Category: Business

  • Top 5 Mistakes Small Business Owners Make with Quickbooks

    Top 5 Mistakes Small Business Owners Make with Quickbooks

    QuickBooks is a cloud-based accounting software program used by small businesses. It allows you to manage your finances, prepare financial reports, and generate customized invoices. It can keep track of your business expenses, sales, payroll, inventory, time and attendance, and more. It also helps you organize your books, prepare business tax forms, and manage your quarterly tax payments. This makes things easier and less expensive overall, since employees don’t have to spend hours tracking information across multiple systems. Plus, it also helps eliminate data entry errors.

    But there are some mistakes that small business owners often make with QuickBooks, particularly if they are new business owners. These mistakes can cause problems and frustration for your accountant, or you if your business is small enough that you need to manage your business accounting by yourself.

    Here are 5 of the most common mistakes that small business owners make with QuickBooks, and how to address them.

    Mistake #1: Not understanding how to work with QuickBooks properly

    When you start using QuickBooks, you may think that everything is easy. QuickBooks is designed to be intuitive and user friendly, but that doesn’t mean it is without a learning curve. If you don’t know how to use it well, then things could go wrong quickly. 

    If you don’t take the time to learn all the tools and functions correctly, you can easily make an accounting error that is difficult to reconcile. If you don’t know how to record the details of your transactions correctly, then it can be very hard to prove anything if a discrepancy or audit comes up. This can snowball into creating inaccurate reports and not being able to accurately compare figures over long periods of time. You’ll lose the ability to spot trends or identify areas where improvements can be made for the financial health of your business. Not only that, but not learning the full functionality of QuickBooks means you could also be missing out on great features that can improve efficiency and accuracy for your small business.

    If you’ve invested in QuickBooks, you owe it to yourself to learn how to use it properly. It is well worth the time to ensure that you get everything you are paying for.

    business owner using QuickBooks

    Mistake #2: Not Updating Your Business Transactions In a Timely Manner

    QuickBooks Online is a fantastic tool for a variety of business needs. You can track inventory, manage orders and sales, maintain timesheets, and manage payroll. But it is still a system that needs to be updated and reviewed to maintain the integrity of your financial records. Any action that you take for your business needs to also be reflected in QuickBooks Online. That means committing the time needed to make sure that your business transactions and other records are entered or updated as soon as possible. 

    It’s easy to get excited about a shiny new piece of technology, especially with all the promises of efficiency, accuracy, and ease that QuickBooks Online truly does deliver on. But if you are a smaller company or a freelancer, it can be difficult to make the mental switch and build the habit of updating your records online rather than putting them away in a file cabinet or a massive Google Drive folder. It is also easy to fall into the habit of thinking “Oh, I’ll remember to update this new sale tomorrow”, and then forget.

    But the great thing about QuickBooks Online is that, in addition to being an effective solution for any business need, it is also user-friendly and easy to navigate even for beginners. It can also give you an accountability boost, knowing that you’ll make the best use of the system by maintaining meticulous records. Take advantage of the free training available and build time into your weekly routine to do “housekeeping” and ensure that the business actions you take in real time are recorded in QuickBooks Online.

    Mistake #3: Not Reconciling Your Accounts

    When you work with QuickBooks Online, you should set up automatic reconciliation so that you won’t miss out on savings. Automated reconciliation only takes minutes per month, yet not reconciling is one of many accounting errors small business owners make.

    When you use automated reconciliations, you get access to real-time information. This allows you to see exactly what needs to happen before you pay bills. For example, you might receive a bill for $1,000, but when reconciling your accounts, you realize that your payment owed is $500 less than that amount. Or your automated reconciliation catches a late invoice, allowing you to check in with a client before too much time passes. By using automated reconciliation, you are able to catch errors right away, which improves the accuracy of accounting and reduces your accounting mistakes overall.

    Mistake #4: Not Reviewing Your Profit and Loss Statement

    You may think that reviewing profit and loss statements isn’t important, but it actually plays a huge role in keeping your finances accurate. For certain industries, the profit margins are very small. And if you are a new business, you need to get in the habit of reviewing your profit margin equation. Your profit and loss statement is vital to getting an accurate picture of your overall finances. QuickBooks makes it very easy to review profits and losses, so why not take advantage of it?

    When businesses fail to review their P&L statement, they can easily fall into the trap of assuming that things are fine since they haven’t seen a major change in recent months. Unfortunately, this assumption leads to an inaccurate grasp of the financial wellbeing of your business. It doesn’t matter whether you own a restaurant or a construction firm; you still need to look at your profits and losses at least a few times a year.

    business owner worried about accounting mistakes

    Mistake #5: Not Creating or Updating User Roles & Permissions

    User roles and permissions play a big role in ensuring that everyone has an appropriate level of access to your QuickBooks account, based on their position in your company. Without these roles and permission settings, someone could potentially gain access to sensitive data without permission. That means that they could steal money from your bank account or even delete records. To avoid these issues, you must create user roles and assign appropriate permissions. Otherwise, you could find yourself dealing with serious security risks down the road. 

    This should also include having employees use strong passwords and also updating them regularly, in addition to deactivating old permissions for former employees that have moved on from your company.

    Whether you are a sole proprietor who is new to managing business accounting or a seasoned small business owner with a robust understanding of bookkeeping, QuickBooks is an excellent system for maintaining financial records and giving you peace of mind. Sound Accounts can help you take the guesswork out of managing your business finances through QuickBooks.

  • QuickBooks vs Xero: What’s the Difference?

    QuickBooks vs Xero: What’s the Difference?

    QuickBooks is a popular business accounting software that is used around the world. Xero is a newer but also a popular business accounting software that is more geared towards larger companies. They offer similar services, but there are unique differences between them that you and your accounting department should consider. In this article, we will go over the differences between these two products and help you decide which one is right for your business. 

    What Is QuickBooks?

    QuickBooks allows users to manage their finances in an easy-to-use interface that can be accessed from anywhere with internet access. It is available as both QuickBooks Online, which is a cloud-based service, and as QuickBooks Pro which is their desktop version. This makes it perfect for any type of company, whether they have employees or are a sole proprietor. 

    If you run a payroll service, QuickBooks helps you easily set up paychecks, calculate tax deductions, connect bank accounts, manage banking transactions and online payments, and get everyone on the company payroll with ease. It also manages timesheets and allows employees who work overtime to log extra hours directly onto tasks, making it easier to track wages accurately. You can easily manage your business taxes and your quarterly taxes.

    If you sell items online, the inventory management system allows you to keep track of your inventory levels at all times. You can import inventory orders, add new items, update existing inventory, view sales history, and compare current inventory stock levels to previous years. You can easily view your balance sheet and expense tracking with this business accounting software.

    QuickBooks’ customer relationship management system allows you to organize customer information into categories such as contact details, purchase histories, and more, making managing customers easier than ever before. Billing and Invoicing is generated automatically when certain events occur. For example, if you receive payment, you can generate an invoice immediately and it will calculate shipping costs, tax rates, and other fees associated with selling goods. There is also an invoice template if you are new to creating them and want to make sure you have included all the necessary information. Expense reporting is also simplified through categorized transactions based on location, category, date, and amount. You can quickly find specific expenditures using filters and search criteria. The ease of expense reporting and the search functions take away a lot of the guesswork and frustration with accounting, bank reconciliation, and business taxes, even for established accountants.

    QuickBooks vs Xero, accountant trying out each one

    What is Xero?

    Similarly, Xero is cloud accounting software designed specifically for businesses. Its main focus lies in helping companies save time and money by automating processes. In addition to this, it offers robust security measures to protect sensitive financial data.

    The most obvious advantage of Xero over traditional desktop accounting programs is speed. Since it runs entirely in the cloud, there are no downloads required; all updates happen instantly. There are no installation steps either, which means less downtime during setup. Once installed, Xero takes care of itself. No more worrying about backups, upgrades, or system crashes! QuickBooks Online also benefits from automatic upgrades and backups without the need to initiate these on your own. However, while both systems are free from the worry of local problems that come with desktop, laptops and other devices, they are still sometimes vulnerable to network crashes since they depend on a consistent internet connection. 

    Another major advantage of Xero is scalability. Unlike desktop applications, Xero doesn’t limit growth. As long as you’re connected to the Internet, you’ll always have access to updated versions of your software. New features come along regularly, so unlike some legacy systems, your business won’t be left behind.

    Xero was designed with simplicity in mind. It is easy to use and does not require any technical knowledge. It is suitable for small businesses and individuals, though their main customers do tend to be larger businesses. With their app, you can check your account anytime, anywhere, and access your account from any device. It is compatible with Android, iOS, Windows, Mac, and Linux operating systems, and seamlessly integrates with Google Drive and other third-party apps.

    Xero also has comparable invoicing and billing systems to QuickBooks. It allows users the ability to customize reports for specific needs besides adding images, graphs, charts, and tables to their reports. The customizability of their reporting is an excellent feature if you have highly specific reporting needs.

    Another big benefit to Xero are its powerful security features. Data encryption ensures that nobody but you can read your personal information. User authentication keeps unauthorized people off your computer. And user permissions prevent others from accessing areas of your account that aren’t meant for public viewing. You can add second factor authentication to your accounts, requiring each employee to login using both a password and a phone number to access Xero. Xero also includes automatic back-ups, giving you an extra level of protection for your small business data.

    Xero also comes with 24/7 customer support via phone, email, chat, and social media. They offer free employee training and ongoing support through a customer service team that can answer any questions at any time.

    accountant using accounting software

    So what’s the difference?

    The main difference between the two comes down to the pricing plan and customization options based on your needs. QuickBooks has both a cloud and a desktop-based version, while Xero runs solely in the cloud. Both are user friendly and each accounting dashboard is attractive and simple to navigate. Managing bills, expenses, invoicing, connecting your bank, and managing other financial transactions is comparable between the two programs, giving you an accurate picture of your business transactions and your overall financial health. 

    Both provide multiple plan options where the pricing is based per month per person. Each option also offers a robust array of integration with various third-party apps, such as Google Drive, CRMs (customer relationship management software), time tracking tools, email marketing, project tracking, and ecommerce. You will need to compare and verify that your existing systems will work with QuickBooks and Xero, which can help you make a final decision on a software for your business bookkeeping.

    In terms of pricing and scalability, QuickBooks is popular with freelancers and small businesses because of the low cost. QuickBooks Online offers three versions based on the number of users, going from $25 a month for one user up to $180 a month for 25 users, though they also regularly offer promotions to start using QuickBooks Online for half-price for the first three months. QuickBooks Pro offers an annual desktop subscription for $299.99, with a similar promotion for 50% off in the first three months. QuickBooks gives you an incredible amount of value at even the lowest price point, allowing you to access all the key features of their accounting software at a reasonable cost.

    Xero is attractive to more mid-level companies with up to 1000 employees due to its scalability. Xero offers three pricing tiers from $11 per month with limited features to $62 a month with full functionality. They regularly offer joining discounts similar to QuickBooks Online, and also give you the option of an add-on feature, Payroll with Gusto, for an additional monthly fee. The difference between their cheapest plan vs. QuickBooks Online is that there is a limit to how many invoices per month you can process. These limits make the basic plan with Xero a better choice for freelancers or entrepreneurs with side hustles. Where Xero has the advantage is in its scalability, with additional features that can grow as your business and budget grow. It also has an excellent user experience and intuitive design. In fact, one of Xero’s marketing taglines is “beautiful accounting software”, and it really is both beautiful and easy to navigate.

    So QuickBooks or Xero? The short answer is still, it all depends. But both are excellent options and you won’t go wrong with either choice. Think about the needs of your business now, both in terms of the functionality and budgetary restrictions, but also consider the future you envision for your business. Which option is going to best support the growth that you see. Finally, it never hurts to check in with your accountant for advice. They may have experience or a preference that helps you decide what is best for your growing business.

    Sound Accounts provides bookkeeping, payroll, licensing, and notary services. Contact us for a free business assessment and consultation on what software best fits your small business needs.

  • Burnout: Protect Yourself as a Business Owner

    Burnout: Protect Yourself as a Business Owner

    What makes business owners and entrepreneurs burnout?  Why is it important to understand the signs?  With so much focus on employee burnout and its impact on businesses we sometimes fail to take care of ourselves. A business owner’s burnout could be the reason their business suffered a breakdown.

    Entrepreneurs aren’t supernatural beings, and the sooner you realize this, the better it will be for you and your business. Here are a few ways you can protect yourself from burnout.

    Separate Yourself from the Business

    When entrepreneurs talk about their businesses, they sound so passionate. In fact, they’ll be the first to tell you that their employees can’t be as passionate as they are; business-wise.

    While passion is okay, being unable to separate your business from yourself is not. Too many entrepreneurs have this problem. The business slowly becomes them, and they pay no attention to their own health and wellbeing. We found a great video to help you create a self-care action plan to make caring for yourself as much of a priority as your business is.

    Notice the Signs of Burnout

    Do you have sleepless nights and worry over what makes business burnout? Worry and anxiety can lead to burnout and frustration. Are you dreading going in to the office or procrastinating on simple projects?

    As soon as you notice any of these signs, it’s time to take a step back and rest. Go on a vacation or an extended holiday. Whatever you choose, take some time off once you notice any of the signs of burnout.

    Delegate More

    Every entrepreneur has heard this or a version of this advice several times. The response is usually the same. “I can do it best so why delegate?” Well, you can’t be everywhere at the same time.

    Often in business, there will be many fires to put out simultaneously. You can’t fix it all yourself. Trying would only earn you a spot on the entrepreneur burnout list.

    If your staff can do it well, let them do it. After all, your employees are there to work for you, not the other way round. Only attend to a few important tasks at a time; then delegate the rest.

    Outsourcing is another great way of delegating your tasks.  Contact us if you would like someone to help you with bookkeeping, payroll, or managing your business licenses.

    Reflect More

    We tend to focus more on our current struggles than our wins. Entrepreneurs are even worse culprits than the regular person. Many focus on their current struggles so much that they fail to realize their wins.

    A sure-fire way to ensure that you celebrate your wins is by reflecting. Make time out to reflect on your business and the wins you’ve experienced. In addition to this, focusing on your wins leaves less time for you to worry about your business.

    Get off Work!

    One of the most destructive myths about being a business owner is how long entrepreneurs work. Memes with quotes about entrepreneurs working 20 hour days are a dime a dozen. But it shouldn’t be that way. Entrepreneurs aren’t superhumans; they also need some time away from work.

    Pack up your desk, shut down your computer, and leave when your employees are leaving. Whatever cannot be finished today can be finished tomorrow.

    Get off work. Even entrepreneurs can squeeze out a few hours of downtime outside of work. Setting up a default time to leave work every day might help you develop the habit of taking time off work to rewind.

    Focus on Quality, not Quantity

    A lot of young entrepreneurs are focused on signing on as many clients as they can get. It is all about the money and being able to say that they work with many clients.

    After signing these clients, the entrepreneur then struggles to stretch his available resources for so many clients. Firstly, this could lead to sub-par work, and secondly, the stress could lead to burnout.

    Don’t concern yourself so much with quantity.  Be more worried about the quality of clients and the service you offer.

    As a business owner, you protect yourself from burnout when you realize that you are one being. No matter how much you wish it, you can only be at one spot. So, make things easy for your business and yourself by making sure you don’t burnout.

  • Mistakes Business Owners Should Avoid

    Mistakes Business Owners Should Avoid

    Starting a business can be challenging and often marked by a lot of mistakes. Entrepreneurship has been so romanticized that many people forget the hard work, years of obscurity and business mistakes that go into building a successful company. In fact, it’s so tough that few businesses make it past their first birthdays.

    Don’t fret, though. You can own a successful business, but for that to happen, there are certain pitfalls you must avoid. 

    Skimping on a Legal Team

    There will be a wide range of circumstances in which you will have standard questionnaires, which means reviewing documents. You may not know what your rights are and how to protect your interests. Before you start up a business, hire a business attorney to help you make important decisions and commit to legal agreements.

    Forgoing the Partnership Agreement 

    Everything from the birth of your business idea to its future as a billion dollar company and in-between is dependent on your partnership agreement. So don’t make the mistake of taking it for granted. From the very start, have a lawyer draw up an agreement between you and your partner. This singular action can save you and your business lawsuits and a great deal of stress later on. Fundera has a great blog article on finding the best lawyer for your business.

    Too Many Investors 

    Every startup needs investors. While you’re preparing to visit investor firms with your ideas, remember to retain an air of exclusivity. Investors like to buy into exclusive concepts, so the fewer investors you visit, the more your exclusivity.

    Research and pick your investors well before you present them with your idea. Don’t just throw out a big net hoping to snag a few investors. 

    A Missing Business Plan

    Without a plan or structure on how to run your business, you’ll run it into the ground. One of the first things you should do after having a decent idea is to make plans. Have a business plan drafted from the information you must have gathered on your target customers and from researching your idea’s profitability. 

    Skipping the Marketing Plan 

    You could have the best products in the world, and no one would know your business exists because you don’t have a marketing plan. This is a common business mistake. 

    Don’t just have a business plan outlining the business structure, have a plan to reach your consumers. It’s better to have these two things ready from the get-go. 

    Having Too Many Expectations

    The quicksilver rise to fame of certain startups is to blame for the great expectations that most business owners have. Rome wasn’t built in a day, and neither would your business be in a year. Keep your expectations realistic and numbered so you can focus your resources towards them and feel accomplished when you achieve them. 

    Reinvesting Everything 

    Many business owners seem to act like this is the true mark of a long-suffering entrepreneur. On the contrary, it makes your business look unstable when you can’t afford to pay yourself. In the books, it looks like your business isn’t growing well enough to turn out a profit. 

    Surrounding Yourself With the Wrong People

    As stressful as it is to own a business, it’s exciting and fulfilling as well. Most business owners want to get everything done in record time. That’s understandable, but you must apply caution when doing certain business activities.

    Hiring people who will work with you is one of them, especially in the early stages of every business. Hiring the right people can give your business a leg up or a leg down. Be intentional and careful with your hiring process. Surround yourself with people who are skilled, able to think deeply and who can contribute ideas to it. Contact us if you would like to talk about hiring a bookkeeper or payroll provider.

    Maintaining a Fixed Mindset

    Earlier, we talked about having a business plan and why it is vital to have a business structure. However, it would help if you also learned to be fluid. A good business owner has a plan and knows when to veer off. While a plan gives your business structure, remain fluid enough to take advantage of growth opportunities. One of the mistakes business owners make is continuing to do things because that’s the way they’ve always done them.

    Not Using an NDA 

    Ever heard of the saying… “nothing new is under the sun”? Well, it’s true; your idea or invention might be the exception to this rule. As a business owner, you need to protect your intellectual property. Before disclosing any new ideas or inventions, be sure that everyone signs an NDA.

    These business mistakes seem a bit too simple, but you’ll be surprised how many business owners make them. Hopefully, you’ll be more careful to avoid any business mistake that could be fatal. 

  • Everything You Need for a Successful 2021 Tax Day

    Everything You Need for a Successful 2021 Tax Day

    Tax day 2021 is almost here. It’s essential to start preparing ahead rather than wait until the timing becomes too tight to plan in a well thought out way. Here are some things you need to achieve a successful tax day in 2021:

    Adequate Records

    Before your filing day, you need to get your incomes, expenses, and other information ready. Make sure the documents and receipts show your income and expenses clearly. You can also hire a bookkeeper to help you do the work to ensure you keep accurate records. (We just happen to know some great ones!)

    Know Your Correct Due Date

    If you are a new business owner, don’t assume all forms are due simultaneously. Based on your business’ structure, you due date may be earlier than expected. For example, businesses with a partnership or Limited Liability Company are usually due a month before corporate companies.

    Square Up Your Business Information

    Aside from your business name, you’ll require some necessary information to complete your filing. You may need to dig up some of these. Some required information includes:

    • EIN or social security number
    • Business name, address, and start date
    • Accounting method (cash or accrual)

    Get Your Paperwork Organized

    The tax process will require a lot of paperwork. To make the process less stressful, get all the essential documents ready before filing your tax. Some documents you may need include:

    • Forms W-2 and other income records
    • Records of all expenses
    • Previous year tax returns
    • IRS tax statements received in the mail
    • Medical expenses and Health insurance
    • Childcare Expenses
    • Educational Expenses
    • Record of mortgage and property taxes
    • Records of Charitable donations

     Max Out Your Tax-Advantaged Accounts

    Your tax rate will depend on your income range. However, you have the option to reduce your taxable income through deductions.

    For example, if you spent a lot on medical expenses last year, you may be able to get some relief. 

    Below are some deductions you can claim;

    • Business Deductions

    If you’re a self-employed individual, you can claim deductions like travel expenses and home office deduction if you work at home.

    • Charitable Deductions

    CARES Act allows you to deduct up to 100% of your adjusted gross income (AGI) in qualified charitable donations.

    • Medical Deduction

    You can also claim a deduction if you spent a lot of medical bills. Currently, you can deduct medical expenses above 7.5% of your adjusted gross income (AGI).

    • Child Expenses

    You can claim up to your $2000 (per child) with the child tax credit if you have kids. However, there’s an income limit to claim this tax: $200,000 for single parents and $400,000 for married parents.

    There are many more deductions you can take, depending on your situation. It’s best to speak with a professional to help you figure out the deductions applicable to your situation.

    Develop and Incorporate Tax Strategies

    Develop and incorporate some tax strategies to help you make informed decisions with your wealth plan without affecting your next tax payment in 2021. We highly recommend sitting down with a trusted CPA.

    Make Tax Deductible Investments Early

    Big investments should be made before your financial year ends to help with your tax deductions. Investments like buying equipment or furniture for the office can increase your deductions, and you can only claim them if you invested before the end of your financial year.

    Pay Your Debt

    If you owe IRS money, you will need a plan on how to pay. You can pay in instalments or employ other payment option that’s convenient for you.

    Sign Up for IRS News

    Sign up with the IRS to get all the support and information needed to file your returns.

    Hire a Professional

    Being a business owner doesn’t automatically make you a tax expert. You don’t have to do it yourself; you can seek professional help to help you navigate the tax process, gather documents, prepare your income tax returns and offer financial advice. With a tax professional, you will save a lot of time and money,

    In conclusion, the 2021 Tax season might come with a few challenges, especially for business owners. However, with proper preparation and working with the tips above, you will find the process easy.

    If you need help getting your records in order or need recommendations for a good tax preparer, please reach out to us.  Not only do we have a vast network of people we recommend, but we can help you get your records cleaned up before you send them to the CPA.

  • Red Flags That Could Trigger a Tax Audit

    Red Flags That Could Trigger a Tax Audit

    Nobody wants to pay more taxes than they must. However, there are things you can do to limit your risk of an audit. Doing one’s taxes requires an attention to detail. An attempt to minimize your tax liability by getting into the IRS’s grey areas can cause you more problems later on.

    So it seems avoiding an IRS audit is impossible, but naturally, the chances that your tax return will be audited are very minimal. For the record, the IRS only audited 0.4% of personal tax returns in 2019. The good news is that many of the examinations or audits were done via mail, and taxpayers (individuals) had no reason to physically meet with an IRS agent. The bad news is that you will inevitably hear from the IRS if you refuse to identify the red flags in your return.

    Here are a few red flags that may cause the IRS to audit a business.

    Failure to Report All Taxable Income

    The IRS has copies of the 1099s and W-2s you receive, and therefore, you have to report that income on your return. If there is a mismatch, indicating a red flag, expect to hear from the IRS.

    You Make a Lot of Money

    Only about one of 250 returns on individual audit happens. However, the odd increases with the income, especially if such an individual has business income.

    For instance, a 2019 IRS statistic shows individuals with incomes between $200,000USD – $1million USD who file a Schedule C tax form only had a 1.0 percent audit rate. The more income your return shows, the higher your chances of alerting the IRS.

    Mathematical Inconsistency

    Whatever form of filing you do- electronic or paper form- you’re sending your information into a computer. If things do not add up, a red flag could be raised. While a math error won’t automatically bring the IRS auditor to your door, it will cause unwanted attention. 

    Overstating Business Expenses

    Depending on your job type, you may not be reimbursed for numerous legitimate expenses as an employee. As a business, it is possible to be tempted to write off just an extra, which could be genuine deductions. But to avoid raising this red flag, ensure you do not deduct something that is not included on the approved list. 

    Home Office Cuts

    The IRS has strict rules on what you can claim on home office deductions and how much. An attempt to claim too much raises a red flag.

    Large Charitable Gifts

    It is okay to be charitable, and there is no particular legal limit to how much money you can give away. But you have to be careful, making sure that your donation syncs with the norm; else, it will raise a red flag.

    Home Businesses That Do Not Yield Much

    If you are a sole proprietorship and you file a Schedule C tax return year in and out, and it shows a loss, a red flag becomes inevitable. Even with a profit but unreasonably small margin, it will get the IRS’s attention. 

    Inaccurate Reporting of the Health Premium Tax Credit

    With the premium tax credit, individuals can pay for health insurance gotten via the marketplace. The IRS will certainly pick on individuals who receive the advance subsidies and refuse to file returns or erroneously report the credit.

    Your Claim for Rental Losses

    IRS auditors are on the lookout for large rental losses. Many taxpayers are being audited in the real estate profession because, according to the rules for claiming rental losses with no limit, a taxpayer must spend at least 50 percent of their working hours and over 750 hours in a year contributing and participating materially in real estate as a broker, landlord, or a developer.

    In a nutshell, as a taxpayer, you have rights to the examination, appeal, collection and refund processes of your tax. But it is imperative to avoid certain red flags to steer clear of unwanted IRS attention. Having a team of bookkeepers to help you avoid those red flags will go far in alleviating the stress of an audit. Contact us today for a free assessment of your books!

    If you would like more information on the topic, the IRS has a great deal at this site.

  • Getting More Customers Online

    Getting More Customers Online

    Everyone running a business should have an online networking and marketing strategy for long term growth. Meanwhile, there can be no growth without customers and no customers without proper marketing and networking.

    So many people use the internet and social media, and they use it a lot! This makes getting your online message very important.

    But how can you market your brand online? How do you network with the right people? How do you create a powerful customer base? Below you will find simple strategies that will help your business grow.

    Social Media

    As said earlier, social media is widely used by billions of people; this includes your potential customers. You should leverage the use of social media to help you establish a brand presence. 

    However, to succeed with social media marketing, you have to put out relatable and fantastic content. You have to stand out from other brands, network with other brands, and give people a reason to follow you. When you combine amazing content with an engaged audience, the traffic to your brand will dramatically increase

    Sponsorship

    Sponsorship isn’t for big brands alone. If you do not have the kind of budget for massive sponsorship, then go for affordable ones.

    Something as simple as sponsoring or sending your products to an influencer, blog, or even podcast with large followings will draw new customers to your business

    Blog

    To get customers online, you have to build a strong online presence. One of the best ways to do that is to have a website or blog for your brand. Millions of people read blogs every day. To get the attention of people, put out quality content with good SEO and keywords.

    Although blogging doesn’t bring overnight success, it will help you build your industry’s authority, which will eventually snowball into visibility and sales.

    Networking 

    Connecting with others, especially those in the same industry as you, will go a long way to help your business grow.

    Networking with the right people can help you find customers, business partners, staff, and valuable leads. 

    You can network face to face through social events. Also, platforms like Facebook and LinkedIn can help you network online with others in your industry.

    Email Marketing 

    New and small businesses often overlook email marketing. Meanwhile, building an email list is one of the best methods to generate leads and develop a relationship with your customers.

    Take your time to build a list using email automation platforms like Mailchimp and include the email subscription option on your web pages.

    With an email list, you can easily notify customers about new products, discounts, and promos, tips related to your business, and more.

    This will help you retain past customers and keep them updated on your business.

    Promos and Free Samples

    Everyone loves freebies, and while this might not make economic sense, it is the best way to get customers to experience your brand. You can give new customers free shipping if they order at a particular time, offer discounts, do giveaways, offer a free consultation, and more.

    This will encourage your customers to shop with you.

    Referrals 

    One of the best ways a business can get new customers is through referrals. These contacts can happen through word of mouth or you can create a referral program encouraging current customers to tell others about your business.

    Guest Post on Industry Blogs

    Asides from owning a blog, another effective way to market your business is by collaborating with popular bloggers in your industry. A great way to collaborate is to secure a guest post on a popular blog. You’ll build a lot of backlinks and search algorithms with guest posts.

    Advertise

    Advertising is a popular forms of driving traffic to your business. Invest in ads to target your potential customers. You can experiment with easy ads like Google Ads, Instagram ads to help your customers find you.

    Online marketing isn’t for big companies alone. Small Businesses can take advantage of free marketing tools to promote their brand to the right audience. 

    The above tactics are mostly free and will help you attract high-value customers who will improve your business growth. 

    All you have to do is take time to utilize them and be consistent with promoting your business!  Do you need help with your social media and marketing?  Contact us today and we can put you in touch with one of several amazing marketing specialists on our referral team!

  • 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!

  • 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