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Accounting Checklist: Essential Tasks for New Businesses and Startups

It is both exhilarating and scary to start a new business. You have an idea for products or services that will be popular in the market, and you’ve come up with the cash to get the company off the ground. While you are building the business and launching it into the world, it is important that you follow this accounting checklist to ensure that you are meeting all financial requirements for your company.

Yes, bookkeeping and accounting can be daunting. Most business owners want to spend their time focused on product development, marketing, customer outreach, and other tasks that have a direct impact on cash received. While these tasks are important, you need to be sure that you have a solid financial plan in place to set your company up for success in the future. Failing to take care of these essential tasks on your accounting checklist could cause your business to fail due to poor practices and a lack of cash flow.

Even though accounting and bookkeeping can be time consuming, you don’t have to put in the hours to take care of these tasks. One of the best things that you can do as a business owner is to hire the right contracting service to handle these details. You’ll have a better outcome and be proactive in protecting the financial interests of your company.

Consequences of Neglecting Your Accounting Checklist

What will happen if you neglect the important tasks on your financial to-do list? At first, you might not encounter many issues. But these problems tend to compound over time, resulting in big problems in the future that could take your company down.

While tax and financial compliance are time consuming, it is a critical part of building a solid foundation for your company. These tasks give you the information that is necessary for making accurate decisions for your business. Plus, you can avoid hefty fines and an expensive tax burden by implanting a good financial strategy.

Not only do you need to be educated on the right accounting practices for your small business or startup, but you also need to develop the right systems to ensure ongoing compliance and maintenance. The following tips will help when you are launching a new company so that you can build a financial picture for success.

Step #1: What Accounting Services are Needed?

The first step is to learn about the industry and identify the accounting services that will best suit the needs of your new business. Why does accounting matter? These financial reports give you accurate information that affects the decisions that are made for your business. Additionally, you need to comply with legal requirements as outlined by the IRS.

The easiest solution to learn about your options for accounting is to talk to an accounting service for information. Yes, you can find details online with a Google search. But it can be overwhelming to identify the right accounting checklist for your new company. Instead, you need to lean on the services and expertise of someone who understands the best processes for small businesses.

Our accounting team can evaluate the needs of your company and provide recommendations that will suit your preferences. We want to be sure that your accounting services are a perfect fit to set your company up for success in the future. During this initial conversation, we’ll understand more about your business, growth patterns, and anticipated changes in the future. Then, this information will be used to create the perfect setup for your business going forward.

Step #2: Setting Up an Entity

Don’t overlook the important step of creating the right entity for your business. Various legal structures have benefits and drawbacks. As you talk to a legal professional, you can understand how these pros and cons will affect the long-term outcome for your business efforts.

During this step, you need to talk to both an accountant and an attorney. There are many intricacies of the corporate tax code, which can be overwhelming to a new business owner who doesn’t understand the legal jargon and other details that need to be addressed. But a good team of professionals can explain your options and help you in finding the solutions that will suit the needs of your company.

You can use this advice to determine the proper legal structure for your business. Then, the accounting and bookkeeping system can be structured to match the structure that has been created. Not only do you need to get the system set up in the first place, but there are also requirements for ongoing compliance. The easiest solution to handle these details is by engaging an accounting team for ongoing services.

Step #3: Financial Reporting and Ongoing Bookkeeping

Now that your business structure is in place and you have the systems established, it can be a trick to maintain consistency with the ongoing tasks that need to be handled. Ongoing accounting and bookkeeping requirements should include the tracking and categorization of all business transactions. Additionally, you need to have a separate business bank account created so that there is no crossover between personal spending and business expenses.

In this step, it is smart to invest in good accounting software. There is no reason why these transactions need to be tracked by hand. Instead, you can maximize the benefits of automation as much as possible, helping to reduce the problems associated with manual tracking and calculations. If you have questions about any of these transactions, then a tax advisor or CPA can review the information and offer advice about the best way to handle these details.

The step of creating the right reporting and tracking system is crucial in helping you avoid common mistakes. When mistakes are made with tax strategy, then often leads to heavy fines from both the IRS and the state. Good software will help with the creation and maintenance of financial statements.

Plus, you can use this information when making decisions regarding the financial health of your company. If you need to invest money in marketing or business development, you will be well-informed due to the information that is available in the reports. Enhanced financial forecasts can be valuable assets to help with the leveraging of your business efforts in the future.

Step #4: Be Prepared for the Future

You never know when you might be facing an audit, so it is important that you are proactive right now so that you are prepared for anything that might happen in the future. Good accounting practices make it easy to navigate a potential audit because all of the information is organized and clear. You need to have documentation to back up the write-offs and deductions used for your tax strategy. Additionally, you need to have a clear line of paperwork showing where your money is coming from when customers are paying for the products and services.

One aspect of preparing for the future is in the management of your cash flow to ensure that you are ready for slow months. It is inevitable that some months will be more profitable than others. Having a good financial strategy in place will give you the emergency savings that will carry you through the months when cash is tight. Sometimes you can anticipate these fluctuations, but other times the cash need is unexpected due to unanticipated costs and details that affect your business.

It is smart to have regular internal audits and bank reconciliations to ensure that all of the accounts are in order. A little bit of proactive work right now can go a long way to helping you avoid a big headache in the future.

Keep your records up-to-date and make sure that you are abiding by all of the financial regulations and laws in your area. There are many benefits that can come from engaging the services of an experienced accounting team.

Do You Need Accounting Services?

Most small business owners don’t have professional accounting skills to manage their business finances without support. You might attempt a DIY system, only to find that you encountered problems that could have been easily avoided by tapping into the services of an experienced accounting team.

If you want to set yourself up for success in the future, then the best thing that you can do is lean on the expertise offered by a small business accounting team. We are here to help with your accounting checklist to ensure that you are starting on the right foot. Then, our ongoing accounting services will support your needs going forward.

Easier Accounting is here to assist with anything that you need for your business financial tracking. If you are looking for small business accounting or bookkeeping services, then we invite you to contact us to learn about the services that are offered. We are just a phone call away when you need answers to your questions, and our team will explain the benefits that are available when you choose to engage the services of a small business accounting team: (888) 620-0770.

13 Essential Tools, Services, and Resources for Every Small Business Owner

Finding the right tools, services, and resources for your small business can have a significant impact on the overall success of the company. Even though these things might seem like simple details, the smaller efforts add up to great results. At Easier Accounting, we love serving small businesses and our team is always looking for resources and support that will boost your business efforts. Whether you are just getting established or your business has been around for a few years, you might find some of these resources useful.

Some of these recommended tools are free, and others require an upfront or ongoing payment. But they are worth the investment because of the benefits that are available. If you can find solutions to save time and leverage your efforts, it is possible to speed up the growth of your company. We want to help with your financial success, which is why we are sharing this article with great resources for you.

Getting Started on the Right Foot

Entrepreneurship is growing with each year, opening up opportunities for anyone who wants to own a business. Even if you don’t have a background in business or financing, it is possible to start a company that can be run from your home or a local office.

While the excitement of starting and running a business can be exciting, many people find that it can also be overwhelming to navigate the tools and systems that are available. Instead of trying to “reinvent the wheel” by exploring all of the options that are offered, why not tap into the knowledge of others who understand what is necessary for small business success? You can follow in the footsteps of other successful startups, making it easier for your business since you don’t need to navigate new territory.

Keep in mind that if your competitors are using these business tools and you are late in getting started, then your company is going to be left in the dust. Technology has transformed the business industry, making it more important than ever to keep up with the trends.

Work Smarter, Not Harder

You don’t have to work nonstop to support your business growth. Instead, consider the idea that the right tools allow you to work smarter, not harder. You can support the needs of your company and maintain a balanced lifestyle with family and friends at the same time.

The right business systems make it easy to maintain productivity and boost efficiency throughout the days and weeks. Your time will be focused on the tasks that are most important for your company, instead of getting caught in the weeds with the busy work that takes up too much time.

Tools for Your Business

Every business is unique, so you might not need all of these tools that we are sharing. But it can be beneficial to consider the benefits and features to see if they apply to your needs. Save yourself the hassle of research and wasted money by using some of these recommendations, instead of testing an unproven business platform.

Here are some of our top recommendations if you are looking for new business tools:

  1. GSuite: Google developed a suite of tools that make a great software package for businesses of all sizes. This system includes essential tools such as setting up email management, domain purchasing, website analytics, ad campaign management, and more. GSuite is designed with apps, so you can pick-and-choose the features that support the individual needs of your company. It’s nice to have all of these tools in one, easy to access, centralized location.
  2. ScheduleOnce: A good calendar system is essential to keep track of appointments, deadlines, and important dates. Some businesses use the Google Calendar through GSuite. For improved functionality, consider ScheduleOnce that syncs with Google Calendar. This system allows you to give clients the opportunity to book an appointment on your calendar, without the hassle of person-to-person communication to schedule these meetings.
  3. Slack: Step into the 21st century by using this dynamic online team communication tool. Instead of emails and messages getting lost in the shuffle, Slack can be used to streamline communication so that you can be sure that all of your team members are on the same page. This platform allows you to centralize messaging, phone calls, file-sharing, and even fun ways to interact with the group.
  4. Trello: While Slack is a communication platform, Trello is a complementary option to manage workflow and task assignments. You can create different boards for various departments and groups in your company. On each board, cards are set up and assigned to team members who are responsible for those tasks. The system gives flexibility so that you can manage the due dates, tasks that need to be completed, notes about each project, and more. It is a great way to structure the workflow and keep track of the tasks that need to be completed.
  5. Evernote: This app can be used across devices, giving you one location where you can take notes, organize information, keep track of files and more. It’s basically an “external brain” so that you don’t have to keep all of the small details in your head. The notes are cloud synced and can be shared with others if needed. If you have a quick thought or need to keep a running to-do list, then Evernote is a solution to consider.
  6. GoCo: Small businesses don’t often have the resources to bring in an HR expert. Instead of hiring another full-time employee, you might consider the benefits of using a Human Resources service that is based online. This system is designed to help with everything required for employee management and benefits, such as onboarding, paperwork management, PTO tracking, benefits administration, performance reviews, legal compliance, and more. One of the benefits of this system is that it can integrate with your payroll system.
  7. GoodHire: Another great HR resource is GoodHire, which can be used to run new hire checks for background screenings, credit history, driving records, identify verification, employment verification, drug screenings, education verification, and more. When you are hiring new employees, these services are priceless to ensuring that you are bringing in the right team member.
  8. LegalZoom: Paying for expensive legal services can cut into your startup costs. LegalZoom is a good alternative that covers all the basics needed for small business management and even your personal life. You can form a business entity, create an estate plan, file trademarks or patents, or talk to an attorney about your individual needs. This website makes it possible to save thousands of dollars in legal fees by creating basic legal documents without paying expensive, hourly attorney costs.
  9. Shopify: If you want to build an online store, there’s no reason to start from scratch with the website coding. This online service provider simplifies the e-commerce You can create an integrated shopping experience for customers that fit into the structure of your existing website. Additionally, you can track the back-end details of business management, including payment processing, order management, and inventory tracking.
  10. Upwork: Maybe you are looking for services, but you don’t want to bring in another employee? Hiring a freelancer is a great solution to access independent contractors from around the world. You can benefit from the quality services that are offered, without the burden of paying the overhead costs of bringing in a full-time employee. You’ll find anything and everything you might need, ranging from website design to content writing, administrative assistants, social media managers, and more. The great thing about hiring freelancers through Upwork is that you can see their work history and reviews left by other clients.
  11. Telzio: If you are looking for solutions to set up an office phone system, consider an online system. Your entire team can manage messages and phone calls using any device, from any location. The pricing is simple and clear, and you don’t have to worry about locking into a contract.
  12. InfusionSoft, by Keap: This software is commonly known as InfusionSoft, falls under the name Keap A Customer Management System is essential so you can keep track of names, contact information, sales data, and more. The benefit of InfusionSoft is that you can centralize your marketing automation, making it simple to automate your systems so that you are capturing leads and converting them to paying customers.
  13. EasierAccounting: We are proud to add our services to the list of must-have tools for business owners. We have one of the leading accounting and bookkeeping teams, with a focus on small business services. If you can’t keep up with the transactions, reconciliation, payroll, tax paperwork, and more, then we are here to help.

Don’t hesitate to reach out if you need assistance with your business finances. You will see that we have an excellent reputation in the industry, offering unbeatable business accounting services at an affordable price. Learn more about your options by contacting us at Easier Accounting. Call to talk to an industry expert about the financial services that are needed for your company: (888) 620-0770.

7 Tips to Maintain Positive Cash Flow for Your Small Business

It doesn’t matter if you are in the beginning stages of a startup or if you have a successful, established business, your long-term success rests on your ability to maintain positive cash flow. Whether you are bringing in $1000 per month or $100,000 per month, you need to be sure that your current business needs are met with cash in the bank.

How is Your Company Doing?

Your cash flow snapshot is a good reading on the current performance of your company. So, take time to review business cash flow statements regularly. This information will help you evaluate the things that are working and things that are hindering your growth. Then, you can use the data to implement changes that will help you reach higher levels of success.

Not only is the goal to avoid negative cash flow or any activities that will hurt your profit margins, but you also need to be looking at the things that will help with expansion and growth in the future. Too often, cash flow analysis is only focused on the current month or quarter. It makes sense that you are evaluating current financial obligations and requirements that are coming up. But you shouldn’t let your current situation overshadow resources that might be required for business development in the future.

It is a learning process as you identify the strategies that support your immediate business needs while preparing for the future at the same time. There’s no question that good cash flow will be required for all of these efforts.

How to Maintain Positive Cash Flow in Your Business

You might conceptually see why positive cash flow is required for your company. But it can be a challenge to identify actionable steps that will have an impact on your cash flow outlook. Here are a few tips that will help you boost profit margins, minimize expenses, and ultimately keep more money in the bank:

  1. Ongoing Spending: How much money is required to keep your business running each month? You should have a clear budget and spending goals to determine how much you need in the bank to pay for rent/mortgage, utilities, payroll, inventory stocking, services, and more. You can’t avoid overhead costs, but there might be solutions to manage the total amount that you are spending every month. Go through the spending report in detail to see if anything can be cut or trimmed down so that you can reduce the amount of money going out the door each month.
  2. Big Purchases: Even if you are keeping up with the ongoing expenses for your business, sometimes the big purchases can be crippling. Whether you are facing a large tax bill or you need to invest in equipment or business development efforts, you can’t sacrifice the payroll cash. Look ahead so that you can anticipate potential costs in the future. Then, shape your monthly saving and spending plan so that the cash is available without the need to dip into credit.
  3. Set Up a Line of Credit: The hope is that you won’t need to rely on credit for your business expenses. But it’s good to have a backup plan in case you get in a pinch. One mistake is to wait until your time of need to run to the bank for a line of credit application. Instead of trying to overcome the problem at the last minute, it’s better to set up the line of credit when you have positive cash flow, and your business is doing well. During this application process, the financial institution will run a complete check on your financial records to determine whether you will be approved for the line of credit. They want to be sure that you will have the cash to pay back the loan, and this information will also affect the loan limits. Securing the line of credit right now could be the difference between keeping your company going in the future vs. not being able to pay your bills because of cash flow issues.
  4. Minimize Interest and Late Fees: It might seem ironic to talk about avoiding debt right after the tip that suggests you secure a business line of credit. But there’s no question that it is harder to manage your cash flow when you are spending high amounts of money on late fees and interest costs. The more debt you accumulate, the more money you will be spending to delay the payoff of that loan. It could result in a domino effect that makes it hard to pay your bills on time, resulting in late-fees being added to your balances. Set up automatic payments and make sure that you always have enough to cover the minimum payments. A better solution is to pay as much as possible every month so that you can pay off the debt and eliminate the loan payments.
  5. Dial in Your Pricing: It might be tempting to offer deep discounts if you are trying to bring more customers through the door. Keep in mind that these discounts could result in problems in the future. Offering discounts to all customers will cut into your profit margins and even devalue your service in the future. See the value in the products and services that are offered to your customers, and avoid the practice of “racing to the bottom” to beat your competitors based on pricing alone. Customers are willing to spend more money when they can see that value and quality are available with a higher price tag.
  6. Stay Ahead of Receivables: You need to follow up on outstanding invoices to ensure that you are receiving payments from your customers or clients. Not only should you keep a detailed list of the money that is owed, but it is smart to put together a follow-up system if these payments are late. When you are collecting overdue money, time is of the essence. Stick to the payment plan and make sure that receivables don’t fall low on the priority list if you are distracted by other business management tasks.
  7. Boost Cash Inflow: Are you receiving an inflow of cash every day or week? Depending on your business model, the timing of customer payments might vary. You need to make sure that you are making sales consistently to receive the money that will keep your company running. It all comes down to the numbers. Look at the target amount of income you want to receive each month. Then do the calculations to see how many sales need to be made on a monthly, weekly, and daily basis. Finally, determine the most effective activities to help you connect with paying customers so that you can close enough deals to meet the needs of your company.

Cash Flow is More than Just Paying the Bills

While it is important to ensure you can pay your bills and obligations, cash flow is about much more than just paying for these ongoing expenses. Creating good cash flow will set you up to make the spending decisions that help your company grow. When you have extra cash in the bank, you have the opportunity to invest in marketing that brings in new customers. You can also put the extra money towards business development and product research to improve the products and services that are offered. Additionally, good cash flow is essential so that you can maintain the right amount of inventory, so these products are always on hand when customers are ready to buy.

Finally, don’t overlook the peace of mind that comes when you know that there is money in the bank. You can’t put a price tag on the lower stress levels you will experience when you have an emergency savings account in place for a rainy day. Good cash flow strategy and management could be the difference between business success and failure, which is why this task should be at the top of your priority list.

Keeping up with Accounting and Bookkeeping

The foundation of an effective system for cash flow management should be based on the right bookkeeping and accounting strategies. You need to track the transactions that are moving in and out of your bank accounts. Data-driven decisions are important to help your business flourish in the future.

As a business owner, do you find it challenging to keep up with the accounting and bookkeeping tasks that are required? You are carrying a lot of responsibility, so it’s understandable that you find it difficult to stay consistent with these efforts.

Instead of stretching yourself thin with too many responsibilities, consider the benefit of bringing in a good outsourced accounting team. These services will improve your financial systems and help you avoid potential cash flow issues. Working with an experienced financial team is one of the best things that you can do to support your business goals.

For more information, reach out to us at Easier Accounting. We are here to help with anything that you need for accounting, tax preparation, financial advice, and more. Call today: (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.

Strategies to Reduce Bookkeeping and Accounting Costs

It’s easy to see that good bookkeeping and accounting strategies are important for the financial health of your company. But sometimes small business owners have a hard time justifying bookkeeping and accounting costs because they are worried about managing overhead expenses. Today, we are breaking it down to help you see that good services are an essential investment for your company.

Expense Vs. Investment

Yes, you will need to pay money for services, software, and more. Instead of viewing the money as an expense that is eating away at your profit margins, a better solution is to reframe the spending as a long-term investment for your company.

What is the difference between an expense vs. an investment? An expense is a drain on your resources without adding measurable benefits for your company. In comparison, an investment is a cost that will start paying you back and improve your business efforts.

You need to balance the initial and ongoing costs with the potential benefits and costs in the future. For example, failing to implement a good bookkeeping and accounting system can result in messy finances in the future. Even though you are “saving money” by not paying an accounting service for support, you will likely face expensive consequences in the future such as:

  • Missed opportunities for tax deductions
  • IRS fines for incorrect tax filings
  • Mistakes on payroll and invoicing
  • Cash flow problems from poor tracking
  • Poor business decisions due to inaccurate financial reports

When you understand all of the potential issues that can be prevented with the right accounting services and software, then it will help you see why you shouldn’t delay these investments.

Most Important Investment

What is the most important investment that you can make in your company? People! If you cut corners on the quality of employees, contractors, and service providers that are hired, then it will hurt the performance of your company.

Often, business owners look at the amount that is spent on people as an expense. Instead, ask yourself how much that person is worth to your company. Investing in the right talent means that you can bring in the skill set that is needed to help your business flourish and grow in the future.

As you put together the right team, all of the skills and services will be available to help you accomplish the top goals for the organization. If you are paying for costs that don’t contribute to those efforts, then it might be an indication that you can do without those things.

Tips for Managing Expenses

Even though you can’t eliminate the budget line-item for bookkeeping and accounting costs, there are a few things that you can do to decrease your overall spending. Set a budget, then put your money into the right places that will support your needs. Hiring the right accounting team can have a positive impact on your cash flow and the overall financial health of your company.

Here are a few tips to help with the management of your costs:

  • Cut Expenses: Now that you understand the differences between expenses and investments, evaluate your spending to see if you can find areas where you are spending money on unnecessary items. Are there any expenses that you are maintaining that aren’t adding to or supporting your main business goals? You will need to decide about each item to determine the overall strategy that is best for your needs. Then, use that money for an investment that will have an impact. For example, you might adjust your insurance coverage to save a little money each month. Then use that extra cash to put towards bookkeeping services to ensure that you are staying ahead of the numbers throughout the year.
  • Organize Your Information: Once you’ve hired bookkeeping and accounting services, keep in mind that the costs go up if the team has to do extra, unnecessary work. Instead of overpaying your bookkeeper, look for ways that you can streamline your in-office systems to ensure that everything is neat and orderly for the financial professional. Organization not only saves you money, but you can also save time sorting through paperwork and other busy work. Bookkeepers and accountants only work based on the paperwork and information that is provided. So, you need to be sure that you are offering accurate, effective information. Maintaining this organized system will reduce the number of hours required to manage your books.
  • Professional Advice: Without experience in running a business, setting a budget, or filing taxes, it is likely that you are making mistakes with your financial management. You will find that it is worth the cost to bring in an expert for advice on the services that are required. Even though you will pay a fee for time with the professional, you can identify areas where your finances are managed Small tweaks to your ongoing bookkeeping and accounting systems can result in big savings in the future.
  • Contractor Instead of Employee: When you know that you need specific services or skills, then it might make sense to hire an employee to help. But there are many situations where business owners don’t need the full-time services provided by an employee. Another option is to skip the full salary, benefits, and overhead costs of employment by hiring a contractor for outsourced services. For example, you can save thousands of dollars each month by paying a small business accountant for basic services instead of hiring a full-time accountant to work in your office.

The key is to find ways to cut expenses without harming the well-being of your company. Each business is unique, which is why there isn’t a one-size-fits-all solution for all companies. A personalized approach is the most effective way to be sure that you are avoiding high costs and unnecessary expenses.

The Power of Outsourcing

There’s no question that outsourcing is one of the most effective and simple ways to reduce the amount of money that you are spending on skills and support. We’ve talked about this point in other blog posts, but it’s worth a mention again because of the leverage that is available to help you cut accounting costs.

When you look at the numbers, it’s easy to see why a big team of employees can cut into your overall profits. Hiring an employee can be expensive! You need to look at more than their hourly pay. In addition to these hourly or salary costs, you will also bear the burden of benefits, office supplies, office space, furniture, and more. There are times when it makes sense to bring in an employee because you need full-time services in your office. On the other hand, there are many instances where you can pay a fraction of that amount for top-notch services from an outsourced team.

Contractors offer the same skills that are available from an employee. In fact, there are times when hiring an outsourced team is more effective than employee services since those contractors have experience working with many different companies. You can tap into the expertise that comes from working with other businesses that are similar to your company. This information can be used to improve your systems and help you avoid some of the common mistakes experienced by others.

Lean Strategies to Reduce Accounting Costs

Implementing lean strategies for your company means that you are focused on the measurement, control, accounting, and management aspects to maximize the information that is available when making significant business decisions. If you are trying to decide on a business development investment or whether you should hire more employees, you need to be sure that you have accurate financial information to influence the way the decision is handled.

An experienced accounting and bookkeeping team will ensure that your financial reports and transactions are current. Then, this information can be used at any point to help you determine the right decisions that will have the best impact on your company. Hiring an outsourced accounting service ensures that you have timely reports which can be used to determine the value created for customers. Additionally, you can implement a lean system that reduces overall costs while increasing sales at the same time. It feels great to make these changes, knowing that you are improving cash flow and the potential success for your company.

Do You Need Outsourced Accounting Services?

How do you know when it is time to hire an outsourced accounting team? The truth is that you can probably benefit from these services right away. Many business owners choose to implement these services from the beginning of their startup efforts, ensuring that the financial system has a strong foundation as the business grows.

If you are considering the option to hire outsourced accounting services, then you are welcome to talk to us about your situation. Call our team at Easier Accounting to learn more about the way our services can be matched to fit your needs. We’re here to keep your financial information on track so that you can focus your time and energy on growing your business this year. Call for more details: (888) 620-0770.

Accounting Security Tips to Reduce the Risk to Your Company

Data security is an important topic of discussion, especially since many businesses manage most of their transactions through online platforms. Not only do you need to consider the security of customer payments that are processed, but you also need to think about accounting security offered by the outsourced team that you’ve hired.

Data Breaches and Business Targets

It seems like there are always news headlines announcing the latest data breach. Hackers target businesses with the goal of stealing financial information or personal details about clients or employees. Then, this data can be used for profit by selling the information to the highest bidder.

Large companies are often targeted because of the mass amounts of data that are available through a breach. Even though you might think that you won’t be a target since you have a small business, the truth is that there is always a risk for small- and medium-sized businesses. The risk goes up whenever you are turning information over to an outsourced company or transmitting data through software programs.

Proactive Approach for Data Security

Instead of assuming that your business is safe from these threats, you should always be on the offense to protect your data and business assets. Never make false assumptions about the security of your systems. It is important that you do regular assessments to determine how effective your current security protocols are at protecting your company and your customers.

If you wait until a data breach occurs, then you could be facing an expensive, messy situation to solve the problems. A better solution is to spend a little money right now on the right software programs and services to ensure that you have security controls in place before a breach occurs. These proactive steps will help you avoid the possible problems that can occur if someone breaks into your digital system.

Hiring a Trustworthy Team for Accounting Security

The first step you need to take is to evaluate the security of the outsourced team that you are hiring. Don’t make the mistake of choosing an outsourced accounting team with a questionable background. For example, if the company doesn’t have a proven track record, then you don’t know what you are getting yourself into.

Do your research to make sure that the accounting services are highly rated. Researching the company in advance can save you a lot of grief in the future.

You can research the company by asking for information from the accounting team. Also, complete a search online for the business name to see if you can find any reviews or business listings that indicate the reputation of the company.

Security Begins in Your Office

Even if you are hiring an outsourced team that you can trust, you should always remember that the most important layers of security should begin in your office. Inspections should be done of all areas where information is transmitted to identify any potential leaks. For example, you should have an expert evaluate your data generation, storage systems, and data collection processes to make sure that the information is passing through a secure network.

Potential leaks in the system might be identified in the form of outdated software or poor management in the office. One common issue is insufficient control over employee access to the system. Employees shouldn’t have free access to sensitive information unless that access is required for the person’s job description. Just because the person belongs to a department, doesn’t mean that they require full access to all of the information.

Also, be careful about contractors or vendors who have access to your data systems. Too often, these providers are offered record access when the information doesn’t have a direct connection to the transactional relationship.

Never make the mistake of allowing employees or contractors to use the same credentials when accessing financial information. If everyone is using one username and password, then it might be difficult to identify the source if a problem occurs.

Why Accounting Security is So Important

Keep in mind the reason why most hackers are trying to access information: they want to gather details about personal information or financial accounts. Even if you have a small business, your system is always at risk because of the information that it holds: credit card numbers, bank account details, social security numbers, passwords, and more.

Most companies have digital files with demographic information about their employees, executives, and even their customers. If a hacker can gain access to the information, then it is a goldmine of information that could be sold for profit.

Tips for Accounting Security

Here are a few tips that can be implemented in your business practices to improve the security of your company information:

  • Necessary Information: You should only gather information that is necessary for the employee or the services that are provided to the customers. There’s no reason to gather additional sensitive information if it isn’t required for the situation.
  • Security of Professional Service Provider: Talk to your service provider, such as the outsourced accounting team, to find out more information about their security practices. You will be handing over access to sensitive financial information, and you need to be sure that they have protocols in place to prevent a breach of information.
  • Firewalls and Software Protection: These firewalls should be installed on every computer and electronic device that is used when accessing business information. Additionally, you might consider implementing a monitoring gateway so that you know who is accessing the information and when the access points occur. These proactive steps reduce the risk of exploitation of both internal and external vulnerabilities.
  • Computers and Networks: Consider the ways that data could be removed from the office. One option is to disable the USB, CD, and DVD functions on computers to prevent employees or contractors from downloading the information. It can be helpful to have several layers of authentication to avoid remote access as well. Date transfer should always use 128-bit encryption.
  • Data Recovery Plan: If a problem occurs with the systems, do you have a back-up plan in place to recover the information? It can be a headache for your team if you can’t recover employee or customer information that was saved on the computer or in the cloud.
  • Physical Security: Also think about the security of your office. Could someone walk into the office and access paperwork or files that contain sensitive information? All access points into the building need to be secured. Additionally, data entry and exit points need to be managed. If you have hard copies of the files in the office, then these things need to be kept under lock and key. A locked filing room or secure filing cabinet are both good options to consider.
  • Employee Screenings: Every employee should be screened in the recruitment process. If someone is going to have access to sensitive information in your company, then it is important that the proper screenings are completed to avoid issues. Extensive background checks can be used to reduce the risk that a person with a questionable history is accessing financial
  • Employee and Management Training: It is common for companies to have security and systems training that is offered at the beginning of employment. But this new-hire training isn’t enough to ensure long-term adherence to the security protocols. Consider ongoing training to ensure that everyone is up-to-date on the latest technologies and strategies that apply to your data security.

Security for Technology-Driven Systems

Most businesses rely on technology systems for basic processes and ongoing strategies that keep the company running. As a result, security is more important than ever to ensure that you are avoiding potential issues that could arise with a data breach.

There’s no question that investing in the right security protocols, software programs, and outsourcing teams is a good step to protect your company and customers. These investments not only help you reduce the risk of stolen information through a security breach. But some industries are required by law to maintain high standards for security. For example, HIPPA requirements ensure that medical businesses have consistent practices in place to protect sensitive information found in patient files.

When you do the work to choose trustworthy software and service providers, then you can have the peace of mind in knowing that your confidentiality remains intact. Implementing these steps allows you to rest easy since your critical data is protected. As a result, you can turn your attention and focus on the core business concerns that need to be addressed.

At Easier Accounting, we maintain the highest levels of security and confidentiality to protect your sensitive financial information. We understand that you are entrusting us with your information. So, we are diligent about our systems to ensure that your information is protected. If you are looking for an outsourced accounting team that you can trust, then we invite you to contact us for more information. We will gladly answer your questions and explain the services that are available for your company: (888) 620-0770.

Bookkeeper vs. Accountant: Different Services for Your Business

How often have you heard the terms “accountant” and bookkeeper” used interchangeably? If you don’t know about the differences in the services, then it is easy to see how you might be confused about these professions.

Yes, both accountants and bookkeepers work with financial reports, organization, and tracking. In fact, the services offered by an accountant and bookkeeper often overlap. Some firms offer both bookkeeping and accounting services. But their purposes, focus, and skillsets vary depending on the person that you hire.

Services from a Bookkeeper

The term “bookkeeping” is used in reference to services that are rendered for organizing, storing, recording, and retrieving financial information. Usually, a bookkeeper is involved in the ongoing transactions that are moving through your bank account. This person oversees a portion of the accounting process, usually focused on the classification and recording of the daily transactions such as bill payments, payroll, sales, and more.

The purpose of hiring a bookkeeper is to maintain the organization and accuracy required to ensure correct information on financial reports. A bookkeeper spends their time working on record keeping. They don’t spend as much time on analytics or financial strategy.

Keep in mind that a bookkeeper isn’t required to have a four-year degree. As a result, bookkeepers usually have less education compared to accountants.

Services from an Accountant

The accountant uses the information that was compiled and organized by the bookkeeper. Often, accountants are involved in tax strategy, tax filing, financial reviews, auditing and more. Accounting services take it a step beyond bookkeeping services by analyzing the reports, reviewing the information, identifying trends, and interpreting the information. When the data is turned into reportable information, then you can use the details as you are making big decisions for your company.

Accountants are required to complete a four-year degree as well as extensive training and certifications. These requirements ensure that your accountant understands the financial laws, strategies, and other steps that need to be taken to care for your business finances.

Different Stages of Financial Management

As you can see, the services that come from a bookkeeping team and accounting team go hand-in-hand. Even though their services are different, these professionals often work in tandem. The combination of a strong accountant with a detail-oriented bookkeeper is essential to bring clarity to your business finances.

If you need someone to help with the day-to-day processes, then you will likely benefit from the support of a bookkeeper. On the other hand, if you are looking for support with the bigger picture and tax strategy, then you should turn to an accountant for support.

When it comes to the daily and weekly financial management, a bookkeeper can support with a range of tasks:

  • Tracking transactions moving in and out of the financial accounts
  • Managing and logging transactions to ensure accuracy on the reports
  • Evaluating payments, sales, receipts, and purchases
  • Calculating payroll and processing payments for employees
  • Overseeing invoices and payments for contracted workers and suppliers
  • Monitoring accounts receivable to ensure cash flow throughout the month
  • Completing monthly financial closing and bank account audits as needed
  • Using bookkeeping and accounting software to ensure accuracy

Keep in mind that the bookkeeper’s activities and tasks vary depending on the size of your company and the transactions that are moving through the account each day and week. When many transactions are coming through each day, then you might need bookkeeping services throughout the week. But some small businesses don’t need the services of a full-time bookkeeper, so it often makes sense to hire an outsourced bookkeeper instead. Typically, the services of the bookkeeper will expand as the business grows.

As you look over the bookkeeping tasks, you can see that they provide the foundation needed to support your business financial health. Then, the accountant steps in to use the data generated by the bookkeeping activities. Accounting services often include:

  • Tax analysis and strategy to minimize payments to the IRS
  • Completion and filing of income tax returns
  • Answering questions and helping business owners understand the applicable financial regulations
  • Financial statement analysis and business strategy support

Do You Need an Accountant or Bookkeeper?

How do you know who to hire when you need financial support for your company? It is important to distinguish the services so that you can choose the level of expertise required for your business.

While a bookkeeper is a cheaper solution, they don’t offer the financial expertise that comes from a small business accountant. In most cases, business owners find it beneficial to engage the services of both a bookkeeper and accountant, with the bookkeeper working on daily transactions and the accountant offering periodic advice.

Don’t overlook the benefits of a financial team that can provide both bookkeeping and accounting services. It can be beneficial to keep all of these tasks with the same team, ensuring optimal communication and the best strategy when everyone is working together.

How to Tell When You Need Financial Support for Your Company

Is it time for you to hire a bookkeeper or accountant? It might feel like a challenge to determine the right timing in bringing in a financial professional. But, as a business owner, remember one important tip: it’s never too early to bring in accounting and bookkeeping professionals.

Even if you are just getting your startup off the ground, you have the opportunity to work with an experienced team. This professional advice can help you create the right financial foundation and set your company up for success in the future. Business owners who hire accountants and bookkeepers in the early stages of growth rarely regret the decision.

Benefits of Hiring an Outsourced Accountant

It probably doesn’t make sense for your small business to hire a full-time accountant. Bringing on another in-house employee raises your overhead expenses and puts added financial strain on your cash flow. Instead of hiring an employee, consider the benefits of using outsourced accounting services.

The main benefit of outsourcing this part of your business is that you can save both time and money. You don’t have to spend your hours crunching the numbers and trying to make sense of the financial reports. Instead, your attention can turn back to business-building activities because you have the peace of mind in knowing that your accounting and bookkeeping team is taking care of the tracking and analysis.

Plus, these services are essential to help you save money. Even though you will have a bill to pay for outsourced accounting services, you will likely find that you save more money overall. Here are a few financial reasons why you shouldn’t delay the services of an experienced financial team:

  • Improve Tax Strategy: One of the most frustrating aspects of owning a company is seeing how much money goes out the door when it’s time to pay the IRS. Taxes can cut away at your profit margins and make it hard to manage cash flow. An accounting team can evaluate your business and finances, then find the right strategies to minimize the tax burden that needs to be paid each year. These savings can add up to thousands of dollars… often more than you paid for the accounting services.
  • Reduce Error: Consistent tracking and bookkeeping help you avoid common errors that could affect your business. For example, if you don’t have a good system in place to keep track of invoices, then you might overlook payments that should have been made by your clients or employees.
  • Avoid Fraud: Keeping an eye on the financial transactions is essential so that you can avoid fraud and theft in your business? Regular audits, reviews, and analysis will help to uncover anywhere that money might be slipping through the cracks. Even though you should be able to trust your team, you should still have systems in place in case something happens.
  • Increased Revenue: When you spend more of your time on business development and marketing, then it increases the chances that your revenue will go up. As the business owner, you shouldn’t be focusing your efforts on the busy work that can be completed by a bookkeeper or accountant. Your time is valuable, which means that you should be spending your hours on activities that will bring in more money for your company.

At Easier Accounting, we know how important it is that you have a good financial team to support your business goals. We’ve been serving small business owners for many years, offering the best financial services available in the industry. Our goal is to not only ensure your satisfaction, but we go above and beyond to provide unbeatable solutions that will support the growth of your company.

If you have questions about accounting and bookkeeping services, then it is time to contact our company today. We have a team of experienced financial professionals who are ready to create a custom plan based on your needs. Easier Accounting is always here to help. You can call us during regular business hours to learn about the services that are available: (888) 620-0770.

When Should Internal Audits Be Done for Your Business?

Most business owners cringe when they hear the word “audit” because this word is associated with stress, the IRS, and frustrating paperwork. But you shouldn’t be scared of auditing. In fact, internal audits might be the best way that you can improve your business and maximize your results going forward. If you don’t have a system in place for internal audits, then it is time to talk to an outsourced accounting team to learn more about the options that are available.

What are Internal Audits?

An internal audit is a process of assigning an employee or accounting provider to provide an objective and independent evaluation of your business finances. This process helps you identify any areas that need to be improved so that you can avoid big problems in the future.

Internal auditing is a proactive way to care for the needs of your company. In the same way that you take your car in for regular oil changes and tune-ups, you also need to be proactive with preventive maintenance for your company. A little bit of work right now ensures that systems are working and you are staying on the right track. At the same time, you can identify areas of improvement to reach higher levels of success in the future.

Auditing is the answer so that you can reflect on the progress that has been made as well as the goals that need to be set in the future.

Responsibilities of Internal Auditors

What are the responsibilities carried by internal auditors? You can identify these responsibilities and assign them to an in-house employee. But many businesses find benefit in hiring a contractor or outsourced accounting team to ensure that it is a third-party, objective evaluation.

These routine audits are important to ensure that you are maintaining your competitive edge in the industry. Auditors help by:

  • Assessing, analyzing, and monitoring the controls and risks of the company
  • Reviewing your compliance with both state and federal laws
  • Identifying errors or opportunities for improvement
  • Providing recommendations to streamline systems and optimize business practices

The goal is to gather information on the operations of the business. Then, this information is used to show the areas that are going well and identify aspects that are in need of improvement.

It is important that the auditor is objective. When an auditor has a personal connection to the company, then the results can be skewed. For example, as the business owner, you may unintentionally place more focus or attention on things that are at the top of your mind, instead of looking at other aspects of the business that have been sitting on the back burner this year. Getting a fresh perspective is essential so that you can see your business financial situation with fresh eyes.

The Difference Between External Audits and Internal Audits

When you implement internal audits, you have the flexibility to choose the contractor that completes the work and when the audits are performed. This flexibility is nice because you can work around the busy season for your company. The goal is to improve company practices and optimize systems for further growth.

On the other hand, external audits might be done to verify financial reports for shareholders or the IRS. The owed responsibility goes to the entity that initiates the audit, such as the IRS or shareholders. Reporting to different people affects the way the recommendations are presented.

Why You Need to Schedule Internal Audits

Even though it takes a little work and effort, scheduling internal audits might be the best thing you can do to boost your company growth. Here are some of the benefits that you can expect from auditing services:

  • Top of Game: Since full transparency is needed for an audit, this process keeps management and employees at the top of their game. When people know that the work and progress will be tracked, then productivity goes up as everyone strives to meet expectations.
  • Reduce the Risk of Fraud: Regardless of your industry, it is necessary to be proactive to protect your company against the risk of fraud. The auditor will be able to identify any errors or issues that have already happened. At the same time, weak points in the system can be located to reduce the chances of fraud in the future. While you want to trust your employees and customers, it is important that protections are put in place to minimize the opportunities for theft or scams. Not only does auditing help to protect against dishonest activities of employees and customers, but you can also reduce the risk of cybersecurity concerns.
  • Measure Progress: It is easy to assume that your business is thriving when you don’t have a clear picture of the progress that is being made. When you are making big decisions about hiring, business development, and more, it is important that transparency is available to support the decisions that are addressed.
  • Maintaining Compliance: If you are in a business that is governed by state or federal compliance laws, then it is important to ensure that you are implementing all of the necessary activities to maintain compliance. For example, healthcare businesses need to audit the way data is stored and recorded to ensure that HIPPA compliance is respected. Most companies have compliance requirements that need to be met for payment processing and other aspects of running the business.

What to Expect During the Audit

Now that you can see the benefits of having an internal audit, it is time to identify the right company to help with these efforts. You need to know what to expect during this time so that you aren’t caught off-guard by the activities that are happening.

The auditor will come in and request access to documents, financial reports, computer systems and more. They will use this information to analyze the way the company’s performance matches objectives. At the same time, the observation will determine the effectiveness of different strategies that are implemented.

This work can take a few days or a few months, depending on the size of the company. If you have a small start-up or home-based business, then it won’t take long to review all of the financial details and reports.

When Should You Schedule Internal Audits?

You can choose the timeline when internal audits should be scheduled. Some business owners choose to implement a full auditing practice, while others bring in an auditor for a specific focus within the company. For example, you might audit the bookkeeping records to ensure that everything is accurate for tax filings.

Here are some of the common times when internal audits are implemented:

  • Before an Investment or Loan: If you are trying to bring in investors or you need a business loan, then you need to be sure that your financial information is ready for the scrutiny that will occur. It can be embarrassing to have inaccurate information presented to the investors! Instead, complete an audit to ensure that your financial statements are accurate.
  • Mistakes are Identified: Have you recently noticed a mistake in your books? If an error is identified, then it could be a red flag that other issues need to be corrected as well. It is common for mistakes to happen, which is why internal auditing is essential to keep everything on track. The auditor can identify the errors and provide recommendations to fix the discrepancy. Even tiny discrepancies can add up over time, costing you more money in the future.
  • Cash Flow Problems are Happening: Are you having a hard time identifying why you are experiencing cash flow problems in your business? If you are running into issues where sales are made, but you don’t have enough to pay the bills, then there could be internal inefficiencies that need to be corrected. For example, you might be overlooking the monthly expenses and paying too much in overhead costs. An audit can help you find ways to cut down the expenses so that you can maximize your profitability.
  • Consistent Schedule: You don’t need to have a specific reason to implement auditing practices. Instead, you might set a schedule so that you can be proactive with your business goals. Problems with the business could indicate the need for an audit. On the other hand, you can implement auditing practices before the problems arise. Checking the financial health of your company is as important as regular visits to the dentist or doctor to assess your physical health.

What do you need to know about internal audits? If you have questions, then contact Easier Accounting. We will gladly answer your questions and help you identify the right outsourced accounting services to support your business goals. Our team specializes in small business bookkeeping and accounting. We know the best practices to support your financial reporting and other processes that need to be implemented for long-term business success. When you are ready to learn more, you are invited to contact us to discuss your options. We can be reached at (888) 620-0770

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

Avoid These Accounting Strategies that Just Don’t Work

Staying current with your accounting system is essential so that your business can keep up with the growth that is happening. But, it is important that you are careful to avoid common mistakes and pitfalls that often happen in the accounting industry. The right accounting strategies can be crucial to help with potential success. On the other hand, the right financial strategies could be the downfall of your company.

You can find many resources about accounting and bookkeeping tips for small business owners. While there are helpful resources in the industry, it is hard to know which strategies are applicable to your industry and business. Instead of guessing your way through the systems and processes, you need to tap into the expertise that only comes from someone working “in the trenches.”

Hiring an accounting team might be the best decision that you will ever make for your company. Not only will these accounting strategies give you insider information about the processes that are working in today’s economy. But, you can also learn about the techniques that are applicable based on your personal circumstances.

Accounting Mistakes that are Costing You Money

These are some of the biggest mistakes that we see in the accounting industry. Shining a light on these poor accounting strategies can help you avoid some of the problems. Learn from other people’s mistakes so that you don’t have to harm the success of your business:

  • Profits = Cash Flow: Just because you close a big deal, doesn’t mean that the full contract amount can be chalked up as profits for your company. It is easy to see the money that is coming in and assume that the cash is available for other purchases. But, business owners often make mistakes with the way the money is handled. Then, they run into issues when the cash isn’t available for taxes or payroll. Whenever money hits the bank account, it is a good idea to set a portion aside in a savings account that is dedicated for taxes and other expenses.
  • No Emergency Account: Most companies experience ebbs and flows in the way the money moves through the bank account. Instead of being surprised when there isn’t enough cash to pay the bills, look ahead and make sure that you always have an emergency fund to cover the gaps when needed. The best solution is to have 3 to 6 months of cash flow in an account that is left untouched until an emergency situation This strategy protects your company from going under if the economy slows down or you experience normal seasonal fluctuations.
  • Procrastinating Bookkeeping and Reporting: It is essential that you are recording everything that moves through your business account. No matter the size of the transaction, be sure that you are keeping records of both large and small costs and invoices that come through. Proper categorization for your accounts is essential for tax deductions and future financial strategies. Many business owners find it difficult to implement a good accounting system. So, the best solution is to bring in an outsourced accounting team to help with the business strategy and application of the systems.
  • Improper Tax Filings: Did you know that a mistake on your tax filing could cost your company thousands of dollars? Don’t let yourself be fooled into thinking that you can handle DIY business taxes. If you don’t have experience working on business tax filings, then you need to outsource these services to a team that understands the best methods for your company and industry.
  • Blurry Lines Between Contractors and Employees: Understand the legal requirements that separate employees and contractors so that you are handling the taxes correctly. There are major accounting consequences that can occur if mistakes are made with worker classifications. So, never make assumptions about the way the person is classified without consulting with an industry professional. You need to understand the difference between employees and consultants so that your accounting records are accurate to match the business relationship with each person.
  • In-House Financial Services: When new skills are needed, or the team is overworked, then it is common for a company to hire in-house employees. There can be benefits to having an accounting on staff. But, you need to consider the financial impact that will affect your profit margins. When you own a small company with low revenue, you probably can’t afford to pay for the in-house services that are needed. Not only do you need to cover the cost of the accountant’s salary, but you also need to pay for benefits, office space, equipment and more. Plus, in-house accounting could result in problems with accuracy, tax deductions, and more. The best solution is to choose an outsourced accounting team that can help with everything from payroll to reconciliations.
  • Outdated Accounting Systems: If your tax deductions are tracked on sticky notes, and you are still managing invoices in a spreadsheet, then it means that you are behind the times. Manual accounting was a great strategy back in the day. But, newer systems have changed the industry and improved the options that are available for small businesses. There’s no reason why you shouldn’t take advantage of an automated computer system that is managed by a team of accounting experts. Implementing the right system can have a profound impact on your company, helping you keep up with the trends that are happening in our modern digital age.

Why You Will Love Outsourced Accounting Services

If you want to improve the accounting strategy for your small business, then outsourced services are likely your best option. Bringing in a professional perspective is a great way to ensure that you are staying on the right track in the way your company is being managed.

You can offload the busy work that is associated with financial management. When the accounting team takes over these tasks (such as payroll processing, transaction categorizations, auditing, reconciliations, and more), then you can dedicate your time and efforts to other tasks that are needed for your company.

Too often, business owners get caught up in the busy work required for bookkeeping and accounting. If you are spending your valuable hours going through transactions or calculating payroll, then it means that you are likely missing out on opportunities that could help with the growth of your company in the future. How much will your sales improve if you spend time working on new marketing strategies or product development, instead of crunching the numbers for the monthly financial reports?

Outsourcing these services to an accounting team means that you can enjoy the benefits of accurate financial information and a clear picture of the financial health of your business. But, you don’t have to waste your time when you are already carrying many other responsibilities to keep the company running. Invest a little money into accounting services so that you can focus your efforts and attention on other things that will leverage your results in the future.

Making the Best Decisions for Your Company

One thing to consider is the potential mistakes that could be made if your financial reports aren’t managed properly. For example, if there are issues with your accounting system, then it means that you are likely using inaccurate information when it is time to make big decisions relating to the future of your company.

These accurate reports are essential when you are looking at hiring options, equipment purchase, inventory replacement, business development and more. You need to know how much cash is available right now, as well as the cash that will be needed for the future. Staying ahead of this financial information will help by reducing your stress related to cash flow problems.

What Accounting Strategies Do You Need?

Now that you can see the importance of hiring the right services to support the needs of your small business, it is time for you to choose the services that are required for your company. The advantage of working with a concierge team, such as Easier Accounting, is that these services can always be catered based on your requirements.

We are always looking for solutions to personalize your business systems. Our team has been working in the accounting industry for many years. During this time, we’ve built the right experience to ensure that you always receive the best services that are available. We understand the importance of specialized accounting services, which is why you should choose our team. We’ve focused our experience on small businesses and entrepreneurs.

Learn About the Accounting Services that are Available

How should you get started if it is time for you to learn more about accounting services? You can read information online, but nothing beats a personal conversation with an industry expert. Right now is the time to take action, so we invite you to call our team to learn more about the services that are available.

Easier Accounting is leading the industry by offering innovative solutions for entrepreneurs and small businesses. Call us today to see how we can help with your business needs: (888) 620-0770