How to Make Accounting Easier in Your Small Business 0
No business is ever established with the intention of failing. That’s why keeping track and staying on top of your small business’ finances is a key ingredient for expansion and growth.
According to a troubling report, 30% of small businesses crumble in their second year of launch. One of the major reasons why this happen is because attention was not properly paid to their accounting records.
As an entrepreneur looking to grow in your small business, you’ll be better prepared to navigate the uncertainties, obstacles, and future unknowns when you’re fully aware of your business finances. And we’ve got you covered on how to do so.
How to Make Accounting Easier
Launching a new business presents you with several responsibilities that need your undivided attention. However, below are some tips you can practice to make your accounting easier.
Create a concise invoicing system
One of the recommended ways to make your accounting easier and efficient is to create an organized invoicing system. As you progress in your day-to-day activity, you’d soon realize that keeping up with all your finances is tasking.
In a world where everything (including businesses) are going digital, you should opt for one of the best accounting software available to handle your invoices. What you should look out for is a software that has features that will accommodate your accounting needs. Also, you should also consider accounting software that has the potential of moving your business forward.
Create a smooth payroll system
If your small business has employees, you’d have to pay them for weekly or monthly service rendered to your business. This invariably means you’d need to have a payroll system in place.
Contrary to popular opinions, processing payroll is a complex process that you’d have to monitor closely to prevent making costly mistakes for either the workers or the business.
For instance, a lot of time is channeled into calculating a worker’s wages. You’d have to ensure that the taxes are accurately deducted and the bonuses and allowances are included.
You’d have to repeat the same action for the rest of your employees.
Time is money, and when that much time is spent taking care of something else, it might impact your business negatively.
You need to consider hiring the services of a payroll provider to handle this vital responsibility. A reputable payroll provider will handle this problem, ensuring that your business meets compliance with federal and state tax laws.
Keep track of all expense receipts
Whether your business is big or small, it is important to keep track of the receipts from your business expenses. This can be a tad difficult if you or your employee are constantly making purchases that the business needs.
To avoid cases of misplaced receipts, you should store them immediately you’ve made a business expense. Better still, you should opt for accounting software that allows you to archive business receipts efficiently and safely.
Constantly check your records
As a small business owner, now’s the time to start practicing some business habits that will protect your business in the long run. Before filing your financial records away after every month, go through everything properly to ensure that the numbers are consistent throughout.
This habit will save you and your business from future hitches and create a seamless accounting process.
Create a separate bank account for your business
Entrepreneurs often make the mistake of using their personal bank account to finance their businesses. It doesn’t matter if you’re a freelancer, it is better to finance your business expenses from a bank account created for the business.
Keeping track of the finances of your business may seem daunting at first but following these simple steps will make accounting for your business easier.
Can I Pay Myself As A Small Business Owner? 0
Everybody remembers the first time they ever got paid for a service rendered. That feeling of excitement and joy washing over you as you grab your paycheck with tight fists. Is the feeling ever the same when you pay yourself from the profits of your small business?
It sounds weird when you think about it. But as a small business owner, after a long time spent to plan and bring your business to life, it is totally okay to reap from your hard-earned labor by paying yourself.
In this article, we’ll explore how you can pay yourself from the proceeds of your business.
How to Pay Yourself from Your Own Business
If you’re a small business owner, below are the various steps you can take to pay yourself from your business.
Find out your business type
Figuring out your business type is the first step to create the basis for how you want to be paid. There are small business types available, and it is best you know how each of them operates.
- Sole proprietorship. This is typically how small businesses and startups are operated. This is a business owned by you and you alone. This typically means you have total control over your business, including your profits, expenses, and debts. You alone decide the amount of cash you can pay yourself.
- This is a business set up by 2 or more persons. All the partners in this business setup must all agree on the salaries that will be paid. The expenses, profits, and losses must also be shared amongst partners.
- Limited liability company (LLC). This is a business type that incorporates parts of a sole proprietorship, a partnership, and a corporation. In this business structure, you are not responsible for the debts or liabilities accrued in the business. The business takes care of itself including your salary.
Once, you’ve decided on the business type your business falls into, it will further indicate the payment style for you.
Figure out a payment method
After figuring out how your business is set up, the next thing to do is to find out a payment method. This can be determined in two ways:
- By owner’s draw. A small business owner typically pays himself through the owner’s draw. The IRS sees owners of small businesses, partnerships, and LLCs as self-employed. This means you’re not going to get taxed at the point of withdrawals. However, you should pay taxes when you file your individual returns.
- By salary. A small business owner's salary is meant to be taxed by the state and federal government.
Select your payment amount
The next step after determining your payment method is to ascertain how much you’re going to pay yourself. You should decide on an amount that is deserving and not over the top figure.
You need to determine the net profit of your business and ascertain your pay from it and not from the total revenue.
One good way to ascertain a reasonable amount is to figure out how much you’d likely get paid for your duties if you were working a similar role in another business.
Select a payroll schedule
With everything in place, a crucial step is deciding when to pay yourself. Typically, it could be weekly, every two weeks, or monthly. You should select a payment schedule that will suit you.
The final and most important step is to get paid for your efforts in running your small business. You can do this by depositing money from your business account to your personal account. You can also opt to write yourself a check to cash later at your bank.
Paying yourself as a business owner should be done right. These easy-to-steps will set you up just fine.
Small Business Accounting Tips in 2020 0
Let’s say it as it is; starting a business is no joke. You, as the owner, are tasked with several responsibilities that demand your attention. You’d have to plan and launch strategies that will boost your bottom line, hire staff, and on top of that, staying in control of your finances.
While you can confidently handle the two concerns, it may be exhausting to manage your accounting efficiently. This article explores some of the best accounting tips for small businesses that you can incorporate in yours.
Accounting Tips For Small Businesses
The life force of your small business is in your accounting. Below are some tips you can implement in your business this year.
Maintain Distancing Between Your Personal And Business Finances
More often than not, small business owners tend to rope personal and business transactions together. This becomes a financial nightmare when one begins to painfully sort out these finances for clarity and bookkeeping purposes.
It is important you separate your personal and business dealings by creating a bank account for your business. By so doing, your business dealings will never appear in your personal transactions and vice versa.
Keep your receipts tidy
It doesn’t matter what kind of business you run or its size, it is important that all your receipts are filed and stored properly. From stamps, stationaries, and any other related receipts, your business receipts may be kept for reference purposes.
Even if you don’t plan to keep some of your receipts, your business expenses must be kept so that you can claim them later.
Get an accounting software
Everyone’s going digital—including small businesses. It is important that your business is using professional accounting software that will ease the long process of bookkeeping manually.
Accounting systems for small businesses typically take the weight of accounting off your shoulder and allow you to focus on productive ventures for your business.
Attend Accounting Workshops
As a business owner, you need a better understanding of how to manage your finances effectively. An accounting workshop will equip you with information about taxes and how to improve your accounting.
If there are no physical workshops available, you can register on an online workshop.
Budget for Taxes
It is important to note that when the revenue starts coming in, part of it belongs to the government. Thus, you need to budget for it. One way you can achieve this is to set aside some of the revenue for taxes from your business launch.
Understand Tax Rules
Federal and state laws are constantly changing. It is important that you are fully aware of these taxes and how it applies to your business.
This is a grey area for most business owners. And that’s why you should leave this responsibility to a professional payroll provider. These agencies have an expert in taxes and will always provide your business with permanent taxing solutions.
Remember to stick to tax deadlines
One challenge small business owners face is sticking to tax deadlines. This inadvertently impacts the business in a negative light.
You should always remember that your business must remit taxes to the federal and state governments and start planning for it.
Hire a payroll provider
Apart from handling the complexities of state and federal taxes, a payroll provider does a lot more. Payroll fraud, to date, cripples large and small businesses. Issues such as identity theft, illegal timesheets fillings, embezzlement of business revenues, etc. are amongst some of the challenges small business owners face.
Hence, it is important to hire the services of a professional payroll provider to totally eliminate such occurrences.
Managing the financial aspects of your small business is a big deal. However, with the aforementioned tips, you’ll well be in control of your business.
Why Word and Excel Aren’t Accounting Tools 0
As a business owner, you’re likely used to doing things the same way and have no intention of changing the way you operate. This is especially true when discussing the various accounting tools and techniques you’ve grown to love since starting your business.
Whether you’re dealing with payroll, taxes, bookkeeping, expenses, financial reports, invoices, or human resources, Word and Excel provide a lot of benefits when managing one or two employees. It’s a large reason why you continue to use it today.
For years, you’ve been working under the impression, “If it isn’t broke, then don’t fix it.” If this is true, why should you consider financial tax and accounting software when Word or Excel has been working just fine?
The truth is, Word and Excel aren’t built to sustain the growth of your business. These accounting tools don’t compare to the various business accounting software available. They put your business at risk and lead to widespread inefficiency throughout your business.
If your business is growing, you need business accounting software you can trust. For those that don’t believe us, we’re going to explain the major reasons why Word and Excel can’t be trusted when managing your accounting department.
1. Too Many Costly Mistakes and Errors
When managing your business’ accounting and human resources without the help of financial tax and accounting software, you open the door to a wide range of mistakes, errors, and typos. It doesn’t matter how good you are at Word or Excel, there isn’t enough automation or integration to support your needs.
If you want to avoid these costly mistakes and make your job much easier every month, the right software can be designed and tailored to meet your needs. No more entering the wrong number, formatting errors, embarrassing mathematical mistakes, or missed deadlines.
2. Late Payments From Clients
Word and Excel don’t make it easy for your clients to pay you in a timely manner and they don’t make it easy for you to collect that payment. It’s a lose-lose situation that could be solved with the right accounting software.
Easy online payments, different payment options, and vital ways to keep your cash flow in good standing are exactly what your business needs right now.
3. Taxes Are Too Much of a Headache
If there’s a single time of the year that business owners fear most, it’s tax season. There’s so much you need to manage and maintain, making it difficult for things to go right -- which is essential when taxes roll around.
When you need extreme accuracy to avoid those nerve-wracking audits and IRS visits, investing in financial tax and accounting software taxes away those nasty headaches you can’t stand. Taxes will be easy and you’ll no longer fear them each year.
Accounting Tools Tailored to Your Business’ Needs
When properly managing your business and keeping it in good financial standing, the need for business accounting software has never been higher. Especially as your business grows, you need tools that can scale with it and contribute to the growth.
At Consultants In-A-Box, we have a strong passion for helping businesses like yours find practical and effective solutions for their accounting and human resources needs.
We help businesses generate speedy, quality, and professional invoices that are designed to make it easy for the customer/client to pay. There’s no spreadsheet involved, just a beautiful interface that you and your customers/clients will love.
Of course, that also means you’ll receive much quicker payments and won’t be dealing with constant cash flow concerns. This takes those headaches out of the question and cuts down the amount of time you have to spend handling overdue payments.
Finally, you’ll be able to avoid the costly payroll and tax errors your business is prone to each and every year. You won’t have to worry about not knowing what to do, not understanding the rates, or the different classifications. Your software will have all of it covered for you.
If you’re ready to start making this work for you, contact Consultants In-A-Box today. We’re dedicated to making this an extremely rewarding and easy experience for you and your team. We can’t wait to discuss more how we can help you take better control of your business’ operations.
Accurate Accounting Can Boost Your Business’ Value Here’s Why 0
Learning how to determine the value of a business requires taking several different factors into consideration. One of the most important factors to the value of a business is the accuracy of its accounting procedures.
Without accurate accounting, your business won’t hold any appeal to outside people -- whether it be potential employees, current employees, customers, clients, or even investors. It makes it difficult to feel confident with your business’ success when learning how to value a small business.
Since accounting affects every aspect of your business, you need to ensure you have the proper accounting tools, resources, and principles available to your business. It helps ensure accuracy and puts your business in a healthy position moving forward.
If you’re wondering how accurate accounting can affect your business value, we have nine reasons to give you. We’ll discuss them each in more detail below.
1. Improved Marketing Forecasts
Owning a business comes with a wide range of expenses, but none can get out of hand quite like marketing costs. Before launching a campaign, you have to know your business is prepared for everything that comes after.
You’ll need cash flow, employee time (which costs money), and a campaign idea that’s built to work. That’s a lot to ask, but accurate accounting allows you to take any guesswork when launching a campaign.
With improved revenue forecasts, accurate cash flow statements, and expected expense reports, you can perfect the art of planning and budgeting when it comes to your marketing strategy. You’ll feel confident when launching your campaign and will have more time to focus on things that matter.
2. Sustained Financial Success
Imagine setting out on a journey to a destination without a map or GPS to guide you there. You might run into small successes here and there when you come across a sign that helps you out, but it won’t be a sustained and effective way of getting to that destination.
Accurate accounting is your GPS when determining how to value a small business. You have goals and expectations for your business -- everyone does -- and accurate accounting is what helps guide you there.
It breaks down your current financial status, creates forecasts for the future, keeps a tab on your budget, income, revenue, expenses, and everything else you can think of. It helps you plan, prepare, and overcome anything your business encounters.
3. Quality & Efficiency At Its Finest
There are going to be times when your business is presented an investment opportunity -- either outside the company or within the company. Some of these investment opportunities are going to be hard to say No to and others might even be a no-brainer.
Unfortunately, making smart, quality, and efficient decisions when it comes to investments requires accurate accounting. Even the ones that seem like a no-brainer aren’t always the best decision when looking at your business’ current standing.
With accurate accounting, you’ll know when the best time to invest in new equipment is or whether you have the funds to afford to hire more employees to improve efficiency.
4. Employee Satisfaction
Speaking of hiring employees, accurate accounting can help you take better control of your human resources. Looking for employees when you’re in a tough spot leads to rushed hires and quick turnover. Looking for employees when things are working in your favor, however, can give you the time to find the right candidate.
Accurate accounting also helps you know when to hire when to lay people off, and when it’s time to grow your business. Just like business growth makes an owner happy, it makes the employees happy. It means better benefits, better wages, and a better work environment.
The different departments in your business work together like the different organs in the human body. When one department is underperforming, it directly affects the rest of the departments. This is no different when it comes to the accounting and human resources departments.
5. Preventing the Risk of Fraudulent Acts
Accurate accounting and seamless reporting when it comes to your current financial status help keep you better in-tune with the money coming in and out of your business every single day. You’ll know your expected expenses beforehand and will be able to better compare those expenses to what’s really being charged.
This level of non-stop management becomes extremely easy with the right accounting software and helps prevent fraud throughout your company. You’ll be able to spot fraudulent acts as they occur and detect unwanted changes in real-time.
Catching these acts before they truly start to damage your business inside-and-out is essential to limiting the amount of damage they can do. You’ll save the rest of your employees, clients, and customers from a sticky situation, as well.
6. Managing Business Costs
Any business is going to experience a wide amount of costs, whether it be daily, weekly, monthly, or yearly. There are fixed costs and variable costs, all of which need to be accounted for in real-time to effectively control your business’ costs.
Let’s say you need to cut costs in your business. Without accurate accounting, you might start cutting costs in places that shouldn’t or don’t need to be cut -- whether that be letting go employees or saying goodbye to certain products.
At the same time, you’ll be avoiding the key areas where you’re spending too much and can afford to cut costs. It’s a vicious cycle that could be prevented with the right accounting tools, resources, techniques, and assistance.
7. Improved Security Where It Counts
Accurate accounting today requires an efficient software platform that gives businesses everything they need when managing their bookkeeping. Of course, this software also presents a level of security that spreadsheets, handwritten documents, and Microsoft Word simply can’t provide.
Anything handwritten can easily be lost, anything on a USB is prone to be damaged or unreadable, and anything on the internet can be hacked. That’s why you need secure software tailored to meet your business’ needs to help you stay safe when managing your company’s accounting.
8. Financial Management
Poor financial management can quickly deteriorate your business value and it’s something that won’t go unnoticed by your customers, clients, and employees. They’ll see the warning signs and it’ll start to affect the success your business is supposed to see on a daily basis.
On the other hand, good financial management and accurate accounting have the opposite effect on your business value. Customers will feel comfortable investing in your business and employees will want to work there.
9. Building & Maintaining Relationships
As a business, you have several people you need to satisfy on a daily basis. You have employees that want to know their job is safe. You have vendors that want to know their invoices will be paid. You have customers that want to know you aren’t going to close randomly.
Building these relationships is difficult, which makes it even more tragic when those relationships are destroyed. With accurate accounting, you can effectively maintain these relationships and keep your business in good standing with the community you’re surrounded by.
If you’re learning how to determine the value of a business and are starting to realize how important accurate accounting is to the process, we can help. We have the necessary tools, resources, and expertise to help you take control of your accounting procedures and center it all under one roof.
Contact Consultants In-A-Box today to discuss more how we can meet your accounting needs.
How To Manage Business Costs Effectively 0
Admit it; Coronavirus did a number on us all. While governments the world over imposed stringent control measures in place to curb the spread of the pandemic, businesses (SMEs, startups, and even major heavyweights) took a hit.
Businesses, before the pandemic, operated smoothly and freely with resources (both capital and human) at their disposal. Virtually everything from board meetings, marketing strategies, customer service, to payroll and even onboarding was heavily dependent on the corporate office setup where things were done manually.
But with everything 2020 has thrown on us all, brands have begun to see the need to take advantage of impressive digital tools to run business costs, increase productivity, boost brand presence, and improve the experience of employees working remotely.
Ways you can manage business costs efficiently
If you’re a business executive, how do you manage and run your businesses effectively? How do you ensure your tax-deductible business expenses are inputted accurately? We’ll be looking at the following areas:
Time and Attendance Tracking
Attendance of workers and comprehensive tracking of their work schedules have contributed to the overall success of businesses and improving their bottom-line savings. However, due to the global pandemic, a lot of companies and businesses have resorted to having a higher percentage of their workforce working from their homes.
Your business should take advantage of time and attendance tracking software to garner the working hours of your employees, whether they are making use of their mobile phones or PCs.
This software creates the avenue for your employees to tender the daily hours worked remotely to foster accuracy. Another advantage to this is that as their working hours are being tracked, you will be able to know which particular employee is working overtime and make arrangements for their overtime pay.
Also, these digital tools allow workers to see their time and work schedules for the week in advance, so they can prep themselves for their various tasks.
Every employee deserves to be paid handsomely for their service to your business. It is a crucial aspect to boost business productivity and growth. The amount of time spent manually compiling each worker’s tax information, overtime, basic salary, and other allowances may affect other crucial aspects of your business.
Taking advantage of an online payroll service will save you from the long process of computing fees and making costly financial mistakes.
For an employee to be quite successful in their job responsibilities, their background, and relevant experience has a major role to play. This, you can find out during the onboarding process, as you’d collect vital information from them and inform them about the vision of your business.
Taking advantage of onboarding software, you’d be able to verify that they’ve submitted their ID documentation, state withholding forms, deposit information, I-9, and W-4 forms, and other vital information.
With the aid of human capital management, managing benefits has become easier. However, more time is spent procuring benefits manually.
With an online human capital management software available, you will be able to securely gain access to forms, make changes, and update them in real-time.
For a business to thrive, it is crucial for it to have a platform that tends to the concerns of workers. With most of your workforce now working remotely, it is important to have a digital case management platform that will accommodate their various concerns.
This online platform also presents the opportunity for your employees to field their progress reports and allow management to review and track the efficacy of business decisions and compliance.
Consultant-In-A-Box is an all-inclusive software that provides impressive solutions to your brand’s concerns. Take advantage of our unique platform by contacting us today. You’d be glad you did.