- Organize your processes. Lost productivity and mistakes will often come from misunderstanding authority and responsibility. A tax season will be smoother when everyone knows the proper work flow, what their jobs are, and exactly how much authority they have to make decisions. You can make all of these things clear by designing organized processes, bookkeeping procedures and systems that your team can follow.
- Prioritize. When you begin to feel overwhelmed, get systemized. Prioritize a to-do list and work on one thing at a time. As you cross a task off, celebrate! Make sure your team is clear on the priorities too.
- Remember why you're there to begin with. Business can be a very detail-oriented affair, and it's really easy to get caught up in the moment especially when your dealing with your daily bookkeeping tasks. If you ever feel like you're drowning in details, stop and take a deep breath. Now look at the big picture. Just think about what your business goals are and remind yourself that you can obtain them. This exercise can help you to get back in tune with what's really important to you and will help you put everything back in the right perspective.
- Communicate Clearly. Without clear communication it will be hard to get through the tax season. Your CPA is going to have a lot of questions for you and you will need to be able to answer them appropriately. Make sure you are not overtired and have plenty of energy to get you through. Be appreciative of all of the work that your accountant is doing for you. Gratitude is one of the fastest ways to change your perspective for the positive.
- Model Leadership. Emotions are contagious. So is stress. If you are in a bad mood, everyone around you will feel it and may not be far behind. But if you come in cheery and ready to tackle the task before you, you can influence everyone in a more positive manner. It's a lot more fun to be around cheerful people.
Showing posts with label Bookkeeping Tips. Show all posts
Showing posts with label Bookkeeping Tips. Show all posts
Friday, July 17, 2009
Bookkeeping Tips - Important Tips and Bookkeeping Advice
Five Tips for a Smoother, More Efficient Tax Time
Thursday, July 9, 2009
Single Or Double Entry Bookkeeping That Is The Question
The bookkeeping system adopted by a business is based upon double entry principles for all limited companies but self employed businesses may use a single entry bookkeeping system if a statement of assets and liabilities is not required. Bookkeeping is the recording of the prime financial transactions of a business usually by a bookkeeper or accounts clerk in the business books.
The difference between bookkeeping services and accounting may be unclear to the uninitiated while both are of vital importance to financial success. Bookkeeping is an important part of the accounting function and is essentially the record keeping of the financial transactions. Accounting is while incorporating the record keeping also includes the presentation, interpretation and financial control functions including interpretation of the numbers for the financial health of a business of which taxation can play a major part.
Bookkeeping stems from the recording of financial transactions and the accounting term for a business accounts as books. In effect the accounting function prepares a record of the monetary affairs of a business and stores the information in files called books. Hence the term bookkeeping often misspelled as book keeping which is the function of a librarian not that of a bookkeeper.
The financial affairs of a business involve many aspects and start with the recording of what is termed the prime documents. The task of a bookkeeping service which some businesses outsource is to record the prime documents, those prime documents being the sales, purchases and cash/bank transactions. All small businesses do bookkeeping and the most successful use the bookkeeping records as a basis for an accounting function to generate a more efficient financial service.
All business involves buying or selling something and the consequent function of receiving or paying money to the value of those transactions. Recording these transactions in larger business organisations is done by accounts clerks who work under the supervision of the accountant.
Invariably medium and larger businesses use a double entry system for recording transactions. Double entry accounting evolves from the fact that every transaction as a double effect on the business of which these are prime examples.
A sale is made. That creates a record of income for the business which is taxed on that income the other side of the financial transaction, the double entry, is the fact that the organisation who was sold the goods now owes the value of that sales invoice to the business. That is the double entry, record the sales income and also record the debt due from the customer who is now called a debtor.
Someone who owes the business a debt is called a debtor.
A purchase is made. That creates a record of expense for the business which can be deducted from income and lowers taxes and the other side of the financial transaction, the double entry, is the fact that the organisation who supplied the purchase on credit is now owed the money. That is the double entry, record the sales income and also record the credit due to the supplier who is now called the creditor.
Someone who has supplied goods on credit is called a creditor.
The third type of prime transaction is the transfer of money between the debtors and creditors and the business.
When a debtor pays his sales invoice the double entry is to add that amount of money to the business financial records and the opposite double entry goes to the debtor account to reduce the amount owed to the business since it has now received the cash.
When a creditor is paid the amount owed the money is recorded as reducing the cash resources of the business by for example deducting the money from the bank balance and the double entry reduces the amount the business now owes to the creditor account since it has reduced the credit received.
The bookkeeping function is to record these prime transactions. Since every financial transaction has an equal and opposite entry in the books there has to be a mathematical check that both sides of the transactions add up to zero. This check process is called a trial balance where both sides of the entries should be in agreement and normally the point at which the bookkeeping service is deemed to be complete.
Double entry bookkeeping is required for all businesses that require to produce a statement of its assets and liabilities. This statement of assets and liabilities is the total of all the balances from the trial balance and is called a balance sheet.
Many small businesses do not require a balance sheet. In the UK the production of a balance sheet is optional for every self employed business as it is not an obligatory requirement of the self assessment tax return form. A self employed bookkeeping system is not required to produce a balance sheet because the business effectively belongs to the owner and is that owners personal business.
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. The different rules applying to a limited company is 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.
The self employed bookkeeping system can be simpler being produced from a single entry style of bookkeeping rather than double entry. Single entry bookkeeping makes a single entry for each financial transaction which is sufficient to produce an income and expenditure account, a profit and loss account, but does not make the reciprocal entry that establishes the value of the assets and liabilities.
Single entry can be as simple as making a list of the sales income and the purchase expenses. Such a bookkeeping system is valuable to the smaller business as it requires little or no bookkeeping or accounting knowledge. A smaller business can produce its own accounts without the need for a bookkeeper or accountant particularly if it has access to bookkeeping templates through bookkeeping software to produce the accounts in the accounting format required.
About Author:
Terry Cartwright is a qualified accountant in the UK designs Accounting Software on excel spreadsheets providing complete Small Business Accounting Software solutions for with single and double entry Bookkeeping solutions for limited companies and self employed business
Source: http://www.buzzle.com/
The difference between bookkeeping services and accounting may be unclear to the uninitiated while both are of vital importance to financial success. Bookkeeping is an important part of the accounting function and is essentially the record keeping of the financial transactions. Accounting is while incorporating the record keeping also includes the presentation, interpretation and financial control functions including interpretation of the numbers for the financial health of a business of which taxation can play a major part.
Bookkeeping stems from the recording of financial transactions and the accounting term for a business accounts as books. In effect the accounting function prepares a record of the monetary affairs of a business and stores the information in files called books. Hence the term bookkeeping often misspelled as book keeping which is the function of a librarian not that of a bookkeeper.
The financial affairs of a business involve many aspects and start with the recording of what is termed the prime documents. The task of a bookkeeping service which some businesses outsource is to record the prime documents, those prime documents being the sales, purchases and cash/bank transactions. All small businesses do bookkeeping and the most successful use the bookkeeping records as a basis for an accounting function to generate a more efficient financial service.
All business involves buying or selling something and the consequent function of receiving or paying money to the value of those transactions. Recording these transactions in larger business organisations is done by accounts clerks who work under the supervision of the accountant.
Invariably medium and larger businesses use a double entry system for recording transactions. Double entry accounting evolves from the fact that every transaction as a double effect on the business of which these are prime examples.
A sale is made. That creates a record of income for the business which is taxed on that income the other side of the financial transaction, the double entry, is the fact that the organisation who was sold the goods now owes the value of that sales invoice to the business. That is the double entry, record the sales income and also record the debt due from the customer who is now called a debtor.
Someone who owes the business a debt is called a debtor.
A purchase is made. That creates a record of expense for the business which can be deducted from income and lowers taxes and the other side of the financial transaction, the double entry, is the fact that the organisation who supplied the purchase on credit is now owed the money. That is the double entry, record the sales income and also record the credit due to the supplier who is now called the creditor.
Someone who has supplied goods on credit is called a creditor.
The third type of prime transaction is the transfer of money between the debtors and creditors and the business.
When a debtor pays his sales invoice the double entry is to add that amount of money to the business financial records and the opposite double entry goes to the debtor account to reduce the amount owed to the business since it has now received the cash.
When a creditor is paid the amount owed the money is recorded as reducing the cash resources of the business by for example deducting the money from the bank balance and the double entry reduces the amount the business now owes to the creditor account since it has reduced the credit received.
The bookkeeping function is to record these prime transactions. Since every financial transaction has an equal and opposite entry in the books there has to be a mathematical check that both sides of the transactions add up to zero. This check process is called a trial balance where both sides of the entries should be in agreement and normally the point at which the bookkeeping service is deemed to be complete.
Double entry bookkeeping is required for all businesses that require to produce a statement of its assets and liabilities. This statement of assets and liabilities is the total of all the balances from the trial balance and is called a balance sheet.
Many small businesses do not require a balance sheet. In the UK the production of a balance sheet is optional for every self employed business as it is not an obligatory requirement of the self assessment tax return form. A self employed bookkeeping system is not required to produce a balance sheet because the business effectively belongs to the owner and is that owners personal business.
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. The different rules applying to a limited company is 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.
The self employed bookkeeping system can be simpler being produced from a single entry style of bookkeeping rather than double entry. Single entry bookkeeping makes a single entry for each financial transaction which is sufficient to produce an income and expenditure account, a profit and loss account, but does not make the reciprocal entry that establishes the value of the assets and liabilities.
Single entry can be as simple as making a list of the sales income and the purchase expenses. Such a bookkeeping system is valuable to the smaller business as it requires little or no bookkeeping or accounting knowledge. A smaller business can produce its own accounts without the need for a bookkeeper or accountant particularly if it has access to bookkeeping templates through bookkeeping software to produce the accounts in the accounting format required.
About Author:
Terry Cartwright is a qualified accountant in the UK designs Accounting Software on excel spreadsheets providing complete Small Business Accounting Software solutions for with single and double entry Bookkeeping solutions for limited companies and self employed business
Source: http://www.buzzle.com/
Thursday, May 14, 2009
4 Tips for Fundraising and Bookkeeping
When you run a not for profit organization or other type of firm that needs funds raised by methods other than retail sales or other types of financial transactions, chances are you will be involved in the world of fund raising. A fund raiser is often time a fun event and one that is very important for you because it provides potential donors with a specific moment and cause for which to donate funds to you. Also, when it comes to money, you need to be highly organized and make sure that the event does not become too difficult for you to handle and that the funds being raised surpasses the cost of the event itself. For this, you need good book keeping and below are four tips to help you achieve in this area.
Source: http://www.fasttrackfundraising.com/
- Unless you are soliciting donations of which the amount is freely chosen by the donor, come up with a specific donation amount that people can give. In this scenario your book keeping can be largely uniform and easy to comprehend. Also, inviting the opportunity for donors to choose their own amount can cause time wasted if they are giving too little and your costs are not met. The only downside to discouraging these types of donations is you might not receive a very large and generous sum that a person might otherwise give to your cause.
- Make sure that all necessary personal information is recorded from the person giving you a donation. Should their donation be ill conceived, a check they write bounce or another problem arise, you need to know exactly who is giving you what and how to be able to keep track of them should a legal problem arise. Lack of information and documentation could spell disaster in some cases like this.
- Monitor your donations and costs being invested into the event very often, such as once a day or two times a week. Staying on top of the cash flow can alert you to any problems that arise such as costs not being met, funds being lost if you are renting a space or paying for professional fundraisers in a situation where you are not getting sufficient donations. These types of situations going unchecked can not only fail your fundraising efforts but also put you into financial ruin which should never be the outcome of a fundraising effort.
- Use good computer software to do the book keeping for you. While some information input will always be required from you or an employee, the computer software can do much of the mathematical work behind book keeping that we might sometimes make a mistake on or otherwise skew without realizing it. Also make sure book keeping information is backed up onto a remote hard drive in case your computer system goes down and the initial information is lost. You can also print out reports just to be safe.
Source: http://www.fasttrackfundraising.com/
Thursday, April 30, 2009
Small business tips: the basics of bookkeeping
Good bookkeeping practices are essential to keeping your business running smoothly.
Regardless of the size of your company, good bookkeeping practices are essential to keeping your business running smoothly. Accurately kept books do more than make it easy to file your annual tax returns. Banks may require you to submit a profit and loss statement or balance sheet
so they can determine your credit-worthiness. A quick review of your books can show where you need to spend more or less money; who gives you the most business and who takes the longest to pay you; how much you're paying out in commissions compared to how much you're selling.
Here are some general terms that are helpful to know.
ASSETS are things that you own or are owed to you: bank accounts, inventory, loans made to other companies or individuals, company cars, etc.
LIABILITIES are things that you owe: loans, accounts payable, payroll taxes, etc.
EQUITY is net income (sales less expenses), capital stock, and owners/officers distributions.
EXPENSES are things you pay for: business meals, gas for company cars, professional services
, postage, etc.
REVENUE is money you earn from the sale of services or product, or from interest earned on a bank account, investment, or a lease or loan of your equipment or property.
COST OF SALES is any expense directly related to earning revenue: product purchases, freight or delivery, sales tax expense, etc.
One of the most valuable resources you can have for a small business is a public accountant. Even if you only take your books in at tax time, having someone to give you specific advice and answer your bookkeeping questions is important. Find an accountant whom you like and trust. If you're having difficulty finding one on your own, talk to other people with similar businesses for recommendations.
Read More Article...
Regardless of the size of your company, good bookkeeping practices are essential to keeping your business running smoothly. Accurately kept books do more than make it easy to file your annual tax returns. Banks may require you to submit a profit and loss statement or balance sheet
so they can determine your credit-worthiness. A quick review of your books can show where you need to spend more or less money; who gives you the most business and who takes the longest to pay you; how much you're paying out in commissions compared to how much you're selling.
Here are some general terms that are helpful to know.
ASSETS are things that you own or are owed to you: bank accounts, inventory, loans made to other companies or individuals, company cars, etc.
LIABILITIES are things that you owe: loans, accounts payable, payroll taxes, etc.
EQUITY is net income (sales less expenses), capital stock, and owners/officers distributions.
EXPENSES are things you pay for: business meals, gas for company cars, professional services
, postage, etc.
REVENUE is money you earn from the sale of services or product, or from interest earned on a bank account, investment, or a lease or loan of your equipment or property.
COST OF SALES is any expense directly related to earning revenue: product purchases, freight or delivery, sales tax expense, etc.
One of the most valuable resources you can have for a small business is a public accountant. Even if you only take your books in at tax time, having someone to give you specific advice and answer your bookkeeping questions is important. Find an accountant whom you like and trust. If you're having difficulty finding one on your own, talk to other people with similar businesses for recommendations.
Read More Article...
Thursday, April 16, 2009
Bookkeeping Tips for Small Business Owners
Small business owners are so involved with other aspects of their business that they often neglect keeping accurate bookkeeping records. Up to date books are essential for the long term growth and sustainability of your business. Some of these tips may sound trivial, but you will be surprised how often they can be neglected, and before you know it, you are months behind on your bookkeeping!
Here are some tips that should help:
Here are some tips that should help:
- Keep track of receivables and payables
Bill your customers promptly once an agreement has been fulfilled, and follow up regularly to ensure timely payment of the debt. Record receipts regularly in your ledger so that receivables are up to date. As for payables, come up with a filing system to keep track of your receipts. For example, sort them by date or by category so they are easy to retrieve when needed. Again, record receipts regularly in your ledger so that payables are up to date. - Watch cash flow
Since the flow of money into your business can be on a different schedule than the flow of money out of your business, you need to be well aware of cash flow at any given time in a month. If you are able to detect this as a problem early on, it will give you enough time to arrange for alternate methods of financing to cover any shortfalls. Monitoring cash flow regularly will allow you to plan ahead and adjust your collections and payment policy if need be. - Compare Earnings and Expenses
How is your business performing? It is a good habit to regularly compare earnings and expenses, since it will help you identify which areas of your business are profitable, and which could require some more of your attention. Depending upon the size of your business, you could perform this task weekly, monthly, or quarterly. - Go Online
Having well maintained and accessible bookkeeping records will greatly help your small business. The trend in recent years has been to move away from conventional methods of doing business and move to more tech friendly methods using the internet. If online banking causes you to become more organized and efficient, why not apply the same to your bookkeeping.
Thursday, April 9, 2009
Book-keeping Basic Tips
Reasons for keeping books
Legal Requirement - under the new system of self assessment, the keeping of books is a must and it's illegal not to.
Control of Business - It's almost impossible to know whether you are winning or losing, have to pay bills, people owe you money, etc if you don't keep books
Cheaper Accounts - well presented books will reduce accountants bills but check with them that the method you intend to use is the best for both of you - often they may have a system that they prefer or software they can download to your computer to use.
If you Sell the Business books are necessary to indicate the value and worth of the business
Finance - If you require loans or finance you will need to show books
VAT / PAYE - records need to be kept for inspection
Methods for keeping books
Patented System - such as Simplex, Everite, Collins, etc. usually 52 weeks plus Profit and Loss Account as summary
Analysis Book - Can be adapted to own requirements
Double Entry System - Involves Ledger Cards and works on the same system as computerised accounts
Computerised Systems - a wide variety available such as Sage, MYOB, DO$H, etc a download of a free, single user book-keeping system is available through http://atlantic-coast.com/downloads/3451.zip
Your Own Method - using a note book or folder. Just ensure that al incoming go on the Left side of the book and all outgoings are entered on the Right side of the book.
Read More Article...
Wednesday, January 7, 2009
Online Book Keeping Services
New business start ups mean increased need for book keeping services, since accounting is mandatory. Small businesses do not want to waste the time and energy spent on extensive and complicated paper work so they seek the services of book keeping agencies.
Book Keeping Services Online
Some of the services offered by book keeping services online are, reviewing existing bookkeeping systems to recommend the customer's needs, inputting new information, running financial management statements monthly, quarterly or yearly, and preparing payroll records of state and federal withholding reports. It also includes management report creation, assisting tax preparation, invoice or other office data management tasks assistance, word processing, data entry and bulk mailing, paying salaries, coordinating and handling accounts receivable and payable, balancing ledgers and check books, and organizing financial information required for business plans, loan proposals, and cash flow statements.
Book keeping services online are popular, since businesses can offload all the arduous tasks of managing and maintaining financial records, yet not lose access to important details. Traditional bookkeepers require that the records be submitted to them. This is not so with online book keeping services. Their web based filing systems allow access 24 hours a day. You just send the bills, the invoices and the expenses and everything is filed and maintained by them. They will maintain the records, keeping them up to date for convenient viewing.
Some book keeping services online also help in administering taxes. They even calculate the tax due on the invoices, track the VAT owing to Customs, excise on your web site, and complete the quarterly VAT return where applicable. As the financial records are constantly updated informed financial decisions can be made with ease. These web sites are secure using SSL encryption, which makes them safe.
Many businesses prefer bookkeeping services online for several reasons. There is no need to install bookkeeping software, train personnel to use them, and waste money in maintaining them. Another problem with the book keeping software is that you need to keep updating it yearly. Records are always available and it eliminates paying an accountant hourly rates to do your book keeping, as these services charge a fixed monthly fee. All you need is a computer with access to the Internet and a fax machine.
Book keeping services online are fast compared to traditional bookkeepers and reliable. You can monitor and know exactly how much work is being done on a daily basis and since you get to see all records maintained well, you may not get any rude shocks which are inevitable should you use a book keeper to maintain your books at the last minute. These services are hassle free and convenient and they save time, money and energy, which can be used to help the business achieve success.
About The Author, bizavings
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com
Book Keeping Services Online
Some of the services offered by book keeping services online are, reviewing existing bookkeeping systems to recommend the customer's needs, inputting new information, running financial management statements monthly, quarterly or yearly, and preparing payroll records of state and federal withholding reports. It also includes management report creation, assisting tax preparation, invoice or other office data management tasks assistance, word processing, data entry and bulk mailing, paying salaries, coordinating and handling accounts receivable and payable, balancing ledgers and check books, and organizing financial information required for business plans, loan proposals, and cash flow statements.
Book keeping services online are popular, since businesses can offload all the arduous tasks of managing and maintaining financial records, yet not lose access to important details. Traditional bookkeepers require that the records be submitted to them. This is not so with online book keeping services. Their web based filing systems allow access 24 hours a day. You just send the bills, the invoices and the expenses and everything is filed and maintained by them. They will maintain the records, keeping them up to date for convenient viewing.
Some book keeping services online also help in administering taxes. They even calculate the tax due on the invoices, track the VAT owing to Customs, excise on your web site, and complete the quarterly VAT return where applicable. As the financial records are constantly updated informed financial decisions can be made with ease. These web sites are secure using SSL encryption, which makes them safe.
Many businesses prefer bookkeeping services online for several reasons. There is no need to install bookkeeping software, train personnel to use them, and waste money in maintaining them. Another problem with the book keeping software is that you need to keep updating it yearly. Records are always available and it eliminates paying an accountant hourly rates to do your book keeping, as these services charge a fixed monthly fee. All you need is a computer with access to the Internet and a fax machine.
Book keeping services online are fast compared to traditional bookkeepers and reliable. You can monitor and know exactly how much work is being done on a daily basis and since you get to see all records maintained well, you may not get any rude shocks which are inevitable should you use a book keeper to maintain your books at the last minute. These services are hassle free and convenient and they save time, money and energy, which can be used to help the business achieve success.
About The Author, bizavings
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com
Friday, January 2, 2009
IMPORTANT BOOKKEEPING TIPS
- Do not throw away cancelled cheques.
- Either file a copy of the sales invoice numerically or by customer, whichever is more logical.
- Keep a file of all invoices and bills that are paid.
- Perform a bank reconciliation each month.
- Periodically, count the inventory on hand.
- Review accounts receivable on a regular basis and at year-end; determine those that are uncollectible.
- Register for a business number (for GST and payroll taxes).
- Discuss your financial statements with your accountant.
- Remember to keep your business affairs separate from your personal affairs. OPEN a separate chequing account (very important).
- Pay all transactions by cheque if possible; it is easier to keep track of cheques.
- Detail deposit slips and keep a copy for your records.
- If your books don't balance, try dividing the amount (that your out) by nine.
- If your business is not as profitable as you expected, don't be afraid to ask for assistance.
Source : http://profitactivists.com/
Friday, December 19, 2008
Bookkeeping Made Simple
Don't get bogged down with bookkeeping. Keep it simple -- and accurate -- by establishing a procedure and following that procedure each time you send out a bill or collect a payment.
Follow these steps to streamline and increase the accuracy of your bookkeeping system :
Source : http://www.nfib.com/
Follow these steps to streamline and increase the accuracy of your bookkeeping system :
- Design an invoice and keep the template handy. Make spaces to fill in amounts due from clients, job descriptions, hourly rates, outstanding balances and other information. When you send an invoice to a customer, keep at least one hardcopy for your records.
- Set up a special checking or money market account that will be used for business purposes only. When checks come in as payment, deposit them into this account. This will allow you to simply and accurately tally your income -- quarterly and at year-end. Note: When depositing checks, record in your checkbook the customer's name and check number. This will help you if discrepancies arise in the 1099 (Miscellaneous Income) statements that customers send out during tax time.
Use this account whenever you make a business purchase. Avoid writing personal checks from the account. Make sure that you make a note describing the business purchase. If you do make a non-business purchase from the account, make note of it so you won't be confused at tax time. - If you take credit card payments, set up a special checking or money market account for this activity as well. Designate that all credit card payments spill into this account and that your monthly fees automatically be deducted from this account.
- If you take out business loans or establish business lines of credit, set up a special account into which the bank can deposit these funds. It's generally best not to use these accounts for normal business purposes. Your records will be clearer if you transfer funds from these accounts into your business checking account (as described in Point 2 above). This will allow you to more accurately keep records of business purchases. If, however, you will be using the borrowed funds to make only one or two purchases (such as buying a large piece of equipment), you can write the check from the account.
Special note: When you transfer funds from this account into your regular business checking account, be sure to make a note in your business account check ledger that the deposit is NOT BUSINESS INCOME. Note the source of the deposit, the check number and the date of the deposit. This will keep your records accurate for tax purposes. - Because you will be using your business checking account for business purposes only, you will need to have at least one additional checking account for personal use. When you require funds for personal expenditures, write a check from your business account. Record this check in your business checkbook as "To personal account" so you won't mistake it for a business purchase. You should write the check out to yourself. This will further delineate the check as a transfer of funds from your business to your personal account.
If your spouse also has a checking account, follow the same procedure. - Keep a savings account or a money market account that is used exclusively for collecting and storing money for your taxes (i.e., for your quarterly estimated payments). Checks for this account should be written from your business checking account, written with your name on the check and designated in your business checking account as "To IRS account" or "To tax account." Ideally, you should determine the appropriate percentage to take out of each deposit into your business checking account, and write a check for that amount to your IRS account.
- To back up your records and to ensure greatest accuracy, keep a separate log that details each business check you write. Items to include in the log: name of company or individual to which the check is written, details of the transaction or purchase, check amount, check number, check date and any other items of information that will help jog your memory of the exact purpose of the check.
- Also, you can keep a log detailing information contained in your invoices. Items to include: customer name, date of invoice, terms of invoice, details of work performed, etc. When invoices are paid, make a note on the invoice itself and in your invoice log.
Source : http://www.nfib.com/
Sunday, October 19, 2008
Bookkeeping Business Tips For Developing Reliable Financial Projections
Financial forecasting reminds me of the weather - you assemble your forecast at a second in day based upon the dope currently available. You allure a result and society your financial forecast. Nevertheless then, the facts changes, immediately it's raining, and you're caught without your umbrella!
Financial forecasting, unlike the weather, isn't a science on the contrary it's not pure guess grind either. It is a combination of:
awake your business;
discerning your marketplace;
setting goals; and
using daily sense.
As a affair coach, I understand that every miniature racket needs to constitute dependable financial projections at one continuance or another. Forecasting is critical during the next stages of a company's duration span:
when seeking financing
gauging the profitability of a contemporary product or supply
determining the contact of staff expansion or cutback
assessing other incident decisions
The crowded components of forecasting boil down to the succeeding five bookkeeping bag tips that for oldness I've shared with function coaching clients:
Bookkeeping Calling Gratuity #1: Audit Actual Year-To-Date Results
Start by looking at where you've been. Provided you handle an accounting programme allied QuickBooks you can print elsewhere a Income & Loss statement showing year-to-date results. Evaluation the statement for all financial transactions that occurred up to the generation of the report. Reconcile the announcement to your bank statements. (If you don't apply an accounting program or bookkeeping service, then catching the characteristic of the complete year-to-date cash receipts and total expenditures. This should identical your profit or loss.) See everyone column entity to beget confident that it makes belief - is your year-to-date revenue figure where you anticipated, or has it fallen short? Are expenses higher than expected?
Bookkeeping Matter Tip #2: Endow Goals and Involve into Your Forecast
What effect you hankering to accomplish by year's end? Cook you hankering to introduce a contemporary product or service, boost revenue on existing products or services, chop spending, accept a cutting edge employee, outsource a bookkeeping service, or start a marketing crusade that testament position the convention for the dawning of later year?
Write absent your objectives and then choose three to five which are the most determining to accomplish by the objective of the year. Finish the needed steps to consummate the objectives. Which Profit & Loss borderline items will be impacted? Adjust your forecast accordingly. For example, your mark may be to exaggeration revenue 10% by year's neb or to depart a marketing campaign first off so its benefits will be felt in the cardinal quarter of 2009.
Bookkeeping Line Tip #3: Forecast Variable Costs
Variable costs are costs that pin money in manner with revenue change. For example, you are selling bounteous widgets; therefore, your labour costs and materials costs will cumulation in relation to the revenue increase.
Using the conceit that Forecast = Projections + Predictions, combined with the scholarship that variable costs nickels in operation with revenues, forecast each month's variable costs. Forecast each contour effects separately. Glance for opportunities to shorten costs, and be aware of credible eventual influences on each cost.
Bookkeeping Career Tip #4: Forecast Constant Expenses
Fixed costs are relatively steady costs that repeated every month. Examples of fixed costs are rent, call and bookkeeping overhaul fees. Forecast the month's fixed expenses by using the identical solution used to forecast variable costs (Forecast = Projections + Predictions) and the accomplishments that fixed expenses tend to be relatively stable and engage in not modify in action with revenues. Again, forecast each border oppose separately, looking for opportunities to decrease costs, while control in belief any viable likely influences.
Bookkeeping Event Tip #5: Forecast Trap Profit
The ending system is to evaluate your forecast for entangle profit. Is the profit forecast is logical and acceptable? Whether not, re-evaluate each wrinkle thing including revenues and dash off felicitous adjustments. Also, anticipate non-operating resources and expense items, and involve them in your forecast.
Your financial projections may not be defect less at first, on the other hand we didn't con to legwork without falling down. As a complication coach I've seen others entertain a hardly any bumps along the way. However I warranty that if you displace these bookkeeping metier tips, locate your financial projections on paper and revisit them frequently, you will bring off your goals faster.
Autor: Linda A. Hunt
Linda Hunt is the co-founder of The Bookkeeper's Referral Network Inc., the place where business meets great bookkeepers. To get your copy of a free special report, The 9 Disastrous Mistakes Most Freelance Bookkeeper's Make in Business (and How You Can Avoid Them!), visit http://www.bkpr-network.com
Financial forecasting, unlike the weather, isn't a science on the contrary it's not pure guess grind either. It is a combination of:
awake your business;
discerning your marketplace;
setting goals; and
using daily sense.
As a affair coach, I understand that every miniature racket needs to constitute dependable financial projections at one continuance or another. Forecasting is critical during the next stages of a company's duration span:
when seeking financing
gauging the profitability of a contemporary product or supply
determining the contact of staff expansion or cutback
assessing other incident decisions
The crowded components of forecasting boil down to the succeeding five bookkeeping bag tips that for oldness I've shared with function coaching clients:
Bookkeeping Calling Gratuity #1: Audit Actual Year-To-Date Results
Start by looking at where you've been. Provided you handle an accounting programme allied QuickBooks you can print elsewhere a Income & Loss statement showing year-to-date results. Evaluation the statement for all financial transactions that occurred up to the generation of the report. Reconcile the announcement to your bank statements. (If you don't apply an accounting program or bookkeeping service, then catching the characteristic of the complete year-to-date cash receipts and total expenditures. This should identical your profit or loss.) See everyone column entity to beget confident that it makes belief - is your year-to-date revenue figure where you anticipated, or has it fallen short? Are expenses higher than expected?
Bookkeeping Matter Tip #2: Endow Goals and Involve into Your Forecast
What effect you hankering to accomplish by year's end? Cook you hankering to introduce a contemporary product or service, boost revenue on existing products or services, chop spending, accept a cutting edge employee, outsource a bookkeeping service, or start a marketing crusade that testament position the convention for the dawning of later year?
Write absent your objectives and then choose three to five which are the most determining to accomplish by the objective of the year. Finish the needed steps to consummate the objectives. Which Profit & Loss borderline items will be impacted? Adjust your forecast accordingly. For example, your mark may be to exaggeration revenue 10% by year's neb or to depart a marketing campaign first off so its benefits will be felt in the cardinal quarter of 2009.
Bookkeeping Line Tip #3: Forecast Variable Costs
Variable costs are costs that pin money in manner with revenue change. For example, you are selling bounteous widgets; therefore, your labour costs and materials costs will cumulation in relation to the revenue increase.
Using the conceit that Forecast = Projections + Predictions, combined with the scholarship that variable costs nickels in operation with revenues, forecast each month's variable costs. Forecast each contour effects separately. Glance for opportunities to shorten costs, and be aware of credible eventual influences on each cost.
Bookkeeping Career Tip #4: Forecast Constant Expenses
Fixed costs are relatively steady costs that repeated every month. Examples of fixed costs are rent, call and bookkeeping overhaul fees. Forecast the month's fixed expenses by using the identical solution used to forecast variable costs (Forecast = Projections + Predictions) and the accomplishments that fixed expenses tend to be relatively stable and engage in not modify in action with revenues. Again, forecast each border oppose separately, looking for opportunities to decrease costs, while control in belief any viable likely influences.
Bookkeeping Event Tip #5: Forecast Trap Profit
The ending system is to evaluate your forecast for entangle profit. Is the profit forecast is logical and acceptable? Whether not, re-evaluate each wrinkle thing including revenues and dash off felicitous adjustments. Also, anticipate non-operating resources and expense items, and involve them in your forecast.
Your financial projections may not be defect less at first, on the other hand we didn't con to legwork without falling down. As a complication coach I've seen others entertain a hardly any bumps along the way. However I warranty that if you displace these bookkeeping metier tips, locate your financial projections on paper and revisit them frequently, you will bring off your goals faster.
Autor: Linda A. Hunt
Linda Hunt is the co-founder of The Bookkeeper's Referral Network Inc., the place where business meets great bookkeepers. To get your copy of a free special report, The 9 Disastrous Mistakes Most Freelance Bookkeeper's Make in Business (and How You Can Avoid Them!), visit http://www.bkpr-network.com
Wednesday, August 13, 2008
Bookkeeping Quick Tips
Here are some simple guidelines that our clients find useful:
- Keep all original receipts. Don’t keep just the debit or the credit card slip because this is not sufficient proof for the government. You must have THE ORIGINAL RECEIPT.
- Calculate your home use expenses on a different spreadsheet because for your income tax you need the total paid for the year, not just the business portion.
- Use a different bank or credit card account for your business. Even though you are a self-employed and your income tax is on the same form, you should use a different account for your business. It shows the government that you are mindful of keeping personal and business expenses separate.
- Keep your receipts month by month. Create a file for each month, so when you get home at the end of the day you can simply put all your receipts in that file. This makes recording and locating information much easier in the long run.
- Keep a mileage log. If you use your personal vehicle for business, you must keep a log. It is very important that you record the mileage that you do for the business otherwise the government may not accept your vehicle expenses. Record the date, the mileage and the client.
- A proper invoice must include:
- Invoice number
- GST and/or PST number if applicable
- A date
- Name and address of both vendor and customer.
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.
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.
- 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.
- 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.
- 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.
- 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.
Monday, June 30, 2008
Advantages Of Payroll Services
If your company has employees other than you, payroll is one of the most critical areas of your financial record keeping. It's also the area most commonly botched by small business owners, so get professional advice on how to properly set up and maintain your payroll system.
You might consider using a payroll service to save yourself a lot of administrative time and hassle. A payroll service ensures your government reporting and payroll tax remittances are always accurate and up-to-date. This benefit alone can be well worth the cost of the service, as late-payment penalties for payroll remittances tend to be some of the biggest and most severe penalties that the government levies.
Other advantages of using a payroll service:
The payroll service is always up to date on the tax code, whether it be changes in Canada Pension Plan rules, revised Employment Insurance guidelines or new tax rates.
The payroll service automatically handles the creation of accurate T4 slips for your employees at year-end.
With a payroll service, you can offer your employees direct deposit of their paycheque. This is a perk that most employees appreciate.
While there are many good reasons to use a payroll service, you should also be aware that such a service takes all associated government remittances out of your company account each payday, even if those remittances are not actually due for another few weeks. This can create a cash flow problem unless you are prepared for it.
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 : The Profit Line
You might consider using a payroll service to save yourself a lot of administrative time and hassle. A payroll service ensures your government reporting and payroll tax remittances are always accurate and up-to-date. This benefit alone can be well worth the cost of the service, as late-payment penalties for payroll remittances tend to be some of the biggest and most severe penalties that the government levies.
Other advantages of using a payroll service:
The payroll service is always up to date on the tax code, whether it be changes in Canada Pension Plan rules, revised Employment Insurance guidelines or new tax rates.
The payroll service automatically handles the creation of accurate T4 slips for your employees at year-end.
With a payroll service, you can offer your employees direct deposit of their paycheque. This is a perk that most employees appreciate.
While there are many good reasons to use a payroll service, you should also be aware that such a service takes all associated government remittances out of your company account each payday, even if those remittances are not actually due for another few weeks. This can create a cash flow problem unless you are prepared for it.
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 : The Profit Line
Thursday, June 19, 2008
Bookkeeping and Accounting Basics
Bookkeeping and accounting share two basic goals:
The actual process of keeping your books is easy to understand when broken down into three steps.
Step 1: Keeping Your Receipts
Comprehensive summaries of your business's income and expenses are the heart of the accounting process. But they can't legally be created in a vacuum. Each of your business's sales and purchases must be backed by some type of record containing the amount, the date, and other relevant information about that sale. This is true whether your accounting is done by computer or on hand-posted ledgers.
From a legal point of view, your method of keeping receipts can range from slips kept in a cigar box to a sophisticated cash register hooked into a computer system. Practically, you'll want to choose a system that fits your business needs. For example, a small service business that handles only relatively few jobs may get by with a bare-bones approach. But the more sales and expenditures your business makes, the better your receipt filing system needs to be. The bottom line is to choose or adapt one to suit your needs.
Step 2: Setting Up and Posting Ledgers
A completed ledger is really nothing more than a summary of revenues, expenditures, and whatever else you're keeping track of (entered from your receipts according to category and date). Later, you'll use these summaries to answer specific financial questions about your business such as whether you're making a profit, and if so, how much.
You'll start with a blank ledger page (a sheet with lines) or, more often these days, a computer file of empty rows and columns. On some regular basis like every day, once a week, or at least once a month, you should transfer the amounts from your receipts for sales and purchases into your ledger. Called "posting," how often you do this depends on how many sales and expenditures your business makes and how detailed you want your books to be.
Generally speaking, the more sales you do, the more often you should post to your ledger. A retail store, for instance, that does hundreds of sales amounting to thousands or tens of thousands of dollars every day should probably post daily. With that volume of sales, it's important to see what's happening every day and not to fall behind with the paperwork. To do this, the busy retailer should use a cash register that totals and posts the day's sales to a computerized bookkeeping system at the push of a button. A slower business, however, or one with just a few large transactions per month, such as a small Web site design shop, dog-sitting service, or swimming pool repair company, would probably be fine if it posted weekly or even monthly.
To get started on a hand-entry system, get ledger pads from any office supply store. Alternatively, you can purchase an accounting software program that will generate its own ledgers as you enter your information. All but the tiniest new businesses are well advised to use an accounting software package to help keep their books (and micro-businesses can get by with personal finance software such as Quicken). That's because once you've entered your daily, weekly, or monthly numbers, accounting software makes preparing monthly and yearly financial reports incredibly easy.
Step 3: Creating Basic Financial Reports
Financial reports are important because they bring together several key pieces of financial information about your business. Think of it this way -- while your income ledger may tell you that your business brought in a lot of money during the year, you may have no way of knowing whether you turned a profit without measuring your income against your total expenses. And even comparing your monthly totals of income and expenses won't tell you whether your credit customers are paying fast enough to keep adequate cash flowing through your business to pay your bills on time. That's why you need financial reports: to combine data from your ledgers and sculpt it into a shape that shows you the big picture of your business.
Source : http://www.inc.com/
- 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
The actual process of keeping your books is easy to understand when broken down into three steps.
- Keep receipts or other acceptable records of every payment to and every expenditure from your business.
- Summarize your income and expenditure records on some periodic basis (generally daily, weekly, or monthly).
- Use your summaries to create financial reports that will tell you specific information about your business, such as how much monthly profit you're making or how much your business is worth at a specific point in time.
Step 1: Keeping Your Receipts
Comprehensive summaries of your business's income and expenses are the heart of the accounting process. But they can't legally be created in a vacuum. Each of your business's sales and purchases must be backed by some type of record containing the amount, the date, and other relevant information about that sale. This is true whether your accounting is done by computer or on hand-posted ledgers.
From a legal point of view, your method of keeping receipts can range from slips kept in a cigar box to a sophisticated cash register hooked into a computer system. Practically, you'll want to choose a system that fits your business needs. For example, a small service business that handles only relatively few jobs may get by with a bare-bones approach. But the more sales and expenditures your business makes, the better your receipt filing system needs to be. The bottom line is to choose or adapt one to suit your needs.
Step 2: Setting Up and Posting Ledgers
A completed ledger is really nothing more than a summary of revenues, expenditures, and whatever else you're keeping track of (entered from your receipts according to category and date). Later, you'll use these summaries to answer specific financial questions about your business such as whether you're making a profit, and if so, how much.
You'll start with a blank ledger page (a sheet with lines) or, more often these days, a computer file of empty rows and columns. On some regular basis like every day, once a week, or at least once a month, you should transfer the amounts from your receipts for sales and purchases into your ledger. Called "posting," how often you do this depends on how many sales and expenditures your business makes and how detailed you want your books to be.
Generally speaking, the more sales you do, the more often you should post to your ledger. A retail store, for instance, that does hundreds of sales amounting to thousands or tens of thousands of dollars every day should probably post daily. With that volume of sales, it's important to see what's happening every day and not to fall behind with the paperwork. To do this, the busy retailer should use a cash register that totals and posts the day's sales to a computerized bookkeeping system at the push of a button. A slower business, however, or one with just a few large transactions per month, such as a small Web site design shop, dog-sitting service, or swimming pool repair company, would probably be fine if it posted weekly or even monthly.
To get started on a hand-entry system, get ledger pads from any office supply store. Alternatively, you can purchase an accounting software program that will generate its own ledgers as you enter your information. All but the tiniest new businesses are well advised to use an accounting software package to help keep their books (and micro-businesses can get by with personal finance software such as Quicken). That's because once you've entered your daily, weekly, or monthly numbers, accounting software makes preparing monthly and yearly financial reports incredibly easy.
Step 3: Creating Basic Financial Reports
Financial reports are important because they bring together several key pieces of financial information about your business. Think of it this way -- while your income ledger may tell you that your business brought in a lot of money during the year, you may have no way of knowing whether you turned a profit without measuring your income against your total expenses. And even comparing your monthly totals of income and expenses won't tell you whether your credit customers are paying fast enough to keep adequate cash flowing through your business to pay your bills on time. That's why you need financial reports: to combine data from your ledgers and sculpt it into a shape that shows you the big picture of your business.
Source : http://www.inc.com/
Tuesday, June 17, 2008
How can i learn bookkeeping ? - Some Basic Tips
Good bookkeeping practices are essential to keeping your business running smoothly.
Regardless of the size of your company, good bookkeeping practices are essential to keeping your business running smoothly. Accurately kept books do more than make it easy to file your annual tax returns. Banks may require you to submit a profit and loss statement or balance sheet so they can determine your credit-worthiness. A quick review of your books can show where you need to spend more or less money; who gives you the most business and who takes the longest to pay you; how much you're paying out in commissions compared to how much you're selling.
Here are some general terms that are helpful to know.
ASSETS are things that you own or are owed to you: bank accounts, inventory, loans made to other companies or individuals, company cars, etc.
LIABILITIES are things that you owe: loans, accounts payable, payroll taxes, etc.
EQUITY is net income (sales less expenses), capital stock, and owners/officers distributions.
EXPENSES are things you pay for: business meals, gas for company cars, professional services, postage, etc.
REVENUE is money you earn from the sale of services or product, or from interest earned on a bank account, investment, or a lease or loan of your equipment or property.
COST OF SALES is any expense directly related to earning revenue: product purchases, freight or delivery, sales tax expense, etc.
One of the most valuable resources you can have for a small business is a public accountant. Even if you only take your books in at tax time, having someone to give you specific advice and answer your bookkeeping questions is important. Find an accountant whom you like and trust. If you're having difficulty finding one on your own, talk to other people with similar businesses for recommendations.
Here are some helpful hints that should make good bookkeeping an easy task.
Source : http://www.essortment.com/
Regardless of the size of your company, good bookkeeping practices are essential to keeping your business running smoothly. Accurately kept books do more than make it easy to file your annual tax returns. Banks may require you to submit a profit and loss statement or balance sheet so they can determine your credit-worthiness. A quick review of your books can show where you need to spend more or less money; who gives you the most business and who takes the longest to pay you; how much you're paying out in commissions compared to how much you're selling.
Here are some general terms that are helpful to know.
ASSETS are things that you own or are owed to you: bank accounts, inventory, loans made to other companies or individuals, company cars, etc.
LIABILITIES are things that you owe: loans, accounts payable, payroll taxes, etc.
EQUITY is net income (sales less expenses), capital stock, and owners/officers distributions.
EXPENSES are things you pay for: business meals, gas for company cars, professional services, postage, etc.
REVENUE is money you earn from the sale of services or product, or from interest earned on a bank account, investment, or a lease or loan of your equipment or property.
COST OF SALES is any expense directly related to earning revenue: product purchases, freight or delivery, sales tax expense, etc.
One of the most valuable resources you can have for a small business is a public accountant. Even if you only take your books in at tax time, having someone to give you specific advice and answer your bookkeeping questions is important. Find an accountant whom you like and trust. If you're having difficulty finding one on your own, talk to other people with similar businesses for recommendations.
Here are some helpful hints that should make good bookkeeping an easy task.
- Get organized! Good organization is essential to good bookkeeping. In fact, when you come right down to it, bookkeeping is organizing. There are only four general categories of records you need to keep: bills (accounts payable or A/P), customer invoices (accounts receivable or A/R), payroll (time sheets and pay records), and human resources (employee information not directly related to payroll). File all records for these categories neatly in a system that works for you. Done well and consistently, even shoe boxes work! Even better are expandable, alphabetic file folders. Keep one folder for A/P and one for A/R. If your business is too large for that, invest in file cabinets - anything from small portable cases to floor-to-ceiling lateral files. Get something that fits your volume and your budget. Use a different color file folder for each category of record, and it will be that much easier to keep things organized.
- Get an accounting software program, if you can fit it in your budget. This is one place where having an accountant can be very helpful. Ask your accountant to help you select the best program for your needs. An accounting program will collate information you input and present it in helpful reports almost instantly, so you don't have to hunt through your check register or deposit log for the information. Some of these reports can help you pinpoint problem areas, like deadbeat customers or inventory that's not moving, or will help to show employee shrinkage or overtime policy abuse. With a good program, you can get customized reports that will tell you almost anything you want to know. If software is out of the question, you can keep track of everything in a computer spreadsheet or good old traditional ledger books. Even if you have monthly services from your accountant, it's a good idea to keep track of everything on your own. That way, if you need some information in the middle of the month, you'll have it at your fingertips, instead of having to spend a lot of time searching. Keep one spreadsheet/ledger for A/P and one for A/R. If you pay all of your bills every month, your ledger for A/P can simply be your check register, as long as you . . .
- keep detailed records of all payments and deposits. As soon as you write a check, write down when it was written, to whom, for what, and how much it was for. Most accounting programs have a check writing feature, and all of this information will automatically be recorded. If you don't have software that will do this, invest in a business desk set checkbook. The checks have large stubs on which you can write down all of the important information. Record as much detail as possible for your deposits, including if they were cash or credit card, and what kind of credit card.
- Keep your check register reconciled to your latest bank statement. If a check or deposit doesn't clear the bank within a couple of months, contact the bank or the payee to find out why. If necessary, stop payment, void and re-issue uncleared checks.
- Schedule a day of the week for paying bills and for reviewing unpaid customer invoices. Paying bills on time saves you money by avoiding late charges, and some vendors may give you a discount if you pay by a certain time. Don't let your customers lag too far behind in paying their bills. Send out monthly reminders, and set up a policy for when you will send a bill to a collection agency.
- If you are a retail seller subject to sales tax, keep detailed records of sales so that you don't collect or pay sales tax on non-taxable items. In many states, labor and freight are non-taxable. If you sell to a tax-exempt entity, make sure that you get a copy of their exemption certificate. Keep those in a separate file, preferably with a list showing each customer's name and exemption number.
- Make sure you are in compliance with record-keeping standards. There are some things that you only need to keep for three years, like individual copies of time sheets. Others need to be kept for much longer. For example, all records pertaining to a worker's compensation claim need to be kept forever. Regulations and recommendations change periodically, so (everyone together now) ask your accountant.
- There are several companies out there that give continuing education seminars on a range of business topics, from human resource management, to communication skills, to effective accounts payable practice . . . just about anything you can imagine. Go to some seminars. Think about what you want to learn ahead of time, and ask questions that are relevant to your business. Oddly enough, meeting other people who also have lots of questions can be a real confidence builder. You'll know you aren't alone.
- Take advantage of the many resources that are available. On-line forums exist for almost any topic. The business section of your local bookstore should have plenty of books for small businesses, or you can check materials out from the library. The Internal Revenue Service has a variety of publications for the small business owner, free of charge, available on their website. Also, the United States Small Business Administration can point you to a wealth of information. There is probably a national association for your type of business. The annual dues may seem high, but the industry specific information that you can get from them may well be worth it. This list could go on and on, but it would still end with this: when in doubt (one more time!), ask your accountant.
Source : http://www.essortment.com/
Sunday, June 15, 2008
Announcing: The “Best of the Best” Business Opportunity!
What is the “Best of the Best”? You might be surprised to learn that of all the possible business opportunities available today, a Bookkeeping and Accounting practice is considered by some to be one of the best. In fact, Paul and Sarah Edwards, authors of “The Best Home Businesses for the 21st Century,” rate a bookkeeping service as the “Best of the Best” home-based businesses. Below is a list of things that I think make an accounting and tax service such a great opportunity.
Read More Article...
- It’s Mandated By Government — Every business needs some form of bookkeeping — whether it’s a one-person operation or the business has thousands of employees.
- A Great Income — A person can expect to earn more than $30 per hour — sometimes as high as $75 per hour. The average client billing will be $300 per month and require six to eight hours a month to complete.
- Inexpensive to start— For less than $1,000 a person can purchase everything they will need to get the business underway. Those that already have a computer have the biggest part of the investment taken care of.
- No Special Equipment Needed — Other than a computer, printer, inexpensive calculator, and fax machine, there’s no special equipment that’s necessary.
- Work Anywhere — Using today’s technology you can have clients anywhere in the world.
- It’s Easy — Accounting/Bookkeeping software has become easier to use. The most popular software on the market today is QuickBooks Pro (less than $250).
- No Outside Office Required — You need only a small area of your home for your office. It can even be in the corner of a bedroom.
- No Zoning Hassles — There’s no traffic in and out of your home, so zoning laws are never a consideration.
- Keep Your Present Job — You can build a part-time business while working full-time at another job.
- Work When You Want — You can perform the work during the day or night. It’s a great business to work around a busy schedule.
- No Inventory — You don’t have to purchase or maintain inventory.
Read More Article...
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.
Source : http://www.nfib.com/
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.
Source : http://www.nfib.com/
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:
Source : http://www.articledashboard.com
If your business is ready to outsource your bookkeeping then the Accounting Aisle can help you find a great service.
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.
Source : http://www.articledashboard.com
If your business is ready to outsource your bookkeeping then the Accounting Aisle can help you find a great service.
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.
- 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. - 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.
- 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. - 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.
- 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.
- 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.
Source : http://www.allbusiness.com/
Tuesday, April 22, 2008
Tax and Bookkeeping Tips
No matter what kind of business you operate, keeping financial records is probably not what you do best. You would probably rather spend your time selling your product or service. However, if you are going to run a successful business, accurate and timely financial information is a must.
Here are some of the reasons why you need a good record keeping system.
Source: http://www.berrigans-taxbookkeeping.com/
Here are some of the reasons why you need a good record keeping system.
- Monitoring the success or failure of your business: It is hard to know how a business is doing without a clear financial picture. Are they making money? Are sales increasing? Are expenditures increasing faster than sales? Which expenses are too high based on their level of sales? Does some expenditure appear to be “out of control?”
- Providing the information you need to make decisions: Evaluating the financial consequences should be a part of every business decision they make. Without accurate records and financial information, it may be hard for them to know the financial impact of a given course of action. Will it pay to hire another salesperson? How much will another production employee cost? Is this particular product line profitable?
- Obtaining bank financing: A banker will usually want to see business’s balance sheet, income statement and cash flow budget for the most current and prior years as well as projected statement showing the impact of the requested loan. A banker may even want to see some of their bookkeeping procedures and documents to verify whether they run their business in a sound and professional manner.
- Obtaining other sources of capital: If a business has reached the point where they need to take in a partner or if they need capital and are thinking of taking in an outside investor, partner/investor will want to become familiar with business’s financial picture. They will need to produce a list of financial information they need. Even their supplier and other creditors may ask to see certain financial record as well. Such information may be produced by their outside accountant but it is based on their day-to-day bookkeeping.
- Budgeting: All businesses should use a budget for planning purposes. A budget will help keep all businesses stay on track by forecasting their cash needs and helping them control their expenditures. In addition, if they are seeking bank financing or other sources of capital, a banker or prospective investor will probably want to see their budget as evidence that their business is well planned and stable. They must have solid financial information to prepare a meaningful budget.
- Preparing income tax return: Whether a business is a sole proprietorship, partnership or corporation, they must file an income tax return and pay income taxes. With good records, preparing an accurate tax return will be easier and they are more likely to be able to do it on time. Poor records may result in their underpaying or overpaying their taxes and filing late results in paying penalties. If their accountant prepares income tax return, poor records will certainly result in paying higher accounting fees. If their business is a partnership, not only will they have to prepare a partnership tax return but it also will pass directly to the tax return of each partner.
- Complying with federal and state payroll taxes: If your business has employees, they must be aware of the rules and regulations relating to payroll taxes. Payroll tax deposits must be made according to strict deadlines. Late payment of payroll taxes results in severe and unnecessary penalties. Also, they must file a payroll tax return every quarter which they must reconcile with the payroll deposits made during the quarter. Then at the end of the year, they are required to give their employees and the government W-2 forms which must agree with their quarterly payroll taxes. Sound bookkeeping practices will make compliance with all these payroll rules easy. Poor records will make it impossible.
- Submitting sales taxes: If a business collects sales tax from their customers, good records will make it easy for them to compute the tax due and prepare the required payments and reports.
- Distributing profits: If a business is a partnership, they will need good records to determine the correct amount of profits to distribute to each partner. If a business is operating as a corporation, they must determine the company profits that they will be paying out as dividends to the shareholders.
Source: http://www.berrigans-taxbookkeeping.com/
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