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CPA vs. Accountant Responsibilities

When deciding whether you need to hire a CPA or a general accountant for your small business, it’s essential to know the difference. There are a variety of accounting services that you can outsource or hire an in-house accounting team to address. Bookkeeping and day-to-day accounts payable and receivable do not necessarily require hiring a person with a degree in Accounting.

There are more in-depth accounting services that you would need to hire someone who is educated with an accounting degree. A CPA is a Certified Public Accountant with even further education and has passed a test to earn that title. They must adhere to a code of ethics as well to keep their certification.

For a greater understanding of which accountant professional may be right for your small business, let’s look at the roles of an accountant and a CPA.

Accountant Responsibilities

While many accountants are trained to do many of the duties that your small business may require regarding accounting, some tasks may need a CPA’s expertise. What are the responsibilities of an accountant who doesn’t have their CPA credential?

  • Has a Bachelor’s Degree in Accounting: A general accountant will have a Bachelor’s Degree in accounting or have a degree with a large number of accounting credits.
  • Oversees Bookkeeping: A general accountant should be experienced in managing bookkeeping and signing off on the processes.
  • Consults on Financial Strategy: A general accountant will have a broader view of your company and offer advice on how to save money in the long run.
  • Sets Up Business for Taxes: An accountant can register your small business as an LLC or whichever category is best for your tax situation.
  • Manages Cashflow: An accountant will keep a close eye on the cashflow and have boundaries set on how much cash goes out in order to maintain ample working capital.
  • Projects Future Earnings: A general accountant can collect data and look at the earnings and growth over a period of time. They will use this data to predict earnings for the future.
  • Runs Reports and Analyzes for Optimal Savings: A small business accountant will also run reports to compare and contrast month-to-month or even week-to-week reports. They should also be experienced in recognizing opportunities for savings within your company.
  • Business Planning: They can help with business planning and offering advice on the financial side of your business. Having an accountant in on the meetings with big ideas for the future is always a good idea.
  • Tax Planning: Every business has a strategy with taxes that helps them save money and utilize tax credits. A small business accountant will be very familiar with the best tax strategies for your business.
  • Files Business Taxes: An accountant can file taxes for your business and make sure there aren’t any errors that could lead to red flags that alert the IRS for an audit.

A general accountant can get the job done when it comes to running the financial side of your business. They are well-versed in business planning and helping businesses thrive. There are some things that an accountant cannot do without the CPA certification.

CPA Responsibilities

It changes state to state, but a CPA generally has a Bachelor’s Degree with a certain amount of accounting credits. And on top of that, they either have to have a Master’s Degree or 150 credits total to be able to sit for the CPA exam. Once they have passed the exam, they participate in continuing education to keep their CPA license valid.

Here are the responsibilities of a CPA:

  • Legally Defends Your Company in an IRS Audit: If the IRS audits your small business, a CPA can defend your business and act as a representative. Choosing a CPA with their tax expertise will minimize the fees that may be required by the IRS.
  • Creates and Signs Off Audit Reports: When a CPA signs off on an audit report, they are putting their name and reputation on the line. A CPA signature means that you can trust anything on the report is accurate.
  • Has Expert Tax Knowledge: If you are looking to file out of state taxes or have a complicated tax return, a CPA will have knowledge of all the various tax laws. They will be able to help you with your unique tax return.
  • Offers Advanced Tax Strategy Advice: A CPA will have advanced knowledge of tax strategies for small businesses.
  • Adheres To a Strict Code of Ethics: The reputation and career of a CPA are on the line if they were to break any rules or sign off on an audit without thoroughly checking it for accuracy.
  • Signs Off on All Financials for Publicly Traded Companies: If your company is publicly traded in the stock market, then all financials that are presented must be signed off by a CPA. The public isn’t going to trust your profit margins until you have a CPA’s stamp of approval.

As you can see, it takes special training and effort to receive a CPA credential. Because of this, their work is more valued and sought after. If you need help with an IRS audit, a CPA can help. And you can always know that they have to be honest and ethical to keep their license.

What is an EA?

An enrolled agent, or professional tax preparer, also has to sit for an exam and adhere to a code of ethics. An EA has the expertise in the tax side of the CPA certification. Their roles include:

  • Preparing Complex Tax Returns: If you are looking for an expert in tax preparation and strategy, then an EA will help you with that. Their role is primarily to prepare taxes and execute tax strategies that are best for big and small businesses.
  • Specialized Knowledge in Tax Law: An EA will know all of the tax laws and fix any problems in your small business that may be bad news to the IRS. They can also defend you if the IRS were to accuse your company of breaking any tax laws.
  • Representing Your Business Before the IRS: An EA is qualified to defend your business before the IRS, just the same as a CPA. They will fight for your business during an audit and reduce fees and present the proper paperwork throughout the process.
  • Negotiating Payment Plans with the IRS: An EA can work with the IRS to negotiate payment plans if there are back taxes that are owed. They can also advocate for your small business and cooperate kindly with the IRS demands.

An EA may be an excellent option for your company if you are looking for an accountant to help you with an IRS audit. They are well-qualified and tax experts. Most of the work an EA focuses on is in the tax side of accounting, so they will always be a great option to take care of your small business taxes.

Which Accountant Professional Is Right for Your Small Business?

Here are some questions you might ask yourself to decide what accounting professional is right for your small business:

  • Is my company private or public? If your company is public, then you will need a CPA to certify all of the financial documents that you present to the public.
  • Do I need help with specialized accounting? For any complex accounting processes, a CPA will be the right person to use their further education to help your small business.
  • Do I need help with daily bookkeeping and simple accounting? A general accountant can help you with any bookkeeping processes and help get your company organized.
  • Do I need representation in an IRS audit? A CPA or an EA can represent you before the IRS. These agents are used to working with the IRS and have the negotiation skills to save you the most money.
  • Am I seeking financial advice for my business? An accountant or CPA is an excellent option if you are seeking big picture advice for your business.
  • Do I need help with taxes? An accountant, CPA, or EA can help you file your taxes and remember all the tax credits for which you qualify. A CPA or EA may have more specialized knowledge and more experience. Plus, their certification is on the line if any big mistakes were to occur.

The answers to these questions should get you started on which path to take when choosing the right accountant for your company. Doing the proper research beforehand will save you from having to hire additional help in the future. The last thing you want is to be audited just to find out that your accountant isn’t qualified to help you with the IRS.

Contact Small Business Accountants Today

When you sign up for accounting services, you want a team who can help you with every need that you have. With Easier Accounting, we have a team of qualified accountants and CPAs who specialize in small business. Our experts can relieve your stress related to bookkeeping or taxes, or day-to-day checks and balances. Invest in your small business by hiring small business accountants today. Give us a call at (888) 620-0770.

Advice for Making a Small Business More Diverse and Inclusive

Being an entrepreneur can come with many brainstorming ideas that are made into a reality with your drive and go-getter personality. An essential part of owning a small business is surrounding yourself with people from all backgrounds and demographics who can help you learn about all perspectives. If you were only surrounded by people who think as you do, you would never be able to reach a broad audience.

What Does Diversity in Small Business Look Like?

Diversity in business can involve many aspects, including:

  • Age: Having a wide array of generations on your executive team is an asset to a company. Yes, hiring a 21-year-old fresh out of college can feel like a risk. It can also have a big payoff by gaining a new and innovative perspective from someone in a different stage of life than you. On the flip side, someone with a lifetime of experience will know shortcuts and life lessons that you may not have experienced yet.
  • Gender: Many successful businesses have spoken out about hiring more women on their teams, and their companies are thriving. Getting input from both men and women can widen perspectives and bring in better ideas.
  • Socio-economic Status: Surround yourself with people from all walks of life in your small business. It is essential to have people from different socio-economic backgrounds so you can discuss price points with real input from your team. Choosing a diverse accounting team is crucial as well, in age and experience, and background.
  • Race: Diversity can look like a wide array of racial backgrounds. You can provide the representation of success and power in hiring people who aren’t exactly like you.
  • Place They Were Raised: An employee raised in the Northeast could have different ideas from a person from California. When you have many regions represented on your team, you will reach audiences all over the country and world with your online business.
  • All Abilities: Open your mind to hiring someone who is deaf or has any disability. Small changes in the workplace to make it more accessible can take care of any initial differences. And you can enjoy the skills presented by a valued employee.
  • Sexual Orientation: Great perspectives and a more extensive reach will result from people who have a variety of life experiences. Celebrate the differences in your work community.

Diversity comes in many forms, and all ways are beneficial to your business. Making small efforts to invest in your business’s diversity will be steps toward making your small business the best that it can be.

Where to Start?

You don’t have to clean up shop and overhaul your team all at once. Company culture doesn’t change overnight. There is power in awareness and then taking the steps toward diversifying your team, little by little. When you all are on the same page and moving in the right direction, real strides can be made toward executing change. Here are some ideas on where to start:

  1. Educate Your Small Business on Diversity and Why It’s Important

The first step is educating your current employees and executive team. You can talk about the benefits of surrounding the business with contrasting ideas and opinions. A company culture of diversity and inclusion isn’t only the right thing to do – it will give your company a competitive edge and help your business grow into financial success.

When the whole team is educated on how important it is to invite differing opinions and views to the table, they will all be on board to move forward with the initiative. Unity in this intent is essential in a business so that everyone is genuinely working together to make a change in company culture.

  1. Start with One or Two Goals

Of course, you can’t fire everyone on the team and start fresh. And you also can’t hire a bunch of new employees without work for them to do. Implement initiatives to drive your current employees into the state of mind surrounding inclusion and diversity.

When the company changes its culture and way of thinking, a new team member will feel more welcomed when starting work at your small business. Employees in a small business can be tight-knit, and your team can work on inclusion strategies before the need to hire a new employee comes up.

  1. Celebrate the Differences Among Your Employees Regularly

You can implement programs in your company to promote the employees to show who they really are and what they love. This can look like a simple basketball or book club that meets after work hours together. Or you can also start service initiatives where the company comes together to serve in the community, and employees take turns choosing charities they are passionate about.

The worst culture you can have is a standard where everyone is expected to conform and hide who they really are. Encourage sharing and learning from one another. Maybe you can spotlight an employee in each staff meeting, highlighting personal achievements and passions. Let people know that opening up and sharing are welcome in your business.

  1. Make a Plan for Recruiting

In order to open your mind to finding diverse talent for your small business, you can create a navigation plan. This can include a diversity component to your interview scorecard. If you are evaluating a potential employee, how would they contribute to your company in a way that would stand out?

Another strategy for hiring a new employee is to try a blind resume assessment. Have the names, schools, and the city they live removed from the resumes and look through them with fresh eyes. This way, you can be freed from quick judgments. When you don’t know their gender or University, you can decide based on qualifications alone. This will set the tone for the interview process and keep yourself aware not to make snap judgments based on appearance as well.

When hiring new employees with diversity in mind, be sure to highlight the steps your company has taken toward educating and making goals around diversity and inclusion. You never want a potential employee to feel like a token hire to check a box. Be genuine about your end goal and the small steps you are taking to achieve it.

  1. Represent Your Company in Advertising Honestly

A lot of times, a company uses models of different ages and races to advertise their business. While this is a great way to show that your company has representation, be sure that your employees also reflect a picture of diversity. Customers want to know that the people involved in making the decisions with the company also look like them.

It can be overwhelming to know where to start when implementing diversity in your small business. When you make your intentions known and implement small initiatives to revamp your company’s culture, you will make the transition more natural. Surrounding yourself with a variety of voices and celebrating those differing opinions will create ideas that are on the next level, ready to propel your small business into a success.

What Are the Benefits of Diversity in the Workplace?

There can be so many benefits to having varied voices and opinions in your small business. One person in charge of making decisions without consulting with others will always lead to a dead-end in innovation. When you brainstorm with a small group of people, especially people with diverse backgrounds and beliefs, you will find success with fresh and new ideas.

Here are some benefits to having a diverse team for your small business:

  • Multiple perspectives
  • Fresh ideas
  • More creativity
  • Increased collaboration
  • Faster problem-solving
  • Higher profits
  • Respected company reputation

When you take the small steps toward building up your small business’s diversity, you will see great results. It takes more than just big talk. You have to act on your ideas and set measurable goals. When you hold yourself accountable for making change, your business will gain a reputation of inclusion and being a safe place for people of all backgrounds to work.

Now Is the Time for Diversity and Inclusion

If it has been heavy on your mind to make changes in your small business surrounding diversity and inclusion, put your money where your mouth is. Taking the necessary steps toward altering your company culture and hiring people with fresh and exciting ideas will help your small business thrive.

When you have a team that is filled with broadened horizons and problem-solving skills, it may genuinely be the revamp that your business needs. Make a plan and invest in the diversity of your small business today.

Contact an Expert Accounting Team

Our team at Easier Accounting can help you with your small business accounting needs. If you are looking to diversify your team, let us take the stress of day-to-day bookkeeping and accounting off your hands. You will be left to focus on the growth of your company with increasing big and diverse ideas. Contact Easier Accounting to learn more about delegating out your small business accounting so that you can focus on what really matters. Please call us at (888) 620-0770.

Start the New Year Off Right for a Small Business

As you go into the New Year with your small business, you may find yourself feeling energized and ready to make 2021 your year! There were likely some hard lessons learned in 2020. But you made it through, and now your company has the potential to grow and thrive. What can you do for your small business to make sure that you start the New Year off right?

Looking Back to Find Fresh Ideas for the New Year

How can you look back on 2020 and turn your experiences into even better results for your small business in 2021? With great analysis and dedication, take a look at these ideas on how your past unexpected adventures can serve great benefits for your small business:

  • Contact Existing Customers: Get in touch with your existing clientele to find out what your business is doing right. What keeps them coming back to your website or store? Is it the friendly employees? Is it the cleanliness? Is it the store layout and modern style? Is it the quality of the products? When you find out why people stay loyal to your small business, you can emphasize those areas of your business to attract new customers.
  • Survey Previous Customers: It’s not easy to hear criticism on your small business, but it helps know why customers are not returning. When you reach out to people who only have one purchase from your company, you can discover why they didn’t return. Maybe the reason is that they loved the product so much, they never needed a replacement or a reason to return. But other reasons could be helpful to know: was it too busy, was the interface complicated, was the product defective, did they have a terrible customer service experience? These things would be vital to know so you can move forward in improving your small business.
  • Look at your ROI on Marketing Strategies: Write out the numbers of how much money you invested in marketing, and find out which marketing strategy brought in the most business. You can find out how people heard of your business through a short exit survey. Or you can send out coupons through email, social media, and the mail, and see which coupons are used the most. If you can pinpoint where your marketing paid off the most, you can put more money into that investment.
  • Review Your Small Business Sources of Success: What is the source of success in your small business? Maybe you initially set out to start a headband business, and you discovered that your greatest strength was in the design prints and fabric choices. With those strengths, the sky is the limit, and your small business can expand into designing workout clothing or athleisure. Maybe your strength is building a community and connecting with customers. Then you can put your efforts into growing your social media following and obtaining loyal customers that will get behind all of your business ventures.
  • Celebrate the Best Performing Months: When you look back at 2020, which months were your best sales months? 2020 was a unique year, but you can learn at what point during the pandemic that your company found its footing with tweaked safety procedures and a big move to online sales. How can you continue that growth into the New Year?
  • Glean from What Worked and Move On from What Didn’t: Do not be afraid to admit failure on an idea and move on from it. You don’t have to stay loyal to your ideas if they are sucking money from the business. If an innovative marketing strategy didn’t work for your business, cut it loose. This will relieve you from unneeded stress and a more significant loss from holding on too long.

Collecting and analyzing data in your small business can work toward your benefit. If you are in over your head with an accounting system, then eliminate the stress and find a team you can trust to do your small business accounting. One of an entrepreneur’s best characteristics is recognizing what’s failing early and making the change to minimize your losses.

Looking Ahead and Start the New Year with a Bang

Whether your business barely made it through 2020 or had the best year yet, every small business owner has pros and cons to look back and learn from over the course of a year. Take what you have learned, and now look to the future. How are you going to make the New Year the best year yet for your small business?

  1. Make New Connections

The small business world is a small community of people who are willing to help one another. Meet new people. Get to know other small business owners in your city and share ideas and tips. When you have friends in the industry, you will likely get referral customers from other small business owners. The people who shop small usually like to support small businesses in general, so become a part of that small business network in your community.

  1. Learn Something New

As your industry is growing and changing, stay at the forefront of the changes. Technology is a huge part of small businesses these days. If you have avoided dipping your toes into social media, delay no longer! Create your small business accounts on social media and post consistently. This way of connecting with your customers will help you keep personal relationships with your clients, especially if you are an online-only business.

If your small business is a service business, then learn new services to offer your customers. If you have a hair salon, stay on top of recent up-and-coming trends. If you have a dog-walking service, implement new procedures to offer contactless pickup and dropoff during the pandemic. This may include a simple tracking device on the dog, so the owner knows where you are. New changes are essential and show that your company is innovative and creative.

  1. Don’t Be Afraid of Implementing Significant Changes

It can be overwhelming to decide to revamp a process that your small business has used for years. But if there is a better way, then the change is necessary. Whether you need to reorganize your accounting system or need a brand new website interface, make the changes that keep your company current and modern. Leaping into significant changes for your small business in the New Year can result in huge profits or savings.

  1. Dream Big

Think back to what your main goal was before you started your small business. If you have always wanted to run your own music school and are currently teaching lessons out of your home, what needs to change to go to the next level? Often, it takes an investment of money to get the big results that you dream about for a thriving small business in the New Year. Save up and work toward that dream, and don’t lose sight of it.

  1. Set Lofty Goals

Usually, we are talking about attainable, small goals that will keep you motivated. Those goals are important too. But if you want 2021 to be your big year, then keeping your eye on the big end goal is what is going to get you to hit the ground running. Do you have a goal to double your small business team by the end of 2021? What about a goal to delegate the day-to-day business dealings so that you can focus on growing the business?

If you are looking to achieve big goals, it may be time to get an investor. Finding an investor in the New Year is a lofty goal. If your business is a 3-person small business, it may be time to bring in more money so that you can find a manufacturer, invest in ample inventory, and be prepared for tremendous growth. If you have found your small business at this point, don’t shy away from it. Dive in and see what can happen for your small business in the New Year.

You can jump into 2021 with a positive outlook for your small business. Stick with the things that work and run with your big ideas to achieve even bigger goals. Keeping this idea of growth and unlimited heights at the forefront of your mind will help your small business move in the right direction for the New Year.

Contact Small Business Accountants for Help

This New Year could finally be the year that you let the professionals focus on your accounting system so that you can focus on growing the business. When you hire experienced accountants, you will quickly see your investment return when you have a team handling your money that knows how to save. Your business can only benefit from an organized and strict accounting strategy, including bookkeeping, taxes, and payroll services.

Our team at Easier Accounting has an extensive understanding of small business accounting. If you require a revamped accounting system for 2021, then contact our team for help. We can set you up an accounting system focused on saving your business money and time. Call Easier Accounting to schedule your appointment at (888) 620-0770.

New Year’s Resolutions for a Small Business

It’s a new year and time to give your small business a boost with New Year’s resolutions. Finding ways to improve your company continually is a vital part of being an entrepreneur. The smallest changes can make a big difference in your business. Take a look at some great examples of New Year’s resolutions for your small business.

2021 Small Business Resolutions

Revamp your business with these New Year’s resolution ideas:

  1. Delegate More So You Can Focus on Building the Business

If you are caught up in the day-to-day dealings of your small business, you will not have time to focus on growing your business. For roles like customer service, accounting, fulfilling orders, inventory counts, and other daily tasks, leave them to your team. When your time is freed up due to delegation, you can turn your energy toward marketing your business and helping it grow.

  1. Call for Weekly Planning Sessions

Yearly and quarterly planning meetings are essential for keeping a small business in check. But take it a step further and plan out your business strategies each week, cluing in the team on your goals and working together to implement them. You will find that setting aside time for planning meetings will actually save you time overall.

In each planning meeting, you can take a look at the New Year’s resolutions you are implementing and tweak them to serve your small business in the best way possible. Letting too much time go by can really set you back if you don’t catch a lousy business practice right away.

  1. Promote Your Small Business Continually

Sometimes you can get so busy that you lose your focus on continual marketing and promotion of your small business. Even when times are slow and money is tight, regular and consistent promotions will keep your company at the top of people’s minds. Running promotions and finding ways to get customers back on your site or get their foot in your door will always benefit your business.

Make a New Year’s resolution to pay for marketing in 2021. Keep track of the cost and find out if the ROI makes sense for your small business. Many e-commerce companies find success with social media advertisements. If that is something you have been hesitant about, take the jump into investing in marketing for your small business.

  1. Connect With a Local Small Business Networking Group

Each city or community has a networking group of small business owners that get together and share ideas, share referrals, and build relationships with one another. By joining a networking group, you will be on the business owner’s mind when a customer asks where they should go to get a good or service. If you are an artist, a local boutique can recommend your custom paintings to buy for a frame from the shop.

  1. Schedule In “Me Time”

Self-care is the buzz word as of late, and for a good reason. If you don’t ever take the time to slow down and focus on yourself, it can be detrimental to your business. As a small business owner, your business will receive more attention to detail and love if you first take care of yourself.

  1. Learn a New Skill

In reading each New Year’s resolution, you may be overwhelmed where all the time is going to come from to fit all of these goals into your year. The time will come from the delegation and planning that you are also mastering this year. All jokes aside, expanding your small business may take further education or the introduction of a new product or service. To keep up in your small business industry, you must be in-the-know about what’s trendy.

If you own a nail salon, you will need to educate yourself about gel nails and the processes that come with them. If you have an e-commerce site with baby products, then stay up-to-date with the prints and textiles that are selling the quickest in the baby industry. This may come with learning a new stitching style or finding a new designer. Continual education and growth are vital as a small business owner.

  1. Get Involved in the Community

A great way to get your name out is to sponsor the local elementary school or a little league baseball team. You can attend the events and meet people who are interested in your service. A lot of times, people don’t know where to start when it comes to finding a realtor or an orthodontist. If they know your business invested in their child’s school, they will think of your business first when a need arises.

Donating and working with a charity is also a great way to improve your business. The most successful entrepreneurs spend a portion of their time volunteering to help people who are not as blessed as they are. Giving back will bond your team together as you regularly serve others and take the time to think outside of your business.

  1. Embrace Diversity

It’s an important question to ask if your small business team represents very similar demographics, whether it be age, race, or socioeconomic status. Surrounding yourself with people of different backgrounds and experiences will allow you to expand your customer base. Diverse ideas are vital in a small business – to learn from people who think of fresh concepts that are new to you.

  1. Build Up Your Reputation Always

In everything you do, do it with your reputation in mind. Even when you start out and are low on capital, choose quality over quantity. Do not take shortcuts. Handle all deals with integrity and honesty. Your small business reputation matters, and it’s a meaningful New Year’s resolution to make that a priority.

  1. Connect with Your Customers

A great way to bond with your customers is to send thank you notes for their business. You can do this at Christmastime, or you can sprinkle it throughout the year. Anytime you have a quiet moment, write out a thank you note to a valued customer and mail it to them or leave it to collect the next time they stop in. Phone calls can also be meaningful. Or even a quick text to check up on a new development in their life that they shared with you.

These subtle changes to your small business will help you achieve the ultimate goal: to spend less and earn more. When you put your heart into your business, you will reap great rewards. New Year’s resolutions like getting involved in the community and making time for yourself may not sound like they will directly benefit your company, but it’s all a part of the big picture. When you are happier and more well-rounded, your small business will expand.

Tips on Achieving Goals

Sometimes writing down your New Year’s resolutions is not enough. It would be best if you made a plan to implement and execute your goals.

  • Set Sensible Goals: All entrepreneurs have big ideas, but be careful to make your New Year’s resolutions attainable. When you set resolutions that are practical to achieve, your positive results will motivate you to keep working toward your goals.
  • Look at the Big Picture in the Far Future: Don’t forget to step back and think of your 5-year and 10-year plan for your business and make sure that your New Year’s resolutions are working toward those big picture goals. When your yearly goals align with your long-term goals, then your small business will always be headed in the right direction.
  • Do Not Settle: It can be tempting to work toward a goal, and then just before you reach it, you decide it’s close enough and never fully achieve what you were working toward. Everything you do must be intentional toward working to build your small business.
  • Embrace Setbacks and Move On: Sometimes, it can be best to throw out a New Year’s resolution once you realize it’s not benefiting your business in the way you thought it would. It is a good business practice to be able to recognize when a strategy isn’t working and move on.

Your New Year’s resolutions are achievable with hard work and planning. Big ideas are the first step to building a successful small business. But hard work goes hand-in-hand to help realize those ideas.

Make 2021 Your Best Year Yet

Get inspired and display your New Year’s resolutions front and center in your office. Remind yourself that this year can be the best year of your life as you grow your small business. Scaling a small business isn’t something that happens accidentally. Setting and keeping New Year’s resolutions will contribute to substantial growth in your small business.

For help in setting purposeful goals for your small business, you can contact Easier Accounting. Our team is here to help! With extensive experience with small businesses, our expert team will help your small business save money as it grows. Call us at (888) 620-0770.

Check it Twice: Year-End Accounting Checklist

As the year comes to an end, it is time to look back on your small business and evaluate what went right and what went wrong. You can celebrate successes and pivots that were made to accommodate COVID-19. You can relax and recover after a holiday rush.

Reflection at the end of the year is essential, and getting your finances in order is also vital. Your year-end accounting checklist is a list of small business accounting tasks to get a pulse on your business. You can use the accounting checklist to nail down exactly how successful your company was this year compared to other years.

As you review your accounting checklist for 2020, reflect on the trials that you overcame in your business. If your business was hurt significantly from the pandemic, make realistic accounting goals for 2021 that will be achievable. Use this comprehensive end-of-year accounting checklist to get your business in order before the New Year.

1. Cash Flow Analysis

There are a number of reports to run at the end of a full year of business. One of them is the cash flow report. When you take a comprehensive view of the cash inflow and cash outflow over the course of a year, you will see patterns. Do you remember specifically when you were strapped for cash in your small business? What went wrong? What can you do better next year?

You can also compare your cash flow to reports from previous years’ accounting checklist. This year will look different because of COVID-19. It was unlike any other year, some small businesses benefiting as online sales went up during the pandemic. How can you continue to bring in cash while being strict about the amount of money that goes out?

Oftentimes, if cash flow has increased, a small business owner may be inclined to spend more freely. If you saw a large amount of cash flow this year that resulted in overall profit for your business, contact a small business accountant. You can review the numbers and make a decision on whether it is smart to make a big purchase to invest in your business with the unexpected year’s profits.

2. Account Receivables Reconciliation

Next up on the accounting checklist is going through your list of accounts receivables for the year and being sure that all is paid and reconciled. You can run a report and find out your turnaround time when it comes to billing clients and receiving their payments.

When you have a clear view of patterns that were set for the year, you will be able to improve accounts receivable for the upcoming year. Did you get paid on time? Were your cash flow problems due to receiving late payments from customers? This is the case with many business owners, and when you don’t have a strict accounts receivable system, it can lead to big problems with needed cash flow.

Use the 2020 accounting checklist to collect all of your outstanding bills and implement a new policy where your accounts receivable will have a shorter turnaround. This way, you will have the money coming in that you planned for when a service has been performed, or goods have been purchased. The smaller the turnaround, the better for your business and accounting practices.

3. Vendor Status Updates

The end of the year is a good time to go through your vendor list. Evaluate which vendor relationships are invaluable. You can send gifts of thanks for their accuracy and timely deliverables. You can compare reports and prices and determine if a particular vendor made good on their promises of savings.

It is also an excellent time to remove any vendors from the list who are obsolete or cannot benefit your business. Keeping your list of vendors short and high-quality will save you time later when you need to consult the list. When you update the list each year, you won’t be caught forgetting that one vendor doesn’t carry what you need or the other vendor can’t compete as well as the others for a particular inventory item.

4. Payroll and Benefits Verification

It’s essential to make sure your employee paychecks are accurate for the end of the year accounting checklist. Your employees will be filing taxes, and your business will be responsible for any mistakes on their paychecks. Backpay of FICA or employee raises can be a large bill that wasn’t planned, so it’s essential to make sure you have that correct the first time around.

The end of the year can also be a time to celebrate your employees. If they worked extra hard through the holiday rush, then reward them with paid time off. Show that you value your employees by giving them benefits specific to your small business.

5. Staff Needs for Upcoming Year

Take a look at your business’s busy patterns vs. slow times and make a plan for hiring staff for the upcoming year. What could you have done better this year to streamline your employees’ workflow? When you look at the year overall, you will get a more accurate picture of how you can improve.

6. Tax Preparation

Collect all of the documents needed to file for taxes. Accounting software can help you identify all the financial reports and documents that you will need. And even better, a small business accountant can help you get everything you need to be done when it comes to taxes on your year-end accounting checklist.

Do you have a tax strategy for your small business? When you consult with an accountant, you will find there are ways to save money with taxes. There is a variety of strategies that could apply to your company, and an accountant can help you identify which one will save you the most money.

7. Accounting Backups

The end of the year is a great time to be sure you have all the backups in your accounting system that you need. If you use a cloud backup service, that is helpful as they backup in real-time. But it is also essential to download specific reports each year to keep on an external hard drive. When you double your backups, you will never lose important files related to your small business.

8. Business Organization

Has your store been turned upside down through the holiday rush? Take time to organize your store at the end of the year. Give a deep clean and organize shelves, rotating any inventory that will no longer be needed in the new year. If your business doesn’t have a brick and mortar store, you can organize your files and your website. Be sure that your website has a customer-friendly flow.

9. Inventory Check

Run an inventory report and make sure it matches up with your end-of-year sales. If you neglect counting inventory, especially after an influx of business, you will leave your small business vulnerable to fraud. Performing checks and balances with your inventory may feel tedious, but it is necessary for keeping your business secure.

10. Website Overhaul

Take this time to go through your website, making sure all the links work. Look at it from the perspective of a potential customer – what welcomes you into the website? What may be difficult to navigate? Your accounting checklist can include updating your website to be ready for new sales in the new year.

11. Business Goals

Take a look at your goals from previous years, and see if you met any new goals this year. When your business is goal-driven, you will always have a target you are trying to hit. And your small business will have a progression toward that goal, always working toward improvement. Set new goals for the upcoming year that are even better than the year before.

Focus on the Future

Now that you have gone through everything on your accounting checklist, it is time to wrap up the year 2020 and focus on the year to come! You have a clear view of how your business improved and know what you need to adjust in order to be even better in 2021. Knowledge is power, and it’s up to you what to do with that knowledge.

Looking ahead for your small business, focus on the positive. Which employees are invested in your business with you? Celebrate them. What challenges are up ahead that you are ready to tackle? Make a plan and overcome slow times in your industry. The possibilities for your small business growth in the future are endless. Your business succeeded through a pandemic that no one saw coming. If your business survived that, it could survive anything and maybe even thrive in the year to come!

End the year 2020 with everything in order and ready for greater success in 2021. Our team at Easier Accounting can help you achieve that. Whether you need help with taxes or setting realistic small business goals for the upcoming year, it is best to contact an accountant who can help. Call us to set an appointment at (888) 620-0770.

How to Give a Small Business a Refresh

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

Steps to Refresh Your Business

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

Brainstorm Ideas

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

Find Natural Extensions

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

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

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

Think Digital

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

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

Try It Out

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

Small Ways to Refresh

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

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

 

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

 

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

 

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

 

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

 

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

 

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

Start Fresh with Your Small Business

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

Contact Us Today

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

Accounting Basics: The General Ledger

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

Types of Ledges in Bookkeeping and Accounting

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

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

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

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

General Ledger History

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

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

What You Need to Know about the General Ledger

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

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

Information You Get from the General Ledger

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

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

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

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

 Benefits of a General Ledger

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

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

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

Set Yourself Up for Business Success

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

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

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

Professional Accounting Services for Small Businesses

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

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

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

9 Small Business Tips to Maintain Your Budget

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

Every Business Needs a Budget

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

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

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

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

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

Tips to Maintain Your Budget

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

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

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

Finding Tax Relief During Coronavirus

Has your business been affected by the Coronavirus pandemic? While many companies have experienced a slowdown or complete loss of income, some businesses are busier than ever trying to keep up with the demand (grocery stores, hospital workers, and more). If you are experiencing a negative impact on your cash flow, then you might be looking for solutions to keep up with overhead costs and ongoing payments. Don’t overlook the benefits available from various tax relief programs that could be used to help your business get through this challenging time.

Why is Tax Relief Available?

Not only is the government working to stimulate economic activity, but these funds are designed to protect vulnerable businesses and individuals. These tax relief programs provide the space and liquidity needed to make it through the reduced spending that is happening due to the virus outbreak. As businesses are closed for health reasons and families are sheltering in place at home, the overall spending has dropped.

It’s a cycle that needs to be corrected: businesses close due to health concerns, causing many employees to lose their jobs. As millions of people across the country are out of work, it slows down the spending happening in all industries. There’s no question that this economic situation will have a trickle-down effect that could last for years.

These tax relief programs are designed to infuse more cash into the economy, helping to mitigate the current concerns and avoid bigger economic issues down the road. The purpose of the programs is to assist with immediate needs and also decrease the potential rebound time as we return to “business as usual” when the crisis is over.

CARES Act: Support for Employers

The Families First Coronavirus Response Act, as well as the Coronavirus Aid, Relief, and Economic Security (CARES) Act have been designed by the federal government to support the economy.

Refundable tax credits are offered for certain employers who continue employee payments during the COVID-19 pandemic. Additionally, penalty relief is offered through the Internal Revenue Service if employers are unable to make timely deposits for employment taxes.

The initial program authorized $2.2 trilling in spending to stimulate the economy, with ongoing decisions to add more money to the fund as needed. The goal is to provide meaningful tax relief to help businesses weather the storm of slow sales or closed doors.

Credits for Leave Wages

Leave wage credits are also offered as a way to minimize the risk of sick employees coming to work. Since the virus can be spread through airborne particles, it is important to keep employees out of the workplace if they have been exposed to COVID-19 or they are exhibiting symptoms of the virus. These tax relief programs encourage employers to maintain good sick leave programs to minimize the chances of employees passing the virus to other employees or customers coming into the business location.

This tax relief is offered in the form of two refundable tax credits:

  • Qualified Sick Leave Wages Credit
  • Qualified Family Leave Wages Credit

Employers are provided with the funds to pay their employees for sick and family leave between the dates of April 1, 2020 and December 31, 2020. These credits are calculated against the portion of Social Security taxes due on wages paid during this same time. In the situation where the credit exceeds the employer’s liability for Social Security taxes, then the credit will be treated as an overpayment – which means the difference will be refunded. Employers must be found eligible to qualify for these tax relief programs.

Employee Retention Credit

One important detail of the CARES Act for employers is a refundable tax relief credit known as the Employee Retention Credit. This tax relief is offered for “eligible employers.” You must pay “qualified” wages to employees between the dates of March 13, 2020 and December 31, 2020.

The credit can cover up to 50% of the paid wages. There is a cap of $5,000 per employee as a maximum credited. As with the Credits for Leave Wages, the Employee Retention Credit is calculated against the Social Security tax due for wages paid during this time. If the tax credit is more than what the employer owes in Social Security taxes, then the difference will be refunded as an overpayment.

Employers can access this credit through their Form 941 filing. But a faster benefit of the credit can be accessed by reducing the amount paid for federal employment tax deposits. Instead of paying the full amount due, employers can decrease their deposits based on the amount they are entitled for Employee Retention Credits.

Employers must meet specific eligibility requirements to qualify for these tax relief credits. For example, the credits are generally offered to businesses and tax-exempt organizations who meet either of these qualifications:

  • Partial or full suspension of operations in the 2020 year because of a “Shelter in Place” or “Stay at Home” order in the local area
  • A significant decrease in gross receipts is experienced in the year 2020

It is also important to note that if an employer received money through the Paycheck Protection Program, then they do not qualify for the Employee Retention Credit. Even if the above eligibility is met, employers can’t receive funds from both tax relief programs.

Tax Filing and Payment Delays

In an earlier blog post here on Easier Accounting, we shared details about the way the economic downturn impacted the tax filing deadlines and payment due dates. Many businesses and individuals have taken advantage of the opportunity to wait on the payments.

To summarize these tax relief deadlines, the due dates for 2019 filing, payments, and estimated tax payments were pushed from April 15, 2020 to July 15, 2020. This change in payment schedule relieves some of the current financial pressure on businesses of all sizes, as well as independent contractors and families. The delayed policy covers most taxpayers – anyone who has been negatively impacted by the coronavirus outbreak.

Other related payments have also been postponed to match the change in tax filing and payment dates. For example, many states have followed suit to push back state tax deadlines to July 15, 2020. Additional postponements include deadlines for HSA and IRA contributions. If you would like to contribute for year 2019, then this deadline has been postponed to July 15th as well.

Individual Economic Payments

Even though many of the tax relief programs are designed to support businesses so paychecks can continue, the stimulus plan also includes economic impact payments paid to individuals. This aspect of the program has been highly publicized through the news outlets, with many families counting on these payments to pay rent and buy groceries.

The payout is $1,200 for an individual or $2,400 for a married couple. Dependent children under the age of 17 qualify for $500 payments per child. Keep in mind that the payments are phased out based on the adjusted gross income (AGI) of the household). The payments are distributed as a tax credit, so you do not need to include the payment as taxable income on your tax filing for year 2020.

Millions of Americans have already received these stimulus payments, with additional checks on the way as the IRS works to distribute the funds across the country.

Personal Tax Guidance for Your Business

Even though we have shared important information about the tax relief programs that have been implemented, you need to be aware that specific eligibility requirements need to be met. Unless you are following the new tax guidelines and ongoing changes closely, and you have a trained background in accounting and finance, it is best that you talk to an experienced accountant for personal recommendations.

Yes, there are tax relief programs available to help employers and individuals. But it is essential to understand the full scope of the programs to ensure proper implementation for your tax credits. Our team is working hard to stay current with all of the changes happening in the accounting industry, giving you access to a trusted group of accounting experts. If you are wondering about your options for tax relief or tax credits, then contact us for more information.

At Easier Accounting, we offer much more than basic tax filing services. We are focused on the ongoing tax strategy you need to keep your business up-to-date with whatever might be happening in the economy. Not only do we evaluate the overall picture, including policies and available tax credits, but we also consider your unique situation to support your tax strategy. The goal is to help you stay within the guidelines as set by the IRS and other government entities, while minimizing your tax burden when possible.

If you are interested in more information about tax strategy, or other accounting services, then feel free to contact us to learn more. We offer a range of accounting services, with a focus on small businesses. Over the years, our team has established a strong reputation in the industry. We’d like to show you the potential benefits your business can receive through our available services. Contact us at Easier Accounting by calling (888) 620-0770.

After Coronavirus: 5 Ways the Stock Market Could Play Out

It’s an understatement to stay that the stock market has been on a roller coaster in recent weeks. The Coronavirus pandemic has caused economic uncertainty across the globe. Some businesses have closed suddenly, while other companies are losing money due to limited sales and customer interaction.

The stock market reports have had significant swings from one day to the next as the markets respond to good and bad news about the current pandemic, stimulus plans, and possibilities for re-opening the economy. If you own a small business, then there’s no doubt that your company has been affected by the news stories. How are you faring in these uncertain times?

Hope for the Future

As the reports come in, many people are holding onto hope for returning to a normal life in the future. Governments are looking at options to relax lockdown restrictions as they feel that the virus is being controlled in certain areas.

While you don’t have any control over the current circumstances or the rules that are governing businesses in your area, there are a few things that you can do to prepare for future business opportunities. During this pandemic, it is a time to shift your business efforts and look for ways to innovate your systems, products, and services. The companies that are changing their approach in doing business are those who will survive the economic changes.

Rest assured to know that there is hope for the future. But you need to be prepared to move forward with a different mindset and approach. Now is the time to take action if you are going to be ready for whatever may come in the future.

Potential Scenarios for Stock Market Movement

One thing that will affect business and sales is the way the stock market responds in the coming days. A recovery is possible, but the stock market trends definitely play an impact in people’s confidence about the economy. When households are uncertain about the current circumstances and future opportunities for income, then spending slows… which has a domino effect in all industries.

Even the best stock market analysts and epidemic experts can’t predict what is in store for the future. Here are a few potential scenarios that we might see in the coming months and years:

Scenario #1: Stock Market Bottoms Before Coronavirus Peaks

The worst-case scenario is that the stock market continues a downward spiral before the peak of the pandemic is reached. If the government can’t maintain systems that keep people safe in public, then the epidemic will continue taking a toll on business sales… which has a negative impact on the stock market numbers.

Not only does this possibility affect business owners and employees, but millions of people across the United States will lose money due to investments that drop in value. It’s impossible to calculate the long-lasting impact it will have for the people who lose their retirement savings that were placed in the stock market.

As economists talk about this possibility, they are anticipating that we could reach recession or even depression levels. The sheer number of unemployment claims, as well as businesses who don’t have cash for overhead costs, will undoubtably result in national and global circumstances that fall within the recession and depression criteria. As a result, it will take years (or possibly a decade or more) before we return to the prosperous trends that were enjoyed just a few months ago.

Scenario #2: Continued Uncertainty, Slow Stock Market Rally

As businesses and individuals continue to adapt to the “new normal,” it is possible that the stock market can rally. When businesses can keep the money flowing, then it can help the economy as a whole so that we don’t hit rock-bottom. It won’t feel comfortable because of the ongoing pressure that companies are feeling as they strive to keep the cash coming in. But this scenario could keep us out of a potential depression.

This scenario is a likely possibility, especially as state and federal governments are proactive in easing a plan that brings businesses back to semi-normal activities. It is obvious that it won’t be an overnight change to go from Stay Home orders to business as usual. Instead, measures will be taken to open business doors as it makes sense, based on the safety of the population as a whole.

As the reports have said, ongoing testing and proactive medical care is essential in avoiding another shutdown in the future. So, businesses need to continue doing their parts in maintaining social distancing recommendations. If hot spots start to pop up, then the weeks of staying at home could quickly be undone.

Scenario #3: Fast Resolution, Fast Stock Market Changes

In the third scenario, the virus is quickly contained and people can return to their normal lifestyles. This scenario is only possible if herd immunity is developed or a vaccine is discovered that can be administered to the population.

A fast turnaround would be an optimal situation, but it doesn’t seem to be a likely scenario. If businesses can stay open and government action can stop the long-term effects of a financial crisis, then there is still a possibility of a sharp recovery occurring in the stock market.

How to Protect Your Business in These Uncertain Times

No industry is immune to the effects of this economic downturn and Coronavirus pandemic. But it doesn’t matter what is happening in the stock market – there are things that you can do to protect your business interests and keep the cash flowing. More than ever, it is time to be innovative and proactive in looking for ways that you can solve the problems people are facing during this challenging time. If you can help people get what they need, then the money will be available for your business.

Follow these tips if you are ready to minimize the impact on your business due to a slow economy:

  1. Business Support Stimulus: Take care if immediate cash flow needs by tapping into the various resources that are available to help struggling businesses during this time. Check out our recent blog post for more information about stimulus programs, small business loans, and other solutions that are currently offered for the Coronavirus pandemic.
  2. Design a Plan: Doing the same thing you’ve always done in your business isn’t going to work for the future. As the stock market fluctuates and the virus continues to spread, you need to be sure that you are implementing safeguards to protect your employees and customers. Write out a detailed plan that lists steps to follow if an outbreak occurs in your business. Look for ways that you can adjust current systems and processes to minimize risk while still keeping the business running.
  3. Digital Interactions: When possible, it can be helpful to encourage employees to work from home. Additionally, are there any options to change the way your customers can purchase products and services? If you have a website, explore options to add payment portals or digital distribution so that customers don’t need to visit your local office in person. Look for ways that you can offer delivery or curbside services. Depending on your business, you might be able to make small changes that support social distancing without harming your sales.
  4. Maintain Communication: Be proactive in keeping your customers updated about changes that are being implemented to protect the safety of everyone. Not only will these updates give your customers the peace of mind to know that the risk is minimal when they visit your store. But employees also need to be up-to-date about current policies and practices.
  5. Upgrade Cleaning Practices: Since the virus can remain on surfaces and transfer from person to person, it is essential that you take your cleaning practices to the next level. Sanitize all surfaces as much as possible, with daily routines to keep everything safe for your employees and customers. Make sure that there are plenty of cleaning supplies on hand, and design a system that engages employees in participating in the cleaning responsibilities. Everyone needs to be trained on proper sterilization methods.

Cash Flow Management for Economic Stability

More than ever, a “rainy day” fund is essential to keep your business afloat when future income is uncertain. If you don’t have an emergency fund in place, then right now is the perfect time to set aside a bit of money in an untouchable savings account.

Also, don’t underestimate the importance of working with a financial team that can assist in your cash flow management. As the stock market moves up and down, you can maintain peace and stability in your company by working with an accounting and bookkeeping team that can assist with your unique financial needs.

At Easier Accounting we understand how challenging it can be to stay on top of your financial reports. If you need assistance with tax strategy, payroll processing, or other accounting services, then we are here to assist. Contact us at your convenience to learn more about how our services can support your company during these times of economic uncertainty: (888) 620-0770.