As the tax filing season approaches every year, the CPA Firms and taxpayers spend restless nights, and there is a lot of stress. With the global pandemic, everything is changing, and there is not even a single sector affected by it. Similarly, tax filing has also been affected. Since the previous year had a significant impact on people’s finances, many things have changed. Nothing remained the same, ranging from unemployment to missed taxes and people losing their crucial documents.

The government has extended the tax filing to give the people time to gather all their documents. No matter if you are ready or not, tax season 2022 is almost here. Even if you are not prepared and do not do taxes at your firm, you must make sure that your tech stack is top-notch so that the upcoming tax season goes as smoothly as possible for you, your team, and your clients.

Here are the top tips that will help you make your tax season 2022 easier.

1. Use cloud-based software

If you are still using that old desktop-based software, it’s time to leave it and convert it to the cloud. Cloud-based accounting software like Xero and QuickBooks makes your work smooth and easy to handle clients. Moreover, there will be no stressors like the risk of overwriting each other’s work or locking each other out of the software.

2. Use dedicated 1099 software

If you do not use a general ledger software that prepares emails, e-files, and mails on your behalf, you can surely use reliable 1099 software that will do all the work. You must pay more for this software, but it is worth buying because of its increased efficiency.

3. Gather documents in advance

The first step for making your tax process smooth and efficient is to gather all the clients’ essential and relevant documents and data. It will save both your and your client’s time and reduce your workload.

Even an additional one or two weeks will provide you sufficient time to avoid the trouble of rushing to collect documents and data from the clients at the last moment during the tax season. Also, it will help you ensure to follow up with your clients regularly and receive documents on time.

 To make this task easier, you can create an online platform where clients can submit their documents rather than physically submit them to the office.

4. Understand your staff’s requirements

In CPA and accounting firms, one of the biggest hurdles is finding and employing expert staff. That’s why you must analyze and assess your staff’s needs and requirements and develop active strategies to remain efficient during the peak tax season. You can also make a rough estimate with the help of tax returns you receive that how many resources you will need to meet the needs of your staff.  

And if there is a resource shortfall, rather than wasting time recruiting an additional workforce, you can go for outsourced tax preparation to meet your deadlines faster. Taking help from an outsourced tax partner will eliminate the need for in-depth training. These outsourced teams have expert professionals and CPAs having many years of relevant experience.

5. Remain up to date with tax legislations

As the IRS is struggling with implementing the TJCA (Tax Cuts and Job Acts), staying up to date can be a tremendous struggle and sometimes exhausting.

Hence, it is essential to update your software every month. On the other hand, you can go for an outsourced client accounting software that can do this work to get acquainted with new tax laws and manage your extra workload. Outsources partners are professionals having many years of experience and thus can help to offer solutions to any accounting or tax-related problems.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

An audit is typically the detailed evaluation of a company’s financial statements, operational procedures, and policies to ensure that everything complies with the state laws and evaluates the company’s overall financial health. While for public companies, an audit is mandatory so that the investors and shareholders alike can get a clear and unbiased view of the company’s standings.

Benefits of having an external audit

Most companies have an internal audit team responsible for reviewing business operations regularly and highlighting incompetence in the processes & discrepancies in the financial statements. Companies often resort to a third-party audit firm to get an external audit as that is more reliable, unbiased, and objective. 

It helps identify the areas of strength and weaknesses and highlights any potential risks and discrepancies in the financial statements. An audit is essential for those seeking investments from banks and other entities. An audit strengthens the confidence of potential investors in the company and ensures financial transparency.

An external audit also helps streamline the processes and internal systems and controls and provides credibility.

Countless international auditing firms are operating which lend their review services to large- and small-scale companies. Since the auditors and audit companies are chiefly responsible for reviewing and streamlining operations of a company and are usually not related to the company in any way, they must follow a set of ethics.

What are auditing ethics?

Auditors usually have complete access to a company’s financial data as well as operational guidelines. It makes them crucial to the company but also puts a hefty responsibility on them. Auditors need to carry out the audit without bias and report without malicious omission of facts. For all of this to happen, auditors are bound to follow a pre-defined set of ethics.

The auditing ethics secure the company’s rights being audited and make sure that the audit process happens correctly. Many global bodies of Certified Public Accountants have published lists of auditing ethics that act as a beacon for auditing procedures. Keeping these guidelines in mind, auditing companies formulate operational strategies for their auditors to ensure no regulations are compromised.

Here are some basic auditing ethics that are important for a smooth and unbiased auditing process.

Auditors must be independent: This is the essential purpose of having an external audit. The auditors must be independent and should not be associated with the company or the owners/management of the company being audited. Relationship with the company owner or direct or indirect involvement of order in the company’s operations can cause faulty or biased judgment, killing an external audit’s whole purpose. The auditor must be independent by fact and by appearance to ensure an impartial evaluation of a business. One of the critical reasons external auditors are hired is that self-review can also cloud judgment. Suppose the accountant or finance head of a company is doing the audit himself. In that case, he will likely mask information or compile unrealistic results in the book to hide his shortcoming, if any.

Precision & timeliness: Most auditing SOPs bind auditors to carry out and complete the audit in a timely manner with due diligence and accuracy. Taking longer than expected can raise questions on the credibility of the audit and can also have an adverse impact on the company’s financial standings undergoing the audit as it can delay loans and investments.

Academics & professional competence: You cannot just select anybody to do the audit of your company. It is essential to have certified public accountants on board with the necessary academic background and enough experience to lead the audit for a proper external audit. It is crucial for an external audit; otherwise, the audit is useless and renders no credibility to the organization.

Confidentiality: Since auditors get excess information vital to any business, every auditor must ensure client confidentiality, and no information carries to any irrelevant resource. You must provide the sealed audit report to relevant authorities only, and no data or information leakage must happen even through word of mouth.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Online advertising has opened many doors of opportunities for small businesses to reach their potential customers with ease. Previously, during the age of mass media advertisement, the competition was stark and dominated mainly by the big fish. A small business couldn’t advertise on television, radio, or newspaper due to the cost it would incur. Therefore, small companies resorted to distributing flyers, door-to-door marketing, and telemarketing. Probably, these were the reasons small businesses found it challenging to succeed back then. However, with the advent of online advertising, it has become easier for small businesses to grow due to its ease and cost-effectiveness. For instance, a small business can easily advertise on Facebook or Google with a few hundred dollars and reach more than a hundred potential buyers. It would have been a dream back in the 90s.

Nevertheless, there are always things to improve on. While online advertising has given way to easy and cost-effective advertising, it also is getting increasingly competitive. Therefore, small businesses might struggle to convert their audience into leads if they cannot present the opportunity the right way. If you are running a small business and wondering how to improve your advertising strategy, then here are a few tips for you:

Tip # 1: Your audience is the biggest draw of the game

Since online advertising is easy to start, most people don’t get into its intricacies and instead keep spending, hoping to get as many customers as possible. No, online advertising is not just about posting and boosting on Facebook. It is much more than that. If you dive a little deeper, social media platforms and search engines offer a lot more that you could work with to reduce your cost and increase your conversion rates. Not selecting the right audience is the biggest mistake most small business owners make. Did you know you can choose the occupation, age, gender, job role, city, state, education level, job title, marital status, and a lot more about your audience? If you have an email list of your existing customers, you can even upload that and ask the platform to find a similar audience for you to advertise. It would increase your conversion and reduce your cost since you will be making more customers per dollar spent.

Tip # 2: Mobile optimization is the key

According to a recent survey, in 2021, around 72% of people in the United States are using smartphones to browse websites, social media, and search engines. That’s a huge number that you need to focus on. Unfortunately, most small business owners are unaware of the importance of mobile optimization. If your website is not optimized for mobile, yet you advertise it on online platforms, you are losing money. When customers visit your website through their mobile phones, they cannot browse through or sign up because your website is not optimized. You would break your call-to-action form, or the signup button might not be clickable.

Tip # 3: Performance optimization of your website

Finally, if you advertise online, you need to have a fast, user-friendly website to convert customers. According to Google, an average person on the internet spends only about 3 seconds on a web page before making a move. If your website does not load within these 3 seconds, you lose your customer. Imagine paying $10 per click, and the visitors aren’t even able to view your website because it takes too long to load. That’s a lot of money lost.

To conclude

While running advertising campaigns online may seem easy, there’s a learning curve for most small business owners. Yes, they are hassle-free and cost-effective, but you need to get yourself familiar with how it works to successfully operate an online advertising campaign.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Accounting is the backbone of your investments, transactions, business, and trades. Two types of accounting exist in the world of digits and money. One is accrual, and the other is the cash accounting method. Both are just a bit different from one another. You might be wondering what exactly is meant by both terms? Let’s clarify it.

Accrual accounting

The accrual method of accounting is beneficial as it provides the complete picture of the incoming and outgoing cash of the company. Regardless of this, the investors choose to pick up these methods as it solidifies the business’s existence much longer than the cash accounting business. We have listed some advantages that might help you to choose between accrual and cash accounting methods for your business:

Make business planning simple: We all are equally knowledgeable about the words of wisdom that business is not an easy task to begin and handle. Accrual methods of bookkeeping can help you get through more efficiently. You can maintain secure data about revenues, profits, and expenses in a brief period. Storing your financial data according to the accrual method will your business be on a lane of being organized.

Help save money effectively: Once you start pinning your credit score and financial statements according to the accrual accounting, you will see a visible decrease in the over-spending habits you once owned. It will amazingly increase your saving decreasing your spending.

The preferable method for investors: Technically speaking, business accounts under the umbrella of accrual accounting are unsurprisingly more organized and strengthened than cash accounting methods.

However, not everything is bright and sunny with the method. As the accrual method is convenient for the firms operating on a large scale, its precise auditing cycle requires a month to complete on a minimum scale. But the transaction detailing reports are filed frequently to ensure that none of the credit details skips the records. It can be a challenge for small-scale businesses as the recording and tracking of accrual accounting requires an entire crew. Small business owners might not be able to afford accrual accounting. Cash accounting would be much more suitable for them; it can be the most sedate drawback in some cases. You are required to clear your tax dues on the payment that is still not received or is still pending. Make sure you take measures that urge the customer to release your payment on time or even before time.

Cash accounting

The dealings and receiving confined with the in-hand cash are cash accounting. Here, cash is the pawn that can be a checkmate for you and your business. There are no second thoughts in the fact that along with plenty of benefits, cash accounting also has a bit of drawback that can startle your business foundation.

Cash accounting methods are used mainly by businesses that operate on a relatively small scale. Some of the aces of cash accounting are listed below:

Represents the accurate picture of your business: Cash is the head of the company, and the cash flow is crucial to maintain. One most measurable benefit of cash accounting is that it helps you interpret how much cash you have saved and spent in a specific time.

Holds you from making decisions based on predictions: Cash accounting methods can save you from making decisions that can be risky for your mature and established business. The plan of actions you align for your trade is more practical, with minimum chances of potential financial loss. 

Convenient recording: The financial data, transaction details, and credit scores are simple to understand and record with the cash accounting method. The method is based on the management paid or earned in-hand cash. Also, you do not need to hire professional financial experts to align the record of whatever you debit or credit.

Cash accounting also has some rip-offs that can be a bit pushing for the business you run. In some cases, you might miss out on one or maybe two customers that have not cleared their payments. Remember to pen down each detail to resist financial losses. Business liabilities are not shown; you assume that you have much more money to spend than you have. Such unconsciousness can cause you and your businesses significant damages. 

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

An investor has two things: a critical mind and a wish to multiply their wealth.

If you’re here right now, reading this article, chances are you have both. But taking the plunge the first time can be a little intimidating as one doesn’t know if they are making the right choice or are cooking up a recipe for disaster. Continue reading the article to understand what kind of investments you should be looking for.

Every avenue for investment has its own sets of advantages and disadvantages. It would be best if you found out which one suits you best. One does not have to be a millionaire to start investing, which is a common misconception. You could start small and eventually climb up the ladder. All you need to have is the patience and understanding that would allow you to make the right choices and see your riches multiply.

Since you are new to the business, there is one thing you should never forget; do not invest all your money in one area. You should constantly strategize and opt for different avenues to narrow down the chance of losing a considerable sum to a crooked investment.

Yes, investments are not all about gaining money because there is a 50% chance of losing your investment. So, before jumping into the train of investments, make sure you do your homework and make a rational decision.

Why should you invest?

Investments serve as future monetary plans that allow you to prepare in advance. Your assets bring in returns that assist you in making bigger and better investments for the future that would inevitably yield even better results.

With inflation on a constant rise, you must start making investments right now to ensure a better future. You can save up the profit yielded from these investments, or you could invest them too to open new pathways for yourself.

Types of investments

There are different types of investments that are common amongst investors. These modes of investments have brought in exceptional results, which is why they remain fan-favorites.

• Real estate
• Stock
• Insurance policies
• Cryptocurrency
• Mutual funds
• Bonds

Despite being the go-to avenues in the world of investments, all of these may not precisely be beginner-friendly. It is why you should continue reading to identify which category would work best for you in terms of making your first investment.

Best investments for beginners

Following are investment ideas that would be perfect for you if you cannot take huge leaps of faith.

1. Gold, silver:

The prices of gold and silver fluctuate according to the political scenario. The prices stay relatively the same if they do not get better.

Gold and silver are a good form of investment because the investor has the authority to choose how much they want to give in. It is beginner-friendly because one does not need to have billions to invest in gold or silver. You could start with a few hundred bucks and build a way for yourself from there.

Just keep an out for all the environmental changes and the political scenario to realize whether these metals would be a good choice for you. Try buying gold or silver when it is considerably lower in price and then wait for the prices to rise again. That is when you can resell them for a better price and enjoy the profit.

2. Cryptocurrency:

The idea of cryptocurrency is still relatively new to the market. It is a digital currency that you can buy and sell online.

When the cryptocurrency price rises, your investment multiplies, which means you would see a profitable increase. Despite being a risky environment, people welcome this currency with open arms because it is a relatively new idea.

3. Mutual funds:

A mutual fund is a form of investment that a wealth manager does on your behalf.

Mutual funds are very well-liked in the world of investments because of the low chance of risk involved. In such an investment, the wealth manager spreads your money out in several different avenues, who tries his best to get you the best returns.

Make sure that you carry out your research before you invest. Choose what you feel is best for you, calculate your risks, analyze your strengths, and take the leap. Happy investing!

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Cloud computing is accessing and storing the data on the internet, which is secure and guaranteed protection. A lot of people think that cloud computing is a hard drive. Well, that is not true. Many of the already running businesses use cloud storage to guard confidential data and information regarding their corporation. Like every technology and software, cloud computing comprises multiple pros and cons as well. But the benefits associated with the technology are much more prominent than its rips-offs. Apart from being cost-effective, cloud computing offers a various plethora of services to new and mature businesses. Before getting knowledgeable about the perks and benefits of cloud storage, you must be aware of cloud computing.

Categories of cloud computing

The trend of cloud computing is rapidly covering every business and enterprise. It is further categorized in following:

1. IaaS (Infrastructure-As-A-Service)

IaaS is also referred to as Infrastructure-As-A-Service. It is defined as the essential components of computing that you can rent, like storage, networking, servers, and virtual machines. IaaS route is beneficial in several ways. The online infrastructure encourages innovation and creativity, making usage more accessible. The IaaS is the best and suitable match for the industries eager to develop applications from scratch. The services enable rapid deployment, which automatically reduces the operational cost. This category of cloud computing requires strong technical skills for coordination. IaaS is beneficial because:

• On-demand innovative and rapid services are available
• No investments are required
• Infrastructure scales on-demand to support vibrant workloads

2. PaaS (Platform-As-A-Service)

PaaS is known as Platform-As-A-Service. It is an improved layer of cloud computing, advanced than IaaS. All the features of IaaS are already inbuilt in the PaaS. Apart from that, it contains some updated tools and software essential and critical in application development. These tools include middleware, database management, operating systems, and development ones. Let’s set an eye on the benefits of PaaS:

• Middleware (software) can reduce the intricacy
• Develop applications
• Helps to reach the market faster
• Deploy applications on the cloud within a few minutes

3. SaaS (Software-As-A-Services)

SaaS is called Software-As-A-Service. Delivery of different applications as a service is listed in the SaaS type of cloud computing. The use of SaaS is surprisingly increasing over time. There is no second thought to confuse that SaaS is the most dominant type of cloud storage. The focus and aim of SaaS are the application it delivers. This variety includes HRM (Human Resource Management), CRM (Customer Relationship Manager Etc). The add-ons of SaaS are:

Each mentioned type has its benefits to cater to. But as the technology is rapidly growing these days, the use of SaaS is at its peak. Cloud computing has a comprehensive list of aces that can cut down many firms’ maintenance costs and operational expenses. A Few benefits include:

• Caters the maximum needs of the users in a professional technical way
• The data is super secure even after a disastrous breakdown.
• Application and data are accessible from any connected computer
• Encourages rapid signup enabling usage of innovative applications

 Aces of cloud computing

Businesses stand firm if they have made some worthy and repaying investments. A prosperous business can run if you have the wit to play smart and safe. Cloud computing is a huge investment your company can ever witness. Cloud computing is constantly evolving its services to let business owners have a better experience helping them solve the significant issues of potential loss of confidential data. The major benefits of clouding system are:

• Cost-Effective – Saves a lot of your money
• Greater And Better Security – Data is transmitted over networks and stored in databases
• More Mobility – End users can access corporate data and confidential pieces of information via smartphones and other devices
• Constant Update – To improve the customer experience
• Improved Collaboration – People can exchange information is more accessible with cloud computing
• Business Continuity – Makes business much more straightforward.

Final words

Switching to cloud computing for data access and storage can be a change. It can save you much time and money. In case of sudden and uninvited downtime, you can sit back and relax as your data is safe and sound on the cloud.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

QuickBooks Online Certification helps you to spend some time on the product. If you want more advanced learning, you can move on to QuickBooks Online Advanced certification training. In the QuickBooks course, accountants learn about inventory management, non-standard transactions, billable charges, making advanced categories, multicurrency, advanced topics for banking, and complex file conversions. QuickBooks training is for those accountants, and accounting professionals can learn a lot through online resources because today is an era of the Internet. You can find whatever you want on the Internet. The same is in the case of QuickBooks. You can search for whatever you want to learn and easily access your desired field. Who is trying to learn to QuickBooks Online and needs help getting started? After the training, they will be able to tell how Accountants can collaborate with client files and emphasize the essential and prominent features of the product in front of the customer companies. If you are running a business or a new company, it is possible that you might not be in the condition to pay financial expenses to give paid training. Luckily, there are ways to learn how to do this training free of cost. 

Here are eleven resources and methods to get started in the below article.

Tutorials and learning center

If you are trying to find information related to a program, sometimes it is best to turn to online tutorials to start with. Maker of QuickBooks usually offers free-of-cost, easy-to-follow video tutorials for small business owners and for professionals and accountants who use the software. The information is designed to quickly get your desired results because of the advanced software. One more colossal platform that plays the role of the primary source of information is Intuit. It is getting training through the QuickBooks Learning Center. This feature adds to the software, which is accessible for you through the help menu. Here you can see short learning modules. You can also download PDF guides and connect with other users from all over the world for guidance through this learning portal from professionals and newbies.

Online learning platforms

There are a lot of online learning platforms to learn QuickBooks online. For example, Udemy is a very vast platform for learning. It gives access to both unpaid and paid classes. It shows you that you can get access to a lot of topics with varieties of tasks. Some of the issues are task-related, while some are just theory. There are a lot of advantages of using this online platform and other media. The main reason for using them is that you can see reviews of other users and other people who are using those platforms, and it will help you to let you know which field is suitable for you and which classes you should take. New guardians start at any time, so you should check after regular intervals to see if they added something new because if you are late, you can miss something important from the course.

Dummies brand

Many people know about the dummies brand who made uh it easy for people to learn things online. But most people have no idea that they can have access to QuickBooks training here free of cost. It is a massive help for people who want to learn QuickBooks training online because it offers it for free. Their content is not much in complex form, and it is so comprehensive that you can learn it so quickly by yourself. More than 10,000 titles are related to QuickBooks, so you can find whatever you want related to QuickBooks online training if you search it.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

When the tax season starts, taxpayers need many tools that would help them pay taxes. A lot of tools have been created for bookkeepers so that they can pay their taxes more smoothly. There is a lot of software, books, and tools that are made for bookkeepers. Following are discussed some key points and some main things that bookkeepers should keep up with them. They should learn these things before the season starts because it is good to know something before the deadline, as it will help you work in an effective way when the tax season begins.

Learn new software

Many bookkeepers are still using old desktop-based software, and now it is time for them to move to the new and advanced type of cloud-based software such as QuickBooks and Xero. This software will help bookkeepers to collaborate with their clients and without overwriting other professionals’ work. If you are still using old software that uh does not allow you so much, then, in this case, there is a Ledger software for you that mails and emails on your behalf, and it is 1099 software. Although you must pay before using this software, it helps you a lot to say that it is worth buying it.

Communication Portal for clients

Many taxpayers are using software that will draft emails on their behalf, and there is a love-hate relationship between the bookkeepers and emails. Sending emails is vital in this field, but we still must remind most of our customers not to send sensitive and personal information through emails because it is too dangerous in this field. Luckily, a considerable number of tools are available to streamline client communication and document sharing with each other. In the past, those clients who did not know how to use this software had to face a lot of difficulties in this case, but nowadays, there are different software such as client hub, and it is straightforward for clients to use them. The client communication portal has a lot of benefits, such as keeping your inbox clean and protecting the sensitive information of present clients. It also helps to interact with your team members. If there is any difficulty they are facing in this procedure, they can contact through emails.

Software for video conferencing and scheduling

No one has time during this hectic tax season to schedule back and forth meetings, and it will also waste the time of you and your clients and your team members. There is a lot of specific software for scheduling, such as Calendly, it will help you get rid of stress during these hectic tax season days, and it will also help save your and your clients and administration time. Create a link that would be specific for your certified public accountants and other tax pairs and then block their time so it will help you to meet with them at a particular time, and it will not waste your time. It will also help you manage your time, and we will build a strong relationship and potential relation with your customers. There is also a solution if you want to have a meeting with more than one, and if you need to schedule the appointment, you can use different software. There is software known as a doodle, and it is precisely for meeting with more than one person. And you can ask your team members which time is convenient for them, and you can just schedule a meeting at that time. Suppose your client is far away from you and you want to have an in-person experience with them. In that case, you can use conference call with them through different apps such as Google and zoom, but as you know that this software and these apps were used in the past, especially if you want to share some information with them, you still must email them. So, there is a solution for this problem, and there is software known as connect four. To communicate for help, you make a conference video call and share files with your clients simultaneously because, in the zoom, you can still not share files with your clients and your other people present in the conference video call. So, it is a plus point of that application that it will help you share files as well.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Bookkeeping is so much more than just recording the internal and external cash flow. It helps companies to excel in their past performance, evaluate their current operations, and make wise decisions for the future. Every entrepreneur must follow a bookkeeping cleanup checklist. Bookkeeping is an essential aspect for every business owner out there, and it helps them reserve their strength for rainy days. 

When a business’s bookkeeping records fall out of order, the reports no longer provide guidance, nor do they assist with the company’s tax return filings in case of an audit. Unfortunately, incomplete books might prevent a business from qualifying for loans and credit. Inaccurate bookkeeping can be a destructive part of a small business owner’s life, but it will be equally frustrating for larger enterprises. 

The following guide will walk you through the stages of precise bookkeeping cleanup projects to ensure that your accounts remain stable and healthy. Regardless of the reasons you want to earn from your bookkeeping cleanup projects, the below strategies will help you map out a successful plan. 

Identify the Problems: If you are serious about the confidentiality of the financial books, you must be aware that there’s always room for improvement. However, if you are content with your bookkeeping tactics, you might be drowning secretly inside the accounting graveyard. Among other chores, it is effortless for minor issues to go unnoticed for years. Still, they can be an excellent reason for your business’s destruction, so it is feasible to take precautions beforehand. 

Prevent any further damage:

After recognizing the source of your problems, you will find remedies to fix them. However, it would be wise to consider the outcomes and ensure your books suffer no further damage. At this point, you’ve to make sure that a reliable accounting system manages all the internal cash flows under the eye of an experienced bookkeeper. 

Select a professional bookkeeper or software: 

Suppose you have been outsourcing the bookkeeping responsibilities and getting consistent negative results. In that case, it might be the right time to find a professional one and hand him over the operations. For small businesses, bookkeeping software might come in handy as it would be less expensive and penetrable.

Diversify management:

It might have appeared a smart move to have invoices directly sent to one department, the billing reports to another, and so on. However, internal smartness is not your most significant trouble currently. It is far more essential that one employee at the company be responsible for receiving and sending all the incoming source documents related to your finances. After every document gets accounted for, you can precede it to the destination. 

Analyze the problematic areas:

After reviewing and recording the financial documents, you can now begin addressing the problems you found earlier. This guide cannot determine every mishap you might have discovered, but you will indeed find a few helpful remedies to implement in your situation. 

Establish a clean system for bookkeeping:

Now that you must select a new bookkeeping system recognize the problems that influenced the previous ones, and analyze your accounts what exactly is wrong. Now it is time to develop an accurate and complete set of bookkeeping of the period. Start by setting up a list of accounts in your chosen bookkeeping software and enter each cash transaction attentively. Preferring this bookkeeping cleanup checklist for your official requirements, and following it regularly, will result in accuracy of the accounts. 

Reconcile the credit and cash accounts:

A proper bookkeeping cleanup checklist would be imperfect without coordinating the cash and credit accounts. You will start by associating your cash accounts and repeating the same procedure for the credit accounts. It is a pivotal cleanup activity that you must consider implementing if there are not any red flags. 

Upon finishing, it would be wise to make a strategy to rectify your cash accounts regularly. Some accounts might require a monthly reconciliation, but cash accounts utilized constantly might need a weekly reconciliation. However, there is still room for the interpretation of valuable financial information of the company. 

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

By: Jennifer Brazer

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

Fact Checked By: Brittany McMillen

COGS & Inventory: A Powerful Partnership

COGS and inventory and how they work together represent a critical relationship at the heart of any product-based business’s financial health. When inventory items are sold, their cost value transfers from your balance sheet (as inventory assets) to your income statement (as Cost of Goods Sold), directly impacting your reported profits, tax obligations, and business valuation.

As the founder of Complete Controller, I’ve guided thousands of businesses through the complex dance between inventory management and COGS optimization. Over my 20+ years leading a cloud-based financial services provider, I’ve witnessed how mastering this relationship transforms struggling companies into profit powerhouses. In this comprehensive guide, you’ll discover practical strategies to align your inventory practices with COGS goals, proven methods to reduce carrying costs without sacrificing availability, and technology solutions that streamline the entire process. By implementing these approaches, you’ll gain tighter control over your product costs, clearer insights into your true profitability, and a competitive edge in your market.

How do COGS and inventory work together?

• COGS and inventory work together through a direct financial relationship where inventory becomes an expense (COGS) when sold
• Inventory represents an asset on your balance sheet until the moment of sale
• COGS directly impacts your gross profit margin, revealing your operational efficiency
• Inventory valuation methods like FIFO, LIFO, or weighted average determine how costs flow into COGS
• Efficient inventory management reduces carrying costs, shrinkage, and waste—all factors that inflate COGS

How COGS and Inventory Interact

The relationship between COGS and inventory forms the backbone of financial reporting for any product-based business. When you purchase inventory, it sits on your balance sheet as an asset. The moment you sell an item, its cost transfers from your asset column to your expense column as Cost of Goods Sold. This movement creates the direct link between inventory management decisions and your reported profitability.

This relationship between COGS and inventory affects everything from tax planning to cash flow. For example, holding excess inventory means tying up cash in assets that generate no return until sold. Meanwhile, these items incur storage costs, insurance, and risk of obsolescence—all expenses that eventually factor into your true COGS calculation, even if they’re not always tracked that way.

The financial relationship between inventory and COGS

Your choice of inventory valuation methods significantly impacts your reported COGS and therefore your taxable income. Each method creates different financial outcomes:

• FIFO (First-In, First-Out): Assumes oldest inventory sells first, reflecting current replacement costs in remaining inventory
• LIFO (Last-In, First-Out): Assumes newest inventory sells first, potentially lowering taxable income during inflation
• Weighted Average: Blends all inventory costs, simplifying calculations but potentially masking cost trends

A boutique with $260,000 COGS and $105,000 average inventory had a 2.48 inventory turnover ratio, meaning it sold all inventory every 147 days. This metric reveals how efficiently inventory converts to COGS—the higher the ratio, the leaner your operation.

Strategies for Optimizing COGS-and-Inventory Synergy

Strategic inventory management directly lowers your COGS by minimizing waste, reducing holding costs, and preventing stockouts that lead to expedited shipping expenses. Implementing these strategies creates a virtuous cycle where improved inventory practices continuously drive down your cost structure.

By analyzing sales patterns and seasonal variations, you can forecast demand more accurately, allowing you to maintain optimal inventory levels that balance availability against carrying costs. This approach prevents both overstocking (which increases storage expenses) and understocking (which risks lost sales and emergency shipping fees).

Proactive inventory management to reduce COGS

Walmart’s 2023 inventory turnover ratio was 8.2, nearly 3x higher than the boutique example, showing scale advantages in inventory management. Their advanced forecasting systems and vendor-managed inventory programs demonstrate how sophisticated approaches can dramatically reduce COGS at scale. For smaller businesses, similar principles apply with appropriately sized solutions:

1. Demand Forecasting: Use historical sales data, seasonal patterns, and market trends to predict future inventory needs
2. Economic Order Quantity (EOQ): Calculate optimal order sizes that minimize combined ordering and holding costs
3. ABC Analysis: Categorize inventory by value and turnover rate to focus management efforts on high-impact items
4. Supplier Relationship Management: Negotiate volume discounts, consignment arrangements, and just-in-time delivery terms

Case study: Reducing COGS through inventory optimization

Dell’s build-to-order model reduced inventory to under 1 day while generating $15M daily sales, proving JIT inventory slashes COGS. Their approach eliminated traditional warehousing costs by assembling computers only after orders were placed and paid for. This model transformed inventory from a cost center into a competitive advantage.

A manufacturing client of Complete Controller achieved similar results on a smaller scale by:

1. Implementing cycle counting instead of annual physical inventory
2. Establishing reorder points based on lead times rather than arbitrary levels
3. Negotiating vendor-managed inventory for high-volume components

These changes reduced their inventory holding by 34% while improving product availability, ultimately lowering their COGS by 12% and increasing gross margins significantly.

Common Pitfalls in COGS-and-Inventory Management

Many businesses underestimate the true cost of carrying inventory, tracking only the purchase price while ignoring substantial hidden expenses. Carrying costs of 20% ($10k/$50k inventory) for a motorcycle retailer show how excess stock directly inflates COGS. These costs include warehouse space, utilities, insurance, taxes, obsolescence, shrinkage, and the opportunity cost of capital tied up in inventory.

When calculating COGS, companies often miss critical components beyond the basic materials and direct labor. Complete costing must include:

• Inbound freight and customs duties
• Quality control and inspection costs
• Production supplies and packaging materials
• Warehouse labor for receiving and picking
• Allocated production overhead

Inaccurate inventory records and their impact on COGS

Discrepancies between physical inventory and accounting records create cascading errors in financial reporting. Common causes include:

• Unrecorded transfers between locations
• Theft and damage not properly documented
• Returns processed incorrectly
• Production scrap not accounted for
• Receiving errors and vendor shortages

These issues distort your COGS calculation, potentially leading to incorrect pricing decisions and tax reporting problems. Regular cycle counts and strong receiving procedures help maintain accuracy.

Misaligned tech systems

Many companies operate with disconnected systems for inventory management, order processing, and accounting. This fragmentation creates data silos where information isn’t shared effectively between departments. Symptoms include:

• Manual data entry between systems leading to transcription errors
• Timing differences causing temporary discrepancies
• Incomplete transaction records missing crucial cost details
• Inconsistent application of valuation methods
• Difficulty tracking actual costs per unit sold

Integrating these systems through modern ERP solutions eliminates these problems while providing real-time visibility into inventory levels and accurate COGS reporting.

Implementing Best Practices for COGS-and-Inventory

Successful businesses implement consistent procedures for tracking both inventory and COGS. Start by documenting your entire inventory management process from purchasing through sales fulfillment. Clearly define responsibilities for each step, establish control points to prevent errors, and create an audit trail for all transactions.

Develop standardized formulas for calculating carrying costs, reorder points, and safety stock levels. Review these calculations regularly to adapt to changing business conditions and market dynamics.

Inventory valuation & reporting

Choosing the right inventory valuation method requires understanding your specific business context:

• Products with short shelf life or rapid obsolescence typically benefit from FIFO
• Commodities with significant price volatility might use weighted average to smooth fluctuations
• Businesses in highly inflationary environments might prefer LIFO for tax advantages (where permitted)

Once selected, apply your chosen method consistently and document any changes in accounting policy. Regular reconciliation between physical counts and system records maintains accuracy in both inventory and COGS reporting.

Leveraging technology for improved COGS management

Modern inventory management systems automate much of the inventory tracking process, reducing human error while providing deeper analytical capabilities:

1. Barcode scanning and RFID: Capture accurate data at each inventory movement
2. Perpetual inventory systems: Track real-time levels without manual counting
3. Automated cost calculations: Apply consistent valuation methods to each transaction
4. Integrated accounting: Synchronize inventory and financial records automatically
5. Analytics dashboards: Visualize trends and identify opportunities for optimization

These technological solutions provide both operational efficiency and strategic insights into your inventory-COGS relationship.

Long-Term Financial Health Through COGS-Inventory Optimization

The ultimate goal of managing the COGS-inventory relationship is improving your overall financial performance. Average retail gross margins ranged from 15.01% (auto parts) to 71.52% (software) in 2023, proving COGS impacts vary widely by industry. Understanding where your business should fall within these ranges helps set appropriate targets.

By optimizing inventory for COGS reduction, you create a competitive advantage through either higher margins or more aggressive pricing. This optimization becomes a continuous improvement process, not a one-time project.

COGS’s role in pricing strategy

Your COGS directly influences your pricing flexibility. Lower COGS allows you to either:

1. Maintain current prices and enjoy higher profit margins
2. Reduce prices to gain market share while maintaining acceptable margins
3. Invest in quality improvements that justify premium pricing
4. Offer strategic discounts during competitive situations

Understanding your fully-loaded cost of goods sold provides clarity when making these critical pricing decisions. Many businesses unknowingly price products below their true cost because they haven’t accurately calculated all components of COGS.

Tax implications & compliance

Different inventory valuation methods significantly impact your reported taxable income. Working with tax professionals to model various scenarios helps identify the optimal approach for your situation.

Key considerations include:

• Consistency requirements for tax reporting
• Book-to-tax differences and deferred tax impacts
• State and local tax treatment of inventory
• Documentation requirements for audits
• International considerations for global businesses

Properly structured inventory and COGS practices provide both tax efficiency and audit protection while maintaining full compliance with how to calculate COGS in accounting regulations.

Conclusion: Mastering the COGS-Inventory Relationship

Throughout my years at Complete Controller, I’ve seen firsthand how businesses transform their profitability by mastering the relationship between inventory and COGS. The companies that succeed don’t view these as static accounting entries but as dynamic levers they can adjust to optimize performance.

The strategies outlined in this article provide a roadmap for creating this optimization in your own business. Start by understanding your current inventory-COGS relationship, identify your biggest opportunities for improvement, and implement changes systematically while measuring results.

Remember that this journey requires ongoing attention—market conditions change, product mixes evolve, and new technologies emerge. By establishing sound practices and regularly reviewing performance, you’ll maintain your competitive edge through efficient inventory management and accurate COGS reporting.

Ready to take your inventory and COGS management to the next level? Contact the experts at Complete Controller for personalized guidance on optimizing these critical financial components for your specific business situation.

FAQ

How do you calculate COGS using inventory values?

Calculate COGS by adding beginning inventory to purchases, then subtracting ending inventory (COGS = Beginning Inventory + Purchases – Ending Inventory). This formula tracks the flow of inventory costs from your balance sheet to your income statement as products are sold.

What’s the difference between COGS and operating expenses?

COGS includes direct costs of producing goods (materials, labor, manufacturing overhead), while operating expenses cover indirect costs like marketing, rent, and administrative salaries. COGS directly ties to each unit sold, while operating expenses support overall business operations.

How does inventory turnover ratio relate to COGS?

Inventory turnover ratio (COGS ÷ Average Inventory) measures how quickly inventory converts to sales. Higher ratios indicate more efficient inventory management, reducing carrying costs and lowering effective COGS. Low turnover suggests potential excess inventory, increasing costs through storage, obsolescence, and capital tie-up.

Why might businesses choose LIFO inventory valuation?

Businesses choose LIFO primarily for tax advantages during inflationary periods, as it matches current higher costs against revenue, reducing taxable income. LIFO also better matches current replacement costs in COGS, providing a more conservative picture of profitability when prices are rising.

How can small businesses improve their inventory-COGS relationship?

Small businesses can improve this relationship by implementing cycle counting instead of annual counts, using cloud-based inventory software that integrates with accounting, analyzing sales data to identify slow-moving items, negotiating better supplier terms, and calculating the true carrying cost of inventory to inform purchasing decisions.

Sources

• AccountingCoach. “What is COGS?” www.accountingcoach.com/what-is-cogs/explanation
• BILL. (2024). “Inventory Turnover Ratio: What It Is, Formula, and How It Works.” www.bill.com/learning/inventory-turnover-ratio
• Career Principles. (2024). “Inventory Turnover Ratio: Definition, Formula and Examples.” www.careerprinciples.com/resources/inventory-turnover-ratio
• Complete Controller. (2024). Internal Case Study.
• Investopedia. (2024). “Cost of Goods Sold (COGS).” www.investopedia.com/terms/c/cogs.asp
• Irvine Bookkeeping. (2020). “Inventory vs Cost of Goods Sold.”
• NetSuite. (2024). “COGS and Inventory Counts.”
• SaasAnt. (2023). “COGS in Inventory Management.”
• SlideShare. (2017). “Inventory Management of Dell Direct Model.” www.slideshare.net/slideshow/inventory-management-of-dell-direct-model/75551846
• Toast. (2024). “How Much Do Retail Stores Make? (2025 Data).” pos.toasttab.com/blog/on-the-line/how-much-do-retail-stores-make
• Wikipedia. “First-in, First-out.” en.wikipedia.org/wiki/First-in,_first-out
• Zoho Inventory. (2024). “What is Inventory Carrying Cost?” www.zoho.com/inventory/academy/inventory-management/what-is-carrying-cost.html

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.