:

  • Don’t Fight the Early Morning Rush: As a small business, you shouldn’t be trying to compete with the big-box stores by starting your sales before the sun comes up. Most shoppers will head to the big-box stores in the wee hours of the morning (or even on Thanksgiving evening). You can bring in more interested shoppers by starting your sales later in the day. Everyone will be done with the crazy morning rush and ready to move onto your special promotions by noon. Communicate your sales hours in advance so that your customers can arrange their shopping schedule to match. You might be surprised to see how many people are happy to know that they don’t have to set an early-morning alarm to access your Black Friday sales.
  • Longer Holiday Hours: Regardless of the time that your store opens in the morning, consider extending evening shopping hours. Some people like to head out for holiday shopping after spending the day with family. So, extended evening hours could bring in more shoppers that wouldn’t have visited your business otherwise.
  • Encourage Gift Card Sales: How often do customers walk out of the store empty-handed because they were unsure about the right gifts to purchase? Instead of letting your customers get stuck in analysis-paralysis, offer a simple solution: gift cards. It has been found that gift card sales always go up during this time of year. You need to be sure that you have gift card options available and on prominent display when customers walk through the doors for the Black Friday sales.
  • Start a Marketing Campaign Right Now: Why should customers choose your products or services over other options that are available? Start a marketing campaign right now to show the reasons why you are the go-to resource for holiday shopping. In this campaign, highlight the reasons why your business is better than the competition. For example, do you have handmade items, locally-sourced products, or limited-edition options that are hard to find? These hooks are often more effective than the race-to-the-bottom with discount prices.
  • Don’t Offer Unsustainable Pricing: Be strategic with the way the holiday sales are structured. The goal should be to increase conversions. But, don’t boost sales at the risk of harming your profit margins. While it is important to offer deals to bring people in the doors, you should be strategic with the structure of the sales so that you don’t take a hit. The most effective way to ensure that your profit margins are still built-in is by offering product bundles or quantity discounts. Or, offer deep discounts on old inventory that needs to be moved.
  • Bonus Services: What is an extra service that could be offered to bring people in the door? For example, you might go the extra mile by offering free gift wrapping on Black Friday or passing out balloons for children. Or, have stocking stuffers that are complimentary for purchases over a certain amount. Consider the extra services that your customers would value. Don’t forget to share these details in your marketing messages that are shared via email and social media.
  • Schedule an Event: Plan Black Friday to be a day when there is a party in your store. Offer snacks or drinks, play fun holiday music or bring Santa Clause into your store. Send out an email and share these happenings on social media so that your customers know what to expect when they visit your store.
  • Incentives for Social Media: If you are trying to boost social media engagement, then let your customers help with the difficult work. You can share great content on social media to highlight the Black Friday sales that are available. Another option is to add an incentive for customers who share on social media. For example, a share on Facebook gives the customer access to a special discount on the products they are buying. Always include the popular hashtag #blackfriday and a hashtag that is unique to your company.
  • Product Bundles: Gift bags or baskets are always a great solution when people are looking for fun, creative gift ideas. Instead of selling items individually, look for logical ways to package your products. This strategy is an effective way to upsell people to a higher price point. Plus, people love the gifts that are ready to go without additional work. If you don’t have pre-designed packages, consider offering a discount when customers choose three items that are related.

Step Up Your Digital Presence

Promoting your Black Friday sales on social media is a good way to share information online. But, more and more customers are turning to online shopping options. People love the idea of completing their shopping lists without leaving the comfort of home.

As a small business, you can take advantage of Cyber Monday and/or Small Business Saturday. If you don’t have online shopping options available, then right now might be the perfect time to expand your offerings to include e-commerce sales so that you can capture a larger portion of the market.

Offer coupons that are exclusive to Cyber Monday or Small Business Saturday. Or, you could also capture the people who procrastinated their Black Friday shopping by offering sales that are available through the first few weeks of December.

Administrative Prep for the Holiday Season

You might be busy stocking the shelves and working on holiday marketing and promotions. But, don’t overlook the importance of keeping up with the necessary tasks that need to happen behind-the-scenes for your business. For example, right now is an excellent time to get caught up on bookkeeping and accounting if you have been slacking on these tasks.

Procrastinating the financial reporting, auditing, and other business paperwork that needs to be handled means that these essential items will just build up through the holiday season. There’s nothing worse than reaching the end of the year to discover that you have a huge task list of unfinished business that should have been addressed for your company.

Make sure that your payment processing system is ready for the increase in sales. Upgrade accounting and bookkeeping software so that you don’t run into glitches during the busiest time of year. Assess inventory and redirect cash flow if needed so that you have plenty of product to offer when customers are ready to buy. Evaluate the employee schedule so that you have plenty of help available during the busiest times of the season. These small details will go a long way to help you increase sales, improve customer experience, and optimize the results that are available for your company.

Outsourcing the Services that are Needed

A little bit of work right now will ensure that you aren’t overly stressed as you reach the end of the year. If you don’t have the time or desire to work on these tasks by yourself, then it is the perfect time to bring in an industry expert for assistance.

For example, an accounting team can get your books in order so that you are ready to close out 2018 and start 2019 on the right foot. It is important that you have a good financial system in place so that the growth of your company isn’t hindered by the work that needs to happen behind the scenes. Professional accounting services are essential to assist with tax strategy, cash flow, and more.

Easier Accounting is here to assist with your small business efforts. If you need financial advice or you are looking to implement an improved financial strategy for your company, then we invite you to call to learn more about the services that are available: (888) 620-0770

Profit Before Taxes: What it Means for Your Small Business

Now that you’ve started a small business, are you keeping up with the numbers that shed light on the profitability of your company? Not only do you need to evaluate cash flow, but it is also important to look at the reports that show the overall health of the company. Understanding the bigger picture is essential so that you can adjust your business strategy. That’s why you need to prioritize your understanding of profit before taxes.

It is exciting to work on product development and tasks that have a direct impact on business growth. On the other hand, it is common for business owners to feel like financial reporting and tax strategy is boring. But, it is essential to understand the importance of these tasks and how they will affect the future success of your company.

If you want long-term success for your business efforts, then you shouldn’t overlook the reports and numbers. Luckily, you don’t need to manage these details without support. Tap into the experience of an experienced accounting team to learn more about your options and the services that are available.

What is Profit Before Taxes?

What does it mean when your accountant is talking about profit before taxes? This term, sometimes referred to as Earnings Before Taxes (EBT), refers to the amount of money that is brought in by your company before paying for taxes and interest payments.

Even though this number doesn’t include tax burden and debt payoff, it does incorporate the overall business expenses that are used as write-offs. For example, there are many costs that are accrued throughout the year for overhead expenses, product development, marketing, and more. These costs are deducted from the money that is brought in. Then, taxes and reports are calculated based on the gross profit that is calculated.

The profit number can be found in your Profit and Loss statement. Or, you can talk to your accountant for a detailed explanation about how the number was calculated.

Why You Need This Information

Why is it necessary to know your earnings before taxes? Having a clear picture of the financial success of your company is essential so that you can make the right decisions that impact the growth of your company. Not only is your profit before taxes number needed for tax calculations, but these details might also be necessary when you are bringing on investors or applying for business credit.

Investment analysts will request specific information about the financial trends for the company. These details can help the analysts determine the operating performance of the business and possible financial trends going forward. If you can show the potential of your business, then it makes it easier to get the angel investing funds that might be needed to help your company grow.

This type of analysis is essential at specific points of your business progression. Often, the numbers are used to gain an objective analysis for the current trends and possible growth in the future. Additionally, your accountant will use these details when evaluating the tax burden that needs to be paid in a given year.

Applying for Business Credit

There are often times when business owners need credit to keep the company running. If you are applying for credit, then the lender will complete a credit risk analysis. The lender wants to ensure that your business will have the viability to pay back the loaned amount in the future.

Additionally, the financial health of your company might impact the interest rate that is offered for the loan. If the lender can see that your business is a good risk for the investment, then it is easier to get a low interest rate. But, if your company is already bursting at the seams with debt and financial obligations, then the lender will see the risk and probably increase the interest rate accordingly.

Financial institutions want to see that you can repay your obligations without harming your business or operating profits. When the cash flow is too tight, as shown in the financial reports, then it is a sign that the loans might default in the future.

Problems with Your Business Profits?

You might feel the pinch of cashflow as you are working through the month. But, it is hard to understand the full picture without looking at the financial reports. If you are dealing with low profit margins, then your business could be facing some serious consequences:

  • Growth is Limited: It is hard to encourage growth in your company if you don’t have the cashflow to keep things afloat. This poor cash position means that you are lacking in the money that is needed to reinvest into the company. If the profits are low and you don’t have the cash available, then how will you reinvest for inventory replacement and product development? These problems could be the nail in the coffin that prevents you from competing with other companies in the industry.
  • Economic Changes Will Have a Bigger Impact: The economy is always in flux, which means that every business owner should expect financial changes in the future. When the inevitable shock happens to the economic growth of the industry, poor profit margins will have a drastic impact on your company. Not only do you need to maximize your profits during the good months, but you also need to save for a rainy day with an emergency fund.
  • No Options for Business Financing: Financial reports that show poor profits for your company make it hard for you to get the loans or finances that might be needed. These reports can impact lending from banks and credit unions. At the same time, investors will be hesitant to provide the funds if they can see the potential for failure due to poor profit margins.

Just because you can see that your business is reporting low profit before taxes, doesn’t mean that your company is going to fail. Instead, it is a sign that you need to make a few changes. Also, don’t proceed without enlisting the assistance of an experienced accounting team to help with your financial management. It is essential that you tap into the expertise that is offered. Then, use this advice to put your company back on track for the future.

Tips for Boosting Profit Before Taxes

What should you do when you learn that your business has low profit before taxes? Here are a few things that should be evaluated to change the trajectory of your company:

  • Product Pricing: What does it cost to produce the products that are sold? How much profits are available for each unit? Not only do you need to evaluate the product pricing, but you should also look for ways to reduce the upfront costs for product development. You might not be charging enough, or it might be time to eliminate waste or reduce expenses. Look for options to source cheaper goods. Or, you might be able to cut payroll expenses by outsourcing some of the services that are needed instead of hiring more full-time employees.
  • Overhead Costs: Look at every cost that is coming through for overhead expenses. You have a set list of payments that need to be sent each month for anticipated costs. Sometimes, these expenses are higher than necessary and cutting into your profit margins. Consider options to cut unnecessary costs or reduce the amount that you are paying. For example, you might be able to move to an office location with lower rent payments. Or, call the phone and internet provider to see if any cheaper packages are available.
  • Leveraging Tax Deductions: Also, keep in mind that this profit before taxes calculation includes all of the costs that are being used for business management and ongoing costs. It is nice to leverage tax deductions in the form of expenses that are being used. At the same time, you also need to understand that spending the money will have an impact on the profits that are recorded on paper.

The most effective thing that you can do is get personalized advice from an accounting professional.  As a business owner, you don’t need to be an accounting professional. But, you do need to be familiar with the way the numbers work and how they impact your business. You can consult with your accounting team to learn more about the current trends. This information is very important when you are making big decisions that affect your finances.

Tapping into outsourced accounting services is one of the best things that you can do to ensure that you are staying on track for the future. The services of a good accounting team might be the difference to help you avoid common financial pitfalls that are faced by business owners.

If you are looking for support with your small business finances, then we are here to help. Contact us at Easier Accounting to learn more about the accounting services that are available. We specialize in small business accounting, giving you access to team that is leading the industry. Call today to learn more: (888) 620-0770

Accounting Advice: How to Cut Expenses for a Start-Up Business

Starting a new business is an exciting adventure. You are moving forward with big dreams and hopes for a better future, putting in the effort that is needed to build a company that will succeed for many years. Whether you are taking over a family business or moving forward on a passion project, it is essential that you have a good business plan in place to set yourself up for success. You need to consider the money that is coming in, as well as options to cut expenses.

Moving to a Positive Cash Flow

Costs are inevitable when you are pursuing business efforts. It doesn’t matter if you are building a local office or running a home-based business out of your garage; money will be needed for some up-front costs. In the beginning, you will be spending more money than you are making, especially if you need to put cash into inventory or other important setup costs.

There’s nothing wrong with spending money on these business expenses. Keep in mind that this cash is an investment to build your company for the future. There’s a saying in the business world: “It takes money to make money.” It’s true that you need to have some upfront cash to get your company off the ground.

But, just because you are burning through your cash reserves in the beginning, doesn’t mean that you shouldn’t be careful to turn things around as quickly as possible. The goal is to make your company profitable right away so that you can have extra money in the bank, instead of spending everything on your business efforts.

Once you move to a positive cash flow, meaning you are bringing in more money than you are spending, then you will have the option to re-invest and grow the company. Or, you can pull some of those profits to enjoy the benefits of your labors.

Two Ways to Manage Cashflow

There are two things that you need to consider when you are working to manage cash flow:

  1. Bring in more money
  2. Cut expenses

Business owners are always focused on bringing in the income that will keep money flowing into the bank. Even if you have strong earnings every month, your business will struggle if you don’t stay ahead of the expenses at the same time. So, you need to evaluate the money that you are spending to identify areas that can be addressed.

Yes, it is important to look for ways to increase your incoming cash. But, don’t overlook the importance of managing your expenses as well. A good accounting team can assist with these efforts.

Cost-Cutting Ideas to Reduce Small Business Spending

Start by evaluating the money that you are spending. Categorize your spending into transactions that are necessary and transactions that can be cut. You might need to change your thinking a little bit to look at your spending with new eyes.

Here are some of the easiest, most effective ways that you can cut your business costs:

  • Secondhand Furniture and Equipment: Why pay for new materials and supplies if you can save a bunch of money by choosing secondhand items? If you need a new desk for your office, you can go to the local furniture store and pay thousands of dollars for the right desk. Or, you can skip paying retail and look for deals on Craigslist or other online marketplaces. In many circumstances, you can save as much as 50 – 70% by choosing secondhand items. Use caution if you are buying electronics though… computer technology is moving fast, and you might be able to avoid a lot of problems by buying new.
  • Rent or Mortgage Costs: A rent payment can be one of the most expensive bills for small businesses. Do you have a local office in a high traffic area, but most of your business is completed online? There’s no reason to pay the surcharge for a premium office space. Consider moving to a different part of town where the rent costs are lower. Yes, it will cost money to move and it takes a lot of effort. But, the rent savings can add up over time. Better yet, look for options to buy a building and rent out a portion of the space to other businesses. These rent payments can help you pay off the mortgage, creating a valuable asset for your company.
  • Utility Expenses: Ongoing utility expenses offer another potential area where you could be saving money. Get creative to see if there are ways that you can reduce utility costs. For example, you might be able to drop your landline and use a VOIP phone number instead. Invest in energy-efficient appliances and switch out the lightbulbs. Install a smart thermostat that will manage climate control throughout the day. Call the internet provider to see if there are options to reduce the amount of money that you are spending on your business package. Sometimes, a few questions to a utility provider can go a long way to bring the ongoing costs back down.
  • Assess Inventory: Are you storing a lot of inventory that won’t be needed for a while? Not only does extra inventory cost money because of the expense of buying the products. But, you also need to spend cash on the warehouse space that is needed to hold everything. Look for lean business options to minimize your inventory while ensuring that you always have product on hand when your customers are ready to buy.
  • Bid Out New Projects: Instead of assuming that you need to hire more employees, consider the option to talk to multiple contractors to get the best price on services that are needed. This bidding process will help you minimize costs and maximize the services that are available. Seeking out multiple bids is essential so that you can see if your preferred contractors are overcharging for the services.
  • Offer Telecommuting Options: As the business grows, it can be hard to maintain the office space that is needed for the expanding team of employees. Instead of moving into a bigger office, look for options to share the office space more efficiently. You can invite employees to telecommute, helping to reduce the number of people that you are managing in the office each day. This option allows the desks to be shared and reduces the amount of space that is required for employee housing. At the same time, employees will be happy that they can avoid commuting costs.
  • Go Paperless: Paper waste can cost your company a lot of money. Not only do you need to pay for the cost of the paper reams, but you also have expenses for the printing as well. You will spend money on the cost of buying a printer, paying for ink cartridges, and ongoing maintenance as needed. Plus, many companies spend money on recycling and shredding services for old paperwork. These expenses can be reduced by keeping digital records instead of filing printed paperwork.
  • Pay Off Business Debt: Business debt can make it hard for you to keep up with cash flow. Not only do you need to make the payments on the costs that are due, but you are also taking on a lot of expenses for the interest costs. How much are you paying every year in credit card interest? If unexpected costs pop up, then it is common to put those expenses on a credit card. Unfortunately, the interest expenses will really add up, potentially costing your company thousands of dollars a year in avoidable costs.
  • Save for a Rainy Day: It is essential that you set aside cash for the future. This emergency savings account will help you pay for taxes and anything else that might come up unexpectedly. There are always times when you need to dip into the bank account. Make sure that you have money set aside so that you can avoid running up the business credit cards.
  • Maximize Tax Write-Offs: As a small business owner, many things can be used as a business write-off to minimize tax burden. You could save hundreds or even thousands of dollars by using the right tax strategy. Maximize these tax write-offs so that you can minimize the amount of money you need to pay at tax time. The best thing that you can do is hire the services of an experienced accounting team who can help with your tax strategy.

As you can see, there are many ways that you can be creative with your business spending to reduce expenses. If you need assistance, then make sure that you have the services of an experienced accounting team. We can assess your spending habits and provide recommendations that will help to minimize expenses in the future. Financial expertise can offer a valuable way for you to level-up your business efforts and reach higher levels of success.

For more information about small business accounting services, you need to talk to our team at Easier Accounting. We understand the financial requirements that are needed to run a small business. Our team is here to assist with anything that you need: (888) 620-0770

FAQ about Outsourced Accounting and Bookkeeping Services

It is common for business owners to have a long list of questions when hiring outsourced accounting or bookkeeping services. If you are bringing in outside help to manage your business books, then it makes sense that you should hire someone you can trust. Ask questions before you hand over financial details so that you can learn more about the experience and services offered by the accounting team.

Easier Accounting is an accounting firm for both small and large businesses. We are always available to answer your questions. You are welcome to call anytime if you want to learn more about improving the financial future for your small business (888) 620-0770.

These are some of the questions that we often hear from business owners who are considering the services from an outsourced accounting team:

What Services are Available?

We offer a wide range of services to match the needs of each client. Instead of using a cookie-cutter approach for every project, our goal is to customize the services according to your preferences. So, we will ask questions about your business and systems that you already have in place. Then, we can make recommendations that align with your requirements.

These accounting and bookkeeping services include:

  • Monthly bookkeeping
  • Tax consulting
  • A dedicated accounting team
  • Audit support
  • Personal tax preparation
  • Business tax preparation
  • Annual tax planning
  • Payroll
  • Depreciation schedules
  • 1009-M creation
  • Conversion from accounting systems
  • Custom financial reports
  • Custom invoice layouts
  • And more!

The best thing that you can do is schedule a complimentary consultation to learn more about the services that are available. We will discuss your needs and offer recommendations so that you can choose the services that match your preferences.

How Will My Business Benefit from Outsourced Accounting Services?

Our job is to make sure that you have all your ducks in a row. We will evaluate your financial plan, keep up with ongoing tracking and reconciliation, and ensure that you are ready for tax payments and filing. These services will help you stay up-to-date regarding the financial health of your company. You won’t have any financial surprises at the end of the year when you are working with an experienced accounting team.

This information improves the likelihood that you can manage your cash flow and keep up with future expenses. Plus, you can refer to these reports when making big financial decisions for your company. Having a clear picture of the financial health of your business helps you to make educated decisions about future expenses, business development, and growth.

Why Outsourced Services instead of Hiring an Employee?

You have the option to hire an employee to help with bookkeeping and accounting. But, make sure that you understand the financial burden of bringing in another employee. Not only do you need to pay the full-time salary, but other associated costs include benefits, office equipment, office space, employment taxes, payroll, and more. These costs can add up!

Learn about the benefits of outsourcing, and you will see that you want access to the financial skills without taking on the burden of another employee. You can have your cake and eat it too… top-notch accounting expertise without bringing another full-time employee onto your team.

How Can You Manage the Books if You Aren’t in My Office?

Technology has opened up a world of possibilities for remote services. We don’t need to be in your office to look over your books. Instead, the work is performed remotely using a cloud-based software. We can view real-time information about your financial transactions, and work on financial reports and reconciliation from any location.

You can also tap into these online resources from anywhere. Even if you are gone on a business trip or out of the country for vacation, you will have ongoing access to the most current numbers for your company. This information can be accessed on your computer from anywhere in the world!

Don’t worry about security, because we always use secure methods when accessing your financial records. The could-based software is protected, offering a safe place to store your information.

Why is Cloud-Based Software Better than In-Office Accounting?

Manual accounting increases the risk of errors in the transactions. If you need to type in each transaction, then there is a possibility of missing keystrokes or typos. Instead, we have found that it is more effective to integrate a software program that imports transactions. Then, our team will review every transaction to detect potential problems.

Keep in mind that cloud-based accounting reduces the risk of losing all the financial information for your business. If your files are kept on the hard drive of your computer, then you could lose everything if the computer crashes. Or, paper copies of the records could potentially be ruined if a flood, fire, or natural disaster damages your building.

Why Shouldn’t a Small Business Owner Use a DIY Approach with Bookkeeping?

As a small business owner, don’t be fooled into thinking that you can handle the bookkeeping without the expertise from a financial professional. Most business owners are pulled by multiple responsibilities that include employee management, inventory, business development, networking, and more. You shouldn’t be wasting your time on busy work like bookkeeping and transaction auditing.

Hiring an outsourced accounting team will free up your time so that you can focus on more important tasks. You can turn your efforts to grow your business while the experts handle the financial details. As a result, you will find it easier to boost future success because you aren’t getting cause up in the busy work.

What are the Dangers of On-Site Staff Handling the Accounting and Bookkeeping?

You have the option to hand some of these responsibilities to your current staff. But, you need to evaluate the skills that the person has to offer, as well as the potential risk that could affect your company. For example, an inexperienced secretary handling the bookkeeping could result in missed transactions, mistakes, skipped reconciliations, and more. If the numbers are off, then it will have a domino effect to impact your financial reports and cash flow.

Another issue that you might face is potential fraud within the company. If you only have one employee managing the financial details, then transactions can be adjusted, and you won’t know the difference. Avoid theft and other problems by hiring a third-party outsourced team who can offer multiple checks and balances to reduce the risk of theft and fraud.

Can You Help with Taxes and Payroll?

We offer more than just basic bookkeeping and transaction management. You can expect full-service accounting solutions from our team. The monthly bookkeeping services are built around your annual tax plan. We will look at the numbers and help you put together an effective strategy to maximize write-offs and help you prepare for future tax filings.

At the same time, we can also offer ongoing support with payroll and other services that are needed. Our goal is to customize your services to match your preferences. So, we will help you identify the right monthly package to match your requirements. If you have questions along the way, then you are always invited to reach out to our team to learn more about how we can help.

What is the Difference Between Tax Accounting Services and Outsourced Accounting?

Most small business owners will talk to their accountant once a year: at tax time. Instead of waiting until tax season to work with our clients, we focus on the ongoing efforts that will maximize your overall financial success. We offer the tax preparation and filing services that you need, but these services are just a portion of your overall package.

In addition to annual tax filings, we keep up with the ongoing transactions that will impact your tax burden. This annual strategy is an important way for you to measure the financial health of your company and prepare for the future.

Will I Give Up Control of the Books if I Hire an Accounting Team?

No, you won’t give up control. You will still maintain full control over the financial books for your company. In fact, many small business owners find that they have more control after hiring an accounting team. When the transactions are kept current, you can trust the numbers that you will find in the accounting system. Then, you will be able to plan and allocate the funds as needed. You always have the final say when it comes to approving payments and invoices.

How Can I Learn More?

If you are interested in learning more about how your business can benefit from accounting and bookkeeping services, then we invite you to talk to our team here at Easier Accounting. We are working hard to provide the best services in the accounting industry. Our services are specialized for small business owners and entrepreneurs. So, you can rest assured to know that you are receiving services from a team with real-world experience in the industry.

Talk to us right away to see the benefits that are available for your company. We are here to help with anything that you need. Call today to see if our services are right for you: (888) 620-0770

Avoid These Filing Mistakes on Your Tax Paperwork

Taxes are an avoidable part of owning a business, and tax season often adds stress and anxiety to many business owners. If you are dreading tax preparation, then you should consider the benefits of hiring an accountant to help with your filing. There is no reason for you to spend time on the paperwork when you could be focusing on other important responsibilities instead!

Problems with DIY Tax Filing

The biggest problem with doing your taxes without an accountant is that mistakes can be made that could result in big problems in the future. Even something that seems like a minor error could cost you quite a bit of money in fees and a big tax bill. At the same time, it is possible that you could be paying too much in taxes because you missed important deductions that could have been included.

If you don’t have formal accounting training and you are filing your taxes without the help of a professional, then it is likely that you are making a few errors along the way. These mistakes might not show up for a few years but could result in higher taxes or even an audit in the future. The best way to avoid these DIY tax problems is by hiring an accountant to help.

Prevention is always more effective than trying to clean up a big mess. So, work with a trusted accountant or bookkeeper to review your tax filing before it is sent to the IRS.

Avoidable Tax Mistakes

There is no doubt that an experienced accountant can help you avoid a lot of tax problems. Your accountant will check the numbers and make sure that everything is included in the filing. At the same time, a good accountant can also offer advice and services for payroll, estimated tax payments, cash flow, and more.

Here are a few common mistakes that you can avoid when you have a great accounting team working on your taxes and business financials:

  • Matching Taxpayer IDs and Names: Even though it seems like a simple thing, there are often problems where taxpayer IDs don’t match the names on the accounts. Whether the filing is for an individual or a company, it is essential to be sure that everything lines up to match the records that are on file. The IRS and Social Security have databases that connect taxpayer IDs with names, and audits are done to ensure that the filings match the database. If the name doesn’t match, then it could start a chain reaction of problems that need to be fixed.
  • Wrong Bank Account Number: It is easy to see why direct deposit is often the top choice for a tax refund. These deposits will land right in your bank account, helping you avoid the need to wait for a check to show up in the mail. But, be careful to ensure that the right direct deposit information is used. If you setup the direct deposit and one of the numbers is off in the account details, then it could be put into the wrong account. Or, the refund might be returned to the IRS. In this situation, you might not receive the refund because the IRS doesn’t have a policy to replace lost funds that are transferred
  • Incorrect Tax Rates: Whether you are figuring tax costs for payroll or self-employment, there are various percentages and calculations that need to be used to get it done right. These tax rates often stay consistent from one year to the next, although there are times when the laws change the rates that need to be paid. Make sure that you stay ahead of the changes in the accounting industry to ensure that you are using the correct rates when calculating tax payments.
  • Missed Estimated Payments: When you are just entering the world of self-employment, there are a few financial details that you might not understand without talking to an experienced accountant. For example, most employees pay taxes through deductions from their paychecks, then the annual tax filing is a time to ensure that the taxes were paid in full. With self-employment, you might not have regular paychecks with these deductions. So, you will need to make quarterly tax payments to the IRS. Missing these payments or sending the wrong amount could result in penalties and fees. So, make sure that you talk to an accountant to learn how much needs to be sent on your estimated payments.
  • Too Many Deductions: One of the benefits of self-employment is that you can take advantage of deductions. If you spend money on equipment or services for your business, then that money can be factored into your tax filing. But, there are times when small business owners try to take advantage of the situation by claiming too many deductions. Don’t put yourself at risk by deducting too many expenses! Instead, make sure that you understand the laws and only deduct items that fall within the guidelines.
  • Overlooking Deductions: On the other hand, there are times when small business owners are paying too many taxes because they overlook potential deductions. Whenever you spend money for your business, make sure that you hold onto the receipt and track the transaction. These details can ensure that you maximize your deductions as much as possible to minimize your tax burden.

As you can see, it could be easy to make a mistake on your tax filing. But, it is just as easy to take the necessary steps to check and re-check your taxes so that you can avoid these problems.

Do-It-Yourself or Professional Tax Services

How do you decide if you should spend the money for an accountant to take care of your tax filing? Business owners who attempt a DIY approach are often motivated to save money on the costs that they would have spent on the services of an accountant. Even though they think that they are saving money, a DIY approach could potentially cost more money in the future.

Tax filing not only takes a lot of time, but it is important to ensure that you have experience with tax preparation so that you get it done right. Most small business owners don’t have a formal education in accounting, which means that they are forced to study tax law in an attempt to figure it out.

There is no reason for you to waste your valuable time trying to gain expertise in tax law! Instead, learn enough so that you understand the process, but let a professional accountant take care of the preparation and filing. You can use this extra time to focus on ways to increase business profitability and grow your company.

If you choose a DIY approach for tax filing, these are a few ways that you might end up spending more money in the future:

  • Fees, interest, and penalties if the taxes are filed incorrectly
  • Missed deductions, resulting in a higher tax bill
  • Cash flow errors that cause an accumulation of interest costs and other financial problems
  • Incorrect tax rates, causing you to pay more than necessary
  • Lost money if the refunds are deposited in the wrong accounts

Without experience in the industry, you won’t know what you are missing! It is worth the investment to spend a little money so that you can hire a team to guide your company in the right direction.

Ongoing Preparation for Tax Season

Most business owners don’t think about tax filing until it is time to complete the paperwork each year. But, there are several tasks that need to be addressed throughout the year if you want to be ready to file your taxes. Failing to stay ahead of the financials all year could increase your stress levels when it is time to file your taxes. Not only will you need to sort through the mess, but you could potentially miss transactions that should be considered for your overall financial picture.

Make sure that you are keeping accurate records for Accounts Payable and Accounts Receivable all year long. It is also a good idea to complete regular reconciliations to catch potential errors that have occurred.

If you are planning to claim a transaction as a deduction, then you need to have the paperwork to back up the claim. Without a receipt or some type of documentation, you could face problems if an audit occurs in the future.

With a little bit of planning and consistent work, you can get ahead of these problems and stay current with your tax preparation. Most business owners find that it is much easier to work on small things throughout the year, instead of trying to sort through an entire year of transactions at tax time.

Do you need help with your tax preparation? Then it is essential that you talk to the professionals here at Easier Accounting. We focus on accounting services for small businesses, and our team is here to help. Call us anytime if you have questions about your tax filing or business finances: (888) 620-0770

Millennial-Style Accounting: How to Modernize Your Business to Attract Millennials

As a forward-thinking business owner, you need to consider the ways that you can transform your systems to accommodate new trends in the industry. Many start-ups and small businesses are looking for ways to attract Millennials as employees and customers. So, there are a few things that you need to do to shape company culture so that you can increase the likelihood that you will be able to work with this generation.

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Whether you have a big local office or you are managing work-from-home employees, there are a few things that you can do to ensure that you are adopting a millennial mindset. Our team at Easier Accounting is working hard to stay ahead of the trends in the industry, and we will gladly help you transform your system accordingly. We specialize in small businesses and startups, so we have the hands-on experience that you need to ensure that your company is in line with the millennial mindset.

Here are a few tips to help you get started:

Get Rid of the Paper and Go Digital

Most people have a smartphone in their pocket, so there is no reason to fill the office with stacks of paperwork. If you are stuck in the system of only handing out paper checks, then you might cause a little irritation for millennials. This generation wants to work in a digital world, which means that they prefer automated solutions such as direct deposit.

If you are still distributing paper checks, then right now is a great time to choose a payroll processing system that allows for direct deposit. Not only will you improve the system for your employees, but you can also save a rainforest at the same time.

Flexibility of Options

Millennials don’t like to be tied into one pathway, so you need to make sure that you offer multiple options to cater to their needs. Consider the pricing structure of your products or services to see if you are offering the variety of choices that people prefer.

Putting together a solid business plan can be one of the best ways that you can improve the success of your company. Make sure that you talk to your accountant to be sure that you are designing a plan that will help you prepare for the future.

Tech Savvy Systems

Implementing a system for tech-savvy employees is a great way to show that your business is keeping up with the trends. Use a software program that keeps real-time data and information about the employee’s paycheck and benefits. This information can be valuable if an employee has questions about their withholding or payment.

The right cloud-based software can make it easy for you to run reports from any location. This information is always in sync with the accounting team, so that you never have to worry about lagged reporting. Additionally, a secure cloud-based accounting system can keep the information protected to reduce the risk of confidentiality breach due to prying eyes.

Consistency and Organization

You need to make sure that you are setting the right tone for your company with the right organization and consistency. These habits will influence the attitude of your employees and company culture. If paychecks are always sent on time without question, then your employees will feel the security that is needed to feel safe at work. Also, good organization helps to build trust in the company to improve overall company culture.

These practices are important for interactions with customers as well. When you are organized with an effective billing system, then your customers will pay the invoices and come back to buy from your company again in the future. They want to know that you are on top of everything, giving them confidence in your product or service. As you build the confidence of your customers and employee, it helps to boost the brand of your company at the same time.

Other Ways to Build Company Culture for Millennials

In addition to upgrading your accounting system to cater to millennial employees and customers, you also need to think about ways that you can strengthen your brand to show that you are leading the industry. Many people agree that millennials are focused on the details. The best way to set your company apart from the competition is to look for the small ways that you can create a lasting memory for each person.

Here are a few things that you can do in your office to boost the mood of your team each day:

  • Snacks and Treats: Millennials love free food, and you can build your company brand by having a snack area for everyone to enjoy. For example, have a cupboard with candy bars, mixed nuts, and fruit to curb the afternoon hunger when the cravings hit. Also, consider putting a candy jar on the front desk to welcome customers when they come into your office to visit.
  • Coffee and Drinks: Most people like to start their day with a cup of coffee, and you can help everyone feel at home in your office by offering free coffee. This expense is minimal compared to the long-lasting culture that you can create for your employees and customers. A coffee pot and a small fridge with soda and juice can be a great way to help millennials enjoy their experience with your company.
  • Catered Meals: A few snacks can go a long way to curb the cravings, but you can gain extra “brownie points” by catering meals for your employees. Pizza Fridays or take-out sandwiches can show extra gratitude for your team. This strategy can also be used to attract millennial customers. Offer free food at introductory meetings, and you will attract a bigger crowd.
  • Modern Décor: You only have about five seconds to create a lasting impression for each person who walks into your office, so make sure that you are setting the right impression. If people walk in to see shabby carpet and worn furniture, then they will have a bad impression about the services that you offer. Transform the appearance of your office, and you will boost the impression that people get when they walk through the door.
  • Online Presence: Whether you have a brick-and-mortar business or everything is run online, you need to make sure that you have a strong internet presence to build your company brand. A professionally designed website, social media profiles, and other online features can establish your company as a leader in the industry. People spend a lot of time online each day, and they will gain confidence in your business when they see that you have put effort into your online campaign. Look for an accounting system that can be integrated into your website to streamline transactions and make it easy for customers to buy your products.
  • Casual Clothing: If you want to attract millennial employees and customers, then it is time to ditch the suit and tie. For many years, companies held strict dress codes that required business casual every day of the week. Some companies relaxed their standards a little bit with casual Fridays. Now, forward-thinking companies aren’t worried about the dress code. Employees and customers can be comfortable in t-shirts and jeans. In fact, some companies have found that productivity goes up when they take a casual approach to dress code and other non-essential corporate rules.

Thinking Outside the Box

Millennials love the forward-thinking attitudes that are found in business owners who are looking outside the box. If you want to attract the millennial crowd as employees or customers, then you need to take a hard look at your company culture and the daily practices that are influencing your brand.

Just because the corporate culture has been unchanged for so many years, it doesn’t mean that you need to be stuck behind the times in these old habits. A few small changes can go a long way to transform your business and help you reach higher levels of success. Show your employees and customers that you are staying ahead in the industry, and you will naturally attract people who want to buy the products and services that you are offering.

A digital presence, automated systems, and modern accounting practices are essential to creating the foundation for your business. Make sure that you hire an entrepreneur-minded accounting team, like Easier Accounting. We know that things are changing, and our goal is to ensure that you are maximizing your influence in the industry. We will help you stay ahead of the financial tracking and automate your accounting in a cloud-based system to improve the experience for yourself, managers, employees, customers, and more.

Are you ready to learn more about how these accounting services can help you connect with the millennial demographic that you are targeting? Then right now is a great time to schedule a consultation with our team. Here at Easier Accounting, we have the experience that you need to take your success to the next level. Call us to see how our accounting services can make a difference for the future of your business. We are here to help with anything that you need: (888) 620-0770

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Creating a Startup Business: 4 Ways to Get Startup Business Loans

Are you starting a business? Whether you plan to offer services or products, you will need money to get your entrepreneur dreams off the ground. Unfortunately, most people don’t have the money saved up in their personal checking accounts to place toward purchasing or leasing a storefront, buying equipment, hiring employees, buying inventory and getting the other necessary business resources.

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You will need to obtain small business startup loans to help you get your company up to running at full capacity. Here are 4 financing options to consider:

Traditional Loans

Many people first take the traditional route by seeking out a bank or credit union to provide them with a business or personal loan. Loan amounts can vary, and banks will have stringent loan conditions. You will typically have to provide a loan package that will include your business plan, financial documents, tax returns, financial projections and credit history. It can be difficult for a start-up to get a traditional loan if you don’t have any business history or strong credit score as banks have to decide if they want to take the risk on your products or services.

SBA Loans

Many business owners turn to the U.S. Small Business Administration (SBA) loans as a way to get financing to avoid the hurdles of getting a traditional loan. The SBA doesn’t directly offer the money out of their own pockets to business owners. Banks and other financial institutions offer the loans. What the SBA does offer is a guaranty program towards business startup loans in case your business fails. If you don’t pay back the loan, the lender can still recover their money through the SBA.

There are many different types of loans offered through the SBA, such as 7(a) loans, 504 loans and 7(m) microloans.

Peer-to-Peer Lending

Peer-to-Peer (P2P) lending is a non-traditional way to obtain financing where you seek out an investor who will place money toward your startup business. You will make requests for small business startup loans on a P2P online platform as investors will pay a certain financial amount up until the full loan request amount is reached. So you may have multiple investors providing financing to your business. Then you will make small repayments to the P2P platform to pay off the loan.

Angel Investors and Venture Capitalists

Angel investors are individual investors who will provide funding to small businesses startups. The angel investor will usually be successful in a certain industry and will provide financing and mentoring for new businesses who are in the same market segment. Venture capitalists are larger firms and companies funding startup business loans. They are very selective as they seek out businesses that they are sure will reach success.

One of the similarities between an angel investor and a venture capitalist is that both seek out an equity stake in the business. They may cash out that stake once the small business is sold to a larger business or holds an initial public offering.

There are numerous traditional and non-traditional ways to seek out financing in addition to the options listed above. Determine the right loan for your startup business by deciding on the loan amount you need, what the money will be used for, and the type of loan terms you must agree to so you can get the financing.

4 Ways the Accounting Industry is Transforming

Digital information is transforming the way businesses are managed, making it easier than ever to move forward in an innovative way. As you are shaping the future of your company, are you proactively using the tools that are available?

Many businesses aren’t leveraging the full benefits of a modern accounting system. Here are a few ways the accounting industry is transforming to serve your company better:

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Outsource Accounting Skills

There is no need to hire an in-house financial professional because outsourced accounting gives you the opportunity to access these services at a cheaper cost. When you hire an outsourced accountant, you don’t have to worry about employee management or the cost of bringing another individual into your office space. Additionally, there is no need to worry about face-to-face meetings. An outsourced accountant can set up a phone call or video meeting so that you can manage your company from anywhere in the world.

More than Basic Number Crunching

When you hire an accounting team to help with your small business, you will get access to more than just basic number crunching. In the past, financial services have focused on the busy work, leaving the difficult financial decisions up to the business owner. While you always have the final word on any business decisions that are made, you can benefit by asking for financial advice from your accountant. This information can be invaluable to help you make the best decisions for the future success of your company.

Value Based Pricing

For a long time, business pricing and financial decisions were made based on the numbers. It was a race to the bottom to bring in customers based on the lowest price offered for products and services. Now, you can look at value-based pricing with your financial team, helping you to find the “sweet spot” where you can maximize your profits as much as possible.

Keeping Up with the Trends

As a business owner, you don’t need to waste your time trying to keep up with the changes in tax laws or other trends in the financial industry. Instead, you can work with a professional who will keep your company relevant. By hiring an experienced accounting team, you can rest assured to know that you are accessing excellent experience as well as innovative ideas that will evolve as the world changes.

At Easier Accounting, our goal is to provide the best outsourced accounting services that are available. Contact us to learn how we can boost your business by implementing the latest trends in the accounting industry: (888) 620-0770