Category: Bookkeeping

  • Financial Audit: Performing a Self-Audit on Your Business

    Financial Audit: Performing a Self-Audit on Your Business

    Many business owners wait until the next financial crisis before carrying out a financial audit.

    Making financial reports can be hectic and time-consuming. A lot of time is lost digging through records, receipts, and tax documents.

    Benefits of a Financial Audit

    However, performing a financial audit is crucial! It can help you reduce risks and evaluate little expenses that add up to damage your business.

    In one of Benjamin Franklin’s famous quotes, as seen on Forbes, he warned business owners to be wary of little expenses.

    So, what can you do to save your business? Precisely, how can you curtail accruing “little expenses”?

    The answer to those questions is to evaluate your spending through audits – internally or externally. If the expense attached to external assessments scare you, did you know you can do a self-audit?

    Read on to find out more of the benefits of a self-audit and how to implement it on your business.

    Eliminates Internal Theft or Embezzlement of Funds

    A thorough self-audit not only evaluates your financial documents, but reviews your company’s policies. If there is no threat of fraud, there might be loopholes in your company’s procedures.

    Luckily, a self-audit helps find those loopholes. You will also examine vital policies such as internal controls, record-keeping, protection against theft, and spending limits.

    Prepares You for Possible External Probing

    A self-audit reveals and evaluates crucial areas of your business. In this way, it safeguards you against external probing because you already know what and where to check to plead the case of your company.

    It Is Affordable

    Unlike external audits that require you to employ third-party agencies, self-audits are in-house. At most, you’d select a representative from all divisions of your company to form a committee. Think about it, will that cost you a dime?

    How to Carry Out Your Own Financial Audit

    • Find the Right Time

    Say that you run a winter clothing line. Conducting a self-audit between December and February is ill-advised. Why?

    Winter months are likely periods with massive sales in such a business. As such, any financial assessment during that time won’t be thorough.

    On the other hand, summer months are likely perfect for self-audits. In other words, you would likely have time to evaluate your financial documents with undivided attention.

    • Gather Your Financial Records

    Now gather all essential records such as bank statements, invoices, and sales receipts. After assembling the documents, send them to the accounting department for close evaluation.

    While you’re at it, review your accounting policies so that documents are promptly sent to the accounting department.

    • Review Your Record-Keeping Policies

    Additionally, look into your records retention practices. Do you store records adequately?

    If no, put a system in place that archives your canceled checks, cash register tapes, and invoices.

    Also, evaluate your policies on protection against theft. Is your accounting software password protected? Do you separate accounting duties amongst your employees?

    Lastly, analyze your tax records against the tax returns. Are there any non-correlating reporting or numbers?

    • Examine Your Cash Flow

    Say you spent below $2000 on logistics all through 2019. And in the first quarter of 2020, you’d already spent over $3000. When you find such alarming increases, query it. 

    And you should not stop there. Look at the percentages. What part of your business accrued expenses so much?

    The answers will help you build systems to cap spending for each segment of your business. 

    However, you don’t need to compare annual figures only. You could do more frequent audits. Monthly evaluations let you look at expenses such as data charges, service contracts, and logistics.

    With these tips, performing a financial audit is not as difficult as it seems. More importantly, these steps could help you find cash-flow leaks in your business.

    If you would like help with your financial audit, we would love to be of help! Contact us today!

  • 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!

  • 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.

  • 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!

  • COMMON BOOKKEEPING MISTAKES

    COMMON BOOKKEEPING MISTAKES

    Data from the United States Small Business Administration show that about 50% of every new small business in the United States will fail within the first 5 years. So why do small businesses fail? Bad financial management.

    Good financial management begins with knowing some key rules of bookkeeping. From small businesses to big corporations, bookkeeping is a vital part of any business effort. Although it’s typically not the best job, your business needs bookkeeping services to succeed. After all, errors can cost your business significantly.

    Small businesses often make bookkeeping errors in their first years of operation, due to the lack of knowledge concerning correct accounting procedures. If you don’t have the money, time, or wish to become a certified bookkeeper, you can avoid some key pitfalls, which can impact on your business’ bottom line.

    So here are some common bookkeeping mistakes made by small businesses — and how to prevent making them.

    Doing it Yourself

    We only have 24-hours daily. So as a small business owner, you need to ensure that you’re filling them with just the most vital tasks. Although managing money is absolutely an important task, you don’t need to do it yourself.

    In actuality, if your bookkeeping and accounting skills aren’t strong, it’s best you hire someone to do it. Delegating this job to an expert will help you cross check for errors. Also, it gives you time to work on your business – and not in it.

    Employing the Wrong Accounting Method

    There are two principal business accounting methods: accrual and cash. The accrual method is simpler since it’s founded on the actual flow of money in and out of your business. The cash accounting is used essentially by sole proprietors without any inventory. That said, the accrual method documents expenses and income as they happen.

    As your business grow and get more complex, you should change to accrual accounting. This method makes it easier to match income to expenses correctly. Otherwise, your business might appear profitable during periods with some expenses and profitless during months with huge expenses, without understanding the difference.

    Failing to Monitor Reimbursable Expenses

    Often, small business owners pay for purchases with their credit card. After paying, they fail to follow these expenses.

    In essence, don’t mix business and personal spending. Keep your business and personal finances separate always. We advise small business owners to open a company checking account and keep business income into the account.

    Next, get an accountant to devise an income management strategy directing how money is removed from your business. The following factors will drive your income management strategy:

    • The profits that need to be reinvested back into your business
    • Your long-term personal financial plan.
    • Your annual cash flow needs

    Not Negotiating Vendor Terms

    A lot of small business owners often buy items from the same vendor always. If you do this, it’s essential to build a relationship with your vendors. Even if the purchases are little, always call and ask questions. Also, you can bargain longer payment terms or reduced pricing, allowing you to maintain more cash flow

    Not Keeping Hard Copies of Records

    In a world of Internet banking, several small business owners feel comfortable depending on the Internet to safeguard their records. Although going paperless is a no-stress and an eco-friendly option, always keep hard copies.

    Most banks only allow access to these records for some months. As a result, you may come up short if you wait till tax time to reconcile your bank statements.

    Lack of Communication

    Bookkeepers can do their job effectively if they’re filled in and briefed on every financial transaction. A common mistake is paying someone without reporting it or getting supplies and not giving the bookkeeper the necessary information or receipts.

    The Bottom Line…

    You can avoid these costly bookkeeping mistakes. Prepare accordingly and watch out for warning signs. When in doubt, get the right information, know the right bookkeeping rules, and ensure that your books are accurate all year-round.   If that all seems like too much work, please contact us today!  We are here for your bookkeeping needs.

    Your final balance sheet will thank you.

  • Tax Deductible Categories for Small Businesses

    Tax Deductible Categories for Small Businesses

    As the calendar turns, it won’t be long until annual taxes are due. Business owners have different categories they can claim as deductions. Here are 10 categories to remember when seeing your tax professional:

    Employee Pay and Benefits

    Everything you pay your employees in salary and most benefits are a tax benefit to you. Double check with your tax professional

    Auto Maintenance and Mileage

    This one can be tricky to navigate. You must keep good records, but you can claim the maintenance costs or the mileage deduction. Your tax professional can help you determine which way would be best for you.

    Home Office

    Home offices can be a deduction for you on your taxes. This includes costs for utilities, security, maintenance, cleaning, etc. Work with your tax professional to get the most for you.

    Education

    Seminars, symposiums and trade shows that are related to your business are deductions. Remember to include any trade magazine subscriptions, training CD’s/ DVD’s and all other training materials.

    Advertising and Marketing

    Include all areas where you pay for a service. Promotional costs are also included in the category.

    Outside Help

    Not just the office cleaning crew.  Review the records of anyone you pay as part of your business that is not an employee. Hire your kids out to help stuff your mailing envelopes. They may be a deduction for your business.

    Service Fees

    Do you pay for processing credit card payments? Does your bank charge maintenance fees? Keep track, because it may mean a deduction for you.

    Professional Fees

    Do you have a lawyer? An accountant? A tax adviser?  A bookkeeper? (If you don’t, you should call us.) All of those fees are deductible to you.

    Licenses

    Keep track of all licenses, fees and permits that you are required to operate your business. They are likely a deduction

    Taxes

    As strange as it may sound, taxes incurred while running your business, are a deduction. After all, they are a business expense.

    Always consulate your financial professional as they have the training and knowledge to ensure you follow the appropriate tax law.  Sound Accounts is always ready to help you with your business needs.

  • Year-End Wind Up – A Small Business Checklist

    Year-End Wind Up – A Small Business Checklist

    The end of the year is busy with the holidays, family obligations, and looming tax obligations. Taking some time to tie up the loose ends of the business year will help set you up for success for the coming year.  Let’s take a look at some of the steps you can take to wrap up your year with a big red bow!

    Get Organized

    The IRS offers a records retention schedule.  Business owners should take time annually to organize their files and purge old documents.  Ideally, you should store items by year with the exception of those documents the IRS suggests keeping permanently.  This way, you can also go through your boxes from past years and purge documents that are due for destruction.  Taking time to organize and purge your files will set you up for a clean start to the New Year.

    Assess Equipment Needs

    Spending your profits on equipment or furniture will help decrease your tax liability for that year. Take a look at your equipment.  Do your employees need new laptops, desk chairs, software?  There are great deals to be had  at the end of the year which could end up saving you money in the long run.

    Find Places to Save Money

    Year-end is a great time to evaluate your spending for that year.  Look at your spending on office supplies, utilities, or even subscriptions to see if there’s anything you can cut back on in the coming year.  You may be spending money on magazines that nobody reads or purchased software that is rarely used.  Even if you outsource your bookkeeping, it’s a good idea to look over these items yourself on an annual basis.

    Reward Employees

    Show your employees you care!  You can do this through bonuses, buying lunch for them, having an in-office party, holding a catered party off-site, or simply buying gift cards.  Take the time to thank them for their time, energy, and efforts in growing your business.  A small hand-written note in a card will go a long way to encouraging employee loyalty.

    Count Your Inventory

    We encourage our clients who keep inventory to do a count more than once per year.  As a small business, you can very easily fall victim to theft if you aren’t watching your inventory closely.  Some of our clients with high inventory turnover conduct monthly counts of their inventory.  This way, they can look for patterns of loss to determine if theft is occurring. Getting your inventory up to date is very important for your tax preparation efforts.

    Check Your Website and Social Media

    Go to your website and check every single link.  Try sending yourself a message from the “Contact Us” page.  Call the listed phone number to make sure it works.  Make sure your hours of operation and listed holidays are up to date.  This is often the first thing new members see and it doesn’t look good if your web page is full of outdated information and broken links.

    Verify Vendor Information

    Now is the time to look through your vendors and update any old or missing information.  Take a moment to look at inactive vendors and decide if rekindling a relationship with them is worth it.  If not, purge your system of inactive vendors for a cleaner list going forward.

    Set New Goals

    The is the perfect time to evaluate your current goals and set new ones for the coming year. Employees feel included and a bigger part of the organization when goals that were met throughout the year are shared with them. Use your financial statements, customer feedback, and team input to set new goals. While it’s a given that we are discussing financial goals, we suggest you also make room to evaluate professional and client goals, too.  It’s also a good idea to set Key Performance Measurements for your team and have them set personal and professional goals for themselves, too.

  • Sound Accounts Co-Owner, Michael, Discusses His Why

    Sound Accounts Co-Owner, Michael, Discusses His Why

    What I Thought I Knew and Why

    When I reflect on why we started Sound Accounts, I remember my first business and my lack of knowledge. I knew everything I needed to run my business, or so I believed.  Bank accounts were set up and had obtained the business license. I was set.

    What I didn’t have was a partner.  I didn’t have someone looking out for my interests or the experience I thought I did to be successful. I didn’t have Sound Accounts.

    Making Dreams Into Reality

    Sounds Accounts has been a dream of ours for over 10 years.  We constantly talk about what skills do we need. What is our mission. Who are our customers. The one thing that is always central, is people like us. Individuals who have a vision for a business. Those who have a drive to make their corner of the world a little better. Business owners who do their one thing well. People who don’t know what they don’t know.

    Starting a business is hard work. It requires determination and a lot of sacrifice. It also requires some one who can help you navigate what is unknown.

    What You Don’t Know

    When you start your business, you know two types of things; what you know and what you don’t know.  You know what your business is and what good or service you are trying to sell. Maybe you don’t know the ins and outs of business banking or how to do your taxes. But there is another category; what you don’t know you don’t know.

    A good example of that is city and/or county business licensing.  You may know that you need a state license. Do you know if you need a license for operating in your city or county? Are you required to have more than one? Where to even begin to searching for the answers?

    What I’ve Learned

    I have leaned that having a partner to help you navigate the unknown is not a sign of weakness. It is, however, a sign that you don’t know everything. As much as I wanted to admit that I knew everything about my first business, I had to accept that I didn’t. If I had partnered with a business, like Sound Accounts, I would have been much more successful.

    As we approach the holiday season, I hope that you take some time with your family and friends. I hope that you are successful in 2019 and beyond. I hope that you will see the strength in partnering with others who have been there and have the skills to help you be successful in the areas that you aren’t even aware that exist.

    Happy Holidays

  • Top 10 Tasks Small Business Owners Should Consider Outsourcing

    Top 10 Tasks Small Business Owners Should Consider Outsourcing

    Most entrepreneurs don’t go into business because they do all aspects of business well.  They know their skill, task, or particular industry well so they start a business.  Successful business owners understand this concept.  They readily outsource the parts of their business they don’t want to tackle, enjoy managing, or understand.  Let’s take a look at some of the tasks you could be outsourcing.

    Marketing and Social Media

    According to Entrepreneur magazine, “Over 40 percent of companies have an executive in their organizations who is directly responsible for content marketing. Unfortunately small businesses like yours may not have the budget for that.”  So, what is a small business to do to get their products in front of customers?  Hire a marketing and social media team to hand this task.  You could start out small by outsourcing this to a writer, engaging some freelancers on Fiverr, or employ an agency.  Not only will you save money, but you are more likely to build better client relationships because your content will be higher quality.

    Bookkeeping/Payroll

    Good financial reports can make or break a business.  When your reports are clear and easy to read, you can use them to plan for the future.  You can also present them to a lender if you are looking to procure a loan.  Unfortunately, it is very easy to make mistakes and end up with reports that don’t make sense.  You could also find yourself in trouble with the state or federal governments for improperly paying your taxes.  Outsourcing your bookkeeping and/or payroll can save your company a lot of money in the long run.

    IT

    We all have that relative who claims to know all about computers.  Some of us hire them to set up our networks and workstations.  But, do they really know all the ins and outs of security?  Is our business one that is subject to specific technical regulations such as HIPAA or HITECH?  Making sure that our networks and workstations are secure and won’t be hacked easily is very important to the survival of our businesses.  Our clients aren’t likely to stick around if we make it easy for hackers to steal their information.

    Office Cleaning

    Clean and tidy offices are comforting to clients.  Not many clients are going to want to return to a space that looks unkempt.  But who has the time, as a busy entrepreneur, to clean the floors and make sure the paper towels get filled?  Nobody!  Hiring a janitorial service can save you a lot of time and money by keeping your office clean and presentable.

    Taxes

    Much like bookkeeping, most business owners don’t know the first thing about business taxes.  Hiring a professional will not only save you time, but it will likely save you money as a tax professional knows what deductions to look for that you may not have claimed.  Additionally, having a CPA manage your taxes lowers your audit risk.  And, the CPA will be the one representing you to the auditor if they complete your taxes and you get audited anyway.

    Writing

    Blog posts, ad copy, website copy, biography information, oh my!  Business owners have a lot to write.  Most of us, however, don’t have the time or ability to write all of this or to stay on top of all of it.  We don’t have the understanding of all that’s required or who to write a blog post that will score high in SEO.  This is another task best left to the experts.

    Scheduling and Administrative

    It’s hard for business owners to get much done during the day.  If we allow ourselves to get bogged down with repetitive tasks like answering emails, setting appointments, and playing phone tag, we will never get anything done.  Hiring a virtual assistant to manage your schedule, answer emails, or return phone calls can go a long way to saving you time and money.

    Graphic Design

    We all need good graphics for our advertisements.  So, unless your business is graphic design, it would likely be best for you to be spending your time working on your business instead of designing graphics yourself.  With the freelancer marketplaces opening up, it is not difficult for a small business to outsource this task even with a small budget.

    Website Design, Development, and Updates

    We have one chance to make a first impression.  Our website is often the first impression a client has of our business.  Our websites must be flexible to be viewed on a wide variety of platforms from desktop computers to cell phones to tablets.  Websites must reflect our brand image and also be updated regularly so that it continues to function.  Unless you are a web designer, this can also be outsourced to a freelancer to ensure that your site is turning visitors into customers.

    Training

    Are you a teacher?  Do you know how to motivate a sales team?  What about putting together a curriculum for onboarding new employees?  If you are unsure how to do these, we suggest that you outsource this process.  Providing training or motivation for your employees and staff will go a long way toward keeping them happy and productive.  Therefore, unless you are a trainer by trade, we highly recommend that you seek out a company who specializes in training other companies and employees.

    There are a lot of other tasks and projects that small business owners can, and likely should, outsource.  Unfortunately, most of us entrepreneurs don’t want to give up that control and hand those tasks over to someone else.  However, knowing what your weaknesses are and having a willingness to give those tasks to someone who is an expert at it will save you a lot of time, money, and frustration in the long run.

    Interested in outsourcing your bookkeeping, payroll, or office management?  Call us today!  We would love to help!

  • Unfiled Tax Returns

    Unfiled Tax Returns

    A non-profit came to us one day because they received a bill from the IRS for over $120,000 plus penalties and interest for failure to file their tax returns.  They were in a panic and had no idea what to do.  This is where we stepped in.

    The Issue

    This non-profit thought they had been compliant.  That is, until they realized their treasurer had been stealing money from them.  Additionally, they had no idea that the treasurer hadn’t been filing the non-profit’s tax return for the past three years.  Per the IRS, “the maximum penalty for any return is the lesser of $10,000 or 5 percent of the organization’s gross receipts for the year.  For an organization that has gross receipts of over $1 million for the year, the penalty is $100 a day up to a maximum of $50,000.”

    The Plan

    First, we knew we had to work quickly.  We had to get all their information into a QuickBooks file so that we could produce financial statements.  Then we had to have a tax preparer utilize those statements to file the past due tax returns.  Lastly, we had to put together a letter explaining the situation this non-profit was in and their plan to keep this from happening in the future.

    The Work

    We quickly started putting together their numbers for the years they had not been compliant.  This was not an easy task as they did not have all the information readily available.  They had to go to their bank and request paper copies of their prior year bank statements because they were no longer available to download online.  They also had to speak to their bank and request copies of checks that were written because they had no idea what some of their expenses were.  Once we had all the information together, we entered it into QuickBooks and produced financial statements.

    The Wait

    As soon as we had everything together and handed it off to the tax preparer, we put together the letter explaining the situation the non-profit was in and the systems they had in place to ensure future compliance.  Our letter also outlined the financial situation this penalty was putting them in and asked that the penalties and interest be waived.  We knew that the IRS might not be so lenient, but we had to ask as trying to pay this amount would surely put this non-profit out of business.  Once our CPA put the tax returns together and sent them in with our letters, all we could do was wait.

    The Outcome

    Several weeks passed without any word from the IRS.  Then, approximately two months later, our non-profit client called us.  They were giddy with excitement!  They had just received a letter from the IRS informing them that all fines, penalties, and interest had been dropped.  The non-profit owed nothing to the IRS.  They couldn’t thank us enough!  So, if you find yourself in a situation with the IRS, give us a call.  We would be more than happy to help you work your way through these issues and we have an amazing CPA that we partner with to take care of your tax issues.