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9 Tips to Create a Modern Bookkeeping and Accounting System

Is your company keeping up with the trends in the bookkeeping and accounting industry? Or, are you stuck in the past with outdated financial systems? If you haven’t stepped into the current business trends with online accounting and financial software systems, then right now is the best time to talk to an experienced team for personalized advice.

Yes, the transition to a new bookkeeping and accounting system can be painful in the beginning. Anytime you are making major changes to your business systems; you will experience growing pains and other adjustments that need to be addressed. But, these changes are worth the effort because of the long-term benefits that are available for your company.

Benefits of Modern Bookkeeping Systems

Why does it matter if you update your financial systems? Here are a few benefits that you can expect when you implement some of the latest advances in the industry:

  • Easy financial tracking
  • Reducing busy work
  • Automated reports
  • Digital access from any location
  • User-friendly solutions
  • Security for financial records
  • Simplified payroll processing

These are just a few benefits of implementing a modern bookkeeping and accounting system. As you adjust to the new processes, you will find that there are countless benefits that can support your business goals.

Strategies to Improve Your Bookkeeping and Accounting Processes

So, what are the changes that need to be made to improve your bookkeeping and accounting system? Here are a few things that should be considered for your small business:

  1. Eliminate the Paper: The digital world allows you to keep online records for everything in your company. Eliminating the paperwork can reduce the clutter in your office. Not only will you save time on filing, but you don’t have to stress about shredding all of the documents after you are finished. Going paperless means that you have an online, cloud-based accounting program that can be used to manage all of the transactions that move through your account. You have the freedom to access the accounting information from any location, making it simple to keep up with the day-to-day bookkeeping tasks that need to be addressed.
  2. Simple Invoicing and Tracking: How often do you delay payments received from customers because you don’t keep up with invoicing and payment tracking? It is easy to be distracted by other responsibilities in your business. But, invoicing is an important thing that shouldn’t be delayed or overlooked. Implementing a new, digital bookkeeping and accounting system is the best solution so that you always send invoices and payment requests on time.
  3. Separating Financial Accounts: One of the problems that small business owners encounter is the overlap that happens with personal and business finances. Even if you run a home-based business, you need to be careful about creating a distinction between money that is spent for business purposes and money that is used for personal transactions. A digital accounting and bookkeeping system can help you reduce the complications that occur when these expenses are comingled. This step is essential if you want to help your business grow in the future.
  4. Tax Calculations and Preparations: A poor financial tracking system can make it difficult to set funds aside to cover upcoming tax payments. There is no way to avoid tax burden, and you could be facing big issues if you aren’t prepared to make the payments when the deadlines approach. An automated system helps with these tax calculations. At the same time, you can implement a transfer into a savings account to ensure that the funds are available when the tax payments are due.
  5. Easy Bank Reconciliation: Keeping up with the daily and weekly transactions is good. But, it is essential that you are consistent to schedule monthly reconciliations as well. Not only will these reconciliation efforts help you identify potential errors in the transactions and processing. But, you can also find patterns that could indicate possible fraud or theft in the industry. Mistakes will be made at times, but these issues are easy to fix when you have a good reconciliation system in place.
  6. Improve Cash Flow: Is the money always available when it is time to pay for overhead expenses or business costs that are necessary to keep the company running? Cashflow is the lifeblood of your company. If you are struggling with cash flow, then you might be headed to a path that goes nowhere in the future. The best thing that you can do is implement the right system that helps you keep track of cash flow. Then, you can sleep easy at night knowing that the money will be there when it is needed for upcoming payments.
  7. Reduce Cash Transactions: While it might be convenient to have cash in your pocket for small expenses, the use of cash can increase the risk of errors and mistakes with the financial system. It’s hard to know how much you are spending if all of the transactions are managed with cash. Instead, implement a digital system so that you have a paper trail that shows the transactions and categories for your spending.
  8. Boost Tax Write-Offs: If transactions are overlooked during the year, then there is a risk that you might miss out on potential tax write-offs that are available for your company. A digital bookkeeping and accounting system is a good way to ensure that you don’t oversee some of the important payments that can be used as tax deductions.
  9. Integrated Systems: Not only do you need a good way to track the bookkeeping information, but you need to be sure that your new system can integrate with the other tools that are used in your business. For example, make sure that the software can sync with your point of sale system, website sales, and payroll processing. These integrations might seem small, but they can have a significant impact on the simplicity of your future business processes. Put together the right program now so that you can save the stress and headaches in the future.

The Right Services to Implement a Good Accounting System

Paying for an accounting software might seem like a success for your company. But, you won’t reap all of the benefits unless you have a good accounting team to offer recommendations and advice on how the system will be best used for your needs. The right setup and implementation are essential to ensure that you are starting on a good foot.

It is helpful to have ongoing accounting and bookkeeping services to make sure that you are staying on-track going forward. Your accounting team will keep up with the transactions that are moving through the computer program. Any time you need additional information about the financial success of your company, you will find it easy to run a report and see the overview and cash balances.

There are many opportunities available to improve your bookkeeping and accounting systems. But, it is hard to know the best solutions for your company if you don’t have a lot of experience in the industry. Instead of assuming that a specific software program is right for your needs, it is important that you talk to industry professionals for personal recommendations.

Choosing the Right Software Program and Accounting Team

In most cases, you will be making a premature decision by choosing a software program before discussing your options with a professional accounting team. Instead of navigating the financial industry by yourself, consider the advantages of talking to an experienced accounting professional who can offer personalized recommendations.

Not only can you tap into the hands-on experience of someone who has been working in the business for many years. But, you can also benefit from selecting an accounting service that specializes in businesses that are similar to yours. For example, if you are an entrepreneur or small business owner, then it is best to find an accounting team that works with other small businesses. Don’t make the mistake of hiring an accounting firm that specializes in big corporate bookkeeping.

Easier Accounting is Here to Help

We understand the challenges that you face when you are working on business financial systems. If you are ready to upgrade your bookkeeping and accounting systems, then we are here to assist with anything that you need.

Our team has many years of experience helping small business owners with some of the most challenging aspects of running a company. By creating a strong financial foundation, you can rest assured to know that your business is set up to succeed in the future. We can help with these plans so that you don’t have to worry about the transaction management and other bookkeeping details that need to be addressed on a regular basis.

For more information, it is time to talk to our team of experts at Easier Accounting. Not only do we offer general bookkeeping and accounting services, but we are here to assist with customized financial services based on the needs of your company. Contact us right away to see how we can help: (888) 620-0770

Guide for Business Owners: When to Hire an Accountant

As your business grows, how do you know the right timing to hire an accountant? Many business owners struggle with the commitment to outsourcing. It makes sense that you need the additional help. But, the cost of the service is often the reason the decision is delayed.

As we interact with small business owners, the answers to this question vary depending on the size of the company, the recent growth, and anticipated trends in the future. Often, some specific events or situations triggered the idea to hire an accountant. So, it is important that you talk to a finance professional to see if the services are needed for your company right now.

Why Business Owners Delay Accounting Services

Finances and cash flow are a foundational aspect of the future success of your company. So, why do many business owners delay accounting services? Here are some of the common reasons why people procrastinate this service:

  • Costs: Many startups require bootstrapping, which means that business owners wear many hats throughout the day. Instead of hiring professionals for the services, it might make sense to handle everything in-house in the beginning. It isn’t unusual to find a start-up founder staying after hours to pay the bills or process invoices that need to be sent. These strategies help to minimize startup costs. But, eventually you will need to take the leap to bring in the professionals to help with the services that are needed.
  • Cashflow: Another concern lies in the amount of money that will be spent on the accounting services. Can you afford to spend the cash on these services? The real question is whether you can afford NOT to hire an accountant. Even though you will pay for the services, there are many financial benefits that are available for your company: better financial decisions, tax deductions, and more. In fact, it might be costing you money if you delay the decision to start with outsourced accounting services.
  • Control: If a business owner has a micro-managing personality, then they might want to oversee the way the transactions are entered. Even though there are limited hours in the day, you might have a hard time delegating some of the busy work. Just because you did the books when the business started, doesn’t mean that you need to continue these tasks as the company grows. Look for ways that you can outsource tasks that are taking up your time. By handing off these tasks, you can free up your day to focus on other activities and responsibilities that are more important.

What is your excuse for not hiring an accountant? If you don’t already have someone to help with the finances of your small business, then right now is the perfect time to change your mind and implement a new financial system.

Opportunity Cost of NOT Hiring an Accountant

It is easy to see why business owners get stuck on the amount of money that will need to be spent on accounting services. But, these costs are minimal compared to the potential financial benefits that are available from an accountant. Bringing in a financial professional might be one of the best things that you can do to help your company grow.

An accountant will be able to optimize your financial system, helping to eliminate redundancies or things that are costing you money. This process can be essential to tighten down the overhead expenses, resulting in lower costs that need to be paid each month.

Accounting services can also be beneficial to ensure payments from your clients. It is easy for overdue invoices to slip through the cracks. You need a team that can watch the transactions to make sure that you receive timely payments from your customers.

Additionally, these services are essential to help you maximize the write-offs that are available for your company. Are you leveraging all of the tax breaks that apply to your industry? Only an experienced accountant will know the right places to look to find other options to minimize tax burden. It is common for business owners to find that the accounting fees are recovered in the tax savings alone.

Finally, you need to consider the opportunity cost that you are missing when you are spending your limited time on bookkeeping and accounting tasks. Instead of looking at product development or employee management, you are dedicating your time to busy work. If you keep your head in the books, then you will miss out on potential opportunities to help your company grow. It makes sense to outsource these services so that you are setting your company up for success.

Signs that You Need to Hire an Accountant

Here are a few sure signs that it is time to hire an outsourced accountant:

  1. You Don’t Have Experience with Accounting: If you are sick, then you schedule an appointment with an experienced medical professional. In the same way, it is important that you find someone with hands-on experience to help with your business books. If you are confused by financial reports and you have a hard time keeping up with the transactions, then it is time to hire an accountant. A small business accountant will sift through the information and provide the information in an easy-to-understand format to help you make better decisions for your company.
  2. You are Too Busy to Keep the Books Current: Is there a stack of invoices and transactions sitting on your desk? If you can’t keep up with the paperwork, then it is a sign that you need to outsource these tasks. Even if you can carve out a few hours a week to handle the bookkeeping, consider the other tasks that are neglected within your company. It doesn’t make sense for you to waste your time managing the books. Instead, dedicate that time to connect with new clients or work on your marketing strategy.
  3. You Don’t Know the US Tax Code: Do you stay up-to-date with the changes that happen each year with the tax code? If you aren’t working in the tax industry, then it is likely that you will miss changes that are applicable to your company. Failing to pay the right amount of taxes can result in fines and penalties for your company. An accountant is helpful to identify the right tax strategy, ensuring that you can maximize deductions while staying within the guidelines of the law.
  4. Your Company is Going Through a Rapid Growth Phase: You might have been able to keep up with the bookkeeping when the business started. But, if you are experiencing rapid growth, then the accounting tasks will grow as well. Not only are you facing more paperwork and reports that need to be analyzed, but the increased income can also affect your tax strategy. Make sure that you hire an accountant who can help you move through the growth patterns with ease.
  5. You are Struggling to Maximize Profits: Some companies find that their revenue is increasing, but they are having a hard time keeping money in the bank. If you don’t see that the profits are going up, then it is time to hire a financial expert to analyze your cash flow, expenses, and more. Your accountant will help you identify areas where you can reduce expenses, helping to increase your profit margins.
  6. You are Being Audited: A notification from the IRS about an upcoming audit can be one of the most stressful things that a business owner might face. There’s no way around the messy process that is required for an audit. If you want to protect your company, then don’t make the mistake of trying to navigate the audit without professional accounting services. An accountant can save you time and money, guiding you through this experience.
  7. You are Preparing to Merge or Sell the Company: Whether you are looking at an acquisition or you are preparing to retire from the industry, you need to make sure that you have an accountant to help with strategy. These efforts will maximize the price that you can get for the company. At the same time, your accountant can offer recommendations to decrease the amount of taxes that you will pay from the proceeds of the sale.

As you can see, there are many reasons why you need to hire an accountant. If you aren’t already using professional accounting services, then right now is a great time to learn more about the benefits. For more information, you need to talk to an accounting team that specializes in small business accounting.

There’s no doubt that accounting services are essential for every small business. Instead of risking the future of your business, we invite you to call us at Easier Accounting. We will discuss your needs and determine if our services are a good fit for your company. Our team understands the unique challenges that are faced by small business owners. So, we are always looking for ways to improve our services to match your needs. Call for more information: (888) 620-0770

Tips to Overcome the Most Common Problems Faced By Startup Companies

Even though you have an unbeatable idea for your new business, certain problems are seemingly unavoidable for start-ups. Whether you are preparing to launch the company or you are a year or two into your business efforts, it is essential that you are proactive to minimize the impact of these common issues that are faced by startup companies. A little bit of strategy and problem-solving can go a long way to keep your company moving forward.

Become a Problem-Solving Expert

As an entrepreneur or business owner, problem-solving can be one of the most valuable skills that you can develop. You need to have a clear vision of your goals, as well as a deep understanding of the day-in-day-out practices and tasks that need to be accomplished.

Not only do you need to face big decisions that will influence the future of your company. But, you also need to be ready to think on your feet so that you can solve smaller issues when they pop up. These decisions can impact customer satisfaction, company culture, product quality, business development and more. Even when you are facing a seemingly insignificant problem, these small issues can compound to create a ripple effect for the future.

You are capable of tackling the problems that are holding back your success. As you face these issues head-on, you will gain the skills and knowledge that will prepare you for other problems that might come up in the future. Instead of feeling overwhelmed or pushing the decisions to the backburner, you need to be in the mindset of finding solutions that will create the results that you desire.

Cashflow Difficulty

Most business owners will agree that cash flow is one of the biggest concerns that they face on a regular basis. In fact, a large percentage of small business failures happen due to a lack of cash to keep the company going. Even if there is a potential for a strong profit in the future, you can’t keep the doors open without money to cover overhead costs this month.

Some of the biggest companies started out with limited resources. Research the roots of large tech companies and product developers, and you will see that many of these business ideas hatched in home offices, basements, and makeshift work areas in the garage. As the business idea takes hold, then it is possible to get the funding that is needed to launch the company.

Even if you have a savings account or investor funds to use, startup budgets are often focused on the best-case scenario instead of looking at the worst things that could possibly happen. While it is good to be optimistic about the potential profits, you also need to be realistic about issues that you might face.

As a result, it is smart to err on the side of having too much start-up cash in the bank, ensuring that you can keep things going while you are building the brand. It is hard to predict sales and cash flow in the early stages of the company, so you need to build in an emergency fund in case you encounter problems.

Finding a Balance Between Work and Home Responsibilities

Not only are you trying to launch a business from your basement, but you also need to carry the ongoing responsibilities with your family and home life. It takes a significant time commitment to make a startup successful. So, many startup business owners find it hard to create a balance between the long work hours and quality time spent with the family.

Set a schedule for your work tasks and draw boundaries when it is time to focus on your family. These relationships are important and shouldn’t be neglected! Taking a little bit of time for your spouse and kids can reduce the stress at home, which will have a positive impact to improve your business results as well.

Weak Marketing Strategy

Just because you have a good business idea, doesn’t mean that customers will come flocking as soon as the products are available. It is common for startup companies to rush into product manufacturing and business development, without dedicating much time or money for marketing efforts. Poor marketing strategy could leave you with a basement full of inventory and no funds left to connect with your target demographic.

Be strategic with your marketing efforts. Instead of rushing into expensive sponsorships, radio advertisements, or television commercials, consider the advantages of online marketing to dial in your ad targeting. You need to start with a clear picture of your target demographic, to understand where these people are spending time each day. For example, it doesn’t make sense to spend advertising dollars on Snapchat ads if you are targeting a demographic of middle-class retirees. These people probably don’t use Snapchat, but you might have better success targeting them through Facebook advertising instead.

Gathering market data makes it easier to optimize your marketing budget in a way that helps you connect with people who are interested in the product or service that you are offering.

Do you know who your target market is? Consider the problems that these people are facing and look for ways to cater your products to solve these common problems. If you are having a hard time finding your target market, then it could be beneficial to spend some of your start-up cash to bring in an expert to get you started with an effective online marketing campaign.

Poor Pricing Structure for Products and Services

You need to find the right balance when determining the prices for your products and services. If it is a race to the bottom to win customers over with the lowest prices, then you will never create the profit margins that are needed to help the company grow. On the other hand, over-inflated pricing can scare away your target demographic.

Focus on the quality of the materials and products, as well as great customer service. Excelling in these areas ensures that your customers will leave raving reviews about your company. As you establish a good reputation and show the benefits that you offer to your customers, then you can set higher prices to improve profit margins in the future.

One of the keys to ensuring success for your business: focus on solving your customer’s problems and establish value in the way your products will solve their issues, which will help to solve your business problems. This strategy gives you a stronger basis to increase your prices because customers will see that they will benefit from the purchase. It is a win-win situation when you are looking for ways to support your customers and overcome the common startup issues at the same time.

Jack of All Trades, Master of None

Business owners wear many hats throughout the day. Not only are you trying to figure out issues when they arise, but it is common to take a DIY approach to minimize the outlay of expenses for professional services. There is a saying that if someone is a “jack of all trades,” then they will be the “master of none.” If you are spreading yourself thin with the administrative tasks and busy work, then your top-level problem-solving abilities will suffer.

Instead of letting your time be overtaken by these smaller tasks, you will see that your results and productivity increases if you are strategic with outsourcing and delegation. Plus, hiring the services will give you a team of experts who can offer advice to help you overcome the problems that you face in your company.

For example, if you are dealing with cash flow issues and you don’t have formal accounting experience, then it might be a challenge to keep up with the books and prepare your company for future expenses. Instead of trying to manage these big financial decisions by yourself, it is better to hire outsourced accounting services to manage your books. You can lean on the professionals to improve your tax strategy and avoid common bookkeeping mistakes at the same time.

You don’t need to handle all of the operations of your startup by yourself. Trying to do everything on your own isn’t an effective use of your time or resources. Make sure that you have an accountant and a lawyer to answer questions along the way. At the same time, consider the advantage of hiring a few employees or contractors to assist with the ongoing tasks and services that need to be addressed.

As you free up your time by assigning important tasks to other people, you will be in a better position to give your full attention to the problems that might come up each day. Then, you can be strategic in your decisions to ensure that you are on the path to boost potential success in the future.

At Easier Accounting, we understand that it takes a lot of time and resources to get your new business off the ground. We specialize in accounting services for startup companies and small businesses. Call today to learn how we can support the growth of your startup. Our team is here to help with the implementation of a solid financial and tax strategy, making it easier to keep up with the cash flow that is needed to help your company grow. Call today to learn about the services that we offer: (888) 620-0770

The Serious Consequences of Bad Bookkeeping on Your Small Business

There are many things that you need to worry about as a small business owner. Not only are you evaluating cash flow to make sure that you have enough money for payroll, but you are also carrying the burden of overseeing employee management, budgeting, business development, customer service, marketing, and more. These responsibilities can add up, making it easy for important tasks to slip through the cracks. Certain tasks can be handed in the future, but don’t procrastinate financial matters resulting in a situation where you are facing bad bookkeeping practices.

Bookkeeping and accounting encompass all aspects of the financial side of running a business. It is essential that you are tracking the money that is coming in and going out so that you have detailed information for tax filings, profit and loss reports, and more. Without the right financial tracking, you are setting your business up for failure.

Some small business owners attempt to manage bookkeeping in-house. If you have professional experience as an accountant, then you might have the skills to handle these responsibilities. Even though you have the skills, there are advantages to outsourcing these tasks. For example, it can be a challenge to keep up with the changing tax laws and other factors that impact your finances. Plus, most business owners don’t want to spend their free time crunching numbers.

What Do Accounting and Bookkeeping Encompass?

Many aspects of your business fall under the umbrella of bookkeeping and accounting. If money or value is changing hands, then these details need to be addressed by your accountant. These transactions can include everything from payments and earnings to purchases, sales, and receipts.

The goal of your financial system is to track the money that is flowing in and out of your business. Every penny needs to be accounted for to ensure that you are making the right decisions to support the future of your company. This information is necessary to help you with tax calculations. Additionally, you need accurate reports so that you can calculate your profits and make good decisions regarding the spending and business plan for your growing company.

Are There Problems with Your Financial Records?

Jotting down a transaction on a piece of scrap paper isn’t good enough for your financial tracking. Instead of “getting by” with unproven systems, right now is the perfect time to implement an effective accounting and bookkeeping program. This step will help you overcome some of these common mistakes that happen when an inexperienced person handles bookkeeping for a company:

  • Lack of consistency where transactions are recorded
  • Hand-written accounting, instead of using a computer system
  • Only using manual calculations
  • Overlooking small transactions
  • Missing tax payments and paperwork
  • Lack of communication with a bookkeeper or accountant
  • Organizational problems causing lost invoices and paperwork
  • Falling behind on data entry
  • Failing to complete regular audits and checks
  • Hiring an inexperienced person to do the bookkeeping

Tracking your financial records might be the most important thing that you can do to support the future success of your company. If you let these tasks fall to the backburner, then you will face big challenges that need to be overcome before you can lead your business to the goals that you desire.

Why Do You Need a Bookkeeping Professional?

It seems easy to hire a secretary to oversee the financial transactions. Isn’t it easy to do a little data entry from the receipts and sales invoices? Yes, a low-level employee can oversee some of these tasks. But, they need the training and understanding to make sure that they aren’t missing important parts of the financial tracking.

In addition to the daily data entry, it is also important that higher-level strategy is used to plan for the future. Not only do you need to assess cash flow and profit/loss reports, but you need to be prepared for tax filing. Correct information on your financial reports will have an impact on the taxes that you pay and the amount of money that you can save due to write-offs

An experienced bookkeeper could cause a domino effect that impacts many aspects of your business. Even though a missed transaction or mathematical error might seem minor, it can play a big part in the accuracy of your reports in the future. When it comes to finances, it is essential that you have an expert team overseeing every detail. Hiring a professional accounting and bookkeeping service not only ensures the accuracy of your reporting, but it also helps with the long-term success of your company.

What Will Happen if You Have Bad Bookkeeping Practices?

If you don’t know a lot about accounting and bookkeeping, then it is possible that you don’t understand the serious implications of bad bookkeeping. Here are a few consequences that you might face:

  • IRS Audit: Resulting in time, stress, and money for accounting services to work through the audit. If incorrect information is discovered on your tax filing, then it is possible that you will be facing expensive fines and fees that could negatively impact your current cash flow. The best solution is to have an experienced accountant who will help you follow the rules and avoid the risk of an audit.
  • Cash Flow Problems: What will happen if it is time for payroll and you don’t have enough money in the bank to pay your employees? Costs come up every month for business development, payroll, office supplies, and more. If you aren’t tracking your inflow and outflow, then you might be caught in a difficult situation where there isn’t enough money to pay the bills. These problems can be avoided by hiring a good accountant who will track the records and help you avoid cash flow problems.
  • Poor Business Decisions: How can you make accurate decisions for your company if you don’t understand the current financial health of the business? When you are facing decisions about hiring employees, business development, or marketing costs, you need an accurate picture of the financial health of your company. This information is essential so that you can run financial reports and then make decisions based on the current financial trends that you are experiencing.

Important Principles of Good Bookkeeping and Accounting

So, what should you be looking for when you are ready to hire someone to help with bookkeeping and accounting? First, make sure that you find a team with many years of experience in the industry. You need an accountant with hands-on experience working with other small businesses. For example, you will get better results hiring an accounting team that focuses on small business services, instead of hiring someone who usually does personal tax filings.

Next, it is important that your accounting and bookkeeping team has a good system that is implemented to track financial transactions and generate reports. Everything should be done using a software program, instead of using hand-written records or manual tracking on a spreadsheet.

The system needs to be able to categorize expenses so that you know how much you are spending on various things. Breaking down these details can help you see where you are spending the most money on unnecessary costs. You can also evaluate the most profitable aspects of your company, helping you maximize cash flow by focusing on the activities that are bringing in the money.

A good accounting system needs to account for every penny that moves through the company. There are also taxes and other things that need to be accounted for as well. For example, sales tax, quarterly tax payments, and other details need to be tracked and paid along the way.

Finally, it is important that your accounting team offers a reconciliation of your bank accounts. Even if you are consistent with data entry for the transactions, there are times when the numbers are off, and everything needs to be adjusted. These small discrepancies can be identified if regular reconciliations are happening. This effort is basically a small audit to make sure that all of the accounts match up and everything is in alignment.

Don’s Stress Over DIY Accounting

There is no reason why you should be handling the stress of managing the accounting for your company. As the business owner, you have enough to worry about for the business development, employee management, and more. Let a professional team of accountants and bookkeepers oversee the financial tracking for your company, freeing up your time to focus on other activities that will help your company grow,

DIY accounting is often a bad idea because it results in many problems with inaccurate reports and missed transactions. Instead of making a mistake by handling the accounting in-house, it is better to hire an outsourced team to help.

The Easier Accounting team is experienced in all aspects of small business accounting and bookkeeping. If you need a trusted team to help with your company, then we invite you to call us today to learn more about the services that we offer. We are here to help with the financial success of your company: (888) 620-0770

Is it Better to Hire a CFO or Outsource Your Small Business Financials?

How many people are employed by your company? If you need to bring in a specific skill set to help with your business goals, then the first inclination is often to post a job opening and hire another employee. While there’s nothing wrong with hiring employees, it is important that you consider the needs of your business and all of the options that are available.

Not only will you take on the financial burden of one more salary to pay, but you also need to oversee the in-house management of an additional person. So, you should evaluate your motivations for hiring another employee, and also consider the benefits of outsourcing if it makes sense.

Today we are going to compare the options that you might be considering if you need help with your business financials: in-house bookkeeper or accountant, hiring a CFO, or outsourcing the tasks to an experienced team.

Be Prepared if You Hire Another Employee

If you are hiring an employee to help with business financials, then you probably need someone to assist with basic bookkeeping tasks, such as tracking transactions and cutting paychecks. On the other hand, a high-level executive can be helpful if you need assistance with bigger financial decisions.

It can be a hassle to go through the process of finding the right employee that will fit the scope of work that you need. Plus, you will need to ensure that a good onboarding program is in place to help the employee learn more about the in-house practices that you are using.

On top of the logistics of bringing another employee into the office, you also need to think about the monthly costs that will need to be covered. Most small business owners only think about the salary that will be paid. But, you shouldn’t overlook the additional costs that come with employees: employment taxes, benefits, office space, equipment, and more.

The salary is just the starting point… with many other cost burdens that will need to be carried by your company. These expenses go up exponentially if you are hiring a top-level executive instead of an entry-level bookkeeper. You will spend more money for an experienced CPA or CFO compared to the costs for someone who is only looking after the books.

Outsourcing for Efficiency and Affordability

In comparison, outsourcing gives you the access to the skill sets that are needed without the hassle of bringing another employee onto the team. You can hand the financial tracking responsibilities to an experienced team. But, there is no need to pay the costs of a full-time employee or benefits.

Many small business owners see the benefits of outsourced accounting. These services are growing every year, giving you more access to the best in the industry without the need to hire an employee. It is a win-win situation: accountants and bookkeepers love the freedom of self-employment, while small business owners can minimize costs and maximize profits.

What Skills Do You Need?

Whether you are hiring an employee or choosing an outsourcing team, you need to consider the tasks that should be addressed and the skills that need to be provided. If you don’t know a lot about business finances, then it can be hard to know if you should hire a basic bookkeeper, accountant, or CFO.

Here are a few questions that you can ask to help you identify the skill set that will fill your needs:

  • Do You Need Someone to Manage the Invoices and Paperwork? In some cases, business owners already have an accountant to handle tax filings. But, it can be a challenge to keep up with the invoices that come through the office each day. If you are looking for a person to oversee the filing and data entry, then a bookkeeper might be the right solution. There’s no need to pay someone with more experience if you won’t be using their services for financial analysis or tax preparation.
  • Are You Looking for Help with Tax Preparation and Strategy? Then, you will be best served to hire a CPA to oversee these tasks. A CPA knows the current tax laws and they can help with the strategy of minimizing your tax burden. Their job is to make sure that you are staying in compliance with the various state and federal regulations. In most situations, a CPA will keep the financial records and perform regular audits to ensure the quality of the reports. At the same time, they also take care of the reports and paperwork necessary for tax filing. If you face an IRS audit, then a CPA will assist with the proceedings.
  • Do You Need an Expert to Forecast the Future and Design a Financial Strategy Around Your Business Plan? Then, a CFO might be the right answer. CFOs don’t handle the busy work like invoice data entry or payroll processing. Instead, they are looking at the way the numbers are working out to anticipate the future of your business. A CFO can help with the capital structure of your company, as well as assisting with fundraising and relationships with investors. The goal of a CFO is to help a company sustainably reach peak performance levels, helping to improve company profits.

CPA vs. CFO

The benefits of hiring an accountant are if you need someone to oversee your business finances to ensure that the reports are accurate and you are maintaining compliance. A CPA can also assist with clarification of tax law, as well as preparing and filing the tax paperwork. If needed, these skills might encompass other financial tasks such as bookkeeping, payroll preparation, and more.

On the other hand, a CFO is needed if you require higher-level financial analysis. Don’t hire a CFO if you just need help with tax preparation! Instead, a CFO offers the skill set to bring insight and top-level strategy for the operations of your company. CFOs focus on the future of the business, forecasting, anticipated cash flow, and long-range planning to help the company grow. In comparison, CPAs are usually focused on reporting and accuracy of historical data.

One of the biggest mistakes that growing businesses make is hiring an accountant and assuming that they will get the full long-range strategy and business plan designs that should be coming from a CFO. Accounting services are perfect if you need tax strategy services. But, you need to tap into the expertise of a CFO if you need forecasting and financial strategy.

Best Solution? Regular Accounting with Occasional CFO Services

If you are running a start-up or small business, then the highest priority is to make sure that you are maintaining regular accounting services to keep up with the daily financial tracking and reporting. Your accountant can oversee company assets and offer the technical financial knowledge that you need as you are making decisions along the way. Accounting services are also essential to make sure that you are current with internal auditing.

To sum it up, most small businesses need accounting services for tax preparation and more. But, not all companies need to bring on a CFO. Instead of hiring a full-time CFO, consider the benefits of occasional consultations until your company is strong enough to carry the costs of a full-time CFO. In the meantime, don’t harm the future of your company by cutting corners on accounting services. These regular financial skills are essential to make sure that you are staying on track and keeping up with the cash flow demands for your company.

Accounting Services Will Boost Your Results and Decrease Your Stress

Most business owners will agree that hiring an accountant is one of the best decisions they made for their company. Your accountant can take responsibility for the financial reports. Instead of crunching the numbers, you can turn your attention to the business development activities that will help your company grow.

If you want to expand your offerings and help your company grow, then it is essential that you hire a CPA to assist with your tax strategy and preparation. These services are key so that you don’t have to carry the financial responsibility on your own. Plus, you will make better business decisions when you always have accurate financial reports to assess the current status and anticipated cash flow for the year.

Is it time for you to bring in the accounting skills that are needed for your small business? Instead of spending the cash on a full-time employee, consider the benefits of outsourced accounting. You will have full access to an experienced team while saving money on your monthly cash flow at the same time.

Our team at Easier Accounting specializes in these accounting services for start-ups and small business owners. We invite you to call us today to learn more about the options that can support your business goals. We will cater the services to match the needs of your company, helping to create the long-term success that you are working hard to achieve. Call today to learn more about the services that we offer: (888) 620-0770

Hiring a Business Accountant? Look for These Important Qualities

It is easy to see the many benefits that you will experience when you choose to hire a business accountant. Not only will you save time on the daily financial tasks, but you can also tap into the skills that are needed to maximize the future success of your company. If you don’t already have an accounting team to help your small business, then you need to pick an accounting service as soon as possible.

Do You Need a Business Accountant?

The size of your company doesn’t matter, because you still need to track details such as payroll, expenses, sales, taxes, and more. Most entrepreneurs or small business owners don’t have the knowledge or experience to stay ahead of the numbers. So, they fall behind in the books and face a financial mess that needs to be cleaned up. Instead of getting caught up in these details, hire a business accountant who can track the financial information so that you can focus on other tasks that will help your company grow.

Not only will these business accounting services reduce your stress levels, but they also ensure that you are staying current with local and federal tax laws. You need to make sure that you are staying compliant with the laws to avoid potential fines and problems in the future.

Some business owners see the benefits of working with an accountant. But, they get overwhelmed with the task of choosing an accounting firm. Instead of over-analyzing the options, look for these important factors that will help with your decision:

Consistency and Reliability

When it comes to business financials, the details need to be looked at regularly. It is a bad habit to look at the numbers once and then neglect them for a few months. Instead, these details need to be managed all the time to ensure that reports and details are accurate when making big financial decisions.

Consistent service means that you talk to your accounting team throughout the year. If your current accountant only touches base when it is time to file your annual taxes, then you are missing out on many of the benefits of having a business accountant. Instead, you need to find a team that offers ongoing support and advice throughout the year. These services will ensure that you are staying on track with your business goals.

Look for an accounting team with a long history of success in the industry. This reliability will ensure that the accountants will stay consistent with the services that are offered for your business. You deserve an accounting team that offers timely, efficient services to support the needs of your company.

Industry Experience

Hands-on experience in the industry is much better than anything that can be learned in a book or classroom lecture. Choose an accounting team that has experience with other similar businesses. For example, if you are managing a start-up company, then it might not be the best solution to hire an accounting team that has been supporting large corporations with hundreds of employees. Instead, you will find more benefit by hiring a team that specializes in small businesses.

This industry experience will help you avoid some of the common pitfalls that new businesses face. Since the accounting team knows the potential problems that could come up, they will use proven systems to reduce the risk of these issues.

Systems and Organization

It is a red flag if you walk into an accounting office to see a mess of papers and files. If you are looking at an online accounting service, then you might be able to identify organizational factors in the way ongoing tasks and customer service are handled. Make sure that the team is staying ahead of the requirements, instead of missing deadlines and dropping important things that need to be addressed.

During your consultation with the accounting team, ask about checkpoints and reconciliation strategies that are used to ensure that nothing slips through the cracks. These details are important to ensure that your business receives the attention that it deserves.

Modern Tools

If you talk to an accounting team that suggests implementing a manual spreadsheet tracking system, then it is a good sign that you need to walk away and find another accounting service. Manual financial tracking is a thing of the past! There are so many great accounting software programs that will improve your results and maximize the future success of your company.

Using manual accounting methods means that you will miss out on important information that can be gathered from ongoing financial reports. It is hard to get a clear picture of the financial standing of your company if you are trying to crunch spreadsheet numbers or doing the math on a piece of paper!

The right business accountant will integrate a software program that will stay ahead of the reporting and reconciliations. This system will allow you to see real-time financial details. You have the opportunity to customize the analysis to match the needs of your company.

One benefit of the right account system is that you can avoid potential filing errors and reporting issues. This computerized program will systemize the process to reduce the risk of a manual error. As a result, you can maximize tax savings and avoid potential fines or fees associated with mistakes that could be made on the forms or tracking information.

Current Industry Knowledge

There is no doubt that the bookkeeping and accounting industry has become more complicated over the years. Business owners see the benefits of hiring an accountant because they are unable to keep up with the changing laws and trends in the industry.

So, you need to be sure that your accountant is proactive to pay attention to the changes in the laws and regulations. Tax laws change every year, and there are often small adjustments to employment tax rates, tax filing forms, and more. Unless you are focused on the accounting industry, you won’t be able to keep up with everything by yourself! Instead, you can lean on the expertise of your accountant to ensure that the team is taking care of the details.

Ongoing Strategy

Working with an accountant who focuses on the big picture can be a valuable way to help your company grow. This accounting advice is more than just basic information about how to fill out a tax form. You need a team who can assess the cash flow and current growth of your company, and then make recommendations to match your needs.

These accounting recommendations can be anything from tax advice to ways to changes that are needed for your financial system. Improving your daily habits and regular business practices can go a long way to boost your future success. For example, your accountant might help you see the way your company is struggling with cash flow, then make recommendations about the steps that can be followed to help you keep cash in the bank.

Many aspects need to be considered for future growth. Not only do you need the cash flow and investments to support growing inventory and workforce, but you also need to think about other overhead costs and maintenance. An experienced accountant will help you see the big picture so that you are prepared for any potential roadblocks that might be in the future. Managing the costs and income of your business will help you stay ahead of the trends so that you can take advantage of opportunities when they come along.

Personal Attention

You have unique concerns and requirements for your company, which means that you need personalized service from your accounting team. Choose a business accountant who is willing to have a conversation to understand your needs. Then, the services can be catered to match your business plan and requirements.

These personalized services are important to ensure that you aren’t getting a cookie-cutter approach that won’t work for your company. Instead, the systems will be designed to fit around your business goals, helping you achieve the long-term success that you desire.

Talk to the Leading Team in the Accounting Industry

If you are looking for a business accountant, then we invite you to talk to our team for more information. Here at Easier Accounting, we are working hard to provide the best small business accounting services that will support the needs of your company.

Before you decide to hire an outsource accountant, it is important that you learn more about the company that you would like to hire. As you research our business, you will see that we have built a solid reputation in the industry.

We understand the importance of a solid relationship with our customers. You can rest assured to know that someone is always available to answer your questions and offer the advice that you need. Not only will you receive honest, caring service from our company, but you will be working with a team that specializes in small businesses.

When you are ready for more information, talk to the experts in the industry: Easier Accounting. Call today to learn more about the ways that we can help your company: (888) 620-0770

FAQ about Outsourced Accounting and Bookkeeping Services

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

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

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

What Services are Available?

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

These accounting and bookkeeping services include:

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

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

How Will My Business Benefit from Outsourced Accounting Services?

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

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

Why Outsourced Services instead of Hiring an Employee?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Can You Help with Taxes and Payroll?

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

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

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

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

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

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

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

How Can I Learn More?

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

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

Why Payroll is One of the First Things You Should Outsource

The quality of your staff is the foundation of a successful business. If you have skilled employees and contractors, then you can rest assured to know that things will get done and the business will keep moving forward. On the other hand, unmotivated employees can quickly bring down a company because of the poor customer service that is reflected.

As an employer, you need to be sure that you are proactively working to improve company culture. Happy employees will treat your customers right, helping you to increase sales and productivity. Payroll is an important aspect of employee satisfaction because your team needs to know that they will receive a correct paycheck in a timely manner. When payroll problems happen, it starts a domino effect that negatively impacts attitude and culture in your business.

Mistakes of Do-It-Yourself Payroll

If you are just getting started with your small business, then it makes sense that you are carrying many responsibilities. It is common for small business owners to carry the bulk of the responsibility, instead of handing some of these things off to employees and contractors. Not only are you looking for ways to cut overhead costs, but you also want to maintain control over the business.

Even though it might seem like a simple solution to handle the payroll by yourself, be aware that you could be causing potential problems for your company. Too often, small business owners don’t have the experience or knowledge to manage the business financial details. As a result, things slip through the cracks and mistakes are made.

Compare the costs of hiring a payroll service to help with your company, and you will see that it is cheaper to pay for this monthly service instead of dealing with the aftermath of a failing business because of payroll mistakes. These mistakes could cost thousands of dollars in employee turnover, back taxes, IRS fines, and more.

Is Payroll Software a Good Idea?

Using a reputable software program is a great place to start, but the software won’t overcome the human mistakes. The computer is only as good as the information that is entered into the software. So, you need to be sure that you are using accurate information when setting up the payroll details for your employees.

Depending on the software without using regular checks and balances could cause a domino effect of problems in the future. So, it is important that you have an experienced accounting and bookkeeping team in place to stay ahead of the details. The combination of the right software program and a knowledgeable team will set your company up for success.

Accounting Employee or Outsourced Payroll Services?

Now that you see the importance of hiring an experienced financial professional to help with payroll, the next step is to compare the options of an in-house employee or an outsourced payroll service. When you look at the numbers, it is easy to see why many small business owners turn to outsourced services to solve this problem.

If you hire an employee to manage payroll, you will need to pay their salary with extra costs on top for benefits. These benefits can cost thousands of dollars per year for health insurance, life insurance, paid time off, and more. Plus, you have the employee taxes and worker’s compensation fees calculated based on the amount that is paid to each employee.

Not only do you need to cover these taxes and benefits for an employee, but you also need to carry the cost burden of paying for office space to accommodate that employee. Other expenses might include office furniture, computer equipment, and office supplies that are needed so that they can do their job.

There is no doubt that it can be expensive to hire an employee. So, many small business owners are looking at options to bring on contractors for support instead. These outsourced payroll services offer all of the expertise that you need, without the burden of having an employee in your office. You get the best of both worlds: you can save money and have reliable, accurate payroll processing at the same time.

Benefits of Outsourcing Your Payroll Processing

Are you considering the option to outsource your payroll? Here are a few benefits that you can expect if you choose to invest in this service:

  • Save Time: There is no reason for you to spend your limited time on payroll processing. As a business owner, your time is better spent on employee management and company growth. Let someone else handle the busy work for payroll processing. Outsourcing these tasks will free up your time so that you can focus on more important responsibilities for the company.
  • Boost Productivity: How often do you feel like your day is taken up with busy work and seemingly mundane tasks? As the owner of the company, it can be hard to maintain productivity if you are constantly interrupted throughout the day. Plus, your productivity will go down if you are wasting your time on busy work. Outsource this busy work so that you can improve your productivity each day and maximize your results.
  • Decrease Expenses: As mentioned above, there are many costs associated with bringing another employee into your company. By working with a payroll provider, you can reduce the direct costs of payroll processing. Even if you have a large company that can support the salary of an in-house accountant, you still might consider the benefits of outsourced payroll services to minimize costs.
  • Avoid IRS Penalties: If tax filings and paperwork are turned in late, then the IRS will charge expensive fees and interest costs. Your risk of these fees will go up if you are handling the payroll without the support of an experienced accounting team. Small business owners often make mistakes, which can result in costly problems in the future.
  • Financial Security: Is your bank account and employee information secure in your office? Payroll processing can be risky if you aren’t using the right security features to protect the information. There are many security threats that you can run into in the digital age in which we live. So, it is a good idea to hire a company who will go above and beyond to protect your financial security.
  • Keep Employees Happy: One of the fastest ways to make an employee upset is by making a mistake on their paycheck. Reliable, accurate paychecks are the foundation of employee satisfaction. So, you need to make sure that you have a payroll team that will ensure accuracy for every pay period.
  • Expert Financial Advice: Hire the right payroll processing team, and you will have expert financial advice throughout the year. These accounting services can be much more than just writing the paychecks! The right accounting service will offer services for tax filing and management, as well as all other types of business financial support that you need. Take advantage of this expertise to help your company grow.
  • Regular Reconciliations: There are many benefits to having an outside party handle the reconciliations for your payroll and business transactions. These checks and balances will decrease the possibility of fraud or theft within the company. Instead of leaving this responsibility with an in-house employee, bring in an outsourced expert who can look for potential signs of employee fraud.
  • Current Expertise: Payroll services make it their job to stay ahead of the changes in the industry. If the IRS makes adjustments to tax rates, then you can rest assured to know that your company will stay up-to-date with these changes. You don’t have time to study the industry and keep up with these changes by yourself. Instead, bring in an outsourced service which is entrenched in the industry and retains current knowledge for mandates on the federal, state, and local levels.
  • Lower Stress Levels: How much do you stress every time you need to calculate payroll for your employees? This task can increase your stress levels and make it hard for you to relax during your free time. Instead of burdening yourself with high stress levels, outsource the work so that you can sit back and relax while the experts handle the details.

Hiring an outsourced payroll team is one of the best things that you can do for your company! Not only will you free up your time, but you can also have the peace of mind to know that you are missing some of the mistakes that are commonly made by small businesses.

It is important that you build the right team to support the future success of your company. If you are looking for ways to improve your financial systems, then you need to talk to us to learn more about the services that are available.

At Easier Accounting, we specialize in all types of business financial services, including payroll processing and tax filing. We invite you to call to schedule a consultation to learn more about the ways that we can support your small business. We are here to help with anything that you need! (888) 620-0770

How AP/AR Processing Impacts Cashflow Management

Cashflow management is a critical part of running a business. Without cash in the bank, your company can’t function! Cash is necessary for nearly every aspect of running a company, so you need to look to the future to ensure that you have the funds that are needed for upcoming expenses.

Unfortunately, cash flow is an issue that many business owners face. Have you found yourself in a situation where you aren’t sure if there will be enough cash to cover payroll or buy new inventory? Your business can’t move forward if you don’t have employees or product to sell. So, it is important that you make a few changes so that you always have the cash flow needed to keep your company running.

Foundation of Cashflow Management: AP/AR

When are you are working to improve your business cash flow, Accounts Payable and Accounts Receivable should be the area where you direct your focus. Invoices that are coming in and going out will impact the money that moves through your bank account. Accounts Receivable encompasses the money that is owed to you by clients and customers. Accounts Payable includes the money that you owe suppliers and vendors. You also need to be aware of potential shortfalls, which are times when the incoming funds won’t cover outgoing expenses.

Accounts Receivable has an obvious impact on cash flow since it is an overall picture of the money that you will be receiving from clients and customers. Sometimes, companies get behind in their invoicing, which delays the receipt of money because the invoices are so late. If you want to be paid, then you need to be sure that the invoices are sent promptly.

Also, late invoicing can be a problem for your clients who are trying to manage their own cash flow. Whether you are dealing with business-to-business transactions or you have individuals who are buying your services, most people will need to work to be sure that the cost fits into their budget. Having an invoice in hand as soon as possible makes it easier for your customers to manage their cash flow to pay the costs that are due.

Even though it seems like Accounts Receivable is the biggest influence on your cash flow, you shouldn’t overlook how much Accounts Payable will impact your cash position as well.

Accounts Payable and Cash Flow

Once you have dialed in the invoicing system and you have the money flowing in from customers, it is also important to make sure that you are controlling the money that is moving out of your bank account. Overhead expenses and other costs are unavoidable… it takes money to earn money! It isn’t a bad thing to have invoices that need to be paid, but you need to be careful to ensure that you are tracking business spending and avoiding unnecessary costs.

The biggest problem that you can face with Accounts Payable is failing to track upcoming expenses, and then facing a situation where you need to pay a large bill and the money isn’t available. Some business owners make financial decisions based on the amount of money currently in their bank account. Then, a big bill will come through, and they no longer have the cash to pay for the expense.

For example, if you land a contract with a big client and have an infusion of money into your bank account, then it might create a false sense of security that you can spend a little more than normal. Some business owners use this type of situation to justify extra costs such as new office furniture or hiring a new employee. Spending the money as soon as it comes in might result in an issue with cash flow later.

Even though the money was available at one point, what will you do when a large, unavoidable expense comes through? Tax bills are one area where small business owners can often get caught off guard, resulting in problems because they don’t have the cash to pay the bill.

With a little bit of planning, you can look ahead to see the anticipated costs that will be coming up. Then, you can work with an experienced accounting team to ensure that you are using the best strategies with incoming and outgoing expenses to support your future financial growth.

Tips to Improve Small Business Cashflow

Whether you are currently facing cash flow problems or you are looking for a way to improve your financial future, there are a few things that you can do to improve your account management and tracking. Here are some ideas to help you get started:

  • Know Where You Will Break Even: Your breakeven point won’t necessarily impact your cash flow, but it can provide an overall picture of the financial stability of your company. Having a clear picture of the profitability of your business will help you to see whether there is enough cash left over after the expenses are paid. If your breakeven point is too high, then you might need to ramp up efforts to increase profitability.
  • Always Have Emergency Reserves: It is hard to know when an emergency will pop up. Emergencies can be in the form of equipment that needs to be replaced or damage from a natural disaster. Your cash reserves can be used to keep your company running while you are sorting through the details.
  • Make Your Cash Work for You: If you are going to save money in an emergency account, then make sure that you choose an account that will help the cash work for you. Interest-earning accounts can help you maximize your investment and generate a little more income from the money that is sitting in the bank. Talk to your bank, or look into options such as CDs or money market accounts if you don’t need immediate access to the funds.
  • Expect Shortfalls: The goal is always to have more cash than you are spending, but there are times when shortfalls might occur. Some companies face these shortfalls during the slow season, while other companies face a slowdown in sales because of economic factors. Expect that you will face shortfalls at some point and be ready with your emergency cash reserves.
  • Anticipate Upcoming Expenses: A big tax bill or a cost to replace old equipment shouldn’t be a surprise. These expenses will roll through every so often, and you can evaluate your company to know when these costs will be due. Look forward to a few months and identify potential bills that you might need to pay. Then, plan accordingly so that you have the money in your bank account for these invoices.
  • Be Proactive to Collect on Invoices: Have a proactive person on your team working on AR invoices. Keep net-30 or net-60 pay terms, and always follow up if invoices are left unpaid.
  • Offer Incentives for Timely Payments: Are you running into problems with many past-due invoices? Consider offering some type of incentive to customers who pay early. For example, you could provide a payment discount if the payment is received in 7 days.
  • Establish Clear Payment Expectations: Written payment terms need to be provided to every customer. Set clear expectations about when payments are due and the penalties for late payments. Then, make sure that you are proactive to enforce those rules always.
  • Use Cloud Based Accounting: Staying ahead of the numbers will help you see the costs that are coming up. Cloud based accounting is a great option to consider because it helps you track expenses from any location. Make sure that you have a trusted employee or accounting team who can keep these numbers current so that you always have accurate reports.
  • Double Check the Accounts with Reconciliation: When transactions aren’t properly recorded in your accounting system, it could result in bounced checks or other cash flow You need to reconcile the accounts regularly to make sure that your accounting system accurately reflects the amount of money in the bank. Monthly reconciliations are a great way to identify the missed transactions so that you can fix the problems and balance the accounts.
  • Hire an Accountant and Bookkeeper: If you can’t keep up with the paperwork, transactions, and reconciliation, then it is time to hire someone to help. It can be expensive to bring on another employee, which is why you should consider the benefit of outsourced accounting services. An accountant has the experience and knowledge to know the best way to improve your financial outlook and help you stay ahead of cash flow

Do you have a hard time keeping up with financial management in your company? Then you need to hire a team to take care of these accounting details. Here at Easier Accounting, we work with small businesses and entrepreneurs to assist with payroll, tax preparation, and cash flow. Our team knows how to help you stay ahead of the accounting requirements for business. For more information, we invite you to contact us to schedule a consultation. We are always happy to answer your questions and we can cater your accounting services to match the needs of your company: (888) 620-0770