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Small Business Accounting: How to Choose a Service Provider

One of the most important steps a business owner can take is hiring a pro to help with small business accounting. Not only will you have confidence knowing that your records are up-to-date at all times, but it is important to tap into the financial strategy available from someone who has industry experience.

Don’t Wait for Small Business Accounting

If you don’t already have a small business accountant to help with your financial records, why wait? Sometimes people make excuses about the cost of the accounting services. Even though you will need to add another expense to your business records, it is well worth the investment when you see how much money can be saved.

Here are a few reasons why you should consider small business accounting services as soon as possible:

  • Ongoing Tax Strategy: Your accountant can provide tax support throughout the year to ensure you are on track for the upcoming annual tax filing. Business taxes are more than crunching a few numbers before April 15th. You need to be strategic with your spending, business entity, and overall financial strategy if you want to minimize your tax burden. Since taxes are necessary for every business owner, it makes sense to enlist a tax specialist as soon as possible so you can minimize the impact on your bottom line.
  • Free Up Your Time: It is common for business owners to find it hard to step away from their offices. You are wearing many hats during the day to keep your company running. All of these responsibilities are important, but it can be burdensome to keep up with everything. If you are still managing your books, then it is time to hand the bookkeeping and accounting responsibilities over to a pro. Hiring the right accounting team will free up your time so you can turn your attention to other requirements within your company.
  • Optimize Profits: Owning a business can bring personal fulfillment, but the ultimate goal is to bring in a profit. You wouldn’t be running the company if you can’t take a paycheck home! Yes, there are times when you need to be careful with your spending, especially in the start-up stages of owning a business. With time, the right financial strategy can help you increase your profit margins so you can enjoy the full benefits of being a business owner.

Options for Accounting Services

Many business owners don’t know much about the accounting industry, which can make it overwhelming to hire a service provider. Not only do you need to know the difference in the various financial specialties that are available, but you also need to consider the specific services that are offered for your business.

Some of the most common accounting services offered for small businesses include:

  • Bookkeeping: These services focus on the ongoing financial tracking to ensure your records are up to date. Software programs can be used to automate banking transactions; then, the bookkeeper keeps track of the transactions to identify potential issues or errors that might need to be addressed.
  • Taxes: Hiring a tax accountant can be beneficial when you need to file paperwork for the IRS. The topic of tax accounting is huge since the forms vary depending on the way your business is structured. As a business owner, you don’t need to worry about tax laws and rules. Instead, let your CPA do the tax accounting. This service often includes both paperwork preparation and strategy that can be used to reduce your tax liabilities each year.
  • Strategic Services: As your business grows, it can be helping to have a financial expert who offers advice about management accounting. These services are focused on the financial data within your company, helping to create a long-term strategy that will ensure sustainable growth. These services can be expensive, but are worth the investment to ensure you are prepared for the future.

What are the Unique Needs of Your Company?

Before hiring a small business accounting expert, it can be helpful to determine which services will be a good fit for your needs. What are your business goals? Where are you falling short when it comes to your financial systems? You might not have specific answers to these questions until you have a conversation with an accountant.

Keep in mind that an experienced accountant can help you avoid common problems that arise with business growth. You don’t have hands-on experience with these aspects of business management, which means there are pitfalls that might be encountered without someone who can help you avoid these issues.

Talk to your accountant about your priorities and goals for the business. Then, ask about the best accounting services to fit your needs. Also, open the conversation to learn more about accounting services that might fill in the gaps for issues that you could potentially be overlooking.

Characteristics of a Great Small Business Accountant

We live in a digital business world, which means that you aren’t limited to hiring an accountant who is close to home. You can look online to find service providers, but it can be a challenge to choose from the many accounting firms located across the United States.

As you are researching your options, here are a few things that will help you choose the right small business accounting service:

  • Experience: For optimal results, it is beneficial to work with an accountant who has been in the industry for years. While book-smarts can be useful, nothing beats the skills that come from the day-in-day-out application. Find an accounting team that offers specialized services focused specifically on small business accounting.
  • Professionalism: Customer service matters because you need to be sure that your accountant will respond when you need to have a conversation. Not only does professionalism indicate the service you will receive, but you also feel good knowing that they will be detail-oriented with your tax return and ongoing services. Consider the interactions you have with the company to get a feel for the level of professionalism you can expect.
  • Credentials: In the United States, specific education and certification requirements need to be met before someone can offer accounting services. Just because someone knows how to use Quickbooks doesn’t mean that they are qualified to offer small business accounting advice. It is smart to check your accountant’s credentials before selecting their services.
  • Recommendations: Consider the option to talk to business contacts for accountant recommendations. Conversations with other business owners can help you find a trusted provider.
  • Accounting Team: While you can get the required services from a single accountant, there are bigger benefits that come from hiring an accounting team. You always have access to talk to someone for accounting advice, even when your point of contact is out of the office. Plus, an accounting team means that you are tapping into the experience and specialized skill sets of various industry pros, which can help to optimize the overall results that are achieved.
  • Cost: Small business accounting services are an investment. While it is worth the cost to bring in a team of experts to help with your business finances, make sure that you aren’t overpaying for the services. Compare the costs of the available services with other providers. Make sure that you are making similar comparisons – for example, the rate should reflect the same scope of provided services from each accounting team.
  • Software: One of the most effective ways to design your accounting system is by using a software program that can automate various aspects. For example, the software can pull in bank account transactions and other financial information. Then, your accountant can reconcile the numbers and use this information to help your business as needed. Ask your small business accountant about their recommendations for software programs.
  • Ongoing Services: Ask questions about the frequency of reporting, how often you will be in contact, and what the ongoing services will entail. Setting this expectation in the beginning will ensure that your needs are met throughout the year.

You can research various accounting firms to find potential providers, but don’t overlook the importance of finding a provider that has the right personality to match your preferences. Personality fit matters, especially when you will be working with the person throughout the year. You need to be sure that you get along with the accountant so that you are comfortable talking to them about your questions and needs.

Easier Accounting Offers Quality Business Services

We are dedicated to providing high-quality services for small business owners and entrepreneurs. Our team offers years of experience in the accounting industry and a proven system that works. When you choose our team for accounting services, you can have the peace of mind to know that you are working with a group that cares about your success.

Customer satisfaction is a high priority for us, which is why we are happy to customize your services based on your individual needs. If you have questions about available services, then you are welcome to contact us at any time. Reach out to have a conversation with us at Easier Accounting: (888) 620-0770.

IRS Red Flags for Business Owners: Tax Return Mistakes to Avoid

Taxes are one aspect of running a business that most entrepreneurs dislike. Not only do you need to be sure that the cash is available when tax time rolls around, but it can be a burden to keep up with the tracking and paperwork required for tax preparation and filing.

Taxes are unavoidable, both for businesses and individuals. Even though it seems like taxes are cutting into your profits, it is essential that you maintain proper systems to ensure accuracy in your payments. If tax return mistakes are made with your quarterly payments or annual filing, then you could be paying a lot more in fines and fees charged by the IRS.

Annual Tax Filing: How it Works

The IRS requires that you submit an annual tax report. But this once-a-year paperwork isn’t the only time of year that you need to think about taxes. Often, other reports and payments need to be made throughout the year, such as payroll taxes, quarterly estimates, sales tax, and more.

When mistakes are made on your tax return, then you can expect the IRS to charge fines for the error. Additionally, interest costs are often accrued on the unpaid amounts – usually calculated monthly for the length of time the mistake went uncorrected.

When you file your taxes each year, the IRS is thorough about analyzing your income and deductibles. Potential mistakes are easy to avoid. The key is to stay away from a DIY approach with tax preparation and filing. Instead, it is best to hire an experienced business tax accountant so you can avoid these common tax return mistakes. The small fee paid to an accountant is worth the peace of mind in knowing that your tax paperwork is accurate and ready to be filed with no mistakes or errors.

Underpaying on Your Estimated Payments

When employees are receiving regular paychecks, taxes are withheld and paid through the payroll processing system. As a business owner, you have to make sure that these taxes are paid on time to avoid potential penalties. Even if you aren’t paid a salary paycheck through your company, it is still essential that you are current with your quarterly estimated payments.

If the IRS finds that you underpaid on your taxes during the year, then you could be facing penalties for the underpayment. Not only do you need to pay the difference, but it will be a bigger amount due because of the consequences of underpaying. When the underpayment is seen as an act of fraud or negligence, then the fines are much higher compared to an innocent mistake.

An experienced tax accountant can help with accurate estimates, making it easy to dial in the right amount that should be paid when quarterly deposits are due. The goal is to pay enough to avoid penalties, without overpaying. If your quarterly payments are more than you owe, then you will receive a refund when the annual taxes are finalized. But, the extra money is essentially a free “loan” to the IRS. A good business accounting team can help you dial in the “sweet spot” by looking at your expenses and income to determine the estimated amount that needs to be paid.

Common Tax Return Mistakes

These are some of the most common mistakes that are experienced by small business owners:

  1. Numbers Don’t Match Up: Not only will the IRS look at the numbers on your tax return, but they also compare the data with Form W-2 and Form 1099 in their records. If the income sources don’t match up, then you could be running into a problem. If you report a smaller amount than is listed on the W2 or 1099, then you could receive a bill for the unpaid taxes, along with interest and penalties. The best thing you can do in this situation is to review the numbers with your business accountant to determine if the calculations are accurate. If needed, your accountant can help you with a tax amendment submission.
  2. Failure to File the Right Forms: The necessary tax forms vary depending on the structure of your business. For example, sole proprietors don’t have to fill out some of the forms that are required for certain types of corporations. Make sure that you are working with a small business accountant who understands the various tax forms. This personalized approach can be designed to optimize your tax strategy and ensure that you don’t miss the forms that need to be submitted to the IRS throughout the year.
  3. Timing of Tax Filings: Deadlines matter to the IRS. It is important that you are consistent with submitting the paperwork and payments before the listed deadlines for each of the forms. Serious, expensive consequences might be faced for missing a deadline. Keep in mind that you always have the option to file for a tax extension if you don’t think your tax filing will be ready by the due date. Your small business accountant can assist with the submission of Form 4868 to request the extension. Just because you file an extension, doesn’t mean that you can delay your payment. This process only gives you more time for tax filing, but the payment is still due by April 15th each year.
  4. Record Keeping Issues: You can’t play it fast and loose when it comes to small business accounting. It is important that you are diligent with record keeping throughout the year. This system needs to track both income and expenses down to every penny that is sent and received. In the unlikely case that you are facing an audit, your records need to show how the tax return numbers match up to the transactions that moved through your bank account. These records should include everything from miscellaneous office expenses to the petty cash drawer and cash tips that were received.
  5. Quarterly Taxes: As mentioned above, business owners have an obligation to make estimated tax payments throughout the year. These estimated payments need to be paid on a quarterly basis, instead of waiting for tax day to roll around on April 15th. As a self-employed business owner, you need to file your estimated taxes four times a year. Then these numbers are calculated into your final tax filing for the year. These estimated payments should total at least 90% of the taxes that you need to pay for the year.
  6. Tax ID Mistakes: When one number is off on the Social Security Number or Employee ID Number, it can throw a wrench when the IRS is finalizing your filing for the year. Always check and double-check tax forms to ensure there aren’t any errors in the numbers. If a mistake is made by listing the wrong SSN or EIN, then you might need to refile the full tax return for the year. Another common mistake is a misspelling in the name.
  7. Account Numbers: Another number you need to pay attention to is the account numbers submitted for your bank. Whether you are paying an amount that is owed or receiving a refund, it can be a disaster if the money is moved from the wrong bank account. Make sure you are using the right bank account number and routing information to avoid the tax refund mistakes that result in a refund being deposited into a stranger’s account.
  8. Accuracy of Filing Status: Every person must list their filing status since it impacts the amount paid. For example, employees need to choose single, married filing separately, married filing jointly, head of household, etc. As an employer, you need to require new hires to fill out W4 forms which indicate the person’s filing status. Tax calculations need to correspond at all times. You also need to ensure that your personal filing status is accurate.

Talk to an Experienced Accountant to Avoid Tax Return Mistakes

Most small business owners and entrepreneurs don’t have formal training in accounting, which means that a DIY approach often results in tax return mistakes. Even if you are detailed-oriented and thorough with your filing, there are common mistakes that can be avoided by working with a tax professional.

Hiring an accounting team to assist with tax filing means that you can avoid these tax return mistakes and save money at the same time. Yes, you will need to pay for the accounting services that are provided. But it is a great investment when you consider the money saved through strategic tax strategy and by avoiding expensive fines and fees that will add up if mistakes are filed in the paperwork.

You don’t need to stress over the tax paperwork and financial tracking throughout the year. Let the experts assist with all necessary accounting and bookkeeping services so you can focus your attention on other responsibilities that come with being a business owner.

Easier Accounting is here to offer the full-service accounting systems that you need. Our team focuses on small businesses, which means that we have the hands-on experience you deserve. Contact us today to learn more about the ways your business will benefit from these available services: (888) 620-0770.

Business Owners: Avoid These Common Cash Pitfalls

Cash flow matters at all stages of business ownership. Whether you are trying to get a new business venture off the ground, or you’ve been in business for years, it is common to rush into cash pitfalls that can drain your bank account. But these problems can be avoided if you are proactive with your financial system.

A good accounting and bookkeeping team, such as Easier Accounting, can offer the ongoing cash flow support that you need throughout the year. Our team has worked with many small businesses, and we’ve seen the trends that often happen within growing companies. This experience gives us the insight to help our clients sidestep some of the common issues that impact cash flow.

Why Cash Flow Matters

It seems obvious that you need money on the bank to keep your business running. But there are times when you know that the money will be coming through receivables, so it might seem like a good idea to tap into credit if you have immediate expenses that need to be covered. This short-term strategy can lead to a domino-effect of financial issues in the future, especially if you don’t have a good bookkeeping and accounting system in place.

Not only do you need to be looking at the money that comes into your business when customers buy your products and services, but you also need to be looking ahead to the future to see how much money needs to be spent on expenses. For example, a big tax bill can sneak up on you if you aren’t tracking the flow of money, causing you to be cash-poor and unable to keep up with the costs of running your business.

When the bills need to be paid, and you don’t have any money in the bank, the cash flow issues could potentially result in business failure. Rent needs to be covered, employee paychecks need to be paid, inventory needs to be restocked, and you have a long list of other expenses that are required to keep your company running. Make sure that you have enough cash in the bank to cover these expenses each month.

Common Cash Pitfalls

Learning about common cash pitfalls can be an effective way to bring awareness to your business practices, helping you avoid these issues. You can learn from the mistakes of other business owners so that you don’t have to walk the same difficult path of cashflow problems.

Our team at Easier Accounting is here to guide your financial decisions and help you avoid some of the problems that we’ve seen over the years. Here are some of the most common cash pitfalls that we’ve encountered:

  • DIY Accounting: When a business owner chooses a DIY approach for accounting and bookkeeping, they are usually motivated to save the money that would have been spent on accounting services. The truth is that taking on these financial responsibilities might be one of the costliest mistakes you can make as a business owner. Not only are important financial details often overlooked with DIY accounting, but you don’t have the experience to dig into the financial statements and see what is coming in the future. You need clear insights for your expenses and income so you can optimize your business practices, which in turn will help to boost your profit margins.
  • Using the Right Tools: Excel can be a great tool for many projects within your company, but you are making a huge mistake if you are still using a spreadsheet to track your income and expenses. It is important that you have a robust accounting software that can generate reports and help you see a clear picture of your business profits and losses. The right accounting software will help you avoid mistakes that often come when the numbers are calculated manually.
  • Training and Application of Accounting Software: Not only do you need to be using the right accounting software to match the needs of your company, but it is also important to be sure that your team is trained on the most effective strategies for the use of this software. The simplest way to be sure that you are leveraging the full power of a financial software is to hire an experienced accounting team to assist with the setup and ongoing maintenance of your system.
  • Overlooking Accounts Receivables: Having unpaid invoices for current sales can inflate your numbers, but don’t count on the income until you have money in the bank. Too often, small business owners have a gap in their accounts receivables system. Make sure you have a strategy in place to follow-up on outstanding invoices. Late or unpaid invoices can have a major impact on your cashflow.
  • No Rainy-Day Account: Don’t make the mistake of spending every penny that comes into your business bank account. There are always opportunities to spend money on marketing and business development. While these expenses are good investments, it can be harmful to your company if you don’t have money set aside for a rainy day. It is common for small businesses to have slow seasons, which means that you need to have enough cash on hand to cover the costs when sales are trickling through. Set up a savings account designed for emergencies only. Ideally, this fund should have a minimum of three months of expenses.
  • Too Much Spending: It doesn’t matter how much money you are bringing in, you won’t be able to make a profit if you are spending more you are collecting. Often, businesses get bogged down with unnecessary subscriptions and services that eat into the cash flow and profitability each month. Take time to discuss your expenses with a financial pro, such as an experienced accountant. Find line-items where you can cut costs to protect your cash flow. Remember that a little bit can add up… saving $100 per month results in $1,200 in savings each year.
  • Excess Inventory: It is important to be sure that you have product on hand when the customers are ready to buy. But holding onto too much inventory can tie up your cash and make it difficult to keep up with ongoing expenses. If you have a warehouse stocked with products, then you need to dial in the sales trends and fine-tune your ordering. The goal is to have stock on hand for the shortest amount of time before it is sold. Your inventory can be managed by evaluating sales volumes, forecasts, supplier turnaround time, and available cash on hand. Have a system that takes care of ongoing inventory monitoring so you can reorder when needed, helping you avoid the loss of clients if something is out of stock.
  • Realistic Future Forecasting: While you are working to create opportunities for business growth, don’t bank on the money until the sales have actually occurred. One of the common cash pitfalls that we see is when business owners spend money now, assuming that they will have the necessary income needed in the future. You shouldn’t count on a sudden boom in your business in the future. The best solution is to evaluate your business records and data so you can see the trends that are normal for your industry.
  • Large Debt Burdens: Too much business debt can eat away at your profit margins because of the cash flow that is tied up in interest costs. Look for ways that you can manage your cash flow to pay off debt. Lowering these balances can reduce the amount of money that you are paying for late fees, overdraft costs, and interest expenses.

The Simplest Way to Avoid Cash Flow Problems

We’ve found that the most common reason business owners encounter cash flow problems is because they don’t have effective systems in place. It is important that you know the current cash position of your company, as well as upcoming expenses that will need to be paid. If you are just going with the flow and hoping that the money will be there at the right time, then it is likely that you will encounter big problems in the future!

As a business owner, you don’t need to take accounting classes or spend hours on YouTube watching accounting tutorials. The fastest and most effective solution to ensure that you are managing your financial reports and cash flow is to tap into the services offered by an experienced accounting team.

At Easier Accounting, our goal is to reduce your stress by creating a financial system that helps your business succeed. We offer years of experience in the industry. You can tap into our expertise and insights to find the right solutions that will support your long-term financial needs. We want to help your business with financial strategy, and we have proven experience that can be used to optimize your financial systems.

If you are interested in more information about business accounting systems, then we invite you to contact our team right away. Easier Accounting is here to answer your questions and help you find the right solutions to meet the unique needs of your business. We’ll explain the available services so you can see the benefits available for your company: (888) 620-0770.

Modern Accounting: How to Ensure Your Business is Staying Current

Technology has improved the way business is done, making it possible to connect with customers and business contacts through the internet. If you want to maximize the success of your business, then you need to be sure that you are using modern accounting tools to support your financial tracking. What resources are used in your business systems? It’s a great time to talk to an outsourced accounting team to learn more about the processes that can be used to improve your business systems.

Whether you are looking for options to improve your tax strategy or you need to systematize payment collection from your customers, a few good accounting tools can go a long way to improve your results. Investing in the right accounting and bookkeeping software will help you tap into the resources that can be used to amp up your financial systems.

What is Modern Accounting?

Before the invention of computers and the internet, business owners tracked their transactions by hand. These accounting ledgers were used to record money/products that moved in and out of the business account, and most of the transactions were paid in cash. If you go back thousands of years in history, it is possible to find ancient records that show accounting and business tracking in the most basic forms.

Now, the business world has changed. Technology is a foundational aspect of supporting the needs of a company. If you don’t accept digital payments, then it means that your customers are likely going to head to your competitors. Not only do you need to integrate technology into your business systems, but you need to be sure that you are using the tools that are the right fit for your industry and individual needs.

Modern accounting means that you are using technology and accounting software programs to systematize your financial tracking. Every transaction that moves in and out of your account needs to be recorded. There’s no need to write these things down by hand. Instead, you can leverage the automation of modern accounting software programs that take care of the tracking for you.

Even the accounting systems that use the most advanced technology available in the accounting industry are designed with double-entry bookkeeping systems. This approach means that there are always two entries for every transaction: debits and credits. Double-entry accounting dates as far back as 1494, but it’s only been in recent years that these systems have been automated through software programs.

Accounting is the Language of Business

The best way to communicate detailed information about your business is to have the option to run financial reports regarding the profitability of the company. These financial details are required if you are looking for investment money or partnering with other businesses. At the same time, these modern accounting reports can also be used to assess the current snapshot, giving you information that will support decisions that are made regarding cash flow, spending, and hiring.

As the accounting industry continues to evolve through technology, it is impossible to know how these business practices will change in the future. We can’t even imagine the possibilities that lie in the future! The most important thing that can be done is to ensure that you are keeping up with current accounting trends so that you are on track with the way systems are changing with time.

Using a modern accounting approach for your business doesn’t mean that you are on the cutting-edge of all payment technologies. Sometimes, being the first to implement new technology might not be the best investment if others aren’t using the new systems yet. So, the best thing you can do is work with an experienced accounting team and payment processing service to ensure that you have the right balance between staying current without leading out too far in the industry.

Digital Accounting: Key to Business Tracking

When the term “digital accounting” is used, it refers to the electronic format of the formation, data, and transmission of financial information for your business. The math is always the same: money coming in will increase your account balance, and payables decrease your account balance. But you don’t need to balance the checkbook in the way that was done 30 years ago. Now these modern accounting systems automate the math and calculations.

This automation is key to free up your time. There’s no reason to spend hours of your day doing manual calculations. Instead, you can lean on the support that comes through the right accounting software. These programs are beneficial for improving accuracy and optimizing productivity for your team. When digital transactions are moving through your account, you can rest assured to know that everything is recorded because you are using a digital accounting system to record the information.

In addition to the basic bookkeeping and tracking required for every business, digital accounting also offers powerful solutions for data analysis. Collecting financial information doesn’t mean anything unless you have reports that showcase the financial health of the company. These digital, modern accounting systems have enhanced the reporting options. For example, the technology can report and interpret data more quickly than ever before. Plus, the information is more effective and efficient, giving you hands-on application that can have a dynamic impact on your business decisions.

Taking it to the Cloud

When digital accounting first started, there were still manual aspects required for calculations. For example, using a 10-key calculator allowed faster computing, but the numbers were still limited because of the possibility of typos or human error.

Then, the digital tracking moved to computers. Software programs could be installed on computer systems, giving business owners the option to enter transactions and track results. This step upgraded the digital accounting industry because the history could be stored digitally. The main weakness was that the accounting system was limited to a single computer, or an elaborate networking system needed to be implemented to share information on multiple devices. If the local hardware malfunctioned, then the accounting information would be lost.

One of the greatest benefits of our current, modern accounting systems is that information can be stored in the cloud. When transactions move through the accounting software, the data can be viewed on your computer. At the same time, all information is stored securely on an off-site computer. This cloud-based accounting solution minimizes the risk of losing all of the accounting data due to a system malfunction.

Another benefit of modern accounting is that multiple devices can access the financial reports from any location. Storing the data and systems in the cloud means that the information can be reviewed from any location, as long as the person has permissions and access to look at the reporting. For example, a business owner can see the business transactions in real-time, even when located in another part of the country or on the other side of the world. The internet allows the information to be shared and distributed, giving full access to anyone on your team. You can decide who is collaborating in the accounting and bookkeeping systems.

One Hub for All Financial Needs

A modern accounting system makes it easier than ever to keep up with financial responsibilities. Since your business records and financial information are stored in one location that is easy to access, you can view your accounts with the touch of a button. You can be on the road for a business meeting, and keep up with invoicing and payments from any location.

Additionally, digital accounting opens up opportunities for you to hire outsourced bookkeeping and accounting teams. There’s no need to have an accountant in your office when an outsourced accounting team can access your business financial information from their own office. Many businesses are moving to outsourced accounting solutions to save money and improve overall results, without the need to have a full-time accountant on the payroll.

As you can see, the internet has opened up many options that can improve your business systems. If you haven’t implemented modern accounting in your business, then it’s time to take action so that you can upgrade your financial tracking and improve overall results for the company.

Talk to Our Team About Modern Accounting Solutions

Are you exploring options to improve your business accounting systems? Our experienced team is here to answer your questions and assist with anything that you need. Working with an experienced, outsourced accounting team means that you can hand over the financial tasks that need to be addressed. Outsourcing bookkeeping and accounting can be an effective way to free up your time so that you can focus on other business responsibilities. There is no reason for you to spend your time on busy work when you can let the pros take responsibility for accounting support instead.

At Easier Accounting, we offer high-quality, personalized business accounting services. Our team specializes in small business solutions. We invite you to call at your convenience to learn more about the support that is available for your company: (888) 620-0770.

The Small Business Owner’s Guide to Self-Employment Taxes

Self-employment taxes are a necessary and unavoidable part of being a business owner. Building the business feels fun and glamorous, but many entrepreneurs agree that taxes can be both stressful and burdensome. The key is to plan ahead for the tax burden you will be carrying, so the costs and paperwork don’t catch you off-guard. The right financial plan can make it easy to keep up with your self-employment taxes, ensuring that you have money set aside when it is time to make the payments.

Do You Fall in the “Self-Employment” Category?

It is important to understand the IRS’s definition of self-employment to see if these taxes apply to your situation. Knowing the federal regulations and guidelines means that you won’t skip past the tax obligations by mistake.

If you have the goal of bringing in money through work that you do for yourself, then you are considered self-employed. The work that you complete falls in the category of self-employment when you are not a shareholder or an employee.

Keep in mind that your business doesn’t need to actually be profitable for you to be considered self-employed. When you have the goal of earning a profit, and you are putting in regular work towards that goal, then the IRS views your efforts as self-employment. Even if you work as an employee for another company (either full-time or part-time), you still fall under the category of self-employment if you do work outside of your regular job to earn money on the side.

It’s one thing to be paid for a one-off day of work helping a friend with manual labor. A one-time opportunity to earn a bit of extra cash isn’t regular enough to fall in the category of self-employment. But, if you are consistently putting in the effort to engage in activities that bring in a profit, then you are self-employed.

Overview of Self-Employment Taxes

The tax rates can change from one year to the next, which is why it is best to work with a financial professional who will ensure that you are paying the correct rates. Self-employment taxes are calculated by combining your requirements for both Medicare and Social Security taxes.

Both self-employed workers and employees need to pay Social Security and Medicare. When you are working as an employee, your employer pays 50% of the tax burden, and the other half is deducted from your paycheck. On the other hand, self-employed workers need to pay the full 100%.

These self-employment taxes are calculated based on the profits of your business efforts. This is the calculation that is used:

  • Gross (total) revenue – qualifying tax deductions = profit that can be taxed

Since the taxable amount is calculated without the deductions, many business owners look for ways to leverage the deductions as much as possible. It is important to stay within the legal guidelines, and your small business accountant can offer guidelines and recommendations that apply to your situation.

Classifications: When Self-Employment Taxes are Required

You tax classification plays a role in whether you are obligated to pay self-employment tax. If one or more of these classifications apply to your tax filing, then it is smart to talk to a tax accountant for information about self-employment taxes:

  • Independent contractor (freelancer)
  • Sole proprietor
  • Member of a partnership
  • Member or partner of an LLC (single, or multi-member organization) and you haven’t changed your default tax classification

Income Tax vs. Self-Employment Taxes

Don’t mistakenly think that income taxes and self-employment taxes are the same time. Even though there is a difference in the way self-employment taxes are calculated, income tax works the same for everyone.

This income tax rate is also based on the taxable profits, using the calculation listed above. Once the taxable income is determined, then tax credits and personal deductions are calculated in to determine the amount that needs to be paid.

50% of your self-employment tax can be used as a deduction, which helps to reduce the total taxable income for the income tax calculations.

The filing status and tax rates vary, depending on the tax bracket in which you fall. These federal brackets can change each year. In 2019, the progressive range of income tax rates falls between 10 – 37%.

Why You Shouldn’t Kick Taxes to the Backburner

W-2 employees don’t have much to worry about regarding ongoing tax calculations and payments, because these amounts are automatically deducted from their paychecks by their employers. On the other hand, self-employed individuals don’t have the convenience of automatic tax calculations and deductions. It’s your responsibility to ensure that you are keeping track of what you owe and staying current with paying these amounts on time.

You already have a lot to worry about with business-building efforts, marketing, employee management, and more. It might be tempting to push self-employment taxes to the back-burner. But don’t be fooled into thinking that you can deal with taxes at a later date. If you want to avoid a stressful and costly audit by the IRS, then you need to be sure that Uncle Sam is getting his share of your profitable income.

Also, consider the consequences of incorrect tax filings. If you don’t have experience with tax calculations and paperwork, there is a high risk that you might make a mistake. In the case where that mistake is discovered by the IRS in the future, it means that you could be facing expensive fines, interest costs, and penalties. Save yourself time, money, and stress by ensuring that your taxes are calculated, filed, and paid correctly the first time around.

How Often Do Self-Employment Taxes Need to Be Paid?

Most people only think about taxes once a year: in April when the tax filing deadline happens each year. But, if you owe more than $1,000 on the tax return filing, then you will be required to make quarterly tax payments. So, you need to be prepared to pay taxes four times per year.

These payments are calculated by looking at your previous year’s taxable income, then calculating the amount that will need to be paid each quarter. Of course, you can’t predict the exact amount you will earn in a given year, which is why these quarterly payments are called estimated tax payments.

This is the payment schedule for estimated tax payments. You will need to send the payment before or by the end of the day on:

  • Jan 15th
  • April 15th
  • June 15th
  • Sept 15th

Sometimes, these calendar dates fall on a weekend or federal holiday. In that situation, the due date for estimated taxes is pushed to the next day that is not a weekend or holiday. Small business accounting services makes it easy to keep up with these tax deadlines because you will receive estimated tax payment vouchers that list the specific dates for each calendar year.

Other Taxes for Business Owners, Entrepreneurs, and Start-ups

Keep in mind that the IRS only oversees the enforcement of federal taxes. It is possible that you will need to pay state and/or income tax depending on where you live. A few of the states don’t charge personal income tax, so you might consider moving your business efforts to those locations if you have the flexibility of an online income.

Other tax burdens need to be considered as well. For example, if you have employees, then you will need to pay and manage the paperwork for employer payroll taxes. Also, sales tax might need to be calculated on the products and services that are sold, depending on your location.

Be Prepared for Future Payments

With self-employment, it’s easy to make the mistake of confusing take-home pay with the gross revenue. Even though the money is coming into your bank account, it doesn’t mean that it is all yours to pocket. Too often, self-employed business owners spend the cash, then face big cash flow issues in the future when it is time to pay the IRS.

Never make the mistake of making big business decisions based on the money sitting in your bank account, without considering upcoming tax obligations. A good small business accounting software can help you stay current with financial reports and upcoming costs. Use this information to gain a clear picture of the true profits of your business efforts, helping you avoid the pitfalls of not having enough to pay the bills when tax time rolls around.

One of the best things that you can do is set aside a percentage of your money for future tax bills. Since self-employment income is often variable, you can create a system that automatically saves your tax money in a separate account.

Find an Outsourced Accounting Team to Help

Not only is it stressful to keep up with the deadlines for tax payments, but the government forms can be intimidating. Most self-employed business owners choose to hire the help of a local accountant or outsourced accounting services through a reputable provider. Our experienced team at Easier Accounting is always here to assist. If you need help designing the right financial system to keep up with your self-employment taxes and business reports, then we invite you to contact us right away: (888) 620-0770.

Answers to Your 7 Most Common Bookkeeping Concerns

It’s no surprise that questions come up when you are trying to figure out the ins-and-outs of running a business. Whether you are facing bookkeeping concerns or questions about marketing strategies, it is essential that you tap into an experienced team that can guide your planning. As a small business owner, you don’t have to figure it all out by yourself. Instead, you can focus on your strengths and bring in the assistance that is required to keep your business moving forward.

It is common for small business owners to face questions and issues regarding their financial tracking systems. Where should you turn to find answers to these questions? A Google search can be overwhelming because of the vast amounts of information that comes up. Plus, it’s hard to know which resources are accurate and reliable.

The best solution is to look to a trusted expert in the industry. Our team here at Easier Accounting is just a phone call away if you need answers, advice, or information. Here are some guidelines that will help with some of the most common bookkeeping concerns that we hear from small business owners:

1. My financial reports are always inaccurate.

It can be frustrating to look at a financial report and know that the numbers don’t match up with the reality that is happening in your bank account. These financial reports aren’t worth anything if the information is incorrect. If you are going to benefit from your bookkeeping and accounting system, then you need to be sure that the transactions are correct and everything is up to date.

Two things need to be addressed to ensure that the information is accurate: use a reputable accounting software, and tap into the services of an experienced accounting team. You will have checks and balances in place with the software and the ongoing reconciliation services to ensure that your reports are always accurate.

2. I’m scared that the IRS will audit me.

While there is always a risk of auditing, a few proactive strategies can be used to reduce the risk of auditing. Too often, business owners put themselves at risk because they attempt a DIY bookkeeping and accounting system. It’s not worth the little bit of money that will be saved on tax preparation fees when you are facing expensive fines and penalties due to bookkeeping inaccuracies.

We can’t promise that bookkeeping and accounting services will eliminate your audit risk. But we can help you create a clear-cut, accurate system that ensures you are sticking with the guidelines and regulations established by the IRS. Our goal is to help you minimize your tax burden while staying within the laws that apply to your business.

3. Payroll is taking up so much time; I can’t keep up!

Managing payroll is one task that never goes away. As long as you have a business and employees coming to work, you need to be consistent with payroll processing. Timely and accurate payroll calculations support the needs of your employees because they know that they can depend on the paycheck coming through every month.

If your business is growing and you don’t have enough time to manage payroll, then it might be appropriate to enlist the services of an experienced accounting and bookkeeping team. In addition to regular payroll processing, we can also help with the common bookkeeping concerns regarding payroll tax calculations and payments. You need to be sure that you are staying consistent with the paperwork and payments required by the IRS throughout the year.

4. I don’t have the time or energy to hire and train a new bookkeeper.

Are you encountering the common bookkeeping concern that it feels like there is a revolving door on your office? Employee turnover is not only inconvenient, but it is expensive to hire someone new and get them up-to-speed on the accounting systems that are used in your business

Luckily you can avoid the responsibility of training and hiring. Instead of carrying this burden in-house, it is cheaper and more effective to enlist the services of an outsourced accounting team. When our team is on the job, you can rest assured that there will never be gaps in the services that are needed for your business financial tracking systems.

5. I know I need a new bookkeeping system, but I don’t know where to start.

What is your current bookkeeping system? Some business owners might be outdated, using manual tracking either in handwritten notebooks or with excel spreadsheets. Other business owners might have an accounting software program that is 10+ years old, missing some of the key features that are now available in the industry.

If you haven’t upgraded your bookkeeping and accounting system in a while, then it’s time to talk to an experienced team to learn about your options. Instead of fumbling your way through the software setup, let the pros handle everything for you.

6. Cash flow is a mess, making it hard to pay the bills.

Even if you have money coming in from products and services that are sold, you are still running the risk of cash flow problems if you don’t have a good accounting system. You must be tracking every transaction that moves in and out of your financial accounts. You need to know the money that will be coming in from your customers. At the same time, you need to have a clear picture of the expenses that will be coming up in the future.

The right software and ongoing accounting services ensure that you are current with transaction auditing and account reconciliation. As a result, you always know how much is in the bank and how much money you will owe in the future. This information will support you when it is time to make the difficult decisions that impact the profitability and cash flow each month.

7. We need bookkeeping help, but I can’t afford to hire a full-time bookkeeper!

Just because you need bookkeeping support, doesn’t mean that you have to hire another person to be on your payroll. The cost that comes with an employee adds up! In addition to the person’s salary, you also need to bear the burden of benefits, overhead costs, and more.

One effective way to reduce your spending without sacrificing the quality of bookkeeping services that are available is to lean on the support from an outsourced accounting and bookkeeping company. You’ll see that our full-service solutions are a fraction of the price that you would pay for an in-house employee. You can lean on the advice and information from our experienced accounting team and save money at the same time.

Choosing the Best Accounting Team

As you can see, there are many ways that your business will benefit when you enlist the services of an experienced accounting and bookkeeping team. You don’t need to carry the financial responsibility without tapping into the services and expertise offered by the pros.

Some business owners look to their local networks to find payroll and bookkeeping services in the geographical area. There’s nothing wrong with hiring a team that is close to home, but you also need to consider the cost of these services. In many situations, it is more affordable to hire a reputable online accounting service.

Outsourced accounting is becoming more popular with all business owners. Look at the numbers: there’s no question that you will save both time and money by hiring the pros to manage your small business accounting needs. As you learn about the services that are available, you’ll see that it is possible to outsource all of the stressful tasks: payroll processing, tax strategy, financial reporting, tax calculations and filing, and more.

Simply research your options and then choose the accounting and bookkeeping team that will be a good fit for your needs. You’ll see that Easier Accounting has an excellent reputation in the industry. We’ll gladly answer your questions and help you determine if our services are right for your business requirements.

Accounting Services You Can Trust

When it comes to your business finances, it is essential that you hire a team that you can trust. You are leaning on the support of an accounting team, which includes the way you manage your money and set up your tax strategy. Many business owners have said that good accounting services were the key factor in ensuring the long-term success of the company.

If you aren’t already enjoying these benefits for your small business, then our team is here to assist. The simplest way to get started is to open up a conversation to learn about the options that are available. We’d love to talk with you about the ways that we can support your business needs. We specialize in small business accounting services and can help you overcome some of the most common bookkeeping concerns faced by business owners. You can reach our team at Easier Accounting by calling us at (888) 620-0770. Call today to see how our services can improve your business financial systems.

Choosing Business Accounting Services: Firm vs. Freelance Bookkeeper

One of the best stress-reducing decisions you can make for yourself is hiring an expert to help with business accounting services. You are already carrying enough stress as you are working through the details of employee management, marketing plans, and product development. Add the details of bookkeeping and accounting on top of your daily responsibilities, and it can be a lot to keep up with on an ongoing basis.

It’s understandable that the decision to outsource business accounting services can be a challenge. Not only do you need to hand over the keys to someone you don’t know, but some business owners aren’t sure if it is worth taking on another monthly cost. The truth is that you will receive countless benefits when you finally make the decision to work with an experienced financial pro. This one decision might be the turning point to help your business grow to higher levels of success.

Why Do You Need Business Accounting Services?

If you are getting your company off the ground, then it might seem like an unnecessary expense to hire a financial professional. Is it worth the cost when cash flow is tight? Yes! As you learn more about the benefits of working with an accountant and/or bookkeeper, you’ll see that this expense should be at the top of your priority list.

Many entrepreneurs thrive on DIY, especially when they are just getting started. While there are certain things that you can do for yourself, there are also appropriate times to bring in an expert who can assist with your needs. It can be a challenge to find the time required to keep up with ongoing bookkeeping and accounting responsibilities.

Plus, there is a good chance that you are making avoidable mistakes if you don’t have experience in the financial industry. You wouldn’t try to fill a cavity without visiting a dentist, so why would you try to analyze financial reports if you don’t have an accounting background? Failing to engage the services of a trusted accounting team means that you will be missing out on critical insights that are needed to help your business grow.

In fact, when business owners finally make the decision to hire someone to help with accounting and bookkeeping, these business owners often find that they weren’t doing nearly as well as they expected. Just because you are staying consistent with your DIY system, doesn’t mean you are covering all of the essential aspects required for your financial reporting.

It is common for a financial professional to uncover problems with transactional errors, poorly structured systems for paying bills, and even gross errors in the financial reports. If you want to make quality decisions for your business, then you need to lean on the services offered by an accounting professional.

Considerations: Bookkeeper vs. Accountant

The most important thing that should be considered as you are making this decision is regarding the type of services that are required for your company. Are you looking for someone to help with only tax strategy? Or, do you prefer a full-service approach that includes ongoing support with account reconciliation, financial report analysis, and more?

Even though the term “bookkeeper” and “accountant” are sometimes used as synonyms, there are distinct differences in the services that you will receive from these providers. You should never assume that a bookkeeper can provide all of the services available from a business accounting firm. As a result, you might be missing out on a few key services that are required to support your business needs.

A bookkeeper and accountant share common goals, and their roles often overlap. Here are a few details to help you distinguish the different types of services available:

  • Bookkeeping Services: A bookkeeper is responsible for overseeing the ongoing financial transactions, such as invoice payments, payroll, sales tracking, and more. These transactions need to be recorded, categorized, and reconciled to ensure that details aren’t overlooked in the bigger financial picture. Bookkeepers help with accurate recordkeeping, but the services don’t typically include analysis of financial reports.
  • Accounting Services: When a bookkeeper ensures the business is maintaining accurate record keeping, then the accountant can step in and build on the information that has been recorded by the bookkeeper. Accountants often help with financial statement reviews. The data is taken to the next level with detailed analysis, interpretation, and advice. The goal is to use reportable data in a way that helps with cash flow and business strategy.

So, do you need a bookkeeper or an accountant? In most cases, small business owners can benefit from both services. The benefit of choosing a bookkeeper is that the services are often less expensive, but you will be missing out on the financial analysis available from an experienced accountant. In fact, it often makes sense to spend the extra money on accounting services, because you will be able to recover those costs by reducing your tax load and maximizing your business strategy. Many business owners find the best solution is to choose a team that offers both bookkeeping and accounting services, such as the all-inclusive packages offered here at Easier Accounting.

Comparing Your Options: Firm vs. Freelancer

There’s no question that every business owner needs to tap into financial support. Most people begin with a startup idea, but they have no experience or knowledge regarding the business side of things. Just because you have a product that people are interested in buying, doesn’t mean you have the smarts to handle the books that support your business.

It is important that you understand a few distinctions between the services offered by an accounting firm vs. a freelance accountant:

  • Cost: If you are looking for the lowest price, you will often find the best value for your money by hiring a virtual team. Local accountants need to carry the expensive overhead costs of maintaining a building and other expenses. In comparison, an online team can keep prices low since these costs can be avoided.
  • Timeline: When you are working with a team, such as the services offered here at Easier Accounting, you don’t have to stress about deadlines being missed. Certain deadlines need to be met, such as payroll processing, account reconciliation, and tax payments. A single accountant will go out of town at times, which means that your deadlines might be overlooked since only one person is overseeing your financial needs. In comparison, a financial team ensures you will never miss a deadline, regardless of the personal schedules of the individuals on a team.
  • Experience: There’s no question that you are tapping into a broader range of experience when you choose to work with an accounting team. A local accountant will have knowledge about small businesses in your area, but that experience will be limited since the person is tied to a geographic location. In comparison, an online team has experience working with a full range of companies in many different locations. This spectrum of hands-on experience means they have more to bring to the table regarding the financial services needed for your company.
  • Access: One of the benefits of our digital age is the access to cloud-based software programs. Instead of the need to visit with your accountant in person, you now have the option to work with a team located anywhere in the world. Even if you are on the other side of the country, our team can offer high-quality services through digital access to your financial books. Your business can go paperless, and approved managers and financial pros can access your financial information at any time.

When to Hire Business Accounting Services

The truth is that it is never too early to bring in the experience of an accounting professional. Even if you are just getting started with your new business or you are in the early stages of growth, it is essential you have the support of a financial team that will help you get things off the ground. Business owners who make the decision to hire an accountant early in the game rarely regret their choice.

These services help to build a solid foundation that makes it easy to help your business grow in the future. When you have a solid financial system, then you can avoid common growing pains that occur when other business owners aren’t prepared.

A financial professional can help as you create a plan based on the needs of your company. This system will help you save time, which means that you will also be saving money in the process. You can hand the responsibility to an experienced business accounting service, allowing you to turn your focus to other responsibilities that are required to help your business grow.

If you are considering the option to hire business accounting services, then our team is here to assist. Easier Accounting knows what it takes to ensure financial clarity for your small business. We invite you to reach out to us any time to learn about the services that are provided by our team. We’re here to help with both bookkeeping and accounting services needed for your small business: (888) 620-0770.

Accounts Receivable Tips for Business Owners

As a small business owner, how many responsibilities are you juggling throughout the day? Some people find it hard to stay current with accounts receivable invoices when they are busy working on product development, marketing, employee management, and more. Even though you are working on many important details in your business, it is important that you are proactive with your AR strategy.

Why Your Accounts Receivable Strategy is Important

Do you find that your sales are strong, and yet you are always facing a difficult cash crunch? It can be a challenge to keep the money flowing if you don’t have a good AR system in place. Even if the numbers show that your business is prospering, you could be facing serious cash flow issues if you aren’t diligent with collecting payments from your customers.

It’s often easy to stay current with your account payable invoices, because the vendors expect payment by a certain date to avoid fees and interest costs. Do you maintain these same standards with accounts receivable? You need to be sure that money is in the bank so you can pay your bills, which means that you must be diligent about collecting the cash that is owed.

In fact, it’s easy to see that establishing an effective AR strategy should be a foundational practice for every small business. Unfortunately, too many small business owners neglect AR and face avoidable problems as a result. When you optimize your Accounts Receivable systems, you can reduce your stress and optimize the financial success of your company. As a result, healthy cash flow will have a positive impact on your sales, marketing, and all other business operations.

As you can see, it is essential to create a good AR system and also stay consistent with maintaining the system in the future. It’s worth the time to structure these processes within your company. Always look for opportunities to improve these systems if needed. Even if you don’t see the immediate benefits of optimizing your Accounts Receivable processes, these efforts will undoubtedly have a powerful effect on your future business efforts. You can reduce the possibilities of wasting existing capital, giving you the cash flow to pay down debt, fund growth, and reduce costs.

Common AR Problems Faced By Small Business Owners

There is no reason to “reinvent the wheel” when other business owners have already forged the pathway forward with good AR systems. Here are some of the common pitfalls encountered when business owners don’t have a good Accounts Receivable system:

  • Time: You might feel you don’t have time to work on AR right now. But, procrastinating this process can result in a huge time requirement in the future when you are trying to clean up the mess. It is best to be consistent and diligent with your billing in real-time. This process minimizes the work that you need to put in later on when the information is no longer fresh on your mind.
  • Cashflow: A lack of money in the bank will have a ripple effect to impact all aspects of your business. For example, if you aren’t collecting on the invoices that are due, then it means you won’t have the cash needed to invest in your marketing strategy. As a result, your business growth will slow.
  • Cash Allocation: Another issue with poor AR systems is that you will find it difficult to stay consistent with the allocation of your cash resources. When cash is tight, it means that you will always be putting out the fires instead of building your business proactively.

Tips for Improve AR Systems

Now that you can see the importance of a good AR system, it’s time to commit to the changes that will improve your business practices. What are the best tips that need to be implemented? Here are a few proven strategies that can help your business thrive:

  1. Invoice Timing: Don’t fall into the trap of procrastinating the timing of when the invoices are sent out. If your customers aren’t invoiced, then you can expect payments will not come through. Invoicing consistently means that you can receive the payments as soon as possible, helping to keep the cash coming into your bank account. The best practice is to send the invoice at the time of delivery, giving the customers an immediate reminder that the payment needs to be sent.
  2. Invoice Follow Up: Just because you send the initial invoice, doesn’t mean that the payment will be remitted automatically from your customers. Build in a follow-up system for invoices that are due. The process can be built into your accounting software with reminders that you need to reach out to customers who are past-due with their payments.
  3. Ask for Payment: You should never feel bad about following up on an overdue invoice. If you don’t ask for the payment, then it will result in invoices that are months old. The longer the invoice sits unpaid, the more likely you will never receive payment on the invoice. If your digital reminders aren’t enough to encourage the customer to send payment, then you shouldn’t hesitate to have a conversation with the person. This discussion can help you understand more about the payment delay, giving you the opportunity to find a solution that meets the needs of all parties. For example, if the payment is late because of the customer’s cash flow concerns, then you might be able to set up a payment schedule with smaller milestones.
  4. Clear Payment Terms: Make sure you are clear about payment expectations from the beginning. These terms will give your customers information about the expected timeline for the payments, helping you avoid confusion when it is time for the payment to be collected. Communicating this information gives you the structure so that you can build in late fees or interest costs as needed.
  5. Milestone Invoicing: If you are working on a big project with a client, it isn’t necessary to wait until the completion of the project to be paid. When larger projects cover a long period of time, it is best to bill based on milestones instead of completion. This milestone billing strategy ensures you have money for supplies and payroll as the project progresses, helping you avoid cash flow issues. Plus, you reduce the risk of missing out on the full amount if the customer doesn’t pay for some reason in the future.
  6. Itemizing Invoices: Don’t send a generic invoice with an unexplained amount due. Each invoice should show the breakdown of the products and services that were provided. If customers have questions or disagree with the amount, then it means that they will likely delay payment on the invoice. You can reduce the risk of this delay by showing the full amount due as well as the breakdown, helping to avoid questions about the money that is due.
  7. Provide Various Payment Options: While it’s true that “cash is king,” you will lose out on business if you don’t accept credit card payments. It is smart to accept a variety of payment options, including cash, direct deposit, credit cards, Paypal, and even checks. Giving customers several payment options increases the likelihood that they will be able to come up with a payment solution that fits their cash flow needs.

Start This Process Early

Regardless of the stage of business development you are experiencing, it is essential you are proactive with implementing a good AR system as soon as possible. Even if your business is in the start-up mode and you aren’t collecting money for products and services yet, you need to be sure that the system is in place when you are ready to move forward.

Too often, business owners are so focused on product development and marketing strategies that the important financial details get overlooked. Make the smart decision by starting this process early, so you have a good system in place when the time comes. Your AR system should include details such as the accepted forms of payment, establishing payment terms, and follow-up communication for unpaid invoices. When you are proactive with these details, it makes your business launch smooth and seamless.

Tapping into Industry Expert Knowledge

Are you running into challenges with your accounts receivable system? It can be hard to create a new system if you don’t have experience with financial tracking or accounting. Luckily, you can hire industry experts who will help you structure the right financial software to systematize your invoicing and payments. This process is invaluable to create the structure that is needed, so you don’t have to stress over your small business accounting.

You’ll find it is worth the investment to tap into the services offered by an experienced team. If you are interested in more information about how you can improve your accounts receivable and accounts payable systems, then our team is here to assist. Call Easier Accounting for information about the services that are available for your small business: (888) 620-0770.

7 Effective Business Strategies for Reducing Bookkeeping Costs

When you are running a business, it seems like the bills are always piling up and making it hard to maximize profitability. If you want to have extra cash on hand after the expenses are paid, then you need to be looking at options to reduce your spending and increase your income at the same time. Today, we are sharing tips that you can use to reduce bookkeeping costs, which will help your profitability goals.

Tip #1: Organize Your Finances

Staying organized is the foundation for financial success. If your receipts are scattered and you can’t keep up with the payments that are due, then you will be wasting time trying to find the right paperwork. Plus, missed payments result in late fees and interest charges, which increase the overall amount that is paid each month. There’s no question that good organization can save you both time and money.

When your bookkeeper is working on your transactions and financial reports, they can only work on the documents that are provided. It doesn’t matter if you have an in-house bookkeeper or outsourced bookkeeping services… you are paying more than necessary for their time if they are spending hours sorting through a mess of paperwork.

The key is to implement a system right now so that the bookkeeper is provided with all of the necessary information for each transaction. For example, if you buy something and receive a receipt, take 10 seconds to make a note on the receipt to document the purpose of the purchase. Invoices that are paid online should be noted with the date of payment and the method that was used for payment.

If you are looking for ways to cut bookkeeping costs, then talk to your bookkeeper about the way the information should be presented. As a financial expert, your bookkeeper will offer suggestions and advice that will streamline the workflow and allow the bookkeeper to maximize the time spent on the project. The goal is to have a system in place that provides the bookkeeper with the information necessary to keep your books up to date, which requires organization at every step.

Tip #2: Use Proven Computer Software

Leveraging technology can be an effective way to organize your finances and avoid unnecessary busy work. For example, a document management system can be used to keep track of your receipts so that you no longer need to keep a shoebox full of random paperwork. Simply snap a picture of the receipt, then store the image in a cloud-based folder. This file can be shared with your bookkeeper for tracking purposes.

One other benefit of a document management system is that you can always find your receipts if needed in the future. Sometimes, it can be helpful to refer back to transactions that happened in the past to compare costs or evaluate overall spending for the day. This information is just a click away and can be accessed online, without the need to dig through piles of paperwork in the filing cabinet.

An accounting software should also be used if you are looking for ways to reduce bookkeeping costs. For example, this cloud-based software system can pull in the transactions that move through your credit cards and bank accounts. You can create categories that automatically file recurring transactions. Your bookkeeper will spend time evaluating the transactions that are coming through and auditing the system to ensure that nothing is missing.

A good accounting program saves you money because you don’t have to pay for the hours of manpower required for manual data entry. Even though you will pay a fee for the software program, it is a fraction of the cost compared to the time and money required to calculate the financial reports by hand.

Tip #3: Separate Your Business and Personal Spending

Mixing business and personal spending complicates your financial tracking, making it difficult for the bookkeeper to sort through the transactions. One way you can save money on bookkeeping costs is by creating a separate account for your business transactions.

A clear-cut system to define business spending and personal spending will simplify the reconciliation of the accounts. Additionally, it takes less time to determine the right deductions that can be tallied when it is time to do your taxes each year.

Tip #4: Build in Options to Scale in the Future

Cutting corners on your bookkeeping systems might seem like an effective way to save money right now. But you shouldn’t overlook the potential costs that will be accrued if you need to change accounting systems to scale your business in the future.

For example, it might seem like a good idea to select the cheapest accounting and bookkeeping system that will cover the basic necessities for your financial reporting. Even though this software might cover your bases right now, you will be facing bigger issues in the future if the software can’t accommodate the future growth of your company.

As a result, spending a little bit more right now could save you the cost of transitioning bookkeeping systems in the future. Instead of attempting a DIY system, bring in a team of financial experts who can offer advice about the right system designed to support your business growth in the years to come.

Tip #5: Use Technology to Improve Accuracy

Every time a mistake is made on your tracking and accounting, it costs time and money to fix the error. Even though errors are unavoidable, there are a few things you can do to reduce the potential mistakes that happen with your bookkeeping and accounting systems.

One effective solution is to leverage technology for the calculations and report generation. You can skip manual calculations and have peace of mind knowing your numbers are accurate and clear. Choose a system that delivers both financial intelligence and greater efficiency for your business systems.

Tip #6: Control Costs by Eliminating Waste

How much money is wasted each month and year due to payments and transactions that slip through unnoticed? You can offset the costs of accounting and bookkeeping services by leveraging the team’s skill set to reduce waste and unnecessary financial burden.

For example, your bookkeeper might be able to offer advice about reducing overhead expenses and improving the collection of Accounts Receivable. As a result, your income will go up and you can cut out expenses that are no longer necessary for your business systems.

Not only will you have the option to reduce the amount of money that is spent, but these in-house changes can also affect employee productivity. Your employees will understand the importance of streamlining business systems and sticking to spending goals. So, the daily decisions of the employees will support your overall business efforts.

Tip #7: Hire Outsourced Bookkeepers and Accountants

There’s no question that you need bookkeeping and accounting services. Most business owners assume that the simplest way to bring these skills into the company is by hiring an employee. But you need to think about the fact that you aren’t only bringing on the burden of paying the person’s salary, but you also need to carry additional costs of having another employee in the office.

The fully loaded costs will add up over time! Here is a quick overview of some of the expenses you will pay for a full-time accountant or bookkeeper:

  • Salary or wage
  • Benefits
  • PTO
  • IT and equipment
  • Office space and utilities
  • Overtime pay

Many businesses are choosing to outsource accounting services to avoid the fully-loaded costs of bringing on another employee. Do the math, and you might be surprised to learn that it is easy to save thousands of dollars a month by hiring an outsourced accountant as an alternative to a full-time employee.

This method is not only more cost-effective, but many business owners also find it less stressful to tap into the expertise of an outsourced team. It feels good knowing that the service provider has relevant experience working on the financial reports for other small and medium-sized businesses. Outsourced accounting services means that you don’t have to worry about employee management or training. Instead, you can hand off the financial details with confidence knowing your accounting team is taking care of the necessary tasks to track your accounts and reports.

Questions about Reducing Bookkeeping Costs?

Are you enjoying the benefits of outsourced accounting and bookkeeping services? If you don’t have a good system in place, then right now is a good time to make the changes that are needed to boost your financial strategy.

A variety of financial tracking and reporting aspects can be outsourced to our team, helping to free up your time so you can focus on business-building efforts. Common outsourced services include:

  • Accounts Payable and Receivable
  • Payroll Processing
  • Financial Reporting and Statements
  • Tax Calculations and Filings
  • Monthly Reconciliations
  • Credit Card and Bank Statement Audits

Our team of experts at Easier Accounting is here to assist with all of the bookkeeping and accounting services needed for your company. We specialize in small business accounting and would love to have a conversation with you about the options that are available: (888) 620-0770

Are You Building a Scalable Small Business?

Most small businesses start with a simple idea and hours of work in the basement or garage. It doesn’t take much to identify a potential opportunity in an industry of your interest. Some of the best inventions were born out of necessity with individuals looking for solutions to solve their problems. If you are in the position of designing a startup or running a small business, it is important that you are not only looking at your current responsibilities… but also evaluating your options for the future. A few things can be done right now to ensure that you have a scalable small business.

What Does it Mean to Be Scalable?

When investors can see that your business idea has potential, then they will be ready to offer money to help the company grow. A scalable small business is designed so you can multiply revenue for future business growth with minimal costs to expand.

If you have a scalable small business, then it means you have a proven business model and a proven product that consumers love. Once the systems are in place, the next step is to expand the business efforts to other markets and geographies. You don’t have to re-invent the wheel when you want to move to new markets. Instead, it is a “lather, rinse, and repeat” process to implement the same business systems over and over again to new customers.

For example, most business owners have significant upfront costs to develop the product or service that will be offered to the ideal demographic. You will spend time and money on the iterations to ensure that everything is perfect to meet the needs of your customers. Once these systems are designed and in place, then it requires minimal expenses to make additional products that can be sold to others.

How to Build a Scalable Small Business

Here are simple tips that can be implemented into your business plan to ensure that you have options to scale your company in the future:

  1. Attract Investors: When you are ready for business growth, you might run into the roadblock of not having enough cash to pay for the expansion. Just because you and your friends think that it is a great idea, doesn’t mean that investors will be ready to jump on board. As you are building your business plan, consider strategies that will make the opportunity attractive to investors. For example, use market research from outside experts and build documentation showing your profit margins and customer satisfaction.
  2. Continuous Improvement: Just because your business is going well right now, doesn’t mean that you are set up for success in the future. Too often, people run as far as they can with one business idea, only to find that the market fizzles out when the next trend moves in. It is essential to look for ways that you can implement continuous innovation. Instead of offering a single product, you can identify complementary services and products that will continue to solve your customer’s needs in the future.
  3. Work “On” Your Business: As the business owner, you are the point that is directing all actions and decisions made within the company. In the beginning, the business won’t continue with daily progress without the integral role that you play in the system. Ask yourself: how much time are you spending working “in” your business? If all systems come to a standstill when you are on vacation, then it might be time to rethink the way you are building the system. Instead of working “in” your business each day, look for ways you can work “on” your business to create a plan that can be scaled. You only have 24 hours in a day, which means you will be limiting your business growth depends on your involvement.
  4. Build a Good Team: Over time, you can build a team that will keep the system running, regardless of your involvement in the day-to-day responsibilities. One strategy is to bring in the right employees to oversee all aspects of business management. For example, you need front-line customer service representatives, salespeople, managers, product testers, and more. If you are worried about the overhead costs that will be accrued for in-house staffing, then you might consider the option to outsource these services instead. Outsourcing offers an effective way to reduce your spending while tapping into the experience and resources required for your business systems.
  5. Leverage Technology: Tech plays an important role in business management, so it makes sense to take advantage of every benefit available by using technology. If you are stuck using outdated systems and manual processing, then it is time to revamp your company to implement as much automation as possible. For example, it is a waste of time if you are paying employees to handle manual data entry for every transaction that moves through your company. Instead, find the right accounting and bookkeeping software that automatically pulls in the transactions that move through your credit card and bank accounts. This automation frees up your employee’s time, giving them the ability to work on other business-building activities.
  6. Always Automate When Possible: One way that technology can be used is by automating systems and redundancies. If your startup is staff intensive and labor intensive, then it is hard to scale because of the number of people that will need to be hired. The best thing that you can do is start early to identify ways that your systems can be automated. Documentation and processing can be organized and streamlined using technology. You should also evaluate ways that training can be shared to all through online videos instead of training new employees one-on-one. These systems will allow you to bring in new people consistently and quickly as needed to support your business efforts.
  7. Hire Marketing Experts: You can offer the best product in the industry, but have minimal sales if your customers don’t know about your company. Too often, business owners get stuck because they pour money into business development without leaving anything left over for marketing and advertising. As a business owner, you shouldn’t be spending your valuable time reading online internet marketing forums and testing shady marking strategies. Instead, find a marketing expert that understands your industry and can help you connect to the customers who are looking for the product or service you are offering.
  8. Accept Funding When Needed: You can only get so far with organic growth. This process means that you are reinvesting profits to help your company grow, but you will find that your progress is limited without a bigger infusion of cash. Investors can add the fuel needed to boost your rocket to higher altitudes. Even though you will give up a bit of control by accepting money from investors, you’ll find that many benefits come from the experience and expertise offered by these people. Do your due-diligence to ensure you are selecting investors that are a good match for your company. Then, find a win-win solution to leverage their money and your business ideas to bring in profits for everyone involved.
  9. Explore Options for Franchising: If you have a proven business model, then franchising is one solution that might help you expand to other markets. Instead of trying to out-market the competitors, look for ways you can bring them on-board by showing the documentation and profitability that they need to get on board with your business plan.

Do You Want a Scalable Small Business?

Not everyone wants to build a multimillion-dollar company. If you are creating a home-based business to bring in a little extra spending money each month, then you might not have the desire to get involved with investors and large-scale systems.

The most important thing you can do is evaluate your long-term goals and determine the incremental progress that will help you achieve those goals. What are your revenue goals? Are you interested in developing more products and services in the future? Asking these questions can help you decide if you want to put in the effort to scale your business efforts and help your company grow.

Whether you are happy with the current size of your company or you are looking at growth opportunities in the coming years, it can be beneficial to have the support of an experienced outsourced accounting team. Managing the financial details of your business can be both stressful and burdensome. Luckily, you can hand off these responsibilities to an accounting and bookkeeping team. These outsourced services will allow you to focus your efforts on the things that you enjoy most, giving you more time and freedom to build the type of business that you desire.

For more information about small business accounting and bookkeeping services, you are welcome to contact our team at Easier Accounting. We specialize in all the services required to keep your small business running each month. Not only can our team help with payroll processing, but we can also offer the assistance you need for tax strategy, ongoing bookkeeping, and more. Call today to see how we can help: (888) 620-0770