Learning Bookkeeping Basics

Tools are available to help emerchants improve their financial management skills

Poor financial management is one key contributor to why more than 50 percent of small businesses fail in the first five years of existence, according to the Small Business Administration.

Because ecommerce has such low barriers to entry — a few bucks for a hosted shopping cart and a few products are all one needs — entrepreneur-minded people frequently leap to launch a web-based businesses with little thought given to the financial backbone needed to operate a business.

Merchants often think they are going to be “free and independent” when self-employed, said John Day, owner of Real Life Accounting. “They may figure, ‘Since I have the knowledge and skill, I might as well set up my own business and keep all the profits.’ What they don't realize is that if not planned out properly, their dream can turn into their worst nightmare.”

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Do Accounting Rules Discourage Research & Development?

Businesses spend billions of dollars trying to develop new and better products, These outlays are referred to as research and development (R & D) costs. Accounting rule makers have struggled with how best to classify such expenditures. Should they be treated as expenses or assets? The classification of an outlay as an expense or an asset depends upon how long the firm will benefit from the outlay. If the benefit will be for more than one accounting period, it is classified as an asset. If the outlay provides economic benefit for less than a year it is generally classified as an expense.

Tangible assets such as machinery and equipment produce income over several years. These tangible assets usually have easily ascertainable costs, which are spread over the assets' estimated useful lives in the form of depreciation expense. On the other hand, one month 's rent payment is an expense because the outlay entitles the firm to only one month of economic benefit. Now consider the following example of an R & D cost.

Example. Mizer Pharmaceutical has in the last five years spent $65 million on research and testing of a male enhancement pill that actually works and can garner FDA approval. The five years of research and development outlays has lead to the development of an effective pill that they will market and patent under the trade name Mirakle Grow. Market research indicates that it will generate at least $1 billion in sales annually as long as they hold the exclusive patent.

Since the R & D outlays have lead to the development of a pill that will generate significant revenue over several years you would expect that the outlays would be classified as assets rather than period expenses. Well you would be wrong. In fact, accounting rules require that R & D costs be treated as expenses rather than assets even though these outlays clearly are intended to benefit future accounting periods. There are two reasons why accounting rules treat R & D outlays as expenses.

First it is a cruel fact of life that not all R & D outlays lead to the development of marketable products. In fact, a relatively low percentage of such outlays lead to successful products. For example, it may turn out that the Mirakle Grow drug has adverse side effects that would preclude FDA approval.

A second problem in treating R & D costs as assets involves deciding their useful life. Assuming that successful R & D costs can be identified, over what period of time do we spread or amortize these costs? If the R & D costs lead to a patent we could simply use the life of a patent as our guide. But what really matters is the life cycle of a successful new product, not the period of patent enforceability. Who knows how long a period that should be? In the case of Mizer 's male enhancement pill it is entirely possible that an alternative pill developed by a competitor could provide stiff competition to Mirakle Grow. If this occurs demand for Mirakle Grow might peter out in a much shorter period of time than the life of the patent.

If accounting rules allowed the treatment of R & D costs as assets, management would be sorely tempted to record both unsuccessful and successful outlays as assets. This would lead to the overstatement of assets, the understatement of expenses and in turn the overstatement of income. Even if management were neutral and fair minded it is often impossible to predict which R & D costs will lead to successful products and which will not.

Unintended Consequences

Accounting rule maker 's decision to not treat R & D costs as assets probably has undesirable consequences for firms and society as a whole. In the current environment in which publicly traded firms are managed there is great pressure on managers to insure that stock prices are maintained. CEO 's of large corporations are partially compensated and evaluated based upon their firm 's stock price. In turn, stock prices are greatly affected by the current and near term reported earnings of the company. Under current accounting rules a CEO interested in short-term earnings will avoid long term R & D commitments because they will depress current earnings and hence the stock price. However the long-term prospects of a business may be enhanced significantly by increased expenditures on R & D. So the accounting treatment of R & D probably serves as a disincentive to make such outlays despite the fact that such outlays might be in the long run best interest of the firm.

Society is probably also better off if companies increase their R & D outlays. So the current R & D rules may be bad for businesses and bad for society as a whole. The rules may prevent individual firms from overstating income and assets in the short run but reduce the income of the firms and the well being of society in the long run.

About author:
Michael Sack Elmaleh is a Certified Public Accountant and Certified Valuation Analyst. His book, "Financial Accounting: A Mercifully Brief Introduction", has received wide critical acclaim. He has nearly 30 years of accounting and 10 years of teaching experience.His web site is understand-accounting.net

Source :http://www.content4reprint.com/

3 Quick Tips To Banish Those Bookkeeping Blues!

Are you one of those people who are guilty of just stuffing your receipts into a folder and thinking 'I'll sort that out when I've got time'? Do you need a more organized bookkeeping system, nothing too flash, just something that's simple and easy to manage?

Follow my tips below and you'll soon have that simple and easy-to-manage bookkeeping system that won't bring you out in a cold sweat whenever you hear the words 'tax return'. And I promise you, it works!

#1 Gather your supplies!
Get hold of a large ring binder, divider cards, A4/letter-sized paper, stapler, pen, all your business receipts and invoices, plastic folders and a large coffee (or whatever else you prefer!).

Then lock yourself away for a couple of hours.

#2 Get organized
You now need to organise your ring binder into the following sections:

Invoices - Unpaid -- this section is for your outgoing business expenses that have not yet been paid i.e. supplier invoices. Write on the top of each invoice the date it needs to be paid by and place all unpaid invoices in 'date to be paid' order with the earliest one on top.

Invoices - Paid -- this section is for your outgoing business expenses that have been paid or you've paid at the time service was rendered, i.e. that ream of paper that you bought from the office supplies store. Staple each receipt on to a blank piece of paper rather than just putting them directly into the ring binder. This just makes it easier to see at a glance all your receipts
and you can also make notes on the paper. Also write on the top of each invoice/piece of paper the method of payment.

Receipts - Unpaid -- this section is for all your invoices that you have sent to clients that have not yet been paid. Write on the top date payment is due and put them in date order so that it's easier if you have to chase overdue invoices.

Receipts - Paid -- this section is for all your invoices that have been paid. Write on the top the date it was paid and how it was paid i.e. bank transfer, check, credit card etc.

Bank Statements -- this section is self-explanatory! Just keep everything in date order.

3# Schedule It In
Now that you've got your system in place, schedule in each week/month to keep your bookkeeping binder up-to-date. In between updating place all your receipts and invoices in a plastic folder so that everything is together when you come to update your system--it would be too time-consuming to add each receipt as you get it!

What Next?
Depending on how far you want to handle your own accounts, you can either hand your very organized bookkeeping binder over to your accountant at the end of the financial year for them to prepare your final accounts, or you can maintain your own books with the use of financial accounting software.

Either way, you've now got a bookkeeping system that is simple and easy-to- manage and won't cause you to break out into a cold sweat at the very mention of the words 'tax return'.

About the author: Tracey Lawton is a certified Master Virtual Assistant with many years of experience, helping professional speakers, coaches, and authors operate an efficient, organized, and profitable business. Visit http://www.traceylawton.com/tips.htm to subscribe to her newsletter, Virtual Solutions, full of tips for operating a more productive business and receive Tracey’s ‘The 7 Key Steps to an Organized and Efficient Office’ special report absolutely free.

Bookkeeping Tips - Protecting Yourself Against Bookkeeper Fraud

With the rash of recent media stories about bookkeepers defrauding their employers, we thought it was time to offer a few tips that could keep the same thing from happening to you.

First of all, realize that the person who defrauds you could be the person you least expect. Would you think a church bookkeeper who had held her position for close to 20 years was a fraud? No? Neither did the church. And the bookkeeper bilked the organization for hundreds of thousands of dollars.

Since you can't live your life in a state of constant paranoia, suspecting every person who crosses your path, here are a few safeguards you can use to minimize the chances of fraud happening within your organization:

• Never give your online banking information to anyone, period. Password access to your account is just an engraved invitation for someone to dip his hands into the cookie jar. By the time you realize the money is gone, your bookkeeper could be too.
• Never have blank signed cheques anywhere. This is a common mistake; many business owners leave signed cheques with their bookkeeper or staff for the sake of convenience. But it means that cheques to unknown payees and in unknown amounts can easily be made out - and the fraud doesn't even have to forge your signature!
• Never give signing authority on your bank accounts to a bookkeeper. You open yourself to abuse if your bookkeeper has legitimate power to write cheques without your knowledge.
• Be the first person to open and check your bank statements each month. Question any entry or cheque that you don't recognize. Bookkeepers often go years without being detected simply because they are the only ones who actually watch what goes through the bank accounts.
• Separate your bookkeeping and accounting roles. Two pairs of eyes on your books can provide a critical set of checks and balances. The accountant can review the bookkeeper's records and vice versa, ensuring each person is held accountable and deception is more likely to be caught.

Be smart and be aware. With a little caution, you can dramatically reduce your chances of being victim to fraud.

Fern Gordon is the owner of The Profit Line. Making sound business decisions means having a clear picture of your financial situation in front of you at all times - yet the daily demands of running a small enterprise can be overwhelming. As a result, financial record keeping and reporting often don't get the attention they truly deserve.

The Profit Line changes all that. We are your bookkeeping partner, helping you stay on top of your finances so you can make better, more informed business decisions.

In addition to taking paperwork off your plate, we also pinpoint the key numbers critical to the performance of your specific enterprise, and make sure you have them in hand whenever you need them.

Source: http://www.lastminutetraining.ca/articles.php/Bookkeeping-Tips/Protecting-Yourself-Against-Bookkeeper-Fraud

ACCOUNTING ADVICE: Are service sales taxes the answer?

Years ago a presidential candidate proposed a national sales tax and the elimination of the income tax. He was practically laughed out of the running and eventually withdrew from the campaign. Today, however, sales taxes are being brought up again on more of a state by state issue.

I have read much about and was reminded of in a recent professional issue update conducted by the INCPAS is the possibility of a sales tax placed on services.

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What are mobile bookkeepers?

Bookkeeping services have evolved significantly in recent years. More and more companies and small businesses are looking to outsource services, turning over parts of their operations to outside experts, allowing owners to focus on critical needs and growth. This has led to an increasing demand for mobile bookkeepers.

Mobile bookkeeping services will offer to pick-up and drop off all the necessary documentation for keeping your financial records upto date. Mobile bookkeepers gibe you the choice of having someone come to your premises as and when required to carryout bookkeeping duties.

Why outsource a bookkeeper?

Many small businesses and sole traders just do not have the time to undertake all the regular data entry, reporting and other paperwork that is necessary to conform with the tax laws and company reporting requirements. Nor do small business operators want to learn to do the bookkeeping.

Why not employ a bookkeeper?

So SME's and sole traders are faced with having to employ a bookkeeper, or look for a mobile bookkeeping service.

Keeping a bookkeeper on staff is not always a wise use of funds or the best way to keep your books error-free, particularly for small and medium-sized businesses. So they look to bookkeepers that can travel to their premises, and either do the books on site, or offer a pick-up and delivery service.

SME's often assume they need a full-time bookkeeper to oversee the books. But, in fact, you can be running a $5 million company and still not really require a full-time bookkeeper. Such services have little to do with the volume of sales and more to do with the level of accounting activity, such as invoicing, bill paying, payroll and the like. Companies with a full-time bookkeeper can save about $30,000 a year by using outsourced bookkeeping services, say, a half-day a week.
Benefits of a mobile bookkeeping service

The benefits of outsourcing bookkeeping functions to a service provider include the following:

• No dedicated partner is required to hire, train, and monitor quality within the bookkeeping department.
• There is no downtime or unbillable staff time.
• No equipment or overhead costs are required to maintain adequate staffing levels.
• Working with the outsourcing provider to customize preferred reporting formats helps with financial statement groupings.

Source: http://www.quickbooks-bookkeeping.com/mobile_bookkeeping_mobile_bookkeepers_gold_coast.html

Understanding Account Reconciliation

When you confirm that the balance in your checkbook is in sync with your corresponding bank statement, it is known as account reconciliation.

Any record that you keep regarding your financial transactions with banks, credit card companies, or retail stores is known as an account. It is an arrangement between buyers and sellers in which payments are to be made in the future. The different forms of payment are checks, bills of exchange, and promissory notes. These are transferable, signed documents, which guarantee to pay the bearer a sum of money at a later date.

Purposes of Account Reconciliation
Account reconciliation makes available a suitable method for reconciling the accounts to the monthly financial reports produced by the Financial Records System (FRS). Account reconciliation helps you evaluate departmental account records in regards to the reports, which have been generated by the FRS. This helps you to better verify the accuracy of each account statement. The person in charge of each account should verify the account every month. Account reconciliation helps ensure accurate reports on the account. It helps to identify errors and inconsistencies in your accounting.

In order to perform the reconciliation most efficiently, you should be certain that the person in charge of an account maintains full and accurate records. It is your choice to maintain the records in a manual filing system or on a computer program. You can develop your own filing and record keeping system. It should be capable of providing an effective means of reconciling your accounts on a monthly basis. You can make use of the following files to make the reconciliation process easier.

Open Transaction Files: These files hold all source documents that you may have started for the account, but have not yet processed. Some common types of source documents are Distribution of Deposit forms (for cash receipts), Check Requests, Purchase Orders, Prepaid Purchase Orders, Interdepartmental Billing Forms, Merchandise Orders, and Travel Authorizations.

Pending Files: These files hold source documents that had some activities posted on the FRS report, but await further activities before they can be completed. These include Purchase Orders, Inter-departmental Billing Forms, Travel Authorizations and Travel Expense Reports.

Closed Transaction Files: These files hold the source documents that are fully processed in the FRS. You can always refer to the Records Retention Policy to establish how long documents must be maintained on file.

Monthly Reports: You receive these after the end of each month. The accounts must be reconciled to the monthly reports. The FBM090, Account Statement, and the FBM091 and Report of Transactions can be handed over to the person handling each account. You then compare the open transaction and pending files to the FBM091 and the Report of Transactions, which has a detailed list of transactions posted in a particular month. Make a comparison of the source documents with the report to find out if the encumbrance was properly established, adjusted, or canceled in the correct account and the correct object code.

Additional Help
Software is available to help you in reconciling your accounts in an automated fashion. Apart from providing you with all the help, they are reasonably priced as well.

When you confirm that the balance in your checkbook is in sync with your corresponding bank statement, it is known as account reconciliation.

Any record that you keep regarding your financial transactions with banks, credit card companies, or retail stores is known as an account. It is an arrangement between buyers and sellers in which payments are to be made in the future. The different forms of payment are checks, bills of exchange, and promissory notes. These are transferable, signed documents, which guarantee to pay the bearer a sum of money at a later date.

Purposes of Account Reconciliation
Account reconciliation makes available a suitable method for reconciling the accounts to the monthly financial reports produced by the Financial Records System (FRS). Account reconciliation helps you evaluate departmental account records in regards to the reports, which have been generated by the FRS. This helps you to better verify the accuracy of each account statement. The person in charge of each account should verify the account every month. Account reconciliation helps ensure accurate reports on the account. It helps to identify errors and inconsistencies in your accounting.

In order to perform the reconciliation most efficiently, you should be certain that the person in charge of an account maintains full and accurate records. It is your choice to maintain the records in a manual filing system or on a computer program. You can develop your own filing and record keeping system. It should be capable of providing an effective means of reconciling your accounts on a monthly basis. You can make use of the following files to make the reconciliation process easier.

Open Transaction Files: These files hold all source documents that you may have started for the account, but have not yet processed. Some common types of source documents are Distribution of Deposit forms (for cash receipts), Check Requests, Purchase Orders, Prepaid Purchase Orders, Interdepartmental Billing Forms, Merchandise Orders, and Travel Authorizations.

Pending Files: These files hold source documents that had some activities posted on the FRS report, but await further activities before they can be completed. These include Purchase Orders, Inter-departmental Billing Forms, Travel Authorizations and Travel Expense Reports.

Closed Transaction Files: These files hold the source documents that are fully processed in the FRS. You can always refer to the Records Retention Policy to establish how long documents must be maintained on file.

Monthly Reports: You receive these after the end of each month. The accounts must be reconciled to the monthly reports. The FBM090, Account Statement, and the FBM091 and Report of Transactions can be handed over to the person handling each account. You then compare the open transaction and pending files to the FBM091 and the Report of Transactions, which has a detailed list of transactions posted in a particular month. Make a comparison of the source documents with the report to find out if the encumbrance was properly established, adjusted, or canceled in the correct account and the correct object code.

Additional Help
Software is available to help you in reconciling your accounts in an automated fashion. Apart from providing you with all the help, they are reasonably priced as well.

Article Source: http://www.redsofts.com/articles/

David Gass is President of Business Credit Services, Inc. His company publishes afree weekly e-newsletter on Small Business Consulting at their web site
http://www.smallbusinessconsulting.com

Safeguarding Tax and Financial Records

The IRS recently published a newswire urging people to safeguard their records. IRS Acting Commissioner, Kevin M. Brown stated, "With forecasts calling for an active Atlantic hurricane season, the IRS encourages taxpayers to protect tax and financial documents that can be hard to replace." (Newswire dated June 1, 2007)

Actually whether or not you live in a hurricane area, there are many things that can happen to destroy important records. We all think about big natural disasters such as hurricanes, tornados, earthquakes, etc. But there are other disasters that can affect anyone no matter where you live. They include such things as fires, flooded basements, theft, accidentally throwing things away, etc.

If you happen to get audited, the IRS doesn't particularly care why you no longer have your records and they will go off the records they can gather. The IRS can provide you with W-2 information, income from interest, dividends, stock sales, 1099 information, interest paid on government student loans, and how much mortgage interest you paid to a financial institution. They don't have records of business deductions, donations, dependents, alimony paid, daycare expenses, medical expenses, etc.

There are several ways you can choose to keep your records safe.

1. Paperless Record keeping: With the wide use of computers, internet bank records, W-2 forms, and other documents can easily be downloaded to your computer. Other documents can be scanned in. This can then be saved onto a USB drive as a back up which can be store in a safety deposit box and/or sent to a relative in another city.
2. CD or DVD: Records can be scanned into the computer and burned onto a CD or DVD. Several copies can be made inexpensively and stored in several places.
3. Record Keeping Companies: There are companies that will copy and keep your records in their vaults so that in the case of a disaster they can provide you with a copy.
4. Protective Boxes and Safes: You can purchase fire proof and water proof boxes and small safes to keep valuable records in. They can work well if you don't live in a place were place where a natural disaster will likely take down the entire house.

Other items you may want to document and keep safe are personal records such as birth certificates, social security cards, passports, insurance documents, home closing documents, and investment documents. In large disasters, it is important to be able to prove who you are and that your children belong to you. If your home is destroyed you may need to prove ownership.

There once was a family of eight. One evening the whole family went to the local pool for an evening of swimming and fun. They were gone about two hours and when they arrived home, their home was on fire. The fire department was there and the neighbors had all been frantically trying to find them. The plug on their toaster had shorted out and started the fire. It was a small fire that was quickly contained, but the fire department wouldn't let the family go in until they were sure everything was safe, which took a day. They stood there with nothing but their swimsuits and towels as neighbors ran to their homes to find clothing and diapers so the family could at least get dressed.

When they were finally able to enter their home, the smoke had damaged everything. They spent a week in a hotel until the insurance could make arrangements to find temporary housing, Then came the task of listing all the things that had been destroyed and working with the insurance company to fix their home and replace the contents.

This was a relatively small disaster as disasters go. But it could happen to anyone. In any disaster it is good to have a record of your personal belongings, especially items of greater value. Photographing or video taping the contents of your home can be a great help when filing an insurance claim after a disaster.

Also, if you do not have insurance to cover losses, they can be deducted on your tax returns. Recording what you have, when you purchased it and what you paid for it can also expedite claims. The IRS has a free disaster loss workbook that can help individuals and businesses compile a detailed list of belongings. The IRS publication 584 is for individuals and the publication 584B is for businesses.

Nothing can take away the pain and trauma of a disaster, but being prepared can make the recovery process much easier. Review your emergency plan annually. Make sure records that have been safeguarded are current and up to date. Being prepared takes much of the worry out of life.

Article Source: http://onlinejer.com/

Christopher Anderson is part owner of Lone Peak Business Solutions, Inc. He wants to share his success as a business owner with others who desire to own their own business. He also believes that the economy is stronger with more business owners, and as a result, he is focused on helping business owners succeed.

Bookkeeper, Accountant, or CPA What type of Financial Professional does your Small Business need?

Choosing the right type of financial professional for your small business can be difficult. Learn the differences between bookkeepers, accountants, and CPAs.

In most successful small businesses, the owner will come to a point where he or she must choose to manage growing their business and trust another person to manage their books. Choosing the individual to help run the financial side one’s business can be confusing. Sorting through this confusion is especially important for this position since the person chosen has knowledge of and power over the business’ finances.

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How to Eliminate the Frustration from a Small Business Owner

If you are the owner of the small business company you always have heaps of work, regarding your company finances. The fact is there and still do you need to go to the professional to take the stress off your shoulders?

Visiting with your personal accountant is similar to going to your dentist. Time is money; the longer you delay your visit the more it will cost you.

First you need to know how to set up your business and to consider advantages and disadvantages of every business entity (LLC, Partnership or C Corporation, etc).

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Small Business Offshore Accounting - Myths v/s Realities

To increase the efficiency and profitability of the business small business and big business both equally off sourcing their work mostly their Accounting work. But still There are some myths about accounting business process outsourcing; particularly among small business entrepreneurs who are still not sure whether such step can really create value for their enterprise, as in their perception, only big business can benefit form these initiatives. Confusion still prevails on selection of accounting functions that can be outsourced to maximize returns. But, the fact remains that accounting business process outsourcing is absolutely viable for small businesses too and has tremendous possibilities of cost saving and value. This article explores them one by one:

Myth: Accounting Outsourcing is exclusively for Big Business Reality: Small Business equally can share their the same stage in Accounting Business The popular perception that accounting outsourcing is only for big business with abundant wealth, profound resources and multiple locations is misleading. The fact remains that small business can reap great returns too by outsourcing accounting functions. In today’s fiercely competitive global industry, every second and every dollar that you save is very important for your business. By outsourcing non-core business activities like Bookkeeping, Accounts Receivable, Accounts Payable, Accounts Reconciliation, etc, to destinations like India, China, Philippines, etc, where there is abundance of technically skilled manpower at almost one-tenth labor cost as that of US, small business organizations can save substantially on operational costs. Simultaneously, they generate more time to devote to core business issues like procuring orders, improving technology and raising resources.

Myth: Accounting BPO has no place in Offshore business
Reality: False. Accounting BPO can be outsourced
After its start a decade ago, big business houses mostly outsourced transaction processing activities using high-end technology platforms. The situation has now totally changed. Big and small companies routinely outsource Accounting, HR, Financial Services, PR and similar functions to cost-effective destinations like India. Accounting is particularly a domain that has witnessed tremendous growth over the past few years and has immense possibilities as small business entrepreneurs with strong sales often need a full-time bookkeeper to oversee the books. But, in fact, such services have little to do with the volume of sales and more to do with the level of accounting activity, such as invoicing, bill paying, payroll and the like. Companies with a full-time bookkeeper can save about $30,000 a year by using outsourced bookkeeping services to highly competent service providers in India.

Myth: Complex IT integration is needed
Reality: Just a Server and Internet Connectivity can work
It’s a misconception among small business that outsourcing requires extensive IT integration. For management of outsourced accounting portfolio of a small business, just server and Internet connectivity is sufficient to procure value-added services. The outsourced service provider can use Remote Server model to access client’s computer securely to perform services like Bookkeeping, Accounts Receivables, Accounts Payables, Tax Returns, Account reconciliation etc. In the Secure File Transfer all the accounting records are transferred securely from customer’s computer to the outsource vendor to perform the work. After performing the work the offshore vendor will upload the files back into customer’s computer securely.

The trend has risen sharply as more and more companies are increasingly outsourcing accounting and financial services and the sector is growing very strongly. An IDC study entitled US Finance and Accounting Outsourcing Market Forecast and Analysis 2003-2008 has predicted that the global market for finance and accounting outsourcing services, which reached over $30 billion in 2003, will reach $47.6 billion in 2008.

Myth: Accounting Outsourcing is not secure
Reality: False. The services are 100% Reliable
No offshore service provider would risk his business possibilities by unauthorized use of accounting data of the outsourcing company. Through secure FTP software, offshore units transfer all the documents securely into the client server. Using customer specified accounting software; the client performs all the work and export the finished accounting files back in to customer's server securely. The customers will import the accounting files into their Accounting Software. Thus there is no possibility of any breach of data security.

Most accounting packages involve general data handling like daily sales figure, preparing an outstanding statement, maintaining expense register, preparing tax returns etc. Small business outsourced accounting services do not ordinarily involve handling of business critical data. Even if they are there, a reliable service provider with proven experience and credentials can handle the assignment with trust and confidentiality to secure efficiency and cost saving for small business units.

Myth: Accounting BPO harms economy of outsourcing country by cutting jobs
Reality: False. It promotes Growth and Efficiency
Small business outsourcing accounting services is a major budget-balancing act and an option for increasing business returns and lowering process time that does not call for job losses. The efficiency gained through fast and less expensive outturn makes end-price competitive. More products at affordable prices improve consumer dynamism and ultimately, everybody; from the manufacturer to the customer to the government accrue significant benefits. This is particularly more relevant for the small business sector because by outsourcing functions like accounting, they can save costs without compromising on quality and channel this cost saving to hiring people for operational areas to increase productivity and market sales. Ultimately, there is no loss of employment opportunities. Moving away from non-core functions, jobs become available in high-end sectors and to meet the requirements of such jobs, levels of professional expertise, skills and knowledge of the human resource base of the country increase significantly. The host country is the ultimate gainer from outsourcing.

Small business outsourced accounting has immense possibilities to secure greater business efficiency and higher returns and is proven all over the world. Highly enabled service providers aided by cutting-edge technology in offshore destinations can provide extremely reliable and value-added accounting services to ensure greater returns for small business. It’s a trend that will altogether change the face of doing small business for good.

Article Directory: http://www.articlecube.com

Mani Malarvannan is cofounder of Cybelink, a company specializes in small business financial and accounting outsourcing like Bookkeeping, Tax, Accounts Payable, Accounts Receivable, etc. For more info visit www.cybelink.com

Get Tax Deductions

Are you a small business owner who is planning on preparing your own taxes this year? If you are, you may want to know about the business deductions that you can claim. You may be happy to know that there are a number of deductions that you may be eligible for. Just a few of those deductions are touched on below.

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Get a better way for maximum utilization of resources with bookkeeping outsourcing

Outsourcing has become an integral part of many businesses and residual are planning to adapt it. As the popularity graph of outsourcing services is elevating, business owners are outsourcing most of their important but tedious tasks. Bookkeeping is also one of such tedious tasks that require perfection and accuracy as a slight error in entries can cause a big problem. Though business owners pay high attention to bookkeeping tasks and they tally each and every entry carefully but every time it is not possible for business owners to give proper time to check all entries thoroughly. In such circumstances risk of accruing mistake may increase and the whole organization can get affected by this. Outsourcing services help businesses in conquering such problems by offering businesses bookkeeping outsourcing facility.

Bookkeeping outsourcing is all about utilizing human resources from outside the company to take care of day to day and monthly bookkeeping records. The task of bookkeeping that the company used to perform itself with its accounting professionals becomes very easy after outsourcing. That hired bookkeeping outsourcing firm or professional performs every bookkeeping task of that company and also prepares a report on monthly or weekly basis. Bookkeeping outsourcing services involve day to day transaction, record keeping, account maintenance and tax assessment. Not only this, if you are a new business owner and want advice regarding financial activities you can also get best advice from these professionals.

The only purpose of bookkeeping outsourcing services is to benefit businesses. Whether it is daily record keeping or annual financial statement preparation, an outsourcing firm accomplishes very task carefully. In this outsourcing process client organization and service provider go through in a contractual agreement process regarding quantity of work and charges. That agreement makes everything clear to both parties so that any hurdle may not come in the way of smooth processing of bookkeeping tasks. By this you can be rest assured that nothing is going to affect your bookkeeping procedure. The biggest advantage of bookkeeping outsourcing that it is very cost effective and helps in reducing the overhead of your accounting staff salary. Some companies fail to earn estimated profit as they secure a big part of their budget on salaries of accounting professionals which leads to an annoying profit and loss account as the profit is very less in comparison to overheads. If you are worried about the high charges of bookkeeping professionals or firms then stop pestering because there are many service providers that offer reliable and cost effective bookkeeping services. Bookkeeping outsourcing is an excellent way to keep an eye on all accounting activities. It not only offers business owners reliable accounting solution but also gives businesses an ample scope to grow. The decision of outsourcing bookkeeping activities can be prolific if made only after proper research. It is better to take help of internet to make a sensible decision as you find a wide variety of service providers there from which you can select the most suitable option for you.

About the Author
Michelle Barkley is a CPA who advises people on tax preparation and tax calculation.She specializes in Bookkeeping outsourcing,Tax return preparation,back office outsourcing and Outsourced Accounting.To know more about Accounting outsourcing services and to use the services visit http://www.ifrworld.com/

Source: http://www.goarticles.com/

Bookkeeping and Accounting Basics

Bookkeeping and accounting share two basic goals:

• to keep track of your income and expenses, thereby improving your chances of making a profit
• to collect the necessary financial information about your business to file your various tax returns and local tax registration papers

Sounds pretty simple, doesn't it? And it can be, especially if you remind yourself of these two goals whenever you feel overwhelmed by the details of keeping your financial records. Hopefully you will also be reassured to know that there is no requirement that your records be kept in any particular way. (There is a requirement, however, that some businesses use a certain method of crediting their accounts. See " Cash vs. Accrual Accounting.") In other words, there's no official "right" way to organize your books. As long as your records accurately reflect your business's income and expenses, the IRS will find them acceptable.

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Accounting Firm Launches $2,500 Makeover Contest

Mid-Atlantic-area accounting firm Aronson & Company has announced a $2,500 student-to-professional makeover contest, open to college accounting and finance majors entering the job market.

The "Show Us Your Future" video submission contest requires entrants to submit a three-minute video that creatively demonstrates where they see themselves after graduation. The video entries will be posted on YouTube.com and streamed to the contest Web site, www.showusyourfuture.com, where people can watch all of the videos, rate them and add comments.

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How To Turn Bookkeeping Drudgery Into A $175/hour Part-Time Job

For most self-employed people, bookkeeping is about as much fun as a root canal. But like it or not, it must be done, otherwise you'll end up overpaying your taxes big time.

Perhaps this article will help you see this tedious task in a new light. Follow along with me and I can turn your bookkeeping nightmare into the best paying part-time job you ever had.

First, a question:

How much money do you make right now -- per hour -- at your "regular" daytime job or in your business?

Is it $15 per hour? $25 per hour? $50 per hour? Make a mental note of that amount, ok?

Now, let's say by "keeping the books" this month, you record $1,000 worth of deductible expenses.

Let's also assume you are in the 35% tax bracket (15% federal income tax plus 15% self-employment tax plus 5% state tax).

So, for every $1,000 of deductions, you save yourself about $350 in taxes ($1,000 x 35% tax rate).

One more assumption: it takes you about 2 hours to properly record and document that $1,000 of deductions.

Hmmm. You spend 2 hours and save $350 bucks.

How much money did you just make for yourself -- per hour?

$175 per hour! Whoa -- now, compare that to how much you make per hour working in your business or at an employee job. Which "job" paid you more?

Even if it takes you 4 hours -- it's like having a job that pays you $87.50 per hour. Still a pretty good hourly wage, don't you think?

How does that make you feel about bookkeeping? Not such a bad deal after all, is it?

So here's a simple six-step bookkeeping system that will put thousands of dollars of tax savings in your pocket and keep the IRS out of your life.

1. Maintain a separate bank account for your business or self-employment activity.
   
   Never use your personal bank account for business expenses. Having a separate bank account automatically creates the "shell" for the perfect documentation system.
   
   If you don't have a separate business bank account, now is the time to get one.
   
   
2. Maintain a separate credit card account for your business. Same deal as the bank account -- pick one credit card that you use exclusively for business expenses.
   
   
3. These 2 accounts (one bank account and one credit card account) should only be used for business! Never "co-mingle" business and personal financial information.
   
   The only income that goes into your business bank account is business income. The only expenses that are paid from the business bank account and business credit card account are business expenses.
   
   
4. For each major income and expense category, create a simple filing system each calendar year -- one file folder for each major category. Every time you write a check or use the credit card for a business expense, you assign that expense to the appropriate expense category and file the supporting documentation (receipt, invoice, cancelled check, or whatever) into the corresponding file folder.
   
   
5. Keep a separate file folder for all monthly bank account statements and credit card statements.
   
   
6. Use a simple bookkeeping software program to record all deposits, checks, and credit card charges. Once a week or once a month, input all transactions and assign each transaction to the appropriate income or expense category.
   
   

The importance of this "categorization" process cannot be stressed enough -- it's the key to the whole system!

There are any number of software programs out there for this purpose. I've used them all: Quicken, Quickbooks, Money, etc. Spreadsheet programs like Excel can also be used to automate business record-keeping.

But my favorite bookkeeping program for the Small Business Owner or Self-Employed Person is InternetTaxHelper -- it is by far the easiest to learn and simplest to use. If your business grows, you can always invest in a more sophisticated program later. For any small business owner, especially if you're just starting out, this is the best program I've ever seen.

Using a software program is a tremendous time-saver. Once you've input all your individual income and expense transactions, and assuming you've assigned each transaction to the appropriate category and filed the paperwork, you've already completed all the work necessary to audit-proof your income tax return!

One final comment: If you aren't "computer-savvy", that's OK. You can still use good ole pencil and paper to categorize your business expenses.

I have clients who use nothing more sophisticated than a spiral notebook. Each year they buy a new notebook and label each page with a particular income or expense category.

Every transaction gets written down in the notebook on the appropriate page. At the end of the year, they add up the totals for each page, and presto, they give me an annual recap of all major income and expense categories. Get the picture? It doesn't have to be fancy. It just has to be in writing, accurate, and supported by actual paper documents.

Whether you use your computer or not, the end result is the same: Every single transaction has been assigned to the appropriate category, and every transaction has the corresponding "paper trail" -- every receipt, invoice, cancelled check and credit card charge has been filed into the appropriate file folder. Should the IRS question any income or expense amount on your return, you'll be ready!

About the Author:

Wayne M. Davies is author of 3 tax-slashing eBooks for small business owners and the self-employed. For a free copy of Wayne's 25-page report, "How To Instantly Double Your Deductions" visit http://www.yousaveontaxes.com/

Source: http://isnare.com

Bookkeeper accused of embezzlement

A cautionary tale in the Internet advertisement Rohnert Park resident Nilla Billa uses to promote her in-home business warns about accountants "cooking" a client's books.

Now authorities say Billa is suspected of wrongdoing in her job as bookkeeper with a Novato-based company specializing in employment screening and background checks.

Novato police believe Billa misappropriated at least $700,000 from Employment Screening Resources during the past two or three years, Sgt. Dave Jeffries said.

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Beall's Hill audit finds sloppy book keeping, no impropriety

A long-awaited audit of the effort to revitalize the Beall's Hill area found poor record keeping and inadequate oversight, but no misuse of funds, as some public officials had feared when commissioning the audit last year.

The audit found that the corporation's financial statements "present fairly, in all material respects, the position of Beall's Hill Development Corporation," according to a letter from the auditing firm, McNair, McLemore, Middlebrooks & Co. But the letter addressed a number of problems, particularly that "the corporation's files were incomplete and did not contain documentation to substantiate the majority of the activity of the corporation."

Despite that, the remaining two members of the corporation's board said the audit will allow the revitalization effort to move forward.

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Cost Benefit Analysis-Whether you should outsource your Bookkeeping to Professional Book Keeper.

What is a role of a bookkeeper in your organisation : BOOKKEEPERS keep complete, up-to-date, and accurate records of accounts and financial arrangements. Bookkeepers verify and enter information into journals and ledgers or into a computer. They periodically balance the books and compile reports and financial statements. Bookkeepers also receive, record, bank and pay out cash. They balance checkbooks with monthly bank statements. They may calculate employee wages from plant records or time cards and issue payroll checks. Some of the other work they may do includes posting accounts receivable and payable, prepare and make bank deposits, record payrolls, maintain inventory records, purchase supplies, prepare purchase orders and do expense reports. Bookkeepers may also make schedules, sort documents, and file bills.

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