Author: Marie Martin

  • A Guide to Reopening Your Business After Covid-19

    A Guide to Reopening Your Business After Covid-19

    You can almost hear it.

    Across the country light switches are flipping, the roads are getting busy, computers and other machines are powering back up. People are getting back to work.

    After months of closing workplaces, businesses, and enforcing social distancing, countries have begun to reopen their economies. We are slowly but surely getting back to our normal day to day living. This has presented business owners with new risks.

    Businesses that reopen may be affected by the post lockdown risk, and companies that reopen irresponsibly may find themselves not faring well in a recovering economy.

    Like me, I’m sure everyone is eager to get back to work, but life after COVID-19 can be confusing. The way things worked previously isn’t how it will work now, especially early on after the lockdown. The best way to be successful is to ensure the safety of your workers and customers.

    Below is a list of guides or tips that will guide you as you reopen your business. Remember, every business is different, so you must tailor each of these to suit your type of business.

    Avoid Personal Contact

    Making a “no personal contact” rule will go a long way in ensuring the safety of your workers and customers. Handshakes and hugs are the most common form of physical contact, especially in the business world, but they don’t belong in a post COVID-19 world.

    But you have to make rules to ensure no physical contact until later phases of reopening. You could also use an alternative way of communication in your workplace that doesn’t involve physical contact.

    Avoid Large Gatherings

    As we all know, humans are social animals. There is an uncontrollable need to communicate and gather. Every community has a place where people gather to make jokes, gossip, and talk in general, and so does every workplace.

    Right now, this must be stopped. So, it would help if you made rules that prevent people from gathering people in a place.  

    Readjust Your Floor Plan

    Readjusting your floor plan to create more distance or space between your employees and also your customers is a good safety measure. Also, adjust your employees to face walls instead of each other.

    Avoid Item Sharing

    Items like pens, notebooks, and folders could be assigned to specific workers, or you could simply digitalize your workplace. This will reduce contact between your workers and also maximize work time.  Shared tools must be sanitized before and after each employee uses them.

    Adjust Breakroom Rules

    Everyone needs a respite from working, so how you handle the breakroom rule is essential. If your business has a breakroom, then adjusting the break time of each department will help avoid large gatherings.

    Limit the Number of People In a Closed Room

    It’s best to limit the number of people in closed rooms like conferences, seminars, and board meetings.  Each phase will have different specifications.

    Hand Sanitizing Stations

    Creating sanitizing stations is compulsory. Maintaining sanitizing stations for both your workers and your customers ensures both safety and customer confidence. If your place feels risky, customers might not do business with you.

    Disinfecting and Cleaning Your Business Place

    Coronavirus can survive on the surfaces of objects for some time, so it’s best to disinfect and clean your business periodically. This helps to kill the virus on every surface in your office. You might think this is too stressful, but remember safety builds customer confidence and, in turn, generates profits.

    Proper Disposal

    Ensure your employees dispose of used items properly. Providing lined trash bins for disposal is important.

    Posters and Notices

    Office rules, including placing notices about COVID-19 precautions, safety, and contact procedures, can help inform and educate both employees and clients.

    Laws and Policies

    Reviewing and updating your policies following the country and state laws will help your business avoid issues.

    Thanks for checking our guide, and if you find this article useful, please pass it on. Or if you need someone to look over your policy, contact us. Stay safe.

  • Physical Distancing vs. Social Distancing

    Physical Distancing vs. Social Distancing

    The changes we are experiencing from the Covid-19 pandemic might run deeper than we think. In just 4 months, so much has changed: the way we conduct businesses and relate with each other.  And now, even our psychological well-being during and after the pandemic might be affected as well due to social distancing.

    Steps have been taken all over the world to contain the spread of this virus as much as possible. The core idea behind these steps is keeping a certain distance from each other. For example sheltering-in-place, quarantine, and lockdown work under the premise of social distancing.

    The idea behind social distancing is one that scientists and health professionals believe will stop the spread of the virus. It demands that we stay away from gatherings and maintain at least 6 feet from each other.

    While this is effective (after all the society has bought into it), are we practicing social distancing the right way?

    The question then is, “Is this really social distancing, or do we need a reframing?” Many psychologists seem to think that we do need a new phrase to better embody the idea of staying apart to stay safe. Social distancing implies a total cessation of human interactions – both physically and mentally.

    Rather than social distancing, psychologists think that what we need is physical distancing.  Simply put, physical distancing means reducing close contact with others. The problem with social distancing is that its effects might not be so glaring now.

    After the pandemic is over, social distancing could have serious negative impacts on the psychological well-being of people.

    Jamil Zaki, Associate professor and psychologist at Stanford explains in this article that humans need to maintain a connection with each other, especially now. In times of distress, people stay grounded when they feel the care and presence of others around them.

    While we practice physical distancing, we need to find a way to be together even while apart. Thankfully, technology makes it easy for us to interact socially. Some apps and social media platforms make virtual social interactions accessible. Let’s take a look at some of them.

    Zoom

    This pandemic would forever change the trajectory of businesses and the way they are run. With Zoom, people can still carry out their business activities with video calls and make deals from the comfort of their homes. Alternatively, friends can also use Zoom to organize virtual coffee dates with each other.

    Video Calls

    Voice calls can only go so far. At some point, you’ll want to see your friends and family in real-time.   Whatsapp, Messenger, Instagram and very recently, Facebook all have video call options. You can stay apart from your friend physically, but nothing says you can’t call them up. These apps are more common than Zoom, so even if your friend doesn’t have Zoom, you can still see them in real-time.

    Group Activity Apps

    This pandemic has made some group activity apps very popular. Applications like House party, Netflix Party, and TikTok are making waves. These applications have provided a way for humans to remain social with each other.

    Since the lockdown, TikTok challenges have provided a virtual bridge where friends can meet and do fun stuff. House Party is another application that is providing the necessary service of human interaction.

    Being on lockdown doesn’t mean you can’t keep yourself entertained with your family and friends. Netflix Party has made it possible for friends to watch movies together and even chat while at it.

    To conclude, social distancing might not be what you and I need at this point. Being socially distant at this time could have severe psychological impacts on us. Hence, the need for socialization through virtual means.

    Remember also that the only way to flatten the curve of infections is to distance ourselves from each other but only physically, not socially. Stay home, stay safe, stay connected.

    From all of us here at Sound Accounts, we are wishing you a safe and speedy end to this quarantine. Please feel free to connect with us virtually

  • COVID-19 Resources for WA Business Owners

    COVID-19 Resources for WA Business Owners

    We want to be a resource to our clients, friends, family, and other small business owners.  Therefore, we have put together information on various programs available in response to COVID-19.

    Small Business Administration

    The Small Business Administration is going to be a central resource for business owners in this crisis.  Information on the Paycheck Protection Program, the Economic Injury Disaster Loans and Loan Advance at this website.

    Internal Revenue Service

    Additionally, the IRS has established a special section focused on steps to help taxpayers, businesses, and others affected by this crisis.  Their page is updated as new information is available.  For example, the IRS has extended tax filing and payments until July 15. They also offer advice for deducting COVID-19 costs from your taxes here.  The IRS has also dedicated an entire page to the economic impact payments here.

    Consumer Financial Protection Bureau

    Additionally, planning for the financial impact of COVID-19 can be daunting. To help, the Consumer Financial Protection Bureau has put together some great resources and ideas on their website. These include links to articles about meeting your financial obligations, experiencing a loss of income, and being targeted by scammers.

    Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

    You could spend your days reading over this 335 page act. Or there is a great summary of this act available through the SBA, as mentioned above. The Department of the Treasury has also put together a comprehensive summary.

    Washington State Coronavirus Response (COVID-19)

    The state has put together a conglomeration of information all in one place on this website.  On their Business & Workers page, you can find guidance on what businesses are considered essential. You can also find a form you can submit to clarify if your business is essential, here. 

    Washington Department of Revenue

    Whether your business is essential or not, the Washington Department of Revenue has announced some relief for businesses. These address a broad range of taxes and programs including business and occupation tax, leasehold excise tax, and many more.  Find more information here.

    Washington Employment Security Department

    However, if taxes are the least of your worries, eligibility for unemployment benefits has been expanded to include many Washingtonians that have not been eligible in the past.  The Employment Security Department has information regarding COVID-19 here and you can subscribe for updates to this information here. 

    Washington State Department of Labor & Industries

    While this department is focused on workers’ compensation, there is a PDF on their website about Paid Sick Leave, Paid Family and Medical Leave, and workers’ compensation here.  Governor Jay Inslee and L&I Director, Joel Sacks, have also spoken about extending workers’ compensation coverage to quarantined health workers and first responders on this site.

    United Way of Washington 

    While financial help for small businesses is amazing, what if you need other types of help? Assistance through the United Way is managed on a county level.  This site will help you connect with your specific county.  The county sites have links to health updates; health information; financial assistance for individuals, businesses, and non-profits; expense support; food support; school operation plans and meals; various supportive services; a list of hiring employers; and other employment related resources.

    Other Assistance

    We encourage everyone to reach out to their landlord, creditors, and lenders if you find yourself having difficulty making payments.  Many will continue to work with you throughout this crisis, but communication is key. 

    Your Sound Accounts team hopes you are all staying healthy and well. We look forward to seeing you once we have made it through this crisis, together!    Please feel free to reach out to us with any questions or concerns you may have.

  • Small Business Owner’s Guide to the CARES Act

    Small Business Owner’s Guide to the CARES Act

    In this time of unprecedented uncertainty, here is a comprehensive guide to the recently-passed CARES Act.

    Small-Business-Owners-Guide-to-the-CARES-ActDownload

  • Common Accounting Terms Explained

    Common Accounting Terms Explained

    Have you ever felt so confused after speaking with your accountant? If so, don’t fret! We’ve compiled different accounting terms and abbreviations along with their meanings. However, while this would do great for a business owner, it’s for anyone interested in building their accounting vocabulary. 

    Accounts Receivable (AR)

    Accounts receivable are lawfully enforceable claims for payments taken by a business for services rendered, or goods supplied that consumers have bought but not paid for. In essence, it is the money customers owe after goods or services have been provided to them. 

    Accounts Payable (AP)

    Accounts Payable is the amount of money a company owes creditors (suppliers) in return for goods or services they have provided. 

    Accrual (ACR)

    Accrual is a list of expenses a company has incurred or agreed upon but has not yet paid for. It is also a list of sales that have been made but not yet billed.

    Asset

    Asset refers to anything of monetary value that a company owns. It’s the wealth that has been accumulated and owned by a company without a loan or lien.

    These may be goods sold to customers, cash, investments, land, property, equipment and supplies, warehouse inventory, and more. 

    Bad Debt Expenses

    Bad debt is incurred when customers owing don’t pay up and are likely not to pay.

    Balance Sheet (BS)

    Balance Sheet is a snapshot of a company’s financial status, including assets, liabilities and equity at a particular time. The accounting equation when it comes to a balance sheet is: Assets = Equity + Liabilities. 

    Book Value (BV)

    When an asset depreciates, it loses its value. The book value shows the original value of assets.

    Capital (CAP)

    The amount of cash, goods, assets used to start up a company is called capital. You can calculate capital by subtracting the current asset from the current liabilities.

    Cash Flow (CF)

    Cash flow is the revenue expected to be generated by a company through business activities over some time after you made payments (e.g. rent, taxes) and received payments from goods or services sold to customers.

    Credit (Cr)

    Credit is an accounting entry that may either increase liabilities and equities or decrease the assets of a company’s balance sheet.

    Debit (Dr)

    An accounting entry that may either increase assets or decrease the liabilities of a company’s balance sheet depending on the type of transaction made. 

    Depreciation (DEPR)

    Depreciation occurs when business assets such as goods or equipment decrease in value over time due to use or abandonment.

    Dividends (DIV)

    These are distributions of the portion of a company’s earnings to shareholders of the business. It is usually issued as cash, property or stock market value.

    Expenses (EXP)

    Expenses show the cost incurred by a business to generate income or maintain business activities.

    This could be;

    • Fixed Expenses, like rent, workers’ salaries, paid at a scheduled period.
    • Variables: include expenses like labour costs that fluctuate based on the increase or decrease in production or sales.
    • Accrued: expenses which haven’t been paid yet.
    • Operating Expenses: These are expenses that are not directly associated with the production of goods and services. 

    Equity (EQ)

    Equity is the amount of money invested in the company by shareholders. This is usually the money left over after liabilities have been subtracted from assets.

    Fiscal Year (FY)

    A Fiscal year is a measured amount of time (usually 12 months period) that marks the beginning and end of the financial records of a company. The fiscal year doesn’t always correspond with the calendar year. For example, a company’s fiscal year can run from March to February.

    Inventory (INV)

    These are assets purchased by a company to sell to customers but remain unsold.

    Liability (LIAB)

    Liability is a debt a company has to pay. It includes salaries, taxes, the amount payable, utilities, loans etc.

    General Ledger (GL)

     General Ledger is the total record of transactions over the life of a company. 

    Gross Margin (GM)

    Also known as Profits, it’s the total number of sales made subtracted from the associated costs such as manufacturing costs, suppliers cost, etc. 

    Net Income (NI)

    Net Income is a company’s total earnings. You can calculate Net Income by subtracting total expenses from total revenues.

    Liquidation (LIQ)

    Liquidation happens when assets are converted into cash to pay off debts.

    Revenue (REV)

    Revenue is the sum of all the money generated by a company, usually through sales, before you subtract expenses.

    Return on Investment (ROI)

    ROI is calculated by dividing the net profit of a company by the total cost of the investment. This shows how successful an investment is by showing profits gained or loss.

    Variable Cost (VC)

    Variable costs changes as the number of goods that a business offers changes. These costs are the total marginal costs over every unit produced. For instance, if a business produces a commodity and sells more of those goods, it will need more raw materials to meet the increase in demand.

    Improve your accounting vocabulary today! It would be worthwhile to devote time to learn the terms mentioned above.  As you do so, apply these basic accounting terms in your conversation, and you’ll be amazed at how you’ll improve!  If you find any of them confusing or need help, contact us at Sound Accounts, because our strength is your numbers!

  • Exercise at Your Desk

    Exercise at Your Desk

    Did you know you can exercise at your desk? There are several exercises devised for busy people who are always at their desks and people who don’t have the time to exercise as often as they would prefer.

    These exercises can help improve your health and well-being. Also, we understand that work can get exhausting, and it’s helpful if you can take breaks, relax, and then refocus on the job at hand. Here, you’ll find great exercises designed to help you relax and keep you in shape.

    Wall push-ups

    Wall push-up is the simplest exercise you can do in your office. It requires no tool, just you and your walls.

    How do you go about wall push-ups?

    Stand a few steps away from your office wall, lean towards the wall, and place your hands flatly and apart on it. After that, lower yourself towards the wall, and then push back up until your arms are straight. Now, do that at least 15 times.

    There’s a rule, though. You have to maintain a straight line from your head to your toes for wall push-ups to be effective.

    Arm pulses

    Are you looking for a simple exercise that works your triceps and shoulders? Look no further than arm pulses.

    You might want to stand up. Alright, place your arms by your sides and have your palms face back. Now, pulse your arms backward for at least 20 seconds while keeping them as straight as possible.

    Pretend jump rope

    Before you become like “Akeelah and the Bee” in your office, you won’t really jump any rope, so don’t worry. Here’s what this exercise entails:

    Hop on both or either of your feet as you would with a jump rope. Subsequently, increase the intensity of the hops by moving your arms.

    Standing rear pulses

    This is another simple exercise. All you need for standing rear pulses is your desk.

    Hold the edge of your desk for support, bend one leg behind you, and flex the foot. Next, raise your heel a few inches; release it slightly to press the foot directly back behind you.

    Repeat the routine for at least 20 times, and then switch the legs.

    Calf raise exercise

    Stand behind your chair and hold it for support. After that, raise your heels until you are standing on your toes. Next, slowly lower yourself until you’re standing back on your feet.

    Arm circles

    Firstly, stand and have your arms and feet apart. Straighten your arms and stretch them further apart at your shoulder height.

    Lastly, move your arms in a small backward circle. And that’s arms circle! To make it fun and more effective, switch directions after every 20 circles.

    Wall sit exercise

    Slide your back down your office wall until your hips are at the same level as your closed knees. Maintain that position for at least 30 seconds before releasing yourself.

    Desk push-ups

    Desk push-ups are like a typical bodyweight exercise. Mind you; your desk ought to be strong enough to support your body weight.

    With that said, take a few steps backward from your desk. Place your hands flat on the desk, and spread out your arms just a little wider than your shoulder width.

    Next, lower yourself to your desk and push back up until your arms are straight. Try that for at least 15 times.

    Lunge

    Place one of your legs in front of the other. Gently lower the knee of the leg behind towards the ground. Next, switch the legs after every ten lunges.

    Oblique twists

    To do an oblique twist, you need a swivel chair. Sit upright and let your feet hover on the floor.

    Hold onto the edge of your desk. Next, use your core to swivel your chair from right to left (or left to right). Repeat the routine for at least 10 times. 

    Triceps dips

    To do this exercise, you need a stationary chair so that you won’t fall off. You don’t want to create a scene in your office.

    Now, scoot to the front of your chair, stretch your arms backward and place your palms flat on the chair.

    Subsequently, bend your elbows straight back to lower yourself several inches. Lastly, straighten your arms to rise back – voila! That’s a complete dip. Repeat that 20 times.

    Triceps stretch

    Sit on your chair now, raise one of your arms, and bend it back until it is touching the opposite shoulder blade. Next, use your other hand to pull the elbow of the former towards your head.

    Maintain your position for at least two deep breaths, and then switch the arms. It’s okay if your arms can’t reach your shoulder blade. Just bend it to a comfortable limit.

    Chair squats

    Stand up from your chair, and lower your body down – stop right before sitting. Now, stand up again to make a complete chair squat. You may hold onto your desk for support. Keep your weight in your heels.

    Seated Bicycle crunches

    Of all the exercises to do in offices, seated bicycle brings the ultimate fun. More so, it helps you to make good use of your crunch time.

    What to do?

    Sit in your office chair, and place your feet flatly on the floor. Then, position your hands behind your head and lift your knees towards an opposite elbow while twisting your body towards that same elbow.

    Repeat the routine 15 times and switch to the other knee.

    There you have it! Whenever you want to exercise real quick while on the job, try these exercises. Trust me; they will make you feel so good!

    At Sound Accounts, we aren’t just about keeping your books healthy, we want our clients to be happy and healthy, too!

  • 10 Purchases You Didn’t Know Were Tax Deductible

    10 Purchases You Didn’t Know Were Tax Deductible

    The tax season is almost here, and several small businesses defer their tax proceeds in fear of what’s to come. No worries, we have come to remind you of some tax items you may have overlooked.

    A lot of small businesses exclude daily expenses in their tax return deductibles. Usually, these expenses reduce what you can reinvest. But you don’t need to worry (even though you’re a new to tax), this could be an opportunity to earn back some money.

    Keep reading to see some purchases you didn’t know were tax-deductible – hopefully, you might get to save extra cash to help with cash flow.

    Medical and Dental Bills 

    Nothing strains your income like emergency medical or dental bills, but the IRS makes these out of pocket expenditures easy for us.

    Medical and dental bills that exceed 7.4% of your adjusted income are considered tax deductible by the IRS. That means you can save extra cash out of those sudden medical bills. Great, right?

    Student Loan Interest Paid by You or Someone Else

    Student loans are bad, and we all know it but what is even more horrible is the interest. Some stipulations make student loan interests tax-deductible.

    If your student loan interest is more than 4%, the IRS allows you to deduct $2,500 from your taxable income. And get this; this deduction still works even if someone else paid the interest on the loan for you. However, this golden gift is only for people whose individual income is less than $80,000 per year. 

    Donations to Registered Charitable Organizations

    Giving is an act of kindness and the IRS rewards that by awarding a tax deductible for charitable work. If you’ve been an ardent giver to local charities and this does not have to be large monetary donations, you can deduct these from your taxable income. 

    So, collate and add up the cost for that cake you made for a charitable organization. And remember to include 14 cents per mile for every trip you made for a charitable organization. 

    Home Improvement Renovations 

    Yes, the IRS recognizes and offers tax deductibles for home improvement renovations but only when they are done for medical purposes. So forget about getting a tax-deductible for that new pool you installed. 

    If you have had to make certain changes to accommodate a medical situation, the IRS would consider this expenditure and deduct it from your taxable income.

    Compensation from Jury Service 

    Being a Jury is a great opportunity to play an active role in the criminal justice system and society. In addition to the salary concessions made for juries which make provision for them to be paid even while on jury service, they receive compensation from the state.

    Although this money is often remitted back to the company where they work, it is tax deductible. If you’ve been a jury this year, just deduct the compensation from your taxable income. 

    State Sales Tax / Local Tax 

    If you haven’t been making use of this tax-deductible, then you’ve been missing out on saving extra money. You can deduct either your local income tax or your state sales tax. You can choose to deduct whichever tax would benefit you better.

    For states like Texas and Washington that don’t pay income taxes, there is no choice; they have to deduct their state sales tax. For people living in the other states, pick between your state sales tax and your local income tax and subtract from your taxable income.

    Expenses Incurred While Job Hunting

    Looking for a job does take its toll not only on your finances which is a heavy impact but also on your mental well-being. While the IRS can’t do anything about the latter, they can help out with the former. 

    Any expense you incur while Job hunting and even after you get a job is recognized as a tax-deductible by the IRS. But you need to meet some conditions for this. One of them is that the job you’re going for must be within your field of study. 

    The following expenses are tax deductible under this heading:

    • You can itemize any amount incurred from having your resume reviewed by professionals as long as you have receipts for this service. 
    • Travel expenses are also tax-deductible, and they cover gas expenses for transporting yourself for interviews. 
    • Moving costs necessitated by a new job are also tax deductible by the IRS. If you move within 50 miles, you should calculate 23 cents for every mile. 

    Child Care Tax Credit 

    Expenses double when you have kids and during the holiday, those expenses triple, especially when you have to pay for summer camp or babysitters to watch them.

    The Child and Dependent Care Act recognize these expenses, and you can deduct $3000 for each child or dependent and $6000 for two or more. This tax-deductible is only valid as long as the babysitters aren’t family or relatives. 

    Loss from Disasters or Accidents

    Any damages that aren’t covered by your insurance company can be claimed as tax deductibles. 

    Out of Pocket Teaching Expenses

    Many teachers often have to make out of pocket expenses to aid their teaching. The IRS offers a tax deductible for these expenses even if they aren’t itemized. All teachers are allowed to subtract $250 from their taxable income. 

    Final Thoughts

    You need to keep evidence of purchase and written records for every item you claim. Also, make sure you check with your tax expert to know how much and if you qualify for these tax claims.  If you have any questions, feel free to contact us.  We’d love to help you!

  • HOW TO PREPARE YOUR BOOKS FOR YEAR-END

    HOW TO PREPARE YOUR BOOKS FOR YEAR-END

    Year-end is usually the time to take stock and review the current year. For small businesses, it signals the completion of an accounting period – hence the need to put things in order in preparation for the next period. 

    As a business owner, you must close your books at least once a year to file an income tax and also prepare financial statements. Beyond this, it also helps you to know where your business stands financially. With that, you can make the necessary adjustments or changes.

    Below we’ve put together ten steps that you can follow to prepare your books for year-end. This will help every small business owner, especially the DIY enthusiasts who do their bookkeeping themselves.

     Reconcile your monthly transactions

    Reconciling your monthly transactions and bank statements are very vital. It makes preparing your books at the end of the year simpler and straightforward. Further, it makes you track every financial activity that occurs in your company. So, by year-end, you know what to expect. 

    Work toward sending 1099s

    These are tax forms from individuals or companies that your firm has made payment to. It could be for either rent or other services. You must file these forms with the IRS at the appropriate time. 

    This process requires you sending out IRS form W9 to these vendors and then recording the accurate information into your bookkeeping system in readiness for the next accounting period. 

    Take year-end inventory

    Be it physical products, supplies, or assets; you must take inventory, and then compare it to the value you have on your balance sheet. Ensure that there are no irregularities (missing or damaged items). If you notice any, make sure you record them accordingly.

    Record all payments from your clients

    You need to record all payments from clients as soon as possible. This helps you to keep an accurate record of all received payments and the outstanding ones, if any. It also makes it easy to balance your book at the end of the year.

    Print a year-end general ledger

    The YTD general ledger shows the opening and closing balances of your accounts in the year. It includes the total debits and credits as well as the net activity within this same period. You should always do a thorough check to ensure that all the transactions are posted to the correct accounts with documents to back them up. 

    Review your accounts payable and accounts receivable

    The essence of doing this review is to ensure that your accounts payable and accounts receivable are in order. Doing this could help you uncover some discrepancies. For instance, you could find invoices that you’ve already paid in accounts payable. 

    Or discover amounts in accounts receivable, whereas they have not been billed for. Try to access all the invoices and ensure that there are no pending payments. What your statements say should tally with the activities that have taken place.

    Reconcile all credit card accounts and statements

    Ensure that you sort out all expenses charged to a credit card and also make sure that they are dated correctly. Note that the expenses should be dated when charged and not when the statement is paid. 

    This means that it’s possible to charge expenses at year-end, have the statements come at the beginning of the next year, and still be able to capture the expenses in the current year.

    Go through your income statements

    After reconciling your transactions, you can view your income statements to see how your business has fared overall. This will include expenses as well as profits and deficits. You need to do this monthly, so you can spot irregularities before they escalate.

    Review your balance sheet

    A balance sheet reveals the current value of your business. In reviewing it, try to compare the present value to previous periods. It helps you to see the progression or decline as the case may be. Also, you need to look out for other irregularities and sort them out immediately. 

    Budget for the next year

    When you’re done with all the necessary checks and balances and have a clear picture of how things stand, you can then proceed with the following year’s budget. You must put every tiny detail into consideration while doing that, so you don’t get it wrong. Having a wrong budget will not only deny you profit, but it may also cause you to run on a loss.

    Preparing and closing your books for year-end should never be seen as a mere formality. It is something that every business owner must do to keep track of their business’s financials. Aside from helping you to prepare your books efficiently, the above steps will also make your general bookkeeping experience a pleasant one.

    If you would like assistance with closing your books or would like an analysis of your closing process, please contact us.

  • The Reality of IRS Scams

    The Reality of IRS Scams

    When fraudsters engage in phishing, they often use the Internal Revenue Service to deceive victims. It is, possibly, the most mimicked government agency used in scams to get your personal information.

    Sadly, many people have lost a lot of money and their personal data to tax scams. Theses scammers employ the usual telephone, email, or mail to set up companies, people, and tax professionals. 

    While the authorities are doing all that they can to bring the perpetrators to justice, there’s a lot you can do to protect yourself. Information is key, and this article contains substantial information to help you avoid being scammed.

    What You Should Know About Scams

    It is essential to know how these scammers go about their criminal acts. Knowing this will help you be more vigilant and alert.

         I.       Scammers make contacts through emails, text messages, or phone calls. Here they hide under false identities to ask for your personal information. With these vital details, it’s easy for them to defraud you.

       II.       Scammers go under the guise of the Taxpayer Advocacy Panel (TAP) to make claims of a possible tax refund. This usually results in taxpayers revealing their personal information to get these refunds. TAP never requests personal information; they only play advisory roles to the IRS.

      III.       Some of these scammers are very sophisticated, big, and well organized. They operate on a high level of impersonation and usually have a lot of information on their targets. They could even have real IRS employee badge numbers or logos. Therefore, these aggressive identity thieves are very careful and thorough, so it’s easy to fall prey to them.

     IV.       With the help of some vital information, they can infiltrate and doctor your tax returns. They can also make changes to your tax liability and then demand immediate payments. Some of them can go as far as threatening you with criminal fraud charges.

       V.       Additionally, scammers target information on the W-2 forms to initiate their fraudulent activities. The W-2 form reports the employees’ annual wages and the amount of taxes deducted from their paychecks. Scammers use data from these forms to carry out the W-2 scam.

    The Red Flags You Should Look Out For

    Below we will give you some tips on how the IRS operates. With that, you can easily detect the fraud attempt when you notice the contrary.

         I.       IRS never contacts taxpayers or businesses to request personal or financial information, not through emails, text messages, social media, or phone calls. It makes contact through mail delivered by the US Postal Service. Even in the few cases where it calls or visits taxpayers, the IRS will have sent a series of “notices” before that.

       II.       The IRS does not call taxpayers to demand payments through debit cards, gift cards, or wire transfers. However, it does usually send tax bills to taxpayers through the mail.

      III.       The IRS will never threaten taxpayers with police arrests or revoking of licenses. It, rather, gives guidelines on how taxpayers can pay their taxes to the United States treasury.

    Sound Accounts is an establishment that understands licensing. If they handle the licensing and notary aspects of your business, scammers don’t stand any chance.

     IV.       As a taxpayer, you have every right to contest your tax liability. The IRS always gives you the fair opportunity to do so.

       V.       The IRS can use private debt collectors to collect taxes. Note, however, that these debt collectors are not the ones that receive the payments. When real payments are sent, the taxpayers pay to the US treasury through the IRS.

    What You Should Do

         I.       Any contact via email or text message will likely be a scam. It’s therefore advised that you don’t respond to such messages or download file attachments. You should forward such emails and texts to phishing@irs.gov, and then delete the message

       II.       When you get phony phone calls, make sure you don’t disclose personal or financial information to the caller no matter how authentic the number looks. Hang up instead and call the IRS phone number (1-800-366-4484) to verify the authenticity of the caller.

    Unfortunately, IRS scam is real, and it has caused a lot of taxpayers millions of dollars. It may be challenging to be completely free of these scams, but you can increase your chances of safety. Some of these scammers, as we read, tend to target your filing system as a business or even individual.

    It, therefore, becomes important that you have competent professionals to handle vital and delicate administrative roles for you. Such precautionary measures, coupled with the information we’ve provided above, will go a long way to protect you from scams. Good luck!

  • How To Check Up on Your Bookkeeper

    How To Check Up on Your Bookkeeper

    Bookkeeping is an essential part of a business. Unfortunately, many business owners tend to overlook it either due to carelessness or over-delegation of financial responsibilities. When the latter is the case, the individual(s) are in total control of the finances. Unfortunately, this can lead to financial fraud.

    This is why it is vital to check up on your bookkeeper. There are a lot of honest bookkeepers out there. But you can put measures in place to protect your business!

    Having gotten that out of the way, let’s now examine 10 ways you can put a check on your bookkeeper.

    Regular Checking of Accounting Application

    As a business owner, you must log in to your accounting application regularly. Ensure that you do a review on the financial activities happening in your company. You could do this on a daily or weekly basis, whichever one works best for you.

    It is best to do these checks after your bookkeeper has done the necessary updates. It makes it very easy to identify issues, if there are any.

    Consider Getting a Certified Public Accountant (CPA)

    Hiring a controller is always a good idea when it comes to tracking your records. But a CPA may be ideal for this. As a tax expert, a CPA goes beyond checking your bookkeeper’s work; they also handle your tax matters.

    A CPA will review your financial records thoroughly to ensure that everything matches up with your tax returns. Also, they help pinpoint deductions you may have overlooked.

    Ensure There Is Good Documentation

    Receipts for purchases made by the company must be kept. A bookkeeper may ask for them, but won’t likely keep these documents. Reconciliation and balancing of books most times require these documents.

    If they are not available, there could be expenses that are not accounted for. Some apps can fetch receipts automatically. You can use them for this purpose.

    Set up Security Protocols

    An excellent example of this is countersigning. Ensure that all checks require two signatures. Don’t sign blank checks in advance and leave them under the care of the bookkeeper. It is also essential that you examine every check before you sign them. Don’t sign in a hurry; you could be signing away your company without knowing it!

    Monthly Review of the Financial Statements

    Your financial statements help you to track your business performance. How is your business faring as compared to the last month or year? What modifications do you need to make? It is challenging to make changes when you don’t have a good knowledge of your company’s numbers.

    You’ll most likely be making guesses and thereby hurting your business. The bookkeeper should be able to give you a detailed report of everything on the statement. When everything checks out, you can “close” the books and don’t make any changes after that.

    Attach Scanned Images to Each Transaction.

    They help to give a clear and transparent representation of every transaction. It eliminates the issue of check tampering. A tampered check may mean that a bookkeeper has diverted funds without the company’s knowledge or approval.

    Have Access to Your Bookkeeper’s References

    Your bookkeeper has access to your finances and bank accounts. You need to have a way of getting to them in case of trouble. Requesting your bookkeeper’s references during the hiring process shouldn’t be a mere formality.

    You need to have reputable people vouching for them before you hire them. Also, make sure you have ready access to these references. It’ll go a long way to keep your bookkeeper in check.

    Have Regular Meetings with Your Bookkeeper and Ask for Reports

    You should have a regular discussion with your bookkeeper. They should bring you up to speed as it concerns the company’s finances. Also, ensure that what they tell you matches what is on the books.

    To this end, ask them to send daily or weekly reports. These reports will serve as a guide when you’re checking the books. If there are discrepancies, ask for an immediate explanation. 

    Make Sure Their Office and Computer Are Secure

    Bookkeepers handle very vital and delicate information, which mostly involves your finances. It is essential that they have a secure office or computer where they do their work.

    Your company’s records could fall into the wrong hands by so doing. These could include information about your bids, estimates, as well as profit and loss. You already know the implication of this.

    Outsource Your Bookkeeping

    There are professional firms that have excellent protocols in place – protocols that can eliminate dishonesty. It’s worth it to outsource your bookkeeping to any of such firms. It saves you the stress of having to check your bookkeeper.

    You also have access to all your records 24/7. All you need to do is access your QuickBooks online database and get the information you need.

    We hope that you find these 10 tips helpful. Bookkeeping is something you should never take for granted. Keep a close eye on your finances. The success or failure of your business depends on it.

    If you want more information on outsourcing your bookkeeping, please contact us today!