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.

Essential Guide to PPP Loan Accounting: Record Income & Expenses

PPP loan accounting requires businesses to record Paycheck Protection Program funds as either debt under ASC 470 or government grants under IAS 20, while meticulously tracking qualifying expenses and properly recognizing forgiveness when legally confirmed. The process involves creating dedicated accounts, maintaining detailed documentation for potential 10-year audits, and following specific GAAP standards for financial statement presentation.

Over my 20 years as CEO of Complete Controller, I’ve helped thousands of businesses navigate complex financial challenges, but the PPP loan program created unprecedented accounting complexities that caught even seasoned professionals off guard. With 80% of all PPP loans achieving full or partial forgiveness (representing 83% of total loan value), yet fraud estimates reaching $200 billion, proper accounting procedures have become critical for protecting your business from both compliance failures and potential legal consequences[20][6]. This guide walks you through the exact steps to establish bulletproof PPP loan accounting systems, track qualifying expenses with precision, and position your business for smooth forgiveness while maintaining audit-ready documentation.

What is PPP loan accounting and how do you get it right?

• PPP loan accounting involves recording loan proceeds as debt (ASC 470) or grants (IAS 20), tracking expenses, and recognizing forgiveness properly
• Debt approach treats PPP funds as traditional loans with interest accrual until legal forgiveness confirmation
• Grant approach allows deferred income recognition when forgiveness probability is high
• Expense tracking requires 60% payroll costs and 40% eligible non-payroll expenses with supporting documentation
• Financial statements must clearly present PPP loans and forgiveness gains separate from operating activities

Understanding the Two Primary PPP Loan Accounting Approaches

The foundation of proper PPP loan accounting rests on choosing between two generally accepted approaches under U.S. GAAP. The debt approach treats PPP loans as traditional financing under ASC 470, while the grant approach applies IAS 20 principles by analogy for government assistance programs[5]. This fundamental choice impacts every subsequent accounting decision from initial recording through forgiveness recognition.

Under the debt method, businesses record the full loan amount as a liability and accrue 1% annual interest throughout the loan term. The loan remains on the balance sheet as debt until the Small Business Administration legally releases the borrower, at which point forgiveness becomes a gain on debt extinguishment. This conservative approach aligns with traditional loan accounting that most businesses already understand.

ASC 470 debt treatment for PPP loans

The debt treatment requires straightforward journal entries that mirror standard loan transactions. Upon receiving funds, businesses debit cash and credit a PPP loan liability account for the full amount[19]. Monthly interest accrual follows standard practices, debiting interest expense and crediting accrued interest payable at approximately $83 per month for each $100,000 borrowed.

Qualifying expenses paid with PPP funds receive normal accounting treatment through standard expense accounts. The key distinction lies in maintaining supplementary tracking documentation rather than creating special accounting entries. This approach keeps financial statements clean while preserving necessary audit trails for forgiveness applications and potential SBA reviews.

Government grant approach using IAS 20

The alternative grant approach treats PPP loans as deferred income when forgiveness appears probable from the outset[11]. Initial receipt creates a deferred income liability rather than traditional debt, with systematic recognition into income as qualifying expenses occur during the covered period.

This method provides intuitive matching between expense incurrence and income recognition, particularly appealing for businesses confident about meeting forgiveness criteria. The approach requires careful assessment of forgiveness probability and may necessitate reversal if circumstances change unexpectedly.

Setting Up Your PPP Loan Accounting Infrastructure

Creating robust accounting infrastructure begins with establishing dedicated general ledger accounts that segregate PPP transactions from regular business operations. With community banks handling 57.5% of all PPP loans, most small businesses worked with local institutions requiring specific documentation standards that varied by lender[7]. This variation makes standardized internal tracking systems even more critical.

The recommended chart of accounts includes a PPP loan liability account, potentially a separate PPP cash account, and designated income accounts for forgiveness recognition. Many businesses also implement class tracking or department codes to maintain granular expense documentation without disrupting standard accounting workflows.

Creating dedicated bank accounts for PPP tracking

Opening a separate bank account exclusively for PPP funds creates the clearest possible audit trail[3]. Depositing loan proceeds directly into this dedicated account and paying only qualifying expenses from it automatically documents fund usage. The account balance provides real-time visibility into remaining PPP funds available for eligible expenses.

Practical limitations sometimes prevent separate accounts, particularly when banks restricted new accounts during peak pandemic periods or funds were already commingled. These situations require enhanced general ledger tracking through detailed coding systems and regular reconciliation procedures to maintain equivalent documentation standards.

QuickBooks setup for PPP loan tracking

QuickBooks users should establish a long-term liability account titled “PPP Loan” and enable class tracking for detailed reporting[12]. The initial setup involves creating the liability account through the Chart of Accounts menu, then activating class tracking in Company Preferences to establish a specific PPP class designation.

Recording the initial deposit requires a journal entry debiting the bank account and crediting the PPP loan liability while assigning the PPP class. Ongoing expense tracking uses standard transaction entry with PPP class assignment, creating comprehensive reports for forgiveness applications without disrupting normal accounting workflows.

Recording PPP Loan Proceeds and Initial Setup

Initial recording of PPP loan proceeds establishes the foundation for all subsequent accounting and compliance requirements. The entry timing should match actual fund receipt rather than application approval dates, maintaining proper cash flow statement presentation[18]. Given that SBA lending increased 18x from traditional $28 billion annual volumes to over $525 billion through PPP, standardized recording procedures became essential for consistent financial reporting[14].

Documentation requirements include recording loan numbers, lender information, interest rates, and maturity dates within the accounting system. These details prove invaluable during forgiveness applications and potential audits extending up to 10 years post-disposition.

Standard journal entries for PPP loan receipt

The debt approach requires a simple entry debiting cash and crediting PPP loan payable for the full amount received. A $100,000 loan generates a $100,000 debit to cash and $100,000 credit to PPP loan payable, with detailed memo fields capturing lender and loan identification information[2].

Monthly interest accrual follows throughout the loan term, regardless of forgiveness expectations. The standard entry debits interest expense for $83.33 (on a $100,000 loan) and credits PPP interest payable, maintaining accurate financial position reporting until legal forgiveness confirmation.

Recording loan origination costs and fees

Direct costs of obtaining PPP funding, including legal or accounting fees, technically qualify as deferred financing costs under traditional debt accounting[2]. These costs would reduce the loan’s carrying value and amortize over the expected term using the effective interest method.

However, materiality considerations and expected forgiveness timelines often make immediate expensing more practical. Most businesses expense these costs directly, particularly when amounts remain insignificant relative to loan values or forgiveness appears highly probable.

Tracking Qualifying PPP Loan Expenses

Meticulous expense tracking forms the cornerstone of successful PPP loan forgiveness, with specific requirements for documenting both payroll and non-payroll costs. The 60/40 rule mandates that at least 60% of loan proceeds support payroll costs, leaving up to 40% available for other qualifying expenses[3]. Recent fraud cases, including the conviction of Rahul Shah for fabricating $441,138 in payroll expenses, demonstrate severe consequences for inadequate documentation[15].

Qualifying payroll costs encompass gross wages, employer health insurance contributions, retirement plan contributions, and state/local payroll taxes for employees earning under $100,000 annually. Non-payroll expenses include business rent, utilities, mortgage interest, and covered operations expenditures, all requiring pre-February 15, 2020 existence.

Payroll cost documentation and recording

Comprehensive payroll documentation requires maintaining payroll registers, tax filings, and benefit contribution receipts throughout the covered period. Standard payroll journal entries continue unchanged, but supplementary tracking identifies which costs count toward forgiveness requirements[16].

Creating period-specific reports showing employee-by-employee compensation helps demonstrate compliance with individual compensation limits. These reports should reconcile to filed payroll tax returns and bank statements showing actual payment clearance.

Non-payroll qualifying expense management

Non-payroll expenses demand equally rigorous documentation, including original agreements, monthly statements, and payment verification[3]. Rent payments require lease agreements dated before February 15, 2020, plus cancelled checks or ACH confirmations for each payment.

• Business Rent: Lease agreement, monthly invoices, payment confirmations
• Utilities: Account statements in business name, payment documentation
• Mortgage Interest: Amortization schedules isolating interest portions
• Operations Expenditures: Supplier agreements, invoices, payment records
• Software Subscriptions: Service agreements, monthly statements, bank records

PPP Loan Forgiveness Accounting Treatment

Forgiveness accounting depends entirely on receiving legal release from the lender following SBA approval, not merely expecting or applying for forgiveness[1]. This critical timing distinction prevents premature income recognition and maintains compliance with GAAP standards. The unprecedented 93% forgiveness rate for 2020 PPP loans makes proper accounting treatment relevant for most borrowers[20].

The debt approach recognizes forgiveness as a gain on debt extinguishment, while the grant approach systematically recognizes deferred income. Both methods require clear financial statement presentation separating PPP impacts from operating results.

Recording complete loan forgiveness

Complete forgiveness under the debt approach eliminates the entire loan balance through a straightforward entry. The journal entry debits PPP loan payable and accrued interest while crediting other income or PPP loan forgiveness income[10]. This gain appears separately from operating income, preserving period-to-period comparability.

Grant approach forgiveness recognizes any remaining deferred income balance based on expense patterns during the covered period. The income recognition can appear as other income or reduce related expenses, though separate presentation provides clearer financial analysis.

Partial forgiveness accounting considerations

Partial forgiveness splits the original loan between forgiven and continuing debt portions[11]. The forgiven amount follows complete forgiveness accounting, while the remainder continues accruing interest with scheduled repayments over the loan term.

Allocating origination costs and accrued interest between forgiven and non-forgiven portions requires proportional calculations. Documentation of this allocation supports both immediate gain recognition and ongoing debt service accounting.

Final Thoughts

PPP loan accounting demands precision and foresight that many businesses underestimate until facing forgiveness complications or audit inquiries. The stakes remain high with $200 billion in estimated fraud triggering aggressive enforcement actions and extended 10-year audit windows. Your accounting decisions today directly impact your business’s financial credibility and audit readiness for the next decade.

Taking action now to review and strengthen your PPP loan accounting positions your business for smooth forgiveness and long-term compliance. Whether you need to retroactively improve documentation, adjust accounting treatments, or prepare for upcoming audits, professional guidance makes the difference between confidence and costly mistakes. Contact the experts at Complete Controller for comprehensive support navigating these complex requirements and protecting your business’s financial future.

Frequently Asked Questions About PPP Loan Accounting

Can I change my PPP loan accounting method after initially recording it?

Yes, businesses can change from the debt approach to the grant approach (or vice versa) before forgiveness occurs, but the change requires careful documentation and may impact financial statement comparability. Any change should be disclosed in financial statement footnotes with explanation of the rationale and impact.

How long must I keep PPP loan documentation for potential audits?

The SBA requires maintaining all PPP loan documentation for 10 years after loan forgiveness or final payment, whichever occurs later. This includes loan applications, supporting payroll documentation, expense receipts, forgiveness applications, and all correspondence with lenders.

Should PPP loan interest expense be accrued if I expect full forgiveness?

Under the debt approach, businesses must accrue interest monthly at the 1% rate regardless of forgiveness expectations. Only upon legal confirmation of forgiveness can accrued interest be reversed along with the principal balance as part of the forgiveness gain.

How do I handle PPP expenses paid before receiving loan funds?

Expenses paid before receiving PPP funds but during the covered period still qualify for forgiveness. Track these expenses separately and include them in forgiveness calculations with clear documentation showing payment dates and funding sources to support the eventual reimbursement claim.

What happens to my PPP accounting if forgiveness is denied?

Denied forgiveness converts the full loan balance to traditional debt requiring repayment over the specified term. Businesses using the grant approach must reverse any income recognition and reclassify the balance as debt, while those using the debt approach simply continue with normal loan accounting and scheduled payments.

Sources

• AICPA. (2022). “Overview of PPP Loan Accounting Standards and Journal Entry Requirements.” www.aicpa.org
• Baker Newman Noyes. (2021). “Step-by-Step PPP Loan Accounting Treatment.” www.bnncpa.com
• Bench. (2021). “Tracking PPP Funds: Best Practices for Small Businesses.” www.bench.co
• Doeren Mayhew. (2022). “PPP Loan Accounting: Debt vs. Grant Approaches for For-Profit Entities.” www.doeren.com
• Grant Thornton. (2021). “PPP Loan Accounting Guide: ASC 470 vs. IAS 20 Treatment.” www.grantthornton.com
• Husch Blackwell. (2025). “PPP Loan Audits and Investigations Expected to Continue.” www.huschblackwell.com
• Independent Banker. (2021). “Tips for a Successful PPP Audit.” www.independentbanker.org
• IRS. (2022). “COVID-19 Relief FAQs for Businesses and Corporations.” www.irs.gov/newsroom/covid-19-relief-faqs-for-businesses-and-corporations
• IRS. (2022). “FAQs on the Paycheck Protection Program.” www.irs.gov/newsroom/faqs-on-the-paycheck-protection-program
• Ketel Thorstenson. (2021). “Proper PPP Loan Accounting Methods.” www.ktllp.com
• Pugh CPAs. (2021). “PPP Loan Accounting Options for Expected Forgiveness.” www.pughcpas.com
• QuickBooks. (2022). “Recording PPP Loan Forgiveness in QuickBooks.” www.quickbooks.intuit.com
• Richey May. (2021). “Comparing ASC 470 vs. IAS 20 for PPP Loans.” www.richeymay.com
• SBA. (2020). “SBA Achieves Historic Small Business Lending for Fiscal Year 2020.” www.sba.gov
• SBA. (2025). “Suburban Chicago Businessman Convicted for Role in Bank Fraud, PPP Fraud Schemes.” www.sba.gov
• Small Business Administration. “Paycheck Protection Program.” www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
• Squire. (2021). “US GAAP Treatment for PPP Loan Forgiveness.” www.squire.com
• Windham Brannon. (2021). “Detailed Journal Entries for PPP Loans.” www.windhambrannon.com
• Windes. (2021). “Practical Guide to PPP Loan Accounting.” www.windes.com
• Wolters Kluwer. (2022). “SBA Issues Year-end PPP Loan Forgiveness Report.” www.wolterskluwer.com

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. Reviewed By: Brittany McMillen

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Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.

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There is a contrast between the financial principle of a nonprofit organization and a regular company. However, the primary purpose of a nonprofit organization is awareness or fundraising for a social cause. The government and the public scrutinize their every move.

Unlike profit-generating ventures, a nonprofit organization relies on fundings and public support in donations, program revenue, and grants. They must prove the credibility of their financial records how, when, and where the money is spent—all to be clear in the public eye.

Taxation laws are different and complex for nonprofits. Therefore, Nonprofit accountants must keep the organization’s books up to date in conformity with state and federal regulations. Failure to keep the books to legal requirements jeopardizes the organization’s tax-exempt status and exposes it to legal risk.

Here are some details to give you an idea of tax accounting for nonprofits.

Tax exemptions and deductions

Most charitable and fundraising organizations can apply for tax exemption from federal income taxation. 

According to section 501 of IRS:

This tax code section pertains to charitable, nonprofit, and religious organizations exempt from paying federal taxes to the IRS.

While the IRS and federal law may determine tax-exempt status, state law determines nonprofit status. As a result, before filing for tax-exempt status, the IRS needs you to secure a nonprofit group from your state.

While they can exempt from income taxes, there can be exceptions if the organization has generated revenue by working outside their set scope and unrelated to their mission & vision. Then they will be responsible for tax payments on this profit if their gross income is more than one thousand dollars. It is called unrelated business income tax UBIT.

However, up-to-date tax accounting strategies can help to reduce taxable profits. A nonprofit organization can deduct any payments paid to corporate officials as well as wages provided to employees. They can deduct maintenance and repair charges, loan interest, employee benefit programs, and charitable contributions. They can record any losses experienced while attempting to earn profit through commercial activity.

Bookkeeping:

To develop effective accounting strategies, the first step is a nonprofit-friendly bookkeeping system. There are many manuals to automate options for bookkeeping. But the primary goal of this is to obtain receipts that should be recorded and organized (i.e., donations or in-kind contributions). You should keep track of spending (i.e., payouts from funds your nonprofit controls or expenditures it makes), Keep track of your cash disbursements, accounts receivable, accounts payable, and payroll.

Financial statement:

Nonprofits are not required to pay taxes, but they must produce a yearly return to explain how they spent their cash and met their objective. Tax-exempt organizations are set to an extremely high standard. Donors, the government, the media, and the public can expect to scrutinize their operations. As a result, their financial statements must demonstrate their mission. In addition, if a nonprofit organization fails to file an annual report or submits it late, the IRS may levy penalties and taxes.

As discussed above, bookkeeping can help in tax accounting as well as generating financial statements. Getting these statements ready as quickly as possible during tax season can be time-saving and stress-free. There is a more straightforward way. It is preferable to let your nonprofit accounting software prepare the financial statements required for nonprofit tax accounting most of the time.

Activity statements:

Profit-based businesses leverage the profit and loss statements to describe their income & expenses. Whereas nonprofits must submit a detailed and precise account of activities to show income generated and cost. The information of activities, also known as the operational statement, is the nonprofit equivalent of the revenue statement. These incomes obtain funds, donations, and grants. And costs include the utilities, wages, rent, office supplies, etc. 

In nonprofit tax accounting, two types of financial statements are prepared for external evaluations: 

1. Cash Flow Statement: Descriptions of Cash inflows and outflows.
2. Functional Expense Statement: Describes the expenses incurred throughout the reporting period.

Hence, a proper taxation system is a crucial part of any nonprofit organization. And with tax accounting, nonprofits can do their level best.

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.

Taking care of a family is difficult enough, but managing funds might be even more difficult. Not only do you want to give them everything you have, but you also want to do it all on a budget.

Here are some top tips for creating and managing a budget that will supply your family with what they require.

Keep a record of your spending habits:

There are various free tools available online that can help you keep track of your current spending habits. Mint.com has a fantastic budgeting tool that categorizes all your income and expenses as they enter and exit your account. It will allow you to spot patterns and identify when you spend a little more than you want in a particular category.

Make a reasonable budget:

Budgeting might be tricky, so make one that is realistic to your life. Use the information you’ve gained from tracking your spending habits to create a rent, mortgage, utilities, entertainment, and groceries budget. Look for places where you might minimize costs to put more money into investments and savings.

Consider both the long and short terms:

It is vital to plan from week to week or month to month. However, planning for emergencies, down payments on autos, house improvements, and other expenses is critical. To ensure that you are putting money down for the long term, consider splitting your salary into various accounts.

Bring the entire family on board:

It’s challenging to be a budget enforcer, especially when it comes to things like eating out. When you’re weary and the kids are hungry, it’s tempting to just run through a fast-food establishment. Instead, allow children to assist in the selection of dinner menus. It will be easier for you to make selections like these if they agree with you.

Strategize your savings:

There are numerous options available to assist you in paying less for the products you require. Consider using coupons or joining a rewards program at your favorite businesses. Americasaves.org gives some excellent advice on how to save more money.

Set up bill payment days as per your budget:

Setting aside time to focus solely on getting things paid and dealing with any unique issues with a vendor is critical. Make a consistent schedule, whether it’s the same day every week or the 15th and 30th. Find a way to reward yourself because the procedure can be tedious. Cappuccino and jammies are both excellent choices.

Take some time to re-evaluate your budget:

Budgets fluctuate as your family’s needs change. Prepare to make changes to your budget after a few months of trial and error. If you realize that you aren’t spending nearly as much on groceries as you expected, but part of that money into an area where you could benefit from a cushion.

Look for a substitute to make some more earnings:

Find creative ways to make money on the side to put a few extra dollars in your pocket. You can earn points by viewing movies, filling out surveys, and doing quizzes with incentive systems like Swagbucks and Memolink. You may then use your points to purchase gift cards from some of your favorite stores.

Limit your credit card expenses:

Although credit cards have numerous advantages, many people get into difficulty when they charge things with money they don’t have. If you obtain the benefits with a credit card, make sure you pay off the balance at the end of the month. Leaving a balance on your card might result in interest and financing costs, resulting in you paying more for an item than it is worth.

Make a budgeted home shopping list:

Using lists is one of the most effective strategies to keep to a budget. Make a list of what you’re planning to buy before you even enter the store. Take your list with you and only purchase the goods on it.

To assist you in managing your household budget, put all or any of these suggestions into practice. Though keeping track of your finances can be tedious, the benefits will be well worth the effort.

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.

The covid-19 pandemic compelled treasures in a few business organizations to slow down the cash flow burn that many organizations might have experienced. However, the majority of cash flow forecasting practices varied from companies resulting in crises. Financial forecasts are not just for larger enterprises; they are significant for every company stage, especially during the current unprecedented times. If you are worried about your company’s cash flow position due to the adverse impact of the pandemic on businesses, preparing a financial forecast would be a wise move. 

How to create a cash flow forecast:

Undoubtedly, cash flow forecasting can be a complex task, as it includes both the factual data from the past and the present determining the future. Chiefly, you may have to anticipate whether you will have enough cash available to continue preventing the funding issues. You can create a cash flow forecast utilizing one of the following methods. 

Direct forecasting:

This method is usually applied for a temporary cash-flow and involves estimated cash receipts from account receivables and account payables. Direct forecasting is comparatively more dependable as it contains more factual data. 

Indirect forecasting:

This method is feasible for a long-term strategy and includes a projected income statement and balance sheet. 

When you assist in cash flow forecasting solely or with the guidance of a reputable firm, you should be able to develop a sales forecast representing your expectations regarding profit and loss that combines your income with the expenditures. Once you get these two documents, you will complete cash flow forecasting. 

Utilize your sales forecast to calculate how much cash you believe will enter your business, including PPP loans. Deduct the costs from your profit and loss forecast, add up all the expenditures you will have every month, and subtract it from the total cash. 

Benefits of preparing a cash flow forecast:

As a business owner, have you ever considered the financial influence of losing clients, delayed payments, or several other scenarios, including a workplace closure? It is helpful to gauge whether you require additional funds to support your business or if you can meet the market demands and explore fresh opportunities. 

You can also implement your cash flow forecast to evaluate scenarios, and if an employee asks for a loan, how would you grant him and make the repayment policies.

In ordinary circumstances, you might review the former year’s figures to generate the sales and profit and loss forecast, which would provide the data required to see your cash flow trends and variations. With the current environment, you need more assumptions and flexible thoughts. 

Cash reserves in the business:

Through constant reviewing and updating your cash flow forecasts, you must identify the pinpoints where the risks of financial failure lie and the opportunities for quick cash generation. 

Developing efficient methods for cash collection and adjusting the terms of payment to both vendors and suppliers is significant to minimize the monetary impact. Quick implementations require across critical areas, including online sales, equipment management, and servicing the unguarded during the pandemic is sometimes necessary. However, take time to consider the consequences. 

Discounts and concessions:

There is a variety of actions you can apply. Where your clients and debtors are concerned, introduce more effective billing and receiving processes. Also, you can negotiate with the potential customers for the payment beforehand by offering a valuable discount or concessions. 

It is advisable to take approximate direct and indirect costs out of business to protect cash flow. By doing so, if you get to continue at an innovative and profitable level, you can move excess cash from other areas of the company into your capital account. Fortunately, many governments, during this challenging time, are proactively supporting businesses. 

Robust cash flow forecasting permits you to value your priorities. Remember that your key vendors and clients are ring-fenced and that both assist through this pandemic. The most prudent suggestion amid this uncertainty is to simplify the company’s financial procedures. By concentrating on limited areas, you might end up with a slight change in operations, but with a healthier conclusion and a more secured customer base. 

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.

Business owners find more comfortable ways to quit the workforce, leaving their businesses to shut down. The absence of succession planning is approaching at an alarming state. To secure their business, the business owners must focus on the sustainability of their practices and train and develop the following line of succession.

Business owners may not find a competent person in their in-house team. You may look for someone from the industry. There are chances that you might be left alone with no resources if you do not allow your team to run your business as the industry’s top companies will recruit them.

Although the need for succession may not be unique, successors may be. Improving a firm’s succession viability necessitates embedding a succession process into the culture and day-to-day activities. Here are three strategies for navigating the succession process and ensuring your company’s long-term viability.

Start grooming your successors at the initial stages:

It is essential to groom your employees ever since they join your company. Training your team as per your company values, objectives, mission, vision, culture, and client services are recommended. Developing the foundation services among your employees is very important. The foundational understanding will aid you in identifying future leaders who will reinforce your company’s distinctive success elements. Business owners should create teams for succession planning, assign duties and set timelines.

Create a succession planning team with roles, duties, and timelines. Business owners can outsource the specialized team from outside the industry. With proper planning and strategy, efficient succession planning can be made successful.

Delegate tasks to specialized persons:

Job delegation is a crucial element in any organization. Business owners do not complete all the client tasks themselves. Instead, delegate the tasks to the most specialized person. It is highly recommended to know your best employee. Ensure that current and future partners are working in positions that allow them to provide the best possible service to clients. They aren’t stuck in roles that are better suited for firm managers, IT specialists, marketing and business development professionals, and other specialized team roles. Be willing to promote someone who isn’t a CPA to the owner’s position, especially if they have good administrative and operational management skills. If you must outsource specialized positions, do so.

Have flexible work schedules:

Flexibility is an essential element that you should consider. Remote working has taken a boom globally since the pandemic. Work flexibility can increase the success rate of the business as this can

Two part-time partners, for example, might be a better fit if an outgoing owner worked full-time and had a substantial chunk of client business. When it comes to your senior leadership needs and what will lure the best succession prospects, don’t be afraid to think outside the box.

Every business finds out different ways and approaches and different methods for their succession planning. Business owners are highly encouraged to define their succession plans so that reaching the objective can be made easy.

Let your partner run your business:

If you founded your company with a partner or partners, you might be considering them as potential successors. Many partnerships have a mutual agreement that if one of the partners dies or becomes disabled unexpectedly, the surviving partners will agree to purchase the dead partner’s family business interests.

This arrangement can help both the business and the family cope with the stress of a sudden transition. A spouse who wants to keep their shares but doesn’t have the time or skills to help it expand may be unable to do so. A buy-sell agreement ensures that they are adequately compensated while allowing the remaining co-owners to retain control of the business.

The earlier a person gets involved in the business plan, decision-making, and rainmaking, the more likely a pool of possible successors forms. There is no such thing as a small or large company that cannot begin the process early.

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.

Since the pandemic struck us, the workforce operating from the offices has shifted to remote working. And it is not new; many companies have been hiring remote employees before as well.

It is a tricky task to find the best team that can fill the skill gap of your business. And if you are a new recruiter, you might have a few questions too. Like where do I post for these jobs? How to build my recruiting brand? What type of skills are needed for these jobs, and what kind of questions should be asked during the interview? But first, why give preference to Remote workers?

Because Remote working is a blessing in disguise, at first, it is a hefty task to hire someone out of your geography. But it is cost-effective, minimizes your expenditures, and is an effective way to hire the best talent among the potential candidates.

According to USA Today, by working remotely, an employee saves four thousand Dollars By not commuting to work, spending on office wear, and eating lunches away from home. Consequently, a business can save as much as 10,000 dollars per employee by cutting down on office space and other Tangible job benefits like office supplies, parking passes, etc.

Here is a guide on how to hire remotely:

Which is the best platform to hire remote workers?

Job searching websites can be the best source to narrow down your options on the deserving candidate in the pool of freelancers. Websites like

1. Career builder
2. LinkedIn
3. Behance
4. Monster.com etc.

Some of these websites focus on specific skills.

Detailed job descriptions:

Always pen down clear-cut and descriptive job listings so the applicant can get a clear picture of the role they are applying for. Elaborate on the skills required for the job. It is a crucial part of finding appropriate hires. Before writing a job description, you can take ideas from similar job listings by your competing companies or other brands from your industry on LinkedIn or Monster.com to note the main points.

By addressing each, the description will help candidates learn more about you and the role. Keep in mind that you want to make a compelling case for someone to collaborate with your company rather than just execute activities. Include different facets of your company culture and why someone might want to join your team.

Look for these attributes in Remote workers:

It is a reminder that not every professional individual can work from home. Therefore, when recruiting remote employees, make sure to hire someone who can be a pro in online working. Always look and consider the following skills to evaluate their potential.

• Time management
• Ability to freelance with or without a team.
• Organization skills
• Communication skills
• Adaptability to newer technologies
• Dynamic
• Does not shy away from asking for help.

A good recruiter is the one who figures out the needed skill set is there or not by seeing the resume. Extensive Questioning about the candidates and their skillset during the interviews can be fruitful too.

Online Presence:

Today, the world is influenced by social media. Therefore, to attract the best talent, an enterprise should have a trustworthy image online. Remote candidates strongly rely on the social media presence of a company to check the authenticity.

Company websites, social media handle play a big part in this. The career pages on your site must convey your work ethics, Vision mission & help them visualize themselves as team members and understand the terms and conditions before applying for any job.

Schedule an interview:

Compile the questions you wish to ask in a standard interview. You can start by asking about their home work environment and how they will balance their work time and personal time. How can they avoid getting distracted? Schedule a video call interview with the candidates you have shortlisted. Acquire about their tech skills and the reasons for their preferences to remote work. Discuss the remote work policy of your company and ask if they are willing to abide by it.

Remote working can fill any skill gap, but the most common skills that do not require a specific location are web development, Virtual assistants, writing and editing, Graphic designing, and Marketing.

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.

A clear vision of your perfect client is critical to the success of your organization. You’ll be able to identify the most likely people to buy, eliminate those who don’t require your services, and gain a more excellent grasp of how your products and services genuinely make a difference.

One of the most typical mistakes made by new business owners is attempting to help everyone they can. While this may appear to be a good concept at first, the problem is that the larger your target market becomes, the more difficult it becomes to connect with them in a meaningful way.

What kind of customers are you looking for?

It is an ideal question which tells you about the customers of your client. This question gives you the knowledge of which type of customers your clients will be targeting. Some of your clients might have smaller customers, whereas those with million-dollar customers would be more beneficial for you.

What external issues do you have to deal with?

Understanding the day-to-day operation is vital for you. It is highly recommended to know the problems your client is going through during daily operations.

External issues are the issues that others can see and are dealing with on the surface. Continuing with the social media manager, a potential external concern for their ideal customer could be an uneven Instagram feed lacking aesthetic cohesion.

What internal issues are you dealing with?

Internal issues are the opposite of outward issues. These are the thoughts, emotions, and sentiments connected to an issue or a source of discomfort.

Returning to our social media manager’s ideal customer: They’re presumably embarrassed by their Instagram feed’s visual inconsistencies. Perhaps they’re concerned about what others think of them because they don’t post regularly, and their photos aren’t of excellent quality.

The ability to recognize and accurately describe your prospective client’s internal issues will aid you in developing a solid relationship with your audience and gaining community trust. Yes, external problems are crucial to comprehend and resolve since they are visible to the rest of the world. However, it is resolving internal issues that foster connection and loyalty with your ideal client.

What value do they look for?

Understanding your client’s customer is very important. It is not always possible that the services you provide to clients meet their customer requirements. It may seem like you offer accounting services to your clients, but what value them the most is how you respond to them and what value you provide them.

What services are you looking for and your expectations?

If you provide multiple services, it is best to ask the client about the services he would purchase from you. It is best to discuss the services, their nature, and the scope of the services. Your client may look for an accounting and taxation service. Thus, offering them an IT consulting service would be a waste of time and loss of expectation. Budget vs. actual evaluations, asset management services, and strategic planning may be a natural next step if they’ve already engaged in tax and cash flow management. Asking these questions with your leadership team can help you make smarter decisions about investing in marketing and business development, technology, talent, and procedure to attract your ideal customer.

What are the expectations from these services?

Understanding the client’s expectations is very important. Client purchases the services to enhance their sales and meet the company objective. The firm must provide these services in alignment with the client’s business objectives. It is not worth assisting if the client’s goals have not happened. The resources allocation on the client’s project happens by the expectations of the client.

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.