Category: Business

  • COVID-19 Resources for WA Business Owners

    COVID-19 Resources for WA Business Owners

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

    Small Business Administration

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

    Internal Revenue Service

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

    Consumer Financial Protection Bureau

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

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

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

    Washington State Coronavirus Response (COVID-19)

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

    Washington Department of Revenue

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

    Washington Employment Security Department

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

    Washington State Department of Labor & Industries

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

    United Way of Washington 

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

    Other Assistance

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

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

  • 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.

  • The Reality of IRS Scams

    The Reality of IRS Scams

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

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

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

    What You Should Know About Scams

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

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

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

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

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

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

    The Red Flags You Should Look Out For

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

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

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

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

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

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

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

    What You Should Do

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

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

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

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

  • 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.

  • 7 TIPS TO PREVENT SMALL BUSINESS FRAUD

    7 TIPS TO PREVENT SMALL BUSINESS FRAUD

    Indeed, our world is raging with RFID hackers and identity theft that target people. Despite the size, why wouldn’t you be worried about the likelihoods of business fraud? From the small grocery store to an independent hair stylist, there are many avenues through which scammers can apply their malicious intent, and cheat you.

    No doubt, small businesses are exposed to business fraud. Yes, these businesses hire people they trust. But they can’t stop suspicious behavior—even though it’s from their esteemed partners.

    Research shows that fraud affects one in four small businesses yearly – with SMEs losing about $25.6 million annually.

    That said, small business frauds are occupational frauds, which usually ravage small businesses or start-ups. The Association for Certified Fraud Examiners (ACFE) has it that small businesses are generally more susceptible to organizational fraud than the larger ones.

    There are several reasons why these frauds occur, and we shall briefly highlight some of them.

    First, most business owners have their hands full and so have to rely on delegation. Here we see employees performing multiple functions. There are usually little or no checks and balances. It allows them to do some illegal stuff.

    Second, sometimes business owners become too trusting with employees. It can lead to the absence of formal procedure, which means things don’t get recorded. This situation makes fraudulent activities very easy and mostly unnoticed.

    Third, hiring fraudulent individuals can also make your business vulnerable to fraud. The reason is obvious.

    We have now seen certain situations that can lead to fraud. It is then vital to look at ways to prevent it.  But first, let’s take a look at some of the major fraudulent activities. Knowing this will provide awareness of how fraudsters carry out these fraudulent acts.

    Cash theft

    Cash theft is done through skimming, Larceny, or Fraudulent disbursement.

    False invoicing

    False invoicing involves presenting an invoice that does not relate to a real sale or payment. In cases like this, the perpetrators make the company pay for goods or services they did not receive.

    Identity theft

    Fraudsters or cybercriminals could steal a Company’s identity. It gives them access to the company’s vital documents.  There are also cases where these fraudsters pose as legitimate suppliers and then advise changes to existing payment arrangements.  You can uncover this type of fraud when real suppliers emerge.

    Check tampering

    Here, the fraudsters convert the organization’s funds by altering a check. Checks that have not been voided can be illegally cashed, with a forged signature.

    Payroll fraud

    An employee can make false claims for expense made and then demand a refund. Another common payroll fraud is the issue of “ghost worker.” This practice sees the payroll controller add a non-existent employee to the company’s payroll.

    If the company is operating a direct payroll deposit policy, it makes it easy for the “ghost funds” to go straight to the perpetrator’s account.

    A small business owner could have the best ideas and work hard to see the business thrive. However, fraudulent activities can threaten that success. How then can you stop this from happening? Below are 7 tips that can help prevent small business frauds in business.

    How to prevent small business frauds in business

    1. Put a fraud policy in place

    Fraud policy should indicate repercussions for committing fraud (termination of employment, prosecution). These policies should cover both the tangible and intangible assets in your company.

    2. Check the books from time to time

    It is essential that you do this as a business owner, as it helps you to ascertain that there are no discrepancies. You can ask your bank to give you the bank statements of your business accounts. It helps you monitor your cash flow.

    3. Get professionals or Accounting firms to handle your finances

    This will bring for more transparency and accountability. Also, demand for daily or weekly reports from the accounting department.

    4. Have a password policy

    Try to update or change your passwords from time to time. Also, make the passwords a bit complex or difficult to decipher.

    5. Segregate cash related functions

    Don’t let one employee perform all the accounting and bookkeeping duties. Let there be a team or department that handles that. Why? It will make them serve as watchdogs to one another.

    6. Be mindful of who you hire or do business with

     Avoid recruiting or dealing with individuals with fraudulent or dubious tendencies. Working with fraudulent people will expose your business to fraud. Avoid them!

    7. Restrict access to master file records of your vendors/clients

    Any changes to be made should require supporting documentation. It also applies to payroll as it helps to eliminate illegal payments or changes in pay rates.

    Building a business is an uphill task. When you put in so much work and effort, you should be able to rip the dividends and see your business grow. Fraud is a major threat to the growth of your business. So make sure you apply the above tips to keep your business safe and secure.

  • Employee or Contractor

    Employee or Contractor

    Businesses must examine the relationship between it and the worker to determine if the worker is an employee or a contractor.  Distinguishing between these two is important to determine if an employer must withhold income taxes and pay Social Security, Medicare taxes, and unemployment tax wages paid to an employee.  Generally, the rule is that an individual is a contractor if the payer has a right to control or direct only the result of the work, not what will be done or how it will be done.  To better determine how to properly classify a worker, the IRS asks that you consider these three categories:

    Behavioral Control

    A worker is an employee when the business has the right to direct and control the work performed by the worker, even if they don’t exercise that right.  The categories that fall under behavioral control are:

    • When and where to work, what tools to use, where to purchase supplies and services, etc.  If a business gives these types of instructions, chances are, the worker is an employee.
    • If instructions are more detailed it may indicate that the worker is an employee.  Fewer direction means less control and the worker may be a contractor.
    • Does the business use evaluation systems to measure the details of how the work is done?  This would mean the worker is likely an employee.
    • Is there on-the-job training?  If yes, this is a strong indication the worker is an employee.

    Financial Control

    If the business controls the financial and business aspects of the worker’s job, they may be an employee.  Consider these points:

    • If the company invests significantly in the equipment the worker uses for someone else, they are likely an employee.
    • If there are unreimbursed expenses, contractors are more likely to incur those than employees.
    • Is there an opportunity for profit or loss?  If yes, the worker is likely a contractor.
    • Is the worker free to seek out other business opportunities of this same type?  If no, they are most likely an employee.
    • Do you pay a regular wage for an hourly, weekly, or commission?  Then your worker is probably an employee.  If you are paying for a specific project, they may be a contractor.

    Relationship

    The perceived relationship between the worker and business often indicates the classification of the worker.  This may include:

    • Written contracts describing the relationship between the parties.  However, a contract stating a worker is an employee or contractor is not sufficient to classify a worker’s status.
    • Benefits.  If your business provides benefits, you are likely hiring an employee.  Benefits are not usually extended to contractors.
    • Is your relationship permanent?  If you believe the relationship will last indefinitely as opposed to a specific period of time, you may be hiring an employee.
    • Services provided are a key activity of the business.  If the services the worker provides are a key aspect of the regular business of the company, you should classify them as an employee.

    Consequences of Misclassification

    If you accidentally classify a worker as an independent contractor and it is later discovered, your business will be liable for employment taxes.  The IRS can help you determine the status of your workers with Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.  IRS Publication 15-A, Employer’s Supplemental Tax Guide, is also a great resource.

    If you have any additional questions or concerns about your workforce, please, reach out to us at Sound Accounts!  We would love to help and “our strength is YOUR numbers!”

  • Tricks to Maintain Balance

    Tricks to Maintain Balance

    As a small business owner, it is easy to lose sight of business and personal goals. Try these 10 tricks to keep you, and your business, in balance.

    Take A Class

    Being a life long learner is important to running a business.  Find a class that will enhance your business or excite you.  Many colleges or community centers have free or inexpensive classes on topics that feed the mind, body and soul.  Check them out to find one or more that can give you a temporary break and recharge your batteries.

    Take A Walk

    Studies have shown that taking a brief break can help refocus during the work day. Take a 15 minute walk in the morning or afternoon to help clear your head and change your perspective. The results will surprise you.

    Stick to Your Calendar

    We are all guilty of working to long on a particular project. Budget your time and put it in a plan. Stick to it and when the time allotted is up, move on to the next thing on your agenda.  Doing this enables you to take a break when you are getting bogged down and approach it with a fresh perspective.

    Make a Call to a Friend

    To many times we get bogged down and forget about the connections we make along the way. On a regular schedule (daily, weekly, monthly) take the time to reach out to a connection from the past. You will enjoy the break and the connection; and be reminded that the struggles you face aren’t unique. It will also lay foundation for reaching out when you have a crisis and need an extra hand.

    Volunteer

    It is true, we make time for what we feel is important. Find something that you are passionate about and put a little of yourself into it. There are numerous groups that have a multitude of volunteer opportunities. You will feel a sense of accomplishment as well as boost your self-esteem by helping a cause you feel strongly about.

    Read a Book

    We are not unique in the struggles we have, the joys we find or in the way that learn from others. Set a plan to read 1 book a month. Learn from leaders of your industry, as well as leaders in others. Do not overlook this simple method of adding to your knowledge reservoir.

    Set Goals

    This one seems simple but can be a little more complicated.  Set goals, for the hour, day, week, month, year. More than that, write them down. It gives you something to measure yourself against, and there is a very satisfactory feeling in crossing something off the list that you have accomplished.  Remember that goals aren’t static but dynamic, so adjust them as needed.

    Evaluate Your Customers

    We all have that one customer that takes up 90% of our time for 10% of our revenue. Review your customers and what you are providing for each other. Is there a symbiosis there, or is it one-sided? Are you a partnership with them, or simply a means to an end? Examine how you can improve those relationships and discover how you can improve the ones that weigh you down.

    Balance Your Books

    Not all of us are experts at balancing the books but take a look at what you do know. When needed, call us at Sound Accounts and we are most happy to help you examine your business and personal financial health.

    Smell the Roses

    Life is to short to not enjoy it. Take time to do something special that will invigorate you.  Only you know what that one thing is. Take time to do it.  Stop and smell the roses in your business and your life.

    If you are finding that you are needing help in any of these areas, contact us here at Sound Accounts. We are always available for a consultation.

  • 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.