Bookkeeping Hints

Whether you are keeping the business' books yourself or hiring a bookkeeper to take care of them, here are some tips from our bookkeeping experts to help save you time and money.

1. Maintain Daily Records. Allocate 15 minutes everyday to do a little bookkeeping each day. This is one of the most basic rules. If you don't have accurate records, you don't have an accurate picture of your business. There is no right or wrong record-keeping system. What matters most is that you have a record-keeping system and you use it.
2. Bank account statements. Always request a statement with a month-end cut-off date. This will make it easier for you to reconcile your statement and track expenses.
3. Keep an audit trail.The goal here is to be able to quickly and easily retrace your company's financial activities. Record all of your invoices and cheques in numerical order. Never skip numbers.
4. Be consistent. Consistency is the key to successful bookkeeping. Most of us tend to make things harder than they need to be. Keep filing simple and use consistent wording in ledgers and in software files. This will save you and your accountant time at year-end when you are preparing statements and reports.
5. Use a computer. Bookkeeping software makes it easy to track income and expenses, prepare tax documents and summaries your company's financial activities. Make sure that you are trained in the basics, even if you are outsourcing. Take the time to set up your financial accounts correctly from the start. Always ensure that records are backed up for safekeeping.
6. Cash or Accrual. Choose the right accounting system for your business. Cash accounting is much simpler - you count income when you receive it and expenses when you pay them. In the accrual method you count expenses when they happen, not when you receive or pay them.
   

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Here’s How To Make Sure That Your Bookkeeping Service Provider Is Trustworthy

When it comes to business, outsourcing is always a tough call to be made. It is never easy to convince yourself or your partners that you are going to entrust a service provider with the internal business operations responsibilities. Especially for accounting, it involves the transfer of confidential information to a third party whom you have never met before. So before you make any decision to outsource your accounting, the following points should be taken into consideration first:

1. Conduct a background check of the company. As it is your first time entrusting confidential data to a company, it is always wise for you to do a background check first. Search for the company’s details on search engines and you should be able to get a fair idea about the background of the company. You should also try to get details of the vendor’s clients. Ask for their feedback on the service before you make the final decision.
2. Sign a contract with the vendor. The contract is the basis of any business relationship you have with another company. On the contract, it should states very clearly about the accountability of the outsource provider so as to avoid any confusion on the deliverables. The contract should also list down the tasks that the service provider will perform and these tasks should be open for revision for both the parties.
3. Request for an evaluation period. If you want to know whether you can work well with the service provider and are they going to meet your expectation, the performance of the service provider needs to be gauged during the evaluation period. The service provider should allow internal oversight by you so that all parties will know the progress of the account and ensure that the contract is being upheld.
4. Write a performance appraisal after the completion of the assignment. Once the assignment is completed, conduct a performance appraisal on whether the service provider has performed the necessary desired tasks. In the appraisal, also list down areas that you think the service provider can improve. This is to ensure that improvements can be made for future outsourcing assignments.
   

Outsourcing your bookkeeping to a service provider is definitely beneficial to your company. It is Time VS Money. When you outsource your accounting, you will save money on recruiting and training your staffs to do the accounting work for you. Last but not least, remember to conduct your background check of a company before making any decision.

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Top 10 Tax Tips for Small and Growing Businesses

Taxes are one of the most important issues facing small and growing businesses. And like a company's profits, its annual tax bill will in part reflect the owner's skills and knowledge. Business owners need to be sure that they are meeting all of their responsibilities to the tax man -- and also seizing every opportunity to reduce their taxes. These tax tips will ensure Uncle Sam is not getting more than his due.

1. Writing It Off: Deductions. Businesses can deduct all "ordinary and necessary" business expenses from their revenues to reduce their taxable income. Some deductions are obvious—expenditures in such areas as business travel, equipment, salaries, or rent. But the rules governing write-offs aren't always simple. Don't overlook these potential deductions:
   
   
   • Business losses. Business losses can be deducted against a business owner's personal income to reduce taxes. If a business owner's losses exceed personal income for the year, some of the year's business losses can be used to reduce taxable income in future years.
   • Trips that combine business and pleasure. If more than half of a business trip is devoted to business, deduct the traveling costs, as well as other business-related expenses.
     
   
   
2. Employee Taxes. If a business has employees, a variety of taxes will have to be withheld from their salaries. Among them are:
   
   
   • Withholding. Social Security (FICA), Medicare and federal and state income taxes must be withheld from employees' pay.
     
   • Employer matching. Businesses must match the FICA and Medicare taxes and pay them along with employees.
     

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Hiring a Bookkeeper

Hiring a bookkeeper? You'd think it would be easier to find bookkeepers. Where are they, and when you do find them, how do you hire the best bookkeeper for your business?

Keeping track of your company's financial data is vital. In fact, it's so important that you can't just leave it to chance.

You need someone in charge of your books who has the training and experience to get the job done right. But finding a quality bookkeeper can be a challenge - unless you know what to look for.

How to Hire a Bookkeeper

To begin with, you need to understand that bookkeepers are not necessarily the same as accountants. While an accountant's job is to provide financial advice and recommendations, a bookkeeper's job entails things like recording income and expenses, reconciling bank statements, processing invoices, and administering payroll.

If that sounds like the kind of person you need, then it's time to start shopping around for someone to fill the position. Bookkeepers can be hired on a part-time, full-time, or even contact basis depending on the needs of the business. But no matter what kind of arrangement you decide to go with, your bookkeeper needs to meet certain basic qualifications.

Bookkeeper Training & Education

A qualified bookkeeper may or may not have a degree in accounting. Some of the best bookkeepers you'll find don't. But they should have completed some formal coursework in bookkeeping through a community college or other accredited institution. For information about the kind of coursework you should be looking for, you might consider contacting the American Institute of Professional Bookkeepers.

Bookkeeper Experience

Although education and training are important, there is no substitute for experience. Hiring a bookkeeper with only a couple of courses under their belt and no actual bookkeeping experience is a recipe for disaster.

It's not uncommon for bookkeepers to operate on a contractual basis, so potential candidates should be able to provide you with a list of satisfied clients you can contact for a reference. You should also plan to check out references of previous employers if the individual has staff experience on either a full- or part-time basis.

Detail-oriented Personality

Bookkeepers live and die in the details. Therefore, it is absolutely critical for them to have detail-oriented personalities. If the person seems frazzled or disorganized at the interview, that's a good sign that they may not be the right person for the job. On the other hand, if the candidate shows up with multiple copies of a well-organized resume and a color-coded Day Planner, you may be on the right track.

Technological Awareness

The art of bookkeeping has come a long way in recent years. Nowadays, most bookkeeping is done in a computerized fashion. Potential candidates should be familiar with - if not proficient in - the record keeping software your business uses on a daily basis.

Costs for Bookkeepers

How much should you pay a bookkeeper? That depends largely on how much you want them to do. If you're planning to outsource your bookkeeping needs, expect to pay between $20 - $50 per hour depending on the complexity and volume of work your business requires.

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