Telecommuting Idea – Bookkeeping

If you have experience in accounting or have worked as a bookkeeper before, bookkeeping can be a great way to work from home. Small businesses are continuously looking for ways to outsource some of their workload and most of them do not need a full-time in-house bookkeeper. You can approach several businesses in your area and offer to keep their books.

Of course there are some tools you need. You should have some of the basic accounting software like quicken and quick books. If the company you work for uses a different piece of software, they may purchase a copy for you to use at home, or make one of their current licenses available to you. In the beginning I suggest you focus on companies that use software you are already familiar with since you will be working from home and don’t have the opportunity to ask a colleague across your desk for help.

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Keeping Up With The Family Finances

Staying on top of the family finances does not have to be difficult. With a little planning, your finances can be kept up to date with ease. Believe me, having a handle on your family finances goes a long way in creating family harmony.

The first step is to set up a bookkeeping system. We’ve used Quicken software for years. It has helped to keep track of our expenses, and we have been very happy with the program. It takes a little bit of time to set up initially. The second part of your bookkeeping system involves setting up a place to save your receipts. We use a small cardboard divider file with a special slot devoted to “receipts that need to be posted”. The key idea here is to have a place where you store all receipts from expenses (including ATM withdrawals) so that they are readily available when you go to enter them into your bookkeeping software.

Once you have the system set up, then you simply enter your receipts, whether income or expenses. As you enter each item, you select a category for it to go into. Reconciling your account is done online. One of the greatest advantages in using an automated system like this is the ability to see your expenses by category. With the click of a button, you can find out what you spent on groceries, entertainment or any other category for any time period, like last week, last month, or the last quarter. Many other reports are available such as a cash flow report and an itemized categories report. Using this system has streamlined our ability to keep our account updated. Bills are easily paid on time.

Once you’ve established your bookkeeping system, then you must set aside time on a regular basis to update it. For our family, we’ve found that a weekly update works well. My husband and I alternate weekly turns on posting receipts and then reconciling our account. It never takes us more than 30 minutes at a time and our account is always balanced.

If you are behind in your finances, start by doing just 15 minutes at a time. You’ll catch up eventually. Then, be sure to make time on a regular basis to keep up with your account. Having your finances in order is a real stress reliever and can be attained by anyone!

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Article Source: http://www.BharatBhasha.com

Three things you should know about tax

Employer's Pension Contributions

The rules regarding tax relief on employer pension contributions in particular for owner/manager businesses have, since A-Day, been somewhat clouded by the Revenue’s interpretation of the wholly and exclusive rules. The tax planning industry concern has been in connection with the Revenue’s approach with regard to the commerciality of an individual’s total remuneration package.

Thankfully, a recent addition to Revenue & Customs’ Manual provides some extra clarity and states “where the controlling director is also the person whose work generates the company’s income then the level of the remuneration package is a commercial decision and it is unlikely that there will be a non-business purpose for the level of the remuneration package”.

So effectively, the commercial value of a controlling director, in remuneration terms, is deemed to be inextricably linked to the success/profitability of the company assuming that their input is pivotal to that success. Accordingly, full tax relief should be granted on pension contributions up to the annual allowance of £225,000.

Offshore Disclosure Facility
The Revenue’s deadline approaches for the so-called tax amnesty for those who have income arising from offshore accounts for which no UK tax has been declared or paid.

The Revenue’s aim has been to get the majority who have avoided paying UK tax to accept the inevitable with the carrot of a fixed 10% penalty.

The intention to disclose needs to be notified to the Revenue by the 22nd June 2007, a full disclosure and payment of taxes due, to include interest and the 10% penalty, must be made by the 26th November 2007.

With the Revenue having obtained details of offshore account holders, one can expect investigations to commence shortly after the 22nd June for those who have not fully disclosed. In particular, it is rumoured that the Revenue intends to name and shame high profile celebrities.

Offshore Investment Bonds
For those looking to defer or mitigate tax legitimately is through an investment in an offshore investment bond. This can include a wide ranging investment strategy from cash deposits, fixed deposits, guaranteed products or a full range of investment collectives to include exchange traded funds. This legitimate long-term deferral can add substantial benefits to an investor’s portfolio for a minimal cost.

By John Robson & Andrew Selsby at RH Asset Management Limited, as published in the Onassis Newsletter, a fortnightly newsletter that gives insight into the investment markets.

For more from RHAM, visit http://www.rhasset.co.uk/

The 3 Critical Financial Statements

There are three vital statements for understanding the condition of a business or entity: (1) the Profit and Loss Statement, (2) the Balance Sheet and (3) the Sources and Uses Statement. Each of them provides a different perspective of how an entity is operating. Combined, they show examiners the health of the business. Each statement reflects a different perspective on the business’ financial operations.

The first statement, the Profit and Loss, can also be called the Income Statement. It documents the amount of money coming into the entity (the income) and the money going out of the entity (the expenses). The difference between what comes in and what goes out is the Net Income, if there is more money coming in than going out. If not, there is a Net Loss. The statement covers a specific period, which is shown in the heading of the statement. Note that it tells us nothing about what has happened for any date that is not included by the statement dates. Think of it as a snapshot for the specific time period. Some common snapshot periods are monthly, quarterly and yearly ones.

The second statement, the Balance Sheet, covers the condition of the business from the time it began until the ending date on the statement. The Balance Sheet reveals three important business characteristics: (1) it summarizes the assets owned by the entity (e.g., buildings, bank accounts, inventory, etc.); (2) the entity liabilities (e.g., loans, outstanding bills, etc.); and (3) the business owners’ equity. The statement is arranged in what is called the ‘accounting equation’, which indicates total Assets will equal the sum of Liabilities and Equity. Balance Sheets are commonly issued at the same frequency as the Profit and Loss and usually reflect the business on the last day of the Profit and Loss period.

Finally, the Sources and Uses Statement reveals how the business received and used funds during the statement period. It shows how much money was provided by business operations and how much was provided by loans or capital received by the entity. The statement also summarizes how the funds were used by the entity. It demonstrates if the company is healthy, headed for trouble, or just bouncing along. Like the Profit and Loss, this statement covers only the period shown in the statement heading. It says nothing about any period not included in the statement. Again, the statement usually covers the same period as the Profit and Loss.

Taking these three statements together, there is a present picture of the business. From the Profit and Loss, comes how well it did during the period, a short-term perspective. From the Balance Sheet it is seen how the entity is accumulating assets or liabilities, from a long-term perspective. Finally, the Sources and Uses statement demonstrates where and how efficiently the entity resources were used during the period. All three perspectives are important to the entity overview.

To an investor or owner the statements answer three questions about the entity. Did the entity make a profit? Did the entity increase the owners’ equity? And finally, were entity assets used efficiently? From the overviews in these three statements, further questions might be formulated in specific areas.

Michael Russell

Your Independent guide to Accounting