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A behind the scenes look, mid-reno
It is essential for a fix and flip investor to implement maintainable and accessible systems that help in expanding their business and improve the number of revenues they are earning. Successful fixing and flipping businesses are made up of complicated processes. An important aspect of these complicated processes is related to accounting and bookkeeping.

Accounting for all of the expenses that take place is necessary to achieve success in this field of business. Reducing the overall tax on the business by providing accurate values and accounting shows the investors and other lenders that the business is running professionally.

Developing efficient accounting systems is not hard, especially with the technological advancements in the millennial age. Efficient accounting methods can be made easy by utilizing software and applications that are specifically made for accounting and bookkeeping purposes.

However, ensure that the accounting procedures are not complicated. Keep it as simple as possible while educating your employees who are responsible for accounting. They should know the handling of new technology that you introduce in your business or organization. Below are some ways to stay organized and things that you need to show to your accountant or bookkeeper at the end of the day.

1. Introducing and Developing an Effective Accounting System

The shoebox method is a process in which all the receipts and financial records are collected, stored and handed over to the accountant at the end of the year. This is a cost-effective method and is not very common in the millennial age. Some experts do not recommend this at all.

A more profitable and time-saving method would be to use software programs and applications that cater to accounting services. An example of an application is Expensify which allows the user to scan a receipt, enter the specific amount, categorize it accordingly and then save it into the cloud. It works somewhat similarly to the shoebox method, but it is much easier to maintain and simpler to use.

Regardless of whatever method you use for developing an effective accounting system, make sure that you include the following categories of transactions:

1- Acquisition costs

2- Rehab costs (The improvements made in the household)

3- Repairing costs of the household

4- The holding costs of a property

5- The selling price of the property

6- The selling costs

2. Types of Records that should be kept as a Backup

The laws of a state do not require the records of a fix and flip business, unless there are certain specifications. Any method of recording transactions can be opted for that clearly defines your income and expenses or any other expenses that might take place.

Keep a record of all of the tax assessment cards and maintain the HUD statements alongside all receipts that are inclusive of any transactions that may have taken place. Insurance documents should also be stored along with these in your bookkeeping records.

All external expenses that take place should also be recorded with the supporting documentation. The supporting documentation should show the amount that has been paid and the amount of money that was invested for a business expense.

The expenses documents include:

1- The checks that have been canceled

2- The tapes of the cash register

3- The statements of the accounts

4- The sales slips of all credit cards that have been used in the business

5- Invoices

6- The petty cash slips that are used for small cash payments

3. Decide Whether you are using Cash or Accrual Methods of Accounting

Decide whether you will opt for cash or accrual methods of accounting. The cash method defines the income recognized after the paycheck is received and expenses are recognized after they are paid. Many taxpayers use this method to get their returns.

The accrual method of accounting identifies the income and expenses when they incurred or earned instead of recognizing them after the check or payment is received. How does this imply to fix and flip investors?

When someone deals in a property, the IRS classifies him or her as dealers. This means that, for accounting, the house that the investor is dealing with is his/her inventory. The IRS will, therefore, require the use of the accrual method.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

 

 

 

 

 

CPA Certified Public Accountant written in notebook on white table
Accounting is most often controlled by a chief accountant; additionally, there is usually an assistant chief accountant and other ordinary accountants. Depending on the size of an organization and its workflow, these posts can be supplemented by others, such as an accountant-auditor and accountant-cashier.

Certified public accounting has generated an interesting, creative and well-paid profession. In most medium-sized organizations, the accounting system is the most important and is mainly divided into bookkeepers and accountants who are responsible for maintaining detailed operational registers. A certified public accountant of the highest qualification is able to decide how the courses should be reported, composed, and how to interpret it. A CPA is responsible for preparing a special assessment, developing and managing traffic information systems, and ensuring its accuracy. The accounting records of many organizations are evaluated by independent accountants and auditors. Bookkeeping is used by CPAs to keep detailed accounting records.

What You Should Pay Attention to in the Accounting Profession

A certified public accountant must be able to independently make decisions, have management experience, and maintain an accounting record in accordance with the criteria of the national legislature and corporate requirements. They should also be able to work with tax consultants and external audit counselors, interact with the business’s management to effectively solve the set of tasks, and much more.

What Does a CPA do?

After becoming a Certified Public Accountant, an accountant is given a higher privilege in the eyes of expert peers, regulators, business contacts, and potential clients. It is because of the fact that a CPA has met the requirements of education and has passed a very tough exam. The designation of a CPA comes under one of the most versatile and highly sought after qualifications of accounting and finance.

What Can a CPA do?

Public accounting consists of an extensive range of auditing, tax, and accounting. In addition to this, it also involves consulting tasks for small businesses, government organizations, and individuals. A proficient public accountant is capable of doing all of these tasks. Moreover, a CPA can perform two tasks that an ordinary accountant without a CPA license cannot:

  • A professional CPA is capable of preparing reviewed or audited economic statements and can file a report with the commission of securities and exchange. Every public organization has to file a reviewed and audited economic statement with the SEC.
  • An expert CPA is able to represent their clients in front of the Internal Revenue Service. However, an ordinary accountant that is a lawyer, an enrolled agent, or a registered agent for a retirement plan is also capable of representing clients.

CPA Firms

A certified public accountant (CPA) at a CPA firm works in one of the following three areas:

Tax Services

Tax services are comprised of filling and preparing state, federal, and local tax revenues as well as working with individuals and companies during the year to minimize tax obligations. A CPA organization can represent their customers in the case of an IRS audit or investigation by country or local tax authorities.

Auditing Services

Auditing services are said to be independent expert services that help improve the context and quality of both non- financial and financial data, especially for decision makers. The audit is an objective assessment of economic and financial data in order to make sure it is accurate and meeting criteria. For example, GAAP (generally accepted accounting principles).

Management Services

Management services are able to provide complete guidance and assistance for managing and supervising a day to day activity of an individual or organization. Management services also provide strategic and long-term planning. These services might include budgeting, management of cash, and economic planning that includes preparation of financial statements, risk and insurance management, and guidance for investment.

Most businesses, particularly big corporations, also seek the help of CPAs for filling the positions of accounting, especially management and other higher level positions.

CPA’s are Experts in the Following Areas

  • Financial reporting and accounting
  • Management accounting
  • Internal audits
  • Tax accounting

Additionally, CPA’s can work for the government by performing financial tasks and audits of government agencies. Moreover, another job opportunity for a CPA is with law enforcement organizations, helping in the investigation of financial offenses or other crimes which leave an economic trail.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

businessman working on desk office using calculator business financial accounting concept
Creditor days is used for the purpose of calculating the days a company is required to pay all of their creditors, whereas debtor days measure the average amount of days it will take for a business to obtain all payments for the products or services they have sold. It can also be termed as accounts receivable days. Bookkeeping will provide all of the necessary and relevant information from which all of your accounts are formulated. 

Creditor Days

Creditor days is a way for a company to show its creditworthiness to its creditors and suppliers. These days are a way for the company to know how long their creditors and suppliers will wait for their payments to be made.

Within reason, a higher number of days will be better for the company. This is because all companies wish to conserve their cash. Still then, a business that is found to be especially slow in paying all of their bills (for example, taking 100 days or more), could be a company that has trouble generating cash. Maybe the company is having trouble financing its operations with their supplier’s funds. In the end, a business whose creditor days are in excess will eventually have trouble in obtaining their supplies.

Debtor Days

Debtor days is a way of indicating a business’s efficiency in collecting all of their money owed. In such cases, it will be beneficial for the company if their debtor days are lower. When the number of debtor days is high, it reflects on the company’s inefficiency. It may also point towards the company’s bad debts or doubtful sales figures.  

Different Ways to Reduce Creditor and Debtor Days

 

  1. Negotiate and Discuss Payment Terms and Conditions with Suppliers

You pick your suppliers based on your specific needs and requirements, whether it’s about price, quality of the product, or simply speed of delivery. In most cases, the payment terms and conditions are the last thing considered when selecting suppliers.

If you have built a good relationship and rapport with your suppliers, negotiating better payment terms should not be a problem for you.

 

  1. Offer Discounts and Concessions For Prompt or Early Repayment

If you use invoice finance in your business, you end up paying 3% for the first 40 days of the invoice, with 4.5% for 80 days. You could offer this discount to your clients in cases of payment upfront vs. delivery.

  1. Change Payment Conditions And Terms

Although the majority of businesses in their early lifecycle are found to be flexible in terms of their payment conditions, over time this leads to problems with working capital. Just as your client/supplier payment terms start to stretch, you might face difficulty running your business. New businesses start to apply short, new payment terms to all of their new clienteles they have on board. When they are confident that there is no such issue, they revisit their clients and change their terms and conditions. 

  1. Set Up Chasers, Automate Credit Control

With the introduction of cloud accounting, like Geniac and Xero, there are now several solutions available that help a business with automating timely reminders.  

  1. Credit Control Externally

Although automated credit chasers can be extremely helpful, credit control cannot be beaten. If you happen to have a bookkeeper who works part-time, you are likely to find out that you have lengthy debtor days. With the help of external credit control, you will not only have confidential, but quick results.

  1. Boost Stock Control

In order to reduce the necessity of working capital, a business must become effectual and efficient in their sales/purchasing cycle.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Stock Market Graph next to a 1 dollar bill (showing former president Washington). Red trend line indicates the stock market recession period
One of the most important reasons that a company may understate its cost of goods sold is to increase its chances of short-term success in a given market. Short-term success can be attained by getting financing or impressing outsiders to finance the company. However, understating the cost of goods sold can be dangerous for the long-term survival of a company if authorities find the fraud. Moreover, understating the cost of goods sold are in direct opposition to bookkeeping standards and rules. The different reasons why a company would understate its cost of goods sold have been discussed below.

Increase in Income

In order to determine the gross profit of a company, the cost of goods sold is subtracted from revenues. The lower the cost of goods sold, the higher the gross profit. Consequently, lower cost of goods sold makes an organization look more effective and efficient. A company stating lower cost of goods sold can create the appearance of a more sustainable business model in a competitive market. A company looking to increase the figure of cost of goods sold may under represent the cost of goods sold to impress potential investors. However, this does not provide an accurate presentation of the balance sheet of an entity and, therefore, can bring legal trouble. Sure, a firm can increase its income by attracting more investors, but the investors and other authorities can sue the company if they find out that the cost of goods sold was understated.

Get Financing

Small businesses often need outside financing to survive and grow in the market. A lower cost of goods sold (COGS) and a more appealing balance sheet may be needed to impress a bank loan officer. Businesses may be tempted to understate their COGS in order to make their business model look more attractive and their profit more sustainable, making them better candidates for loans. A lower COGS makes the financial statements more attractive – at least until it comes time to pay taxes on the earnings. This may impress potential investors and analysts who look only at the documents and do not delve any deeper into the data. The analysis based on provided data – that is, understated cost of goods sold – can provide positive remarks regarding the performance and sustainability of an organization. Therefore, an investor can be convinced to invest their money into the company. Hence, some companies falsely understate the cost of goods sold in order to present their efficiency in the management of cost and achievement of higher profits.

Considerable Risk

Knowingly filing false financial statements puts a company, the signatory to the documents, and perhaps the business owner in legal jeopardy. State and federal agencies watch for irregularities in balance sheets and are increasingly focusing on the raw data used to compile those numbers. Fraudulently lowering the COGS, or altering anything on financial documents, carries considerable risk of fines, prison terms, or both. Even still, although understating cost of goods sold is illegal and risky, there are companies who do so to attract different stakeholders.

Legally Minimizing COGS

Companies can value their inventory in a way that legally minimizes the cost of goods sold, depending on the nature of their business. Using the first-in, first out (FIFO) method determines the COGS by using the costs of your oldest inventory first. Depending on what kind of business it is, this may or may not objectively be the optimum strategy. For example, a business that sells rare coins may have won a particular item for $100 at auction and later spent $1,000 to acquire another one. If the business then sells that coin for $900 as part of a promotion, the FIFO method would result in the company showing an $800 profit, taking the coin that cost $100 to acquire out of inventory. Using the last-in, first-out inventory value method would record the same transaction as a $100 loss by removing the $1,000 coin from inventory.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Business woman with question mark on a blackboard
QuickBooks is a complex accounting software that requires proper knowledge and training. The nature of the application is quite multifarious which can create problems for users with little or no prior training.

Every department of business has multiple software for managing their workload online.  A sales force of a business uses a CRM system (Customer Relationship Management) to manage their customer feedback, connectivity, customer complaints and all other customer-related tasks. Similarly, to manage accounting and bookkeeping related tasks of a company, businesses often use proper systematic software that can help them in managing their finances. QuickBooks is one such amazing accounting tool that is mostly adopted by small to medium scale businesses.

What is QuickBooks Software?

QuickBooks is an accounting software designed by Intuit Inc. The software provides a set of accounting solutions to businesses which help in managing the payroll, inventory, sales volume and multiple other small business functions. The software’s key features are:

  1. Marketing based tools
  2. Products and supplies
  3. Services for the merchant
  4. Training solutions

However, every solution is designed in accordance with the needs of the business and industry they are operating in. The best thing about Intuit’s business solutions is that they have customized products for every contractor. For example, construction contractors get:

  1. A QuickBooks Enterprise solution for contractors
  2. A QuickBooks Premier contractor
  3. A QuickBooks Pro
  4. A simple starter plus pack

All of these products are specifically designed to meet the needs of the contractor to small to medium-sized companies. This makes QuickBooks the most powerful software which cannot be learned by using a trial and error method. Learning this software requires extreme practice and proper training. However, even trained QuickBooks users skip a few essential tips and tricks that can help in making the accounting and bookkeeping processes easy.

4 Things that you Didn’t Know you could do with QuickBooks Data

  1. QuickBooks is a gold data miner with different versions with different prices and features

As you already know, QuickBooks does not only come with one single software to fit every industry. Rather, it provides multiple solutions to its customers according to their needs. The features available in QuickBooks depend on your business type and the growth of your business. The data you will record through QuickBooks will be all yours. Once your data file is created, you have free access to all of the data which can be later used in a business analysis for your customer survey.

  1. Integration with other business applications that can indicate critical information about your business

Most small-scale businesses have multiple desktop or cloud-based software that help them in carrying out their business operations. By integrating this software with QuickBooks, you will be able to utilize your QuickBooks data with other business software. There are many other business applications that are now providing QuickBooks built-in integration.

  1. Utilizing QuickBooks Data

QuickBooks data has all of the major information about a business’s customers, products, employees, productivity level of employees and the volume of business sales. To best use this data:

  • You have to eradicate the data from QuickBooks and place it in the analysis database.
  • Then, you will need the tool for reporting and analysis process which is properly integrated with QuickBooks data. It will then allow you to see any type of data you need.
  • For bookkeeping purposes, you will be required to create a QuickBooks report that will help you in visualizing the data on a regular basis.

  1. It helps in decision making

As you save and monitor the data of QuickBooks in the shape of reporting files, your company will make more accurate decisions. You will be provided a clear picture of your business that will allow you to make wise decisions for your company’s success.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Intelligent female businesswoman working on laptop while analysis business strategy and sale performance contract on workplace.
One of the most critical aspects of running any business focuses on managing its finances with the utmost care. If you make mistakes on your tax returns or go over your assigned budget, it does not matter how good your product or service is, as you are likely to get stuck in a tricky situation. Hiring a CPA (Certified Public Accountant) for maintaining healthy financial records, applying for loans, and filing for tax returns is one of the best decisions you can make for your business. The certified accountant will not only manage your documents but will also help you make critical decisions about the future of your business.

Who are CPA’s?

An accountant refers to a person who is well versed in the rules and regulations that comply with GAAP (Generally Accepted Accounting Principles). These rules and standards are set by the FASB (Financial Accounting Standards Board) after considerable thought and accreditation from top finance professionals. A CPA refers to professional accountants who have cleared a licensing state examination to work as an accountant. These individuals have the necessary skills and knowledge to combine with the success of your business. Even small businesses who are considering growth should preferably use their services as they can be a valuable asset to any organization.

Why Hire a CPA?

State-Approved License

A Certified Public Accountant has a state-approved license, which makes them an ideal candidate for managing your needs. They are required to stay up to date with the current tax and accounting laws as the examination is a laborious process spanning over several days. There are many standards that a CPA must follow in order to keep their license. The professionalism and skill set makes them perfect for your business as they are highly capable to efficiently handle complex financial matters concerning your business.

Familiarity with Tax Laws

It is necessary for a CPA to be aware of the tax laws concerning different businesses. No matter what type of business you run, a CPA is well equipped to handle any situation because taxation is an important aspect of their examination. They also have to take yearly tax courses to stay up to date with the current changes in tax laws and regulations.

When filing your tax returns, a professional accountant will ensure that the criteria and standards set by the IRS are properly set. The IRS is smart in distinguishing between taxes filed by a simple accountant or a CPA through their tax identification numbers. Therefore, if you want to offer authentication to your filed documents, it is best to consult a professional.

Financial Analysis

CPAs are well equipped and skilled to perform a detailed financial analysis of your organization. With a professional at your service, you should expect a detailed analysis of your financial reports and cash flows. They will provide you with an honest picture of your current financial standing and are capable of offering advice for the future. Managing your cash in the right way is another important demeanor of success and a CPA is able to do that quite well.

Can Represent You in an IRS Audit

One of the biggest advantages of working with a professional CPA is their ability to represent you in case of an IRS audit. Although their authority in representing you can be quite limited, you can still authorize them to execute claims on your behalf as they are very trustworthy. If you want to grow your business, you should consider hiring the services of a CPA in critical financial matters.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

 

 

 

 

 

 

Contemporary black and white business men and women working with papers and communicating in office.
When you start a business, you do not necessarily consider the need to grow your company’s accounting functions. Accounting is a vital task that is performed by companies to record, gather and analyze financial data. This information is useful in performing daily business operations effectively. Historical financial information can also be used to come up with new ways to expand your business operations. A growth strategy that is based on the available financial information helps business managers make important decisions in their current business scenario as well as for future endeavors.

Based on experience, the accounting functions for a business tend to progress step by step. You will most likely not need a Chief Financial Officer on the very first day of business, however, there is always a need to grow your company’s accounting functions as the scale of your business widens. Some of the guidelines mentioned below will assist you in deciding when it’s time to really put your foot on the gas.

Part-Time Services or Outsourcing

At the time that your business starts operating, you are probably not in a position to hire a full-time finance professional. However, it is indispensable to keep accurate financial records from day one. In case you do not have the expertise to perform this task on your own, a part-time professional or an external service provider can do the job for you. Below are some of the tasks that are needed to be looked after.

Setting Up an Accounting System – Grow your Company’s Accounting

QuickBooks is an accounting tool that is preferred by many new businesses as it’s easy to operate. Your company needs to set up the format of your financial reports and decide on SOP’s to be followed by the accounting practices. During your initial phase, you will encounter many issues regarding the handling of accounts, however, the situation can be avoided through better organization of the work.

Bookkeeping

The day to day accounting functions need to be recorded in your books, as soon as they occur. It is not something that requires a lot of expertise and anyone with basic financial knowledge can do this. You can even handle it yourself or hire someone for the preparation of checks, invoices, or any other issues related to them. However, as your business operations foster, you will need to grow your company’s accounting management which is best handled by a professional and you should consider outsourcing the bookkeeping.

Another useful way to manage your books is by avoiding cash and running all of your transactions through a bank account. This way, you will be able to get a record of every transaction you made and it will also help you to cross check all of your entries.

Protection Against Fraud

In the earlier stages of any business, it is more susceptible to frauds and theft because there are no defined Standard Operating Procedures and you are also getting familiar with how to manage your accounting efficiently. When you decide to grow your company’s accounting functions, it helps you against these frauds and thefts because you will be better equipped to manage your money. It has been proven from research that almost half of small businesses are affected by such fraudulent activities, either by employees or external factors.

Tax Preparation

As your business grows, you will need to prepare yourself to pay all taxes. Depending on the type of your business, you may need to pay sales tax, property tax, payroll tax and so on. It is best to consult an expert to file your taxes as there are many complications which require a deep understanding of the taxation system. The outsourcing agency handling your books may also provide taxing services, so it’s better to consult them first before moving on.

Grow your Company’s Accounting with Full-Time Professionals

With time, your company will grow and you will realize that your accounting tasks are far more complicated now. This is an ideal time to either convert your part-time employee to full time or hire permanent employees for the task. You may not only require a bookkeeper but a CFO or a professional who can oversee the completed work. A CFO must be capable enough to handle all questions and must be able to work with you to construe the financial statements, deal with banks and investors, confront taxation issues, forecast future budgets and protect your company’s assets.

Once your business is at a scale that outsourcing professional services and hiring an internal CFO would cost you the same, then it’s better to do the job internally. A CFO is an employee of the company and will sincerely make an effort for its success as your interests are aligned. To grow your company’s accounting functions, this is the right time to hire a full-time CFO.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

 

 

 

 

 

 

Cash Flow sign
Whether your business is developing or going through tough times, managing your business cash flow efficiently is absolutely vital and, for many, the key to business subsistence. You’ve perhaps heard the figure that over 40 percent of businesses that go broke are profitable, but just run out of cash.

From a cash perspective, a business is like a sponge — it sucks in snowballing amounts of cash and, to get money out of it, you have to give it a good squash. If you are unable to manage the business, the sponge is likely to grow bigger with each squeeze, making it tough for you to keep it in your hand. Successfully managing your cash flow will ensure that your business stays right on track to achieve its objectives. Here are some ways to do that.

Set Business Cash Flow Targets

Preparing and maintaining a cash flow forecast is a great way to understand the flow of money in your business. The forecast should be regularly updated to get an accurate picture of how the business is performing. Set specific targets for credit controllers that will encourage them to work hard to achieve them and, as a result, will maintain a positive cash flow for your business.

Set Clear Payment Terms

Businesses that deal on credit are often more vulnerable to declining cash flows because of late payments or other issues. They must set clear and standardized payment terms and plans that must be regularly followed to ensure that business cash flow targets are met. Even businesses that only occasionally deal with credit should have a payment plan. If you are unsure about the payment terms yourself, it will be hard for your employees and even your creditors to correctly access the right time to pay. The payments will be delayed, which ultimately means a decrease in cash flow.

30 days is generally considered to be a good time to make a payment for many businesses. However, based on the type of business and market situation, you have the liberty to set your own terms and conditions.

Generate Quick Invoices

Certain factors to improve the cash flow of your business are in your own hands. If you are efficient, it is likely that the cash flow will be positive. Invoicing your clients is one of the deciding factors and the sooner you do it, the better. Typically, a client will take a week or two to clear the generated invoice and, if it is delivered late, you must expect a further delay. Therefore, set up an automated bookkeeping system that automatically generates and sends invoices right on time so that your business cash flow is unaffected.

Install Easy Payment Options

Offer your clients the quickest and easiest ways to pay you. Online payments are a better option than checks as they take more time to actually show up in your bank account. Linking your bank account with accounting software will make it easier for you to keep track of cleared and pending payments. It also allows for quick transfers as banks already have all of the information needed to ensure a safe transaction.

Use Technology

Cloud-based accounting software is a great time saver for businesses, as it has brought efficiency to almost every business function. Tracking the cash flow of your business is just a click away with the help of this software. You can see, filter, and prioritize credit payments, depending on your need, from anywhere. The ease of accessibility that is offered through these cloud-based accounting services is just unmatched. The data is automatically backed up so you don’t have to worry about any loss or theft.

The fact that everyone in your company has access to all of the information at their convenience automatically speeds up the overall process. By using technology in your business operations, you will observe that the business cash flow has also increased considerably.

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

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In traditional business accounting, the term overhead expenses refers to costs that are not directly associated with the production of specific product units, specific service engagements, or specific sales. “Overhead”, instead, denotes the supplementary costs of production, service delivery, or sales activities. The overhead costs have to be paid regularly, irrespective of whether the company is engaged in a high or low volume of production. It is vital, not just for the sake of budgeting and bookkeeping, but for setting an optimum price for the products and services to make a profit.

Firms plan, quantify, and examine overhead expenses. As a result, overheads, like other expenses, eventually influence how an income statement proceeds. With the increase in expenses, the profits decrease. Your income statement is affected, as a whole, because of these expenses and you have to make required adjustments to cater to them.

Overhead Expenses in Business Accounting

Overheads are either fixed, which means that they stay the same month after month, or they can be variable, which means that they can vary depending on the business activity for the specific month. Some overheads fall into the semi-variable category, which means that they are incurred regardless of business activity, and some are related to the circumstances. Utility bills can be categorized as semi-variable because some of the base charges are fixed while the remainder depends on your usage.

Overheads can be general as well as departmental. A general overhead would be distributed among the whole company while departmental overheads are charged strictly to the specific department. Typically, a service-based business will have more general expenses in the form of insurance and utilities.

Categorizing Overhead Expenses

Overheads can also be applied to many operational categories such as administrative and marketing. Administrative overhead costs are related to the administration of the business and include costs associated with hiring and keeping a receptionist or bookkeepers. Branding for your company also involves certain costs that fall into overheads. Your business accounting needs require you to identify these materials, commercial, printing, and other expenses and charge them into overheads.

Reporting for Overheads

Because the overhead expenses directly affect the profitability of the company, they appear in the income statement of the company. You must account for overheads in order to determine the net profitability of your company. These expenses will be deducted from the revenue and the remaining income, after taxes, will determine your profits.

Applied overhead is generally recorded under the cost accounting method and is charged to a specific department or production job. They are quite dissimilar to general overheads and usually cater for depreciation and insurance expenses.

For business accounting purposes, applied overhead expenses are charged according to a specified formula over multiple departments. For example, if the expense is incurred by marketing, it may not be fully allocated to it. Instead, it will be distributed among various departments according to a specific percentage.

Overhead Rate

To allocate overheads, an overhead rate is applied which determines the resources used in the production of each product and then distributes the expenses accordingly. One way to accomplish that is by setting a fixed rate based on the machine hours required for the production of a product. This is a simplified approach, however, real-time business accounting scenarios require you to account for several cost drivers and then set an overhead rate.

It can be difficult to accurately estimate the overhead expenses. Therefore, the costs are generally estimated depending on the overhead rate for each cost driver.

Under Applied Overheads

Sometimes the assigned cost of work in progress goods does not equal the assigned amount and therefore has to be reported as a prepaid expense on the balance sheet.  Debiting cost of goods sold at the end of a year offsets the discrepancy. Under applied overhead costs are also referred to as unfavorable variance.

Adjusting your books for overhead expenses is an important task that must be undertaken by every business if they want to correctly estimate their profits and set an optimum price for their products.

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

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Hiring a good accountant or bookkeeper is your secret weapon for faster growth and they can truly add real value to your business. Besides helping you to manage your accounts, they will help you grow your company with better financial decision making, employ legal tricks to minimize your tax bills, reduce accounting errors and save you a lot of time on admin.

Most MNCs (Multinational Corporations) have in-house accounting teams usually working around the clock all year to ensure that taxes and other corporate debt(s) are paid on time, salaries and bonuses are being disbursed, profit potential is evaluated, financial reports are created and balanced-out, and the growth is managed successfully. It is the job of a good accountant/bookkeeper to get things moving in the right direction, resolve all financial discrepancies, and make sensible monetary projections year-round.

On the contrary, small-scale businesses, are also now looking to hire the services of professional accountants because they know they can only grab a significant market share and survive in the competitive market if their financial equation is favorable. It doesn’t matter whether you’re in the initial phases of business creation or have an established business, the need for hiring a pro-level accountant never dies. Your accountant and/or bookkeeper is the backbone of your business and, undoubtedly, your secret weapon for faster growth. Any small-scale business with a sound game plan and business execution strategy can expect to reach the top in no time if the business has a good accountant to look after its financial operations.

Planning and Forecasting Your Cash Flow

Planning and forecasting prior to decision-making makes sense but, once you start to take a ride on the sinking boat, it isn’t helpful at all. Businesses—small or large, almost always strive to achieve a perfect balance in cash flow, especially when they structure the operations of business on a DIY accounting model. The influx and outflow of cash have to be maintained properly or else the lack of effective financial management can be fatal to the future of your business. On the other hand, a good accountant and bookkeeper can make your business move in the right direction and help you achieve faster growth. A professional accountant with superior bookkeeping services will help you in better financial decision-making which will allow you to succeed in a very short span of time.

Reduction in Taxes and Financial Discrepancies

Professional accountants and bookeepers have superior accounting knowledge, skills, and experience which helps them to stay on the top of cash flow, taxation rules and regulations. They know the tricks to handle tax-related issues and help you reduce them, up to a great extent. Hiring a good accountant is more of a need than a desire because, without them, you cannot expect to achieve faster growth or strategic goals. The theory of tax reduction is quite simple, the more relief you can claim, the more you save, the faster you grow.

Sharpen Your Focus

Obviously, hiring a professional bookkeeper allows you to focus on the core business operations, which ultimately sharpens your focus. Small-scale businesses usually do everything on their own—from conceptualization of ideas to business establishment to managing their finances. However, little do they know, they can help their business to achieve faster growth if they define a way to manage their finances well. For that, a good accountant or a professional bookkeeper seems like a fair choice as they help you with better decision-making, reduce accounting errors, and find financial discrepancies.

Compare Your Numbers with Industry Benchmarks

It is the duty of a good accountant to let their clients know about their current financial standing and what financial decisions they have to make if they expect to achieve faster growth and success. KPIs (Key Performance Indicators) are a good starting point to know whether you are performing better or worse and what possible measures you can take in order to keep the financial equation favorable. Comparing your numbers with industry-specific benchmarks helps accountants sketch a clear picture of your financial standing for suitable measures.

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.