Thursday, May 29, 2008

'Don't waste tax return' says CU boss

The lucky people who receive a tax return should use the money wisely and not spend it on frivolous items, the nation's largest credit union says.

As tax return time nears, a person should consider using their financial windfall to improve their finances, Credit Union Australia (CUA) managing director Graham Olrich said.

"While those shoes or new pair of jeans may be a 'must have' today, there are smarter ways to spend a tax return that could provide you with an endless shoe or jeans collection in years to come," Mr Olrich said.

Mr Olrich suggests seven ways for a person to look after their tax return.

The first and most obvious way was to reduce your debt, particularly credit cards, he said.

According to financial research service group CANNEX, some credit cards now charge more than 20 per cent on outstanding balances.

Secondly, use the tax return to help pay off the mortgage, Mr Olrich said.

"It's a great way to significantly reduce your loan and perhaps pay it off in a shorter period than expected," he said.

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Wednesday, May 28, 2008 offers hosted accounting software

Accounting company Coda and on-demand specialist claim to have come up with a way for companies to handle their accounting software without having to pay for a full-scale application.

Coda@2Go offers a full-scale accounting software system available through the, platform-as-a-service (PaaS) model running on, the companies claim. Coda@2Go will be officially launched on Wednesday at the Dreamforce Europe '08 conference in London.

This tie-up allows customers to run Coda's financial software without having to go to the expense of buying a complete application, according to Coda's chief executive, Jeremy Roche. "Our customers can get up and running with our software very easily by doing this," he said.

The result is a less costly entry price for companies wanting to put their users on the system. To use a full set of Coda financial software costs between £65 and £75 per user per month, according to Roche. But sub-sets of the full package will be made available in the future priced accordingly. "As we get up and running with this the plan is that we will make different parts of the accounting suite available for users who do not want all the features," Roche said. "That will obviously cost less."

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Tuesday, May 27, 2008

Bookkeepers And Accountants Choose Double Entry Bookkeeping For Accuracy

Double entry bookkeeping stretches back centuries perhaps even as early as the 12th century and is now accepted worldwide as the accounting standard to be employed by all companies in recording the financial accounting records. The first written explanation of the accounting system was reportedly by a Venetian mathematician Luca Pacioli towards the end of the 15th century.

The accounting industry has grown somewhat since then and today contains many technical words known but largely ignored by non accountants. The understanding and desire to understand accounting terms is further confused by the banking industry while adopting double entry bookkeeping as standard use what appears to be diametrically opposed terms in the presentation of information to their customers.

In accounting terms an asset such as money in the bank is a debit balance while bank customers are told if they have money in the bank it is a credit balance. This arises because what the bank is really saying is when a customer has money in the bank that the balance represents a creditor to the bank as it owes the customer money and is a creditor in the banks books. Hence the bank describes the balance as a credit balance.

The simplest way to understand double entry bookkeeping is the understanding that every financial transaction has a double effect. One effect is to change the profit and loss of the business with sales income increasing the financial profit and purchases reducing the financial profit. While the double entry is that every profit and loss transactions also has a balance sheet effect in either increasing assets or increasing liabilities.

In more complex accounting areas such as journal entries or bank transactions both sides of a transaction may have no impact on the profit and loss account as both sides of the double entry effect the value of balances in the balance sheet. For example when a creditor is paid the bank balance reduces and the amount owed by the business reduces by the same amount.

The greatest value of double entry bookkeeping to a business is its ability to show in numerical terms the profitability of the business to generate improved financial performance and management while also producing a statement of assets and liabilities. These factors are important to accountants too although the greatest benefit to an accountant is that because every transaction has an equal and opposite entry a mathematical check can be produced to ensure all financial transactions have been recorded accurately.

This mathematical balance is when all the financial accounts into which the financial transactions have been entered are listed and added up and if all transactions have been entered correctly the total is zero. This is called the trial balance.

The function of accounts clerks and bookkeeper is to record the prime documents such as sales invoices and purchase invoices into the financial ledgers. Cash and bank records must also be entered. And for every entry made there must also be the opposite entry into the business financial ledgers such as sales ledger, purchase ledger and bank.

Accounting software is basically a database of these financial transactions that automates the double entry enabling a single transaction to be entered once by the user but create the second entry in the company financial accounts. Using accounting software which all but the smallest companies adopt as a standard business tool ensures greater accuracy and usually produces a self balancing trial balance since the accounting software always produces a second equal entry to the one being input to the financial system.

The task of an accountant is first of all to ensure the prime documents are entered accurately and then interpret the results produced by the trial balance into financial statements and reports in a format that aids the financial management of the business and ensure those financial figures also represent a true and fair view of the financial position.

Limited companies must produce a balance sheet under various financial acts and submit the balance sheet to both Companies House and the tax authority each year. Different rules apply to a limited company as opposed to self employed business because the accounts including the balance sheet are public records available to the members of that company and not necessarily the property of a single individual or partnership.

Self employed business in the UK are not compulsory required to produce a balance sheet and consequently may choose to operate a single entry bookkeeping system rather than double entry. By adopting a single entry system the self employed business has less financial control over the assets and liabilities although this is often not a problem as the self employed in smaller businesses often know exactly what the individual assets and liabilities of the business are.

In smaller businesses that may not have adopted accounting software it is a common practise for the bookkeeper to maintain day books.

A sales day book would be a simple list of sales invoices issued and by recording against those financial transactions the sales receipts as they are received the sales day book effectively becomes a sales ledger in that it shows the debtor balance owing to the company.

A purchase day book would be a list of purchase invoices received and by recording on the purchase day book the amounts paid to each creditor that day book effectively becomes the purchase ledger.

About The Author
Terry Cartwright, qualified accountant and CEO at DIY Accounting in the UK designs accounting software for limited companies at on excel spreadsheets using a double entry bookkeeping system

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Monday, May 26, 2008

Ten Key Accounting Tips for Small Businesses

It's easy for small-business owners to get so busy that they slack off in one of the most important areas of their businesses -- accounting. It always seems more important to close a sale or service a customer than it is to balance the books. But if you don't take time to tend to bookkeeping basics, your fast-growing business could run off the tracks.

The following tips can help you focus on the crucial aspects of your company's finances.

Protect your company from check fraud. Set up financial limits for checks with your bank. Ask that your bank never cash checks made out to an individual, except for payroll checks, which should be written from a special account and only to designated individuals. Keep inventory of blanks checks -- and keep all checks secure in a safe or lockbox.

Keep careful records of all bills paid. Your financial records serve not only as the basis for cost controls, but also as your tax records.

Review all financial statements regularly. In other words, balance your books! If more than a week goes by without writing down expenditures and income, you'll be playing catch up. Too often, this results in errors or overlooked payments. Also, reconcile your bank statements as quickly as possible after receipt.

Hire a bookkeeper or accountant if you're too busy to keep your books. Many part-time or contract bookkeepers work at an hourly rate. Services included would be: paying salaries, coordinating and handling accounts receivable and payable, balancing ledgers and checkbooks, and organizing financial information required for business plans, loan proposals, cash-flow statements, etc.

Continually review all costs and expenses. Don't let your financial statements sit idly in the drawer. Use them to see how you can cut costs, find better suppliers, reduce unnecessary purchases, etc.

Set cost-control systems. You or someone in an executive position should approve all purchases over a certain dollar amount. Encourage employees to include a description of need and importance with all spending requests.

Monitor your collection procedures and outstanding invoices. Payment terms should be written on every invoice you send out -- and should be agreed upon with clients before a job is started. Ask that payment be made within 15 or 30 days of invoicing. When working on long projects, charge at regular intervals. Don't wait until your bill is so high that if payment is not made you'll be financially hurt. Cash flow depends not only on how much you make per hour, but also on receiving payment in a timely way.

Keep up to date on all tax and accounting rules. Tax rules change yearly. It's better to keep abreast of these changes yourself so you don't have to depend completely on your accountant.

Pay yourself first to fund your retirement. As the saying goes, no one else will watch out for your retirement funding. Take a specified amount from each incoming check (recommended is at least 10 percent) and put it into your retirement account.

Keep it simple. Set up you accounting system to be as simple and easy as possible. Don't have ten checking accounts if two will do. Write a schedule so you do the same thing every time a check comes in. Create monthly to-do accounting lists. A streamlined, systematic accounting procedure will help you avoid mistakes and minimize missed payments.

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Sunday, May 25, 2008

U.S. FASB issues new insurance accounting rule

NEW YORK, May 23 (Reuters) - The Financial Accounting Standards Board, which sets U.S. bookkeeping rules, issued a new rule on Friday to help standardize the way insurance companies account for financial guarantee insurance contracts.

Financial guarantee insurance provides protection from losses to a holder of a financial obligation, such as a municipal bond or asset-backed security, in the event of a default.

The new rule, called FASB Statement No. 163, will take effect for fiscal years beginning after Dec. 15, 2008. It also requires expanded disclosures about financial guarantee insurance contracts, FASB said.

Companies that provide financial guarantee insurance, include MBIA Inc (MBI.N: Quote, Profile, Research), Security Capital Assurance Ltd (SCA.N: Quote, Profile, Research), Assured Guaranty Ltd (AGO.N: Quote, Profile, Research) and Ambac Financial Group Inc (ABK.N: Quote, Profile, Research). (Reporting by Emily Chasan; Editing by Andre Grenon)

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Thursday, May 22, 2008

The Legal Implications of Bookkeeping

Aside from the “two sets of books” scenario that provides the fodder for tabloid headlines and old movies, I tend to think of bookkeeping as, well, mundane (apologies to bookkeepers nationwide as well as to my own, Debbie, who’s a real firecracker). Not something sexy, just something that has to get done. Like brushing your teeth or doing the laundry. Ho hum.

But Lynnea Bylund’s May Intelligence Report made me think differently about it. (Lynnea happens to be co-chair of the President’s Small Business Advisory Council.) Just look at the legal (and other) problems that can emerge because of lack of proper bookeeping:

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Wednesday, May 21, 2008

Breaking away from ERP as bookkeeping

Most traditional business software revolves around transactions — the movements recorded in purchase orders, stock movements, bills of materials, invoices, journals and every other document that has evolved to record business operations over the past several centuries. But this is a roundabout way of representing reality that has evolved through historical happenstance. Modern computing can track real objects and the events that happen to them as they move from make to ship, or from order to pay. As fellow Enterprise Irregulars blogger Sigurd Rinde pointed out recently, this vastly simplifies the computing task: “Most important result — one data-object only per real-object, simple as in reality. A reality-model.”

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Tuesday, May 20, 2008

Outsourcing error left taxpayers at risk

The contract refresh prompted by the erroneous estimates "has already indicated that all of the relevant information to assess value for money may not yet be available," he said.

After the potential for windfall profits became clear, even though there was an overall cap on potential profits, the deal was renegotiated "to align payments to EDS more closely with those originally anticipated."

The company opted to go along. The two-year extension suggests it's happy with the arrangement.

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Monday, May 19, 2008

Accounting outsourcing is synonymous with business enhancement

Outsourcing is making a major contribution in every field these days. Most of the companies are seeking advantages from the assistance of outsourcing. There are numerous factors responsible behind the growing popularity of outsourcing. The most prominent among these are its proficiency and cost effectiveness. The concept is widely used in accounting or bookkeeping as it is considered to be the foundation of the business organization. And hence demand the most meticulous and intelligent work ideology. Accounting outsourcing is often termed as life saver for companies dealing through their hard times. Even the organizations that claim to be over pressurized with the workload can gain a lot from such outsourcing provisions. They not only get a partner to share the burden but also receive a new sense of expertise and accuracy in work.

The business organizations are taking assistance from accounting outsourcing have shown remarkable augmentation in the rate of growth and development. This is mainly on the account that they not only have a systematic approach for handling their accounts but the owners can also focus on the other important parts and aspects of the firm. There are certain number issues, policies and strategies involved in business mechanism that demand equal attention and concentration as the accounting department requires. And through accounting outsourcing, the owners get a chance to free themselves from excruciating burden of maintaining proper and accurate bookkeeping. This in turn draws the new horizons of development and advancement for the company. Another lucrative feature is its low cost.

The accounting outsourcing companies are in great demand these days because they are full with proficient and competent accountants who are qualified and well trained about every aspect of accounting. The owner is simply required to have a couple of meetings with the professionals in order to explain the requirements, goals and work approach of their company. Rest everything is being done by the accountants in the most appropriate manner. They perform all sorts of tasks from filing the data, creating the reports and giving the final statements of the transactions. They even use the software and other techniques to boost the pace of work efficiency and better management. These softwares are very convenient to use and can easily store all the data and information. And this is not all, in case of financial tension; these professionals also act as your financial advisors and provide you with the best solutions to surpass the economic problems. One should not get worried about their cost and charges.

For better execution of this entire process of accounting outsourcing, the owner must get confirmed about the work efficient and status of the outsourcing firm in the market. No company can afford to waste their time and money in recruiting some inefficient outsourcing firm. Therefore, make some necessary inquiries before getting associated with any such firm. One can easily gather all the basic information about an outsourcing firm through the use of Internet. Get in touch with their previous clients and inquire about their time management and sincerity towards work.

Alvis Brazma gives advice to business owners about how to manage their business efficiently without any hassles. To know more about Accounting help,Accounting outsourcing,small business accounting,bookkeeping help and visit this leading internet.


Sunday, May 18, 2008

Indiana to pay remaining $212M owed to local governments

The state will pay off a remaining $212 million owed to local governments by the end of this month, a year ahead of schedule, Gov. Mitch Daniels said Friday.

Daniels said tax collections in March and April were strong and that he was confident the state would end the fiscal year on June 30 with a fourth consecutive budget surplus. The most recent monthly revenue report, for April, showed that revenues for this fiscal year to date exceed that forecast by $133 million.

Meanwhile, spending is being held below the level lawmakers set in the current budget. Daniels said the combination means the state can accelerate the final repayment of debts owed to local governments.

"I believe we responsibly pay now," he said.

During an extended period of deficit spending earlier this decade, the state delayed payments totaling $761 million to schools, universities and local governments. It is essentially a bookkeeping maneuver that pushes spending obligations into future budget cycles so they do not count against the current one.

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Friday, May 16, 2008

ICAI to make accounting system more transparent

In a move that will bring about greater transparencies in the disclosures relating to financial instruments such as derivatives, the Institute Of Chartered Accountants Of India (ICAI) has come up with a even more detailed Accounting Standard – AS-32.

Last December, ICAI had come up with detailed accounting standards — AS-30 and AS-31 — in order to establish principles for measuring and recognising financial assets & liabilities and contracts to deal in non-financial assets.

ICAI president Ved Jain said, “AS-30 and AS-31 were only the measurement and recognition of the financial statements. Whereas, AS-32 is an accounting standard that would lead to a proper disclosure of the financial statements.”

The objective of AS-32 accounting standard, is to bind financial entities to provide disclosures in their financial statements so that users can evaluate the important information in the statements. It will help client assess the significance of financial instruments for the entity’s financial position and performance. Moreover, it would also help disclose the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the end of the reporting period, and how the entity manages those risks.

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Thursday, May 15, 2008

Accountants can save time and money

Computer software packages have made it easier for small business owners to monitor cash flow, prepare tax returns, and handle other financial reporting tasks. Still, keeping up with these chores as your business grows also consumes an increasingly large chunk of precious time, and risks potentially costly mistakes. That's why many entrepreneurs look to outside financial specialists for help.

Choosing the right type of tax, accounting, bookkeeping or other financial help is an important decision. An outside accountant can be one of your most trusted business advisors and a key to your success. Although some business owners work with large national firms, most prefer to work with small independent firms or solo accounting professionals.

Accounting services differ from bookkeeping services, however. An accounting firm prepares financial statements and tax returns based on the numbers that you give them via your own in-house books. Bookkeeping services, if offered, will be extra.

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Wednesday, May 14, 2008

Income tax row as an extra 150,000 people move into higher rate tax bracket

Accountants claim that Mr Darling was "disingenuous" in his statement to the House of Commons because the starting point for 40 per cent tax will be lowered by twice as much as he told MPs, writes Ian Cowie

An extra 150,000 people will have to pay the top rate of income tax as a result of Alistair Darling's emergency budget, accountants calculate. Those affected are currently earning more than £34,800 a year but less than £36,000 in excess of their personal allowances
  • Darling admits mistakes about 10p tax
  • Individual tax allowance increased by £600
Hopes that they might each receive £120 a year windfalls because the Chancellor of the Exchequer announced a £600 increase in the starting point for income tax will be dashed when they see their September paypackets.

Accountants claimed that Mr Darling had been "disingenuous" in his statement to the House of Commons this week because the starting point for 40 per cent tax will be lowered by twice as much as he told MPs.

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Tuesday, May 13, 2008

Bookkeeping Help – How Much Do You Need?

Every office today has a computer, and every office-supply store has accounting software you can load onto your computer. Each year, these software packages become more intuitive and easier for the beginner to learn and understand. Why then, should any small business hire a bookkeeper or other accounting professional? And, even if they decide to hire one – how much help do they actually need?

No matter how astute accounting software has become, it still takes a real person sitting at the computer entering information. It's also important to realize that what you get out of your accounting software is only as good as what was put into it. Some business owners are completely comfortable in dealing with money. They have enough of an understanding of finance and accounting, that they truly have no reason to hire a bookkeeper.

Others, however, feel quite differently. They worry they'll make a mistake and are far more comfortable hiring someone else to handle those areas. The question is – how much bookkeeping help do you need? The answer will very much depend on each business and each business owner. Here are a few tips that will help you sort it out:
  • If you keep your own books and are comfortable doing so, you'll probably only need accounting help occasionally. For example – filing taxes, responding to IRS notices, and the like.
  • Do you feel like you need someone to bounce ideas off of? If so, an accountant or bookkeeper might make sense, as they'll have the knowledge (hopefully) to steer you in the right direction – at least as far as financial decisions go.
  • Do you need financial statement compiled and need something more than the basic ones your software will deliver? If so, you'll want to turn to an expert to take care of this for you.
  • How well do you understand federal and state tax laws? If you feel you have a firm grip on what your business needs to do in order to not be in trouble tax-wise, than you can probably handle taxes on your own. On the other hand, if you receive notice of an audit, you'll likely want an accounting professional on your side to handle it.
  • Are you comfortable dealing with payroll and payroll taxes? What about accounts receivable and accounts payable? Each of these areas is critical to your business's bottom-line. If you operate a small business with less than five employees, you can probably deal with payroll on your own.
The above questions are just guidelines to help you understand your own comfort with your business's accounting and bookkeeping needs. You're the only one who can truly decide how much, or how little, bookkeeping help you require.

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If your business is ready to outsource your bookkeeping then the Accounting Aisle can help you find a great service.

Monday, May 12, 2008

Why you might not have gotten your tax rebate yet

Your neighbor got one. So did your brother-in-law. Your loud-mouth co-worker received his last week and spent it at the track. You, however, haven't gotten your tax rebate yet. What gives?

The IRS, which began sending out rebates on April 28, will continue distributing them through mid-July. The rebates, part of the economic stimulus package enacted this year, range from $300 to $600 per person, or $1,200 for married couples

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Sunday, May 11, 2008

India to adopt international accounting guidelines

One of the problems that one comes across in international business is the lack of consistency in the accounting standards that obtains across countries. This inconsistency can affect the profit of firms significantly as the following reveals.

IT IS just as well that the government of India has decided to adopt international accounting guidelines. Otherwise, almost 200 Indian firms listed on European bourses would have been put to hardship owing to differences in Indian and EU (European Union) accounting norms. These firms have raised capital from EU investors.

If the government of India had not agreed to adopt international accounting guidelines, the EU may have initiated tough action against the said firms for non-compliance with internationally-accepted accounting standards. The firms may have been obliged to de-list from EU exchanges or have their books re-audited by European audit firms. The latter action would have increased the compliance cost for the firms significantly. After all, Indian firms are the largest non-EU entities to have raised capital from the trading block.

The government’s action results from EU’s announcement that it would examine the equivalence of accounting standards followed by non-EU countries during 2008. It would spare firms from tough action only if the home countries of the firms adopted a convergence programme. In the circumstances, the government of India wanted to clearly convey to EU that it intends to converge with international financial reporting standards (IFRS) by 2011. These standards, issued by the International Accounting Standards Board (IASB), have been adopted by around 100 countries. Given that India has already adopted a programme of convergence with IFRS, a public confirmation of the approach leading to convergence with IFRS would enable EU to determine the equivalence of Indian accounting standards. IASB came into being in March 2001, replacing the International Accounting Standards Committee (IASC), which came into being in 1973.

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Wednesday, May 7, 2008

Pitney Bowes Releases Accounting Software

The new suite offers bill presentment and turnkey e-billing.

Pitney Bowes Group 1 (NYSE:PBI) Software has unveiled the latest version of its e2 Account Management Suite, designed to help consumers and businesses more efficiently self-service their accounts. Version 5.4 allows developers and third-party integrators to build personalized self-service portals more quickly and cost effectively.

The new suite offers bill presentment, turnkey e-billing and advanced integrated account management for both business-to-consumer and business-to-business applications. Self-service real-time account status, automated dispute management, global reporting and analytics, and flexible payment options make it an ideal solution for small businesses.

“Businesses are rapidly implementing self-service global portals to provide differentiated, value-added account management offerings for their consumer and corporate customers,” Pitney Bowes product manager, Rich Grossweiler, said in a statement.

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Tuesday, May 6, 2008

Allianz says accounting rules will hit pensions

LONDON (Reuters) - European companies might need to pump billions more euros into their pension funds to meet proposed new accounting rules, Allianz Global Investors said on Tuesday.

The implementation of Solvency II rules "could be the final nail in the coffin for defined benefit schemes" Brigitte Miksa, head of Allianz Global Investor's international pensions unit, told journalists at a meeting in London.

Funding for some schemes could have to rise by as much as 65 to 70 percent if pension schemes are subject to new regulations, analysis by Allianz showed.

Schemes may be forced to slash the amount of equities they hold and drop alternative investments, such as private equity and hedge funds, to try to reduce their funding gap under the new rules, Allianz said, as Solvency II would require schemes to hold more capital against riskier investments.

This would reduce investment returns and place a greater pressure on firms to make up the gap to meet pension promises made to employees.

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Monday, May 5, 2008

Book-Keeping for very small business

This information is for business people, actual and prospective, who want to think about accounting and book-keeping.

The following pages do not tell you how to do your book-keeping or accounting. Instead they tell you what kind of accounting records you may need to maintain. Another way of putting this is: how much detail to record. If you want to know how to drive, it's sensible first to understand that there are different types of vehicle. There are manual cars, automatics, and motorbikes. If you learn to drive an automatic and then decide that the car you really want to drive is a manual... you see what I mean.

In basic book-keeping terms, there are four ways to go. These are detailed in the next four pages. The four choices are cumulative by nature. You can do level 1, levels 1 and 2, levels 1,2 and 3, or levels 1, 2, 3 and 4. But you can't normally do level 4, for example, without doing levels 2 and 3. The first level hardly counts as book-keeping, but it's widely used and is where many people start – so it's included here.

The next two pages discuss slightly different types of issues regarding book-keeping. If you have to deal with VAT and/or PAYE, you don't have much choice about it. By contrast, the first four book-keeping levels reflect choices you have.

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Sunday, May 4, 2008

Successful authors reveal the keys to writing well!

This was originally published several years ago.

Celebrated author Anne Rivers Siddons, who wrote Heartbreak Hotel, Homeplace, Peachtree Road, and King’s Oak believes that “good writing is just about the most subjective thing” there is and “feels she is always at the edge of writing well but never succeeds.”

Now “deep into a new book” entitled Outer Banks, to be published in late July, she “follows a rigid schedule” when she is writing. “Ten to three, five days a week in the beginning and longer toward the end with a Saturday and/or Sunday thrown in.”

Siddons believes “that good writing requires thought and preparation.” For her last several books she has submitted outlines to her agent and editor. The Peachtree Road outline ran some 170 pages, leading an editor at Harper & Row to suggest wryly that perhaps they ought to publish the outline. For King’s Oak, Siddons did a 75 page outline to tie together “all the unfamiliar woods lore and ecological facts” informing that work.

But outlining is a recent thing for the prolific Georgia writer. She “wrote more from personal experience” in most of her previous books (Heartbreak Hotel, Homeplace, and her most recent Outer Banks) so that “emotional impact and memory delineated both the character development and plot.”

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Outsourcing error left taxpayers at risk

The auditor general gave a qualified nod of approval last week after a limited look at how the Liberal government outsourced $1.6 billion worth of work in its first term.

The bottom-line was that it's working reasonably well -- despite the fact the government almost gave away the store in one of its first deals.

His report finally explains a rather vague deal from last year that was never really publicly justified. It was a "contract refresh" the government initiated with EDS Advanced Solutions.

After signing a 10-year, multimillion-dollar deal to turn over revenue collection to the private company, the government redid the agreement not even two years in.

The Liberals announced the radical new arrangement in 2004 and lauded the deal as the answer to all their prayers. It would be a "centre of excellence" for chasing delinquent taxpayers.

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Friday, May 2, 2008

Basic Bookkeeping Tips

For many small businesses, the most common bookkeeping errors are also the easiest to fix. Use these six tips to help keep your business on sound financial footing.
  1. Use the right accounting system. Most businesses use either cash-based or accrual-based accounting. If you use the cash method, you count income when you receive it and expenses when you pay them. Under the accrual method, you count income and expenses when they happen, not when you actually receive or pay them.

    In practical terms, this difference in timing is relevant if your company keeps inventory on hand or handles transactions on credit. In these cases, the accrual method might be a better choice for your business. And in fact, if your firm has more than $5 million in sales or keeps an inventory, the IRS might require that you use the accrual system. In other cases, however, the simpler cash system could be all you need.

  2. Maintain daily records. This is one of the most basic rules: If you don't keep accurate daily records, you don't have an accurate way to track the financial condition of your business. Different people use different record-keeping systems; what matters is that you have one and use it every day. Once you have a good system set up, accurate record keeping will take just a few minutes a day.

  3. Handle and review checks carefully. It's easy to be on autopilot when you're writing checks and tossing canceled ones into a filing cabinet without reviewing them. Remember: Those checks are as good as cash. And if something goes wrong, you — not the bank — will be on the hook.

    Take the same care with checks as you would with cash. Sign checks using a clear, distinctive signature that won't invite forgery. Review canceled checks before anyone else, including your bookkeeper or employees, sees them; that way you can catch unauthorized checks. And if your business is a partnership, it's a good idea to have at least one of the partners co-sign the checks.

  4. Get a bank statement with a month-end cutoff. This is another basic tip that can reap big rewards. Synchronizing your bank statement with other monthly records will make it much easier to reconcile your statement and track expenses.

  5. Leave an audit trail. Your record keeping will be much more effective if you have a system that allows you to quickly and easily retrace your company's financial activities. This means keeping your invoices and checks in numeric order, not skipping check or invoice numbers, and keeping separate bank accounts for your business and personal funds. If you can't go back a year and reconstruct your company's finances, you probably aren't leaving an effective audit trail.

  6. Use a computer. Computer bookkeeping software is absolutely essential for all but the smallest businesses. These applications make it easy to track income and expenses, prepare tax documents, summarize your company's financial activities and back up records for safekeeping. If you're working with an outside bookkeeper, make sure they know how to use a computer.

Thursday, May 1, 2008

Payroll error gives 18 Atlanta workers $375K for gas

Eighteen Atlanta employees must have thought they won the lottery when the city installed its new payroll software.

On Jan. 4, the group mistakenly got paid $375,000 — about $371,000 more than was legitimate — because someone inadvertently coded the mileage reimbursement rate at $40 per mile instead of 40 cents.

still owe the city a total of nearly $40,000.

Officials said some employees have been reprimanded but no one has been fired.

"I was astonished," city auditor Leslie Ward said. "I don't know how else to describe it. This seems like it would have to be some violation of employee conduct, ethics or law."

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