Thursday, July 31, 2008

Basic Tax Tips Anyone Can Follow: Save Money, Pay Less Tax

Tax Tips For Single People

If there are going to be tax cuts in the next financial year, make sure you prepay membership fees for unions & professional associations and make any charitable donations before the end of this financial year (June 30)

If you have a few $1000 in spare cash, don’t leave it in your transaction bank account earning no interest, instead put it in an Online Savings Account with a High Interest Rate and No Bank fees
If you’re single and going to earn more than $100,000/year (from July 2008-June 2009) make sure you take out a basic private health insurance plan (with an Excess of $500 or less) or your Medicare levy will rise from 1.5% to 2.5%.

If you earn less than $28,980 … and contribute $1000 cash to your super fund … than at the end of the year the ATO will deposit an extra $1500 in your super account, more details at Turn $1000 into $2500 with Super Co Contributions

If you were lucky enough to sell assets like shares and made a large profit you’ll have a lot of potential capital gains. Check out your list of assets and see if there are any that have made losses and you were going to sell them soon anyway.

If you do sell them this generates a capital loss you can claim against capital gains from the assets which made a profit when sold.

This also frees up some money to invest in assets that have a hope of rising in value.

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Governments misuse corporate tax policies, think tank says

Quebec among those singled out. Fast-growing, leading-edge sectors face undue burden because of micromanagement

Canadian governments are "whittling away" the gains to be had from recently reduced corporate taxes because of an attempt to micromanage their economies, and shift an undue amount of the business tax burden on fast-growing, leading-edge sectors, says a latest analysis of the country's tax policies.

The C.D. Howe Institute's latest report on Canadian tax policies, released yesterday, issued a stark warning to governments that pursue tax initiatives aimed at boosting the fortunes of "structurally declining industries," such as manufacturing and forestry. The provinces singled out for advocating such measures in their most recent budgets were Ontario, Manitoba and Quebec - which are among the highest-tax jurisdictions in the country, the think tank said.

These tax policies - such as accelerated writeoffs of capital equipment and sector-specific capital tax reductions - has led to what the think tank said was a "larger" distortion in the corporate tax system. As a result, fast-growing, knowledge-based industries, which are seen as key to future economic growth, face much higher taxes on business investment than elsewhere and compared with other industrial sectors.

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Wednesday, July 30, 2008

Why we need symmetrical rules on accounting

Sir, The main problem with the constructive proposal by Jean-Fran├žois Lepetit, Etienne Boris and Didier Marteau on "how to arrive at fair value during a crisis" (Comment, July 29) is that it is still "pro-cyclical". Offering accounting forbearance to banks when asset prices plummet, but not in the boom when roaring prices contribute to excessive lending, will strengthen the incentives for excess that lead to crises in the first place.

If adjustments to mark-to-market accounting are justified on the downside, they need to be done on the upside. To avoid succumbing to political pressure, the accounting regulator would need symmetrical rules to determine when to adjust mark-to-market accounting.

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Tuesday, July 29, 2008

DTI sets seminar on accounting

The Department of Trade and Industry in Negros Occidental will hold a Seminar on Bookkeeping cum Accounting for Non-Accountants under its One Town, One Product program on August 5 to 6 at the NOTLDC (formerly KADIWA Center) at Gatuslao Street in Bacolod City, a press release from the agency said.

Organized by the DTI with the Association of Negros Occidental Food Processors Inc., the seminar seeks to provide the participants with basic knowledge on Bookkeeping and Accounting as important tools in managing business in real scene.

Expected to attend are owners of micro, small and medium enterprises, OTOP beneficiaries, and technology and livelihood coordinators, the press release said.

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Monday, July 28, 2008

Accounting firm says Omaha has competitive taxes

A new study from a major accounting firm says Omaha offers businesses a lower tax burden than other mid-sized cities in America.

The study from KPMG International says Omaha's total tax index is 5.8% lower than the national average. That was the best rating for cities with populations between 500,000 and 2 million in their metropolitan areas.

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Sunday, July 27, 2008

Can’t tax way to prosperity

While government-to-the-rescue programs may ease some of today’s problems, they may worsen the situation in the long run, particularly when lawmakers raise taxes to pay for the programs.

The Conference Boards Consumer Confidence Index declined in June to just 50 percent, its lowest level in 16 years and about half of what it was a year ago. That’s not surprising given rising food costs, skyrocketing oil prices and home mortgage troubles.

It’s tempting in such situations for voters to demand action from Washington. And the pols usually are only too willing to oblige. Even now Congress is debating a $300 billion housing bill to bail out Americans unable to make their mortgage payments.

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Friday, July 25, 2008

Accounting course a huge draw

MANAMA: A Labour Fund-Ernst & Young training programme is proving to be a big success. The initiative, launched in October last year, is being inundated with applications from Bahraini men and women who want to seize a unique opportunity to gain world-class credentials in finance and accounting.

The BD1.6 million project to train 700 Bahrainis over five years was expected to attract 190 applicants by August this year. Instead, training providers Ernst & Young have already received nearly 800 applications with women dominating every course, with female candidates applying for more than 55 per cent of the available places in all programmes.

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Thursday, July 24, 2008

Accounting change not meant to shock: SEC's Cox

WASHINGTON (Reuters) - An accounting change that could force banks to bring trillions of dollars of off-balance sheet transactions back on their books will be implemented in a way that will not create unnecessary shocks, the chairman of the U.S. Securities and Exchange Commission said on Thursday.

"We want to make sure that the discussion of this and the implementation of this is done in such a fashion that the market can absorb it and it does not create any unnecessary shocks," SEC Chairman Christopher Cox told a Congressional panel.

Accounting rule-maker the Financial Accounting Standards Board is working on a proposal to eliminate certain off-balance sheet entities called qualified special purpose entities (QSPEs) that are used to pool debt such as car loans and mortgages.

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Wednesday, July 23, 2008

Bookkeeping Tips

Bookkeeping is a major challenge for many small businesses. We are good at our core business, but may not know much about the bookkeeping side, or don't enjoy keeping the books, or don't have time to keep the books.

Whether you are keeping your business' books yourself, or are hiring a bookkeeper to take care of them, here are some tips to help tame your paper monster, and save you some money, too.
  1. Every week, take 15 minutes to file your receipts. This can be a simple as stuffing them all into one file, or sorting them by category. Do what works best for you, but do it. Having all your receipts in one place means that you won't lose them. A little bit of effort over the year will ensure that tax time is not a stressful time and you get all your deductions.

  2. If your home phone is also your business phone, take the time each month to go through your phone bill with a highlighter and highlight all of your long distance business calls. You get to write off a portion of your basic phone charges if you work from home, but this is a small amount, even over the course of a year. Your long distance charges must be separated out. Highlight them and make an abbreviated note about who the call is to, if it is not obvious. Many small businesses lose this as a business write off because at the end of the year they can't remember which calls were for business, and your bookkeeper won't write off any of them, because there is no way for her to tell which calls were for business.

  3. Take the time to staple receipts and bills that are more than one page long together. This will save you and your bookkeeper time at the end of the year.

  4. Keep a file pouch in your vehicle or in your briefcase for receipts. Throw your receipts in the pouch as you get them. Don't stuff them into your pockets, purse, console, briefcase, or glove compartment. When it comes time to do your books, finding your receipts should not be a treasure hunt.
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Tuesday, July 22, 2008

20 tax tips from the experts

The 2008-09 tax season is almost upon us and entrepreneurs can expect to get some extra scrutiny this year. SmartCompany has asked a panel of tax experts for their best tips and the best action you can take now to minimise your tax bill

The Federal Government has given the taxman an extra $257 million over the next four years to increase its scrutiny of businesses – it expects to collect an extra $1.98 billion for its efforts.

All this means you need to have your tax affairs in good order if you want to avoid angering the taxman, and claim as many deductions as possible. To help you, SmartCompany has spoken a panel of tax experts to get their top tips from a business and personal tax point of view.

Every dollar you can save is another dollar to reinvest in your business, or pay for that well-deserved holiday.

Before we start, there are two very important bits of advice that every successful entrepreneur should follow.

PricewaterhouseCoopers partner Paul Brassil says his best tip for entrepreneurs is to spend more time finding the right tax adviser. “Find someone you really like working with, and who has strong technical backup in people and resources. Too often people muddle along with an adviser from the distant past, without recognising that the needs of a growing business include upgrading the level of advice they receive.”

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Monday, July 21, 2008

China urges financial institutions to extend service in rural areas

China's banking regulators have urged financial institutions to speed up innovations and mechanism reform in rural areas to make credit more accessible to farmers.

The country had made progress at extending financial services in rural areas, including the establishment of new types of financial institutions and development of micro loans, chairman of China Banking Regulatory Commission (CBRC) Liu Mingkang said.

The country had 50 new-type rural financial institutions so far, including county- and village-level financial organs, credit companies and capital mutual aid organizations.

Credit from these new type of rural financial institutions mainly went to farm households and small-sized enterprises in rural areas.

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Sunday, July 20, 2008

A new era in accounting?

In the battle to set accounting standards for companies across the globe, the United States appears to have lost. More than 100 countries, including Russia, those in the European Union, and soon Canada, have adopted or agreed to adopt the rules set by the London-based International Accounting Standards Board, a group established just seven years ago.

In doing so, they have rejected generally accepted accounting principles, the standard this country has been using for decades. And now that the world has shown a preference for international financial reporting standards, or IFRS, the big question is if, or maybe when, the United States will do the same.

Accountants who read the Securities and Exchange Commission's actions like tea leaves believe the agency will either allow or require public companies to switch as soon as 2011. Doing so would represent a seismic shift in the otherwise staid world of accounting.

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Friday, July 18, 2008

Why Accounting is Critical to the Success of Every Business

There are three primary reasons accounting is critical to the success of every business:
  • Tax Planning
  • Cash Flow Management
  • Management Information
Lets go through each of them in the order above.

Tax Planning
How would you like to be the coach of a basketball team, but were not allowed to see the score, nor the statistics until the end of the game? Does it surprise you that many small business owners run their businesses this way?

Many small business owners just collect all their financial information in a box during the year. After the year is over, they will drop these on a tax preparer's desk, and hope the tax person can figure the assortment of papers out. The tax preparer then does his/her best to sort through the materials, and arrive at the information the IRS is looking for. Then a phone call to the wearied business owner will notify him/her of the damages.

It doesn't take much imagination to realize that this is no way to manage a business. With information available throughout the year, a business can take advantage of tax deductions and tax planning concepts that will reduce taxes for the owner. It's not unusual to save the business more on taxes than you charge them in fees for a year.

Cash Flow
Every business owner knows that cash is the "life blood" of the business. Without it, the business suffers and in many cases is forced to close. On the other hand, with proper cash flow management, a business owner can make the best use of his/her cash and anticipate cash needs in time to arrange for financing, if necessary.

Furthermore, knowing the bank balance is not enough. A business can have a sizable bank balance, but be in terrible shape. Our role is to go beyond the bank balance and see further cash needs and resources.

Not only will you be able to provide the business owner with accurate lists of cash resources (current assets) but you will also assist them in collecting accounts receivable, reducing their tax burden, and acquiring financing through preparing all the necessary documentation for the bank, investor, or finance company. The fact that you are helping them with their accounting will improve the chances of them getting a loan as banks deeply recognize the value of good financial record keeping.

Management Controls
Would you ever drive your car blind-folded? Of course not, that would be not only foolish but probably have tragic consequences. Yet, so many businesses have the blindfold on when they operate their business. They have no idea where they've been, where they're at, or where they plan to go. Is there any wonder why one-third of all businesses close in the first 6 months of existence?

This is where you should use a presentation book. A presentation book is a sample of complete books of accounting for various types of businesses. You can create one, or Universal has such a book you can buy. Show the business owner what type of information you will be able to provide that will help him/her in running their business.

Review each journal. Identify the value of knowing how much sales a business had each month and where the money was spent. Emphasize that payroll will no longer be the fearful subject it now is as you take over the burden of maintaining it. If they already have a payroll service processing their payroll, congratulate them and offer to help them understand payroll even better.

Show them an income statement and balance sheet. The income statement provides the monthly "score" for the business. By comparing the current month to prior months a business can not only determine if they are improving or not, but also why profits were up or down.

The balance sheet provides information on financial resources and obligations. This will help to determine the strength and solvency of the business. By tracking key indicators, such as current ratio, you and the business owner can identify potential problems before they become insurmountable.

In each of these benefits, you want to emphasize that information is power. The more information you can provide to the business owner the more capable they will be at running their business effectively.

As you're finishing, ask the prospective client if these benefits are appealing. If he/she says "Yes," then you will want to negotiate a fee that will be fair for them and fair for you at the same time. If not, this would be a good time to thank them for their time, leave your card, and move on.

Source : http://www.accounting-and-bookkeeping-tips.com/

Thursday, July 17, 2008

New Mexico governor proposes rebate, tax holiday

SANTA FE, N.M. - Gov. Bill Richardson is proposing a tax rebate to help New Mexicans with rising household expenses along with a 10-day tax holiday in late November and early December.

The proposals are part of an economic relief package for New Mexicans that the governor will ask lawmakers to approve during a special legislative session, which he plans to call in September.

The governor is to outline his proposals at a news conference Thursday. He previewed some provisions in Las Cruces on Tuesday.

Richardson proposes temporarily suspending the gross receipts tax on certain purchases from Nov. 28 through Dec. 7. The day after Thanksgiving traditionally kicks off the holiday shopping season.

Gilbert Gallegos, a spokesman for the governor, said Wednesday the tax break would help families getting ready for the Christmas holiday and cover certain items, including clothing and some electronics like laptop computers. The proposal is expected to cost about $1.9 million in the current budget year.

Since 2005, New Mexico has offered a three-day tax holiday on purchases of some clothing, school supplies and computers. It will be Aug. 1-3 this year.

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Wednesday, July 16, 2008

Tax Advantages of a Home-Based Business

What Kind Of Tax Advantages Do Home-Based Businesses Enjoy?
You have probably thought of many of the benefits of running your own successful accounting and bookkeeping service. From the independence of working for yourself to making better income than you may currently make, there are many reasons that starting a home-based business might be right for you. One consideration that you might not have taken into account is the tax advantages that you will enjoy with a business run out of your home. Let's explore these qualifying deductions, starting with the better-known ones.

The Home Office Deduction

The deduction that likely comes first to mind that home-based businesses can take advantage of is the "Home Office Deduction". The Home Office Deduction allows you to deduct some or all of the expenses of your office at home and related expenses.

To qualify for this deduction, your home office must be the principal place where your business is done. Secondly, the office space must be used exclusively for business use to qualify. For example, if you use your kitchen as your primary workspace, it is likely that you cannot take the home office deduction, assuming that you use it for personal use as well. To be on the safe side, set aside a room as your home office where possible. This will keep you on the safe side should the home office use ever come into question.

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Tuesday, July 15, 2008

Accounting Is a Super-Hot Career Field!

If you're looking for a sure thing in the labor market, consider accounting. This, according to a recent survey finding that 58 percent of finance and HR managers surveyed worldwide were concerned about losing their top performers. The Robert Half Global Financial Employment Monitor found 73 percent of U.S. respondents shared the concern—up from 46 percent last year.

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Monday, July 14, 2008

Survey finds shortage of accounting, finance workers

A majority of employers say they're having trouble finding qualified accounting and finance professionals for the second year in a row, according to a recent survey by Robert Half International.

Fifty six percent of finance and human resource managers surveyed reported shortages in those fields.

A greater number of those surveyed -- 73 percent versus 46 percent in 2007 -- said they're concerned about losing top performers to other opportunities.

More than 4,000 finance and human resources managers in 20 countries participated in the survey.

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Sunday, July 13, 2008

Bookkeeping help: Bookkeeping tasks are Easily Managed

Accounting tasks are quite a problem when undertaken by in-house staff and become uncomplicated with the help of outsourcing. Since the accounting projects are of crucial importance for successfully running a venture, accounting firms regularly outsource the bookkeepers for this purpose. The financial records are maintained by the professionals which otherwise is considered a very hectic task involving innumerable number of calculations. To regularly update the accounts books, one needs to be thoroughly accurate with the numbers and their computations.

It is thus a wise decision to invest in the services of brilliant professionals who are known for their dedication and ethics. With their vast expertise collected over the years, the companies are able to touch the acme of growth immediately. Taking Bookkeeping help from the experts in this field ensures for an organization, availability of highly accurate data. This in turn, goes a long way to change the way a business is conducted and significantly contributes towards the decision making process by a business head.

For an optimum use of the resources, accounting professionals are hired by a corporate. This is done to reduce the chances of wastage of time and efforts on your part. Outsourcing increases the quality of projects since the professionals are armed with a vast expertise and take upon themselves to go in to the complex details contained therein. Bookkeeping help should only be sought from the well-established firms who are known for their accuracy and less charges.

Moreover, timely delivery of the projects is a standard followed by these professionals with deadly accuracy and hiring them is thus considered a best move by the organizations. Maintaining an internal staff comes with its own costs as far as the salary bit is concerned. Also, demands related to extra bonus from the in-house staff is what prompts an organizational head to take bookkeeping help. For a smaller firm, this is a boon as far as hiring the professional services of the bookkeepers are concerned.

Bookkeeping help is outsourced for a proper use of resources towards realizing growing aspirations of a company. References can be sought in this case from those firms, who have been the clients of these outsourcing companies. Since expansionism of the organizations is on the rise and needs a stable funding, it is important to curb the unnecessary expenditure. This ensures in turn, a proper regulation and outflow of cash which makes an organization capable of generating increasing revenue bases for themselves. The services offered by the professionals are unmatchable by any standard as the firms specialize in maintaining the bookkeeping records through appropriate software. The compiled and processed records of the daily transactions are then transferred by the accounting experts back to the client.

Internet is the perfect source of information as far as the selection of a right firm is concerned. Moreover, the proper selection of a firm ensures a regular tracking of the transaction in a business organization. This is made possible by the excellent expertise of the accounting professionals who check each and every detail by themselves. Handling the complex projects comes easily to them and any kind of mistake is duly looked into. This is done to ensure a flawless financial report from them, containing every detail related to the transactions in a company.

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 visit this leading internet source: www.impacctusa.com

Friday, July 11, 2008

U.S. far from adopting global accounting standard

Why are auditors in Canada so keen on the idea?

The United States is not exactly known for bowing to peer pressure from the rest of the world, even when it means they must go it alone.

So when looking to a very similar situation like adopting a global accounting standard, it might be wise to take rumours of the United States falling quickly into line with a grain of salt.

This is not to say that there isn't a certain amount of U. S. interest in International Financial Reporting Standards (IFRS), especially from auditors, and also some companies and a few regulators. But such interest needs to be put into proper perspective.

For example, United Technologies is a member of the Dow 30 and operates in more than 200 countries. U. S. adoption of IFRS would allow the company to make certain acquisitions more easily, and would lower compliance costs, since many of its subsidiaries already file in IFRS or will need to eventually.

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Thursday, July 10, 2008

UK accounting and finance professionals shortage less pronounced than rest of world

The UK is the only major economy not to have experienced an increase in the shortage of skilled accounting and finance professionals, a new survey has found.

However, 43 per cent of hiring managers in Britain are still finding it difficult to recruit experienced staff in this field, according to the Robert Half Global Financial Employment Monitor.

Online Recruitment reports that this is down from 53 per cent last year.

Of the 20 countries surveyed, an average of 56 per cent of employers admitted to struggling to find qualified professionals. In addition, 58 per cent raised concerns about retention of staff.

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Wednesday, July 9, 2008

Tax Breaks A Boon For Small Business?

The New York Times ran an article yesterday "With Stimulus Package, the Big Winner Could Be Small Business", which discussed how the government's tax cuts could help small business more than any other economic sector.

There is so much conjecture out there about how to weather this economic downturn. Some advocate the retreat/retrench approach as the future is uncertain. Others advocate the spend, spend, spend approach because the economic stimulus package will benefit your company in the long run.

THE REAL WORLD RETAILING TAKEAWAY

Be proactive. Successful business owners are aware of their opportunities and are in a constant state of evaluation.

A looming economic crisis doesn't mean you close the shutters and wait for the storm to pass. It means you prepare - you figure out your plan of action. If the storm hits, you take a specific action based on your plan. And then you have to be in a constant state of evaluation to plot your next move based on the direction the storm is moving, how close it's hitting to home, the severity of it and more. While we aren't always able to predict these things, being prepared will go a long way toward your business making it through unscathed (or only with minor injuries).

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Tuesday, July 8, 2008

New Accounting Guidance for Earnings-per-share

Set to take effect at the end of the year, FASB clarifies the accounting treament for share-based payment awards.

The staff of the Financial Accounting Standards Board (FASB) has, it seems, increased the rate at which accounting guidance is being issued. The latest offering involves a clarification of the manner in which earnings per share (EPS) is calculated for entities which have issued "participating securities," in addition to common stock,

Indeed, FAS 128, Earnings Per Share, defines EPS as "the amount of earnings attributable to each share of common stock." The board decided to require, with respect to the computation of EPS, the use of the so-called "two class method" in the case of enterprises with participating securities. The two-class method (see paragraph No. 59 of FAS 128) is an earnings allocation formula that determines EPS for each class of common stock and participating securities according to dividends distributed and participation rights in undistributed earnings.

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Monday, July 7, 2008

Accounting Plan Would Allow Use of Foreign Rules

WASHINGTON — Federal officials say they are preparing to propose a series of regulatory changes to enhance American competitiveness overseas, attract foreign investment and give American investors a broader selection of foreign stocks.

But critics say the changes appear to be a last-ditch push by appointees of President Bush to dilute securities rules passed after the collapse of Enron and other large companies — measures that were meant to forestall accounting gimmicks and corrupt practices that led to those corporate failures.

Legal experts, some regulators and Democratic lawmakers are concerned that the changes would put American investors at the mercy of overseas regulators who enforce weaker rules and may treat investment losses as a low priority.

Foreign regulators are beyond the reach of Congress, which oversees American securities regulation through confirmation proceedings, enforcement hearings and approval of the Securities and Exchange Commission’s budget.

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Sunday, July 6, 2008

Big Four accounting firms edge back into consulting biz

A half-dozen years after passage of the Sarbanes-Oxley Act, much of the compliance work is leveling off and large accounting firms are casting their eyes back to the consulting and midmarket audit work they previously abandoned.

"There's still a whole lot of things you can do for your audit clients that are not precluded by the Sarbanes-Oxley rules," said Anthony Conti, managing partner for the Philadelphia office of PricewaterhouseCoopers. "You obviously can't be part of management, you can't do things you're going to audit, you can't implement system, but you can certainly advise on systems."

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Friday, July 4, 2008

Another bad week for finance companies

Finance company investors endured another stretch of rocky road this week, with more losses, some companies failing to comply with listing rules and a director fighting to hang on to his money.

Restructured Geneva Finance ended its debut week on the sharemarket with its shares at less than a third of their issue value.

The shares were untraded on their first day on the NZAX board on Tuesday, but closed at 13c on Wednesday and slumped 23 per cent on Thursday to just under 10c.

The stock ended the week at 11c, valuing the company at just under $7.7 million.

Investors had agreed to convert 15 per cent of the $98.4 million in debenture funds and $11.5 million owed to note holders into new shares at a rate of one share for 36.49c. Geneva would repay the balance of the money by instalments over 4 1/2 years for debenture holders and 5 1/2 years for note holders.

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Thursday, July 3, 2008

High demand for qualified bookkeeping and accounting candidates as Pastel People takes off

Pastel People, Softline Pastel's new recruitment division launched in March 2008, has found that demand for certified bookkeepers and accountants is increasing steeply as the economy tightens, the skills shortage intensifies and accounting legislation becomes more onerous.

The division was established in response to requests from Pastel's 180 000 customers and 3 500 business partners for Pastel to recommend either suitable candidates or a recruitment agency - and is geared to finding Pastel-qualified bookkeepers and accountants for customers, Pastel business partners, and Softline Pastel itself.

Customer response to the establishment of Pastel People was so strong that in March and April alone it received more than 128 job specifications.

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Wednesday, July 2, 2008

No New Accounting Rules for Three Years?

Accounting rulemakers are starting to talk about a moratorium on new accounting rules. But the proposal comes with one giant catch: you have to adopt IFRS first.

Although the Securities and Exchange Commission has yet to suggest a date by which U.S. companies might be required to adopt International Financial Reporting Standards, the actual mechanics of such a massive switch are beginning to dominate accounting discussions. IFRS adoption was a recurring theme at a recent public forum held by the Financial Accounting Standards Board — and with that discussion came mention of a surprising idea.

"If we set a date for adopting [IFRS], we need a minimum of a year, if not two years, of no new accounting systems," said FASB member George Batavick. "Companies need a break."

Batavick, who said he is a "strong believer in moratoriums before and after" a future switch to IFRS, discussed the concept in response to a question from the audience at a mid-year update webcast. He also said there should be "at least a one-year quiet period" during which no interpretive guidance would be issued.

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Tuesday, July 1, 2008

Basic accounting tips

Accounting is not just about knowing about cash flow and expenditure. It involves knowledge of profits losses, incomes and expenditures. Without accounting it is not possible to know how much profit or loss a business is making.

About 500 years ago a man called Fra Luca Pacioli noted that three things are essential to run a business sufficient cash, being comfortable with the numbers side of business and system of organizing financial information is called accounting.

Accounting is a part of every day life. To understand accounting we need to know the and understand the different terms used in accounting. Next we need to see how accounting fits into our every day business life. This means that every transaction made has to be entered into the business books. This includes all details of checks, deposits, sales invoices cash receipts and purchase orders. Though individually they may not seem to be important, these numbers when systematically organized produce a picture of the health of the business.

One of the basic principles is to avoid double entry debits will always tally with credits. For every transaction, there will be two entries, one for credit and the other for debit.

The Accounting equation which states that Assets equal Liabilities plus Capital has to followed always. This is just another way of putting the first rule. As assets are debit balance accounts and both liabilities and capital are credit balance accounts.
The system of accounting is divided into categories and each category is further divided into accounts. Categories are of two types balance sheet and profit and loss.
Every debit entry would mean an addition to some accounts and a reduction to other accounts.

Accounting is necessary to assess the financial position of a company and accordingly engage in future planning for finances. As each organization has different needs accounting is customized and highly adaptable.

Financial accounting is about delivering accurate financial statements and hence is considered a precise science. Managerial accounting provides information to managers. In this type the manager is responsible for, Accounts Receivable, Billing, Payroll, Accounts Payable audits of operational procedures and process. It remains indispensable for anyone involved in any type of business.

Some tips to protect businesses from losses would be beneficial. Managers have to ensure their company is protected from check fraud. To this end they can set up financial limits for checks with their bank. An inventory of bank checks must be maintained and kept secure in safes.

Similarly a careful record off all bills paid must also be maintained. They will also serve as the basis for tax records.
All financial statements also need to reviewed regularly and entries made at least once in a week and balance expenditures with income. If not it could result in errors and overlooked payments.

The bank statements also need to reconciled as early as possible. The services of a good book keeper could also be used if you do not have the time. Their services would include 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.

Financial statements should be used to review the costs and expenses. They should be used to guide you to find better suppliers, cut down expenses and increase profits. Set up a cost control system. A systematic and streamlined accounting procedure will help in minimizing mistakes and missed accounts. Accounting helps considerably for any business to grow and increase profits.

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