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accurate efficient bookkeeping

Bookkeeping records are vital for a business to maintain because, without them, a company fails to calculate its costs and keep records of critical financial data. Alongside, if they are not supported, businesses risk losing their data to malicious hackers or viruses.

 

 The following guide will teach you how you can ensure whether your bookkeeping is efficient or not and whether it gives accurate results or fails to do so.   Check out America's Best Bookkeepers

1- The first step to effective bookkeeping is to keep yourself updated daily on what is going on. Notice if there have been any changes in the bookkeeping records. If changes have occurred, check them physically If they are correct or not. Repeat the practice until you are sure that your bookkeeping maintains accuracy and functions as efficiently as you want.

 

2– Secondly, stay organized. Use any organizational tools to set up your bookkeeping records and make sure they are not jumbled up. Lack of labeling or specifications can cause confusion that can prove to be time-consuming. Once you are organized, you will have your records at hand, making them easily accessible whenever required.

 

3- Inform your employees responsible for maintaining the bookkeeping records to keep you updated on everything that goes on. Make sure that they maintain a record of anything that goes behind your back. You can do this by using smart devices bookkeeping management or by using online software.

 

Keeping these things in mind goes through the following basic strategies to keep your bookkeeping work efficient and accurate. Check out America's Best Bookkeepers

 

1) The importance of accurate, timely, and organized financial reports and bookkeeping records must be understood and communicated to the bookkeeper and the business owner. Make sure that the employees/ parties that handle your bookkeeping are:

  1. Well trained in their field of expertise.
  2. All the people involved have sufficient knowledge to create related reports and maintain them for timely submission.

Ensuring these two factors will enable you to identify your business’s progress, thus making it easier for you to make informed decisions.

2) Documenting all the expenses is an essential task that you should punctually maintain. Using your bookkeeping records, decide what costs can be cut down. Pinpoint the excessive spending. Notify your employers to record any other changes done lately and come up with a strategy to cut them down.

 

3) Have sufficient knowledge of your recordkeeping requirements. Always maintain an understanding of your unique recordkeeping requirements for the specific industry you are operating. Make time-to-time reconciliations, observe bookkeeping procedures, and make sure that you retain knowledge on accurate information. 

 

4) In case you are not in the mood to hire a bookkeeper, an outsourced bookkeeper is your best option. Mostly when a business grows, they have trouble recording the massive amount of transactions that take place daily. Outsourcing a bookkeeper does not make the company lose control over their records; instead, the business itself should keep a check and stay on top, without giving the bookkeeper authority. Check out America's Best Bookkeepers

 

5) In the millennial age, many business applications have the option of integrating with accounting software. This integration saves ample time for the business. It enables business owners to keep track of all the bookkeeping records, even if they are not physically present in their office. Also, this saves ample time for the business owners, giving them the benefit of staying punctual. 

 

6) Delve Deep into Details. When contrasting accounting rates, you should be careful when comparing one type with its logical counterpart. This comparison can be hard to do with accounting rates; they are not as immediate as you think. What you will discover is that a steady accountant can lessen the expenses of a free clerk. Be that as it may, you need to perceive what that rate incorporates and how long they will charge you. Guaranteeing that you understand how the costliest hourly rate can turn into the best offer.

 

7) Comprehend the Hidden Costs. In case you settle on an outsourced accountant and want to employ it in your office, you should be extremely cautious. To start with, you will find that it is costly to procure somebody. When you need to talk, take the session of your day and do foundation audits, which can be expensive. Remember that factor in your bookkeeping rate and honestly remember this, outsourcing to a clerk can be significantly more affordable with regards to the accounting charge swelled when you enlist somebody.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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. Check out America's Best Bookkeepers
Similar to almost anything in life, an accounting career has its pros and cons. There is nothing wrong with the career path itself, but it may not be right for certain people, while it may be the perfect option for others.
These positives and negatives of the career path can help you determine if it is right for you.   Check out America's Best Bookkeepers

Pros

  1. A clear career path

Studying accounting means learning practical skills about analyzing costs and crunching numbers required by employers. This education means your career path is more apparent than a person studying subjects like Philosophy or English, for which it can be hard to determine the possible career options.
  1. It is a growing and stable field

The job prospects for a career in accounting are growing year over year. Accountants will be required as long as people need help with taxes and business finances. 
  1. There is potential for growth

Once you graduate, you may start with an entry-level associate job, but there is an immense potential to grow professionally in this career path. Many people who graduate with an accounting degree begin their career path as junior auditors, staff accountants in public accounting, or controller’s assistants in private accounting. However, once they gain experience and get established, they can advance their careers through additional certifications or education such as CPA or MBA and job performance. Check out America's Best Bookkeepers
  1. Good earning

Anyone would love to make enough money to be able to live comfortably and cover all their expenses. An accounting career can help you afford a good lifestyle.
  1. You can find work anywhere

Unlike other career paths, you do not need to relocate to an industrial hub and disturb your personal life. Considering how accounting is a universal need, everyone from farmers to IT companies requires accounting services. This need gives accountants flexibility when deciding on location in which to live and work.
  1. There is potential to become an entrepreneur

The accounting profession puts being the one in charge of everything within reach. Unlike many other professions, it is a common habit for accountants to start their accounting firm. While it carries its risks and may not be a good idea for everyone, it is undoubtedly an excellent choice to have.

Cons Check out America's Best Bookkeepers

  1. Ongoing education

Unlike other fields, you need to continue learning even when you have graduated with an accounting degree. To advance your career, you must continue your education even after getting a degree. However, there is a benefit to that, too, as higher education means increased status and pay.
Once you start as an entry-level accountant, you must look into further certifications. There several accounting credentials such as CPA (Certified Professional Accountant), CFA (Chartered Financial Accountant), and CMA (Certified Management Accountant). Earning these will require the right amount of effort and time, so it can be helpful to know what you are putting yourself through beforehand.
  1.  It can get boring

The everyday work of accounting involves a lot of math and investigation, which some people may find boring and dull. However, finding something boring is subjective. Some people may find this work fascinating.
  1. It can get stressful

There is going to be a lot of pressure on you if you are accountable for an organization’s finances. For this reason, you need to determine if you can handle the pressure. Suppose you get easily frazzled by stress, then maybe it is not the right career choice for you. Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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. Check out America's Best Bookkeepers
accounting filing - Complete Controller

A filing system is an essential record-keeping system for an organization. It helps you to be systematized, systematic, efficient, and transparent. Accounting professionals in a company are responsible for a lot of paperwork. Without a proper filing system, things can quickly turn in to chaos. It’s a standard procedure for accounting departments to have several filing cabinets, including locked ones, to safeguard payroll and critical information about the business.

Access to file systems in an accounting environment should be available to authorized personnel. Having a system in place is to maintain all the documents and records accurately. It is imperative for all kinds of businesses; therefore, it must be a priority. Check out America's Best Bookkeepers

Features of an appropriate file system

Record keeping varies from modest folder filing systems to intricate electronic systems that maintain real-time data—whether simple or complex, keeping files should be easy for everyone to use and must offer sufficient storage and recovery of files. A bookkeeping system suited to your business’s particular needs will fit well into your accounting environment. The category, scope, and intricacy and available resources are the primary factors determining the precise file system for your business.

Detail tracking

While running a business, you will be required to track a variety of information related to the customers, sales, inventory, and payrolls. If you do not have a proper file keeping system, you are likely to miss the critical details in all the concerned departments. Knowing about your target market and their needs is vital for your business to thrive as your product or services have to cater to the specific customer need specifically. Knowing when and what to pay or receive depends on the accuracy of maintained records in your business accounting environment.  Check out America's Best Bookkeepers

Planning

Planning for the future is another important aspect that businesses have to contemplate. A business owner who has not devised a file system to track its customers cannot determine the inventory quantity that he must keep for optimum performance. Only through careful analysis of all the numbers can a business owner make futuristic decisions, which can eventually reap fruits. Retail businesses like clothing are required to update their inventory every season. Without an active accounting environment, they can never predict accurately.

Legal compliance

As a business owner, you are likely to get into contracts and business deals with partners and clients, which would require proper documentation for everyone to be on the same page. You will be holding licenses and permits to conduct business and have to maintain a file system on payroll expenses and other documents for tax purposes. Legal compliances fit into three subcategories. 

  • Contracts, leases, copyrights
  • Licenses, permits, and insurance
  • Personnel and payroll Check out America's Best Bookkeepers

An adequately maintained record-keeping system ensures that your business’s accounting environment remains good throughout the year, including tax times. IRS is quite strict about companies filing their taxes accurately, and errors can lead them into trouble. 

Records retention

A well-maintained record-keeping system ensures the right decision-makers in the current situation and accumulated valuable data for future reference. Based on your previous data analysis, you can predict future sales patterns, manage your resources well, and avoid the shortcomings. Many unforeseen situations can arise, which can require you to refer back to the file system. If your business lands into a dispute with a former client or an IRS, you will have all the relevant documents to clear your stance. Apart from saving yourself from many troubles, a record-keeping system is essential for maintaining a healthier accounting environment in any business.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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. Check out America's Best Bookkeepers
guide to bookkeeping - Complete Controller

If you’re a small business owner, you’ll be acquainted with handling numerous tasks at once. Alongside handling basic operations, you need to generate income, keep your customers happy, and manage financial information. Bookkeeping and accounting can be quite a task, and one of the biggest questions to answer is finding the right person to do the job.

Any company irrespective of the kind of business is absurd without accounting. It will help you stay clear of the IRS and form the foundation of business stability and decision-making. Therefore, bookkeeping and accounting are a vital task that needs handling with the utmost care. In very general terms, accounting is a documentation of all economic operations through records management. However, in a broader sense, it deals with all the financial matters, including tax planning.  Check out America's Best Bookkeepers

A smart business owner understands that without proper accounting, he is like a car owner without a GPS. You can see the road but are not able to reach the destination. The primary functions of bookkeeping include

  • Validates the outcomes of the company activity to date
  • Helps in the timely submission of all the business documentation
  • Tracks all available resources like inventory, labor, materials
  • Decision making and future planning

Below is an ultimate guide that, if followed, can be your recipe for success.

Selecting the appropriate accounting method

Businesses follow two methods for recording financial transactions. Either a company will support a cash method or an accrual method—the difference between the two lies in how the economic event gets recorded in the books. Well-established businesses practice the accrual method of accounting. It involves recording a transaction even if the customer has not paid yet. The cash method is a slightly simpler version as the transaction gets recorded when money exchanges hands. Small businesses usually focus on the cash method for bookkeeping and accounting, as it is convenient and straightforward. However, depending on your business needs and preference, you can choose the most desired. Check out America's Best Bookkeepers

What records to keep

Business licenses, permits, tax documents, DBA certificates, and other vital documents that have legal implications for the business should be regularly updated and stored safely. You need to know the location of all your business-related documents, whether it’s online or offline. These documents can come in handy at any time, and if you have kept the correct records in the right place, you can access them anytime. 

Along with legal documents, there are many other sources and supporting business documents. Accounting for small businesses requires you to maintain the source documents accurately as they are of high importance while keeping copies of your contracts, invoices, receipts, and payroll records along with many other materials depending on the scale of the business. All successful companies keep authentic records and use them as sources of information to make better future decisions. 

What and how to record

The whole shebang that has a connection to money and involves transactions has to get recorded properly. Keeping day to day records of both inbound and outbound payments is imperative because it will offer you a wholesome picture of the movement of funds across your business. Bookkeeping and accounting for small companies should record liabilities, taxes, operating and overhead expenses, and employee paychecks as those have to get referred to regularly.

The cash that comes from the sales has to be managed and recorded appropriately daily. If you leave that to the last, the probability of making errors get high. If you leave this to the year-end closing time, you are surely in for big trouble. Therefore, what and how to record is a question you must answer right at the start of the bookkeeping process.  Check out America's Best Bookkeepers

Separate business and personal finances

Some small business owners make the mistake of keeping business and personal finances alongside. It is never a good idea to do that because it can be confusing and legal because it can get you into trouble with the IRS. If your business lands into some trouble, you can be personally held liable for the discrepancy. Whether you are managing the accounting yourself or have hired someone for the job, a business should always be kept separate from personal matters.

Separating personal and business finances will also benefit you at the time of taxes. It will be easier for you to file the returns as well as you’d make the IRS job easier.

Use bookkeeping and accounting software

Most businesses these days start with opting for accounting software that keeps track of all the financial information. All you need is to enter the data. You can get complete balance sheets, income statements, and all the other vital documents vital for better decision making.

Small businesses have a lot to worry about at the start. Ensuring the correct implementation of the underlying financial structure will keep them away from harm for the most part. Following the guidelines mentioned above for bookkeeping and accounting can save you significant time and effort.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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. Check out America's Best Bookkeepers

According to a study, businesses from all across the globe lose significant revenue each year to different levels of accounting fraud. Employees and accountants have been using clever tactics to steal from their employers, which is making businesses lose about $350 billion in annual profits. In the US alone, 16,000 fraud cases were reported last year, with a 16% increase from the previous year and an expected increase of 20% in the upcoming year.

Catching Stealing Employees—the Right Way!

Check out America's Best Bookkeepers Every business has devised its way of preventing accounting fraud by implementing specific theft prevention policies and procedures. Theft prevention tools and techniques, coupled with effective preventive measures, can never guarantee that fraud will not be committed. According to a study, trusted employees are far more apt to steal from you than those who have been recently employed.

Fraudulent activities or accounting fraud by employee(s) can be damaging to the company as it may kick a business out of the competitive race or result in a downfall of the entire organization. Also, it can incur high legal costs and negatively impact on company’s reputation and brand name. For protection, hiring an experienced auditor or agency that has wider accounting and auditing knowledge and skills is advised. The use of technology and the implementation of the right fraud prevention practices can help you catch stealing employees or accounting fraud.

Accounting Fraud: Drivers and Considerations

Check out America's Best Bookkeepers As per 10-10-80 rule: 10% of employees responsible for handling critical affairs of the business, such as bookkeeping, accounting would never intend to steal from the company. 10% will steal when there is an opportunity. And 80% of employees are those who usually evaluate the opportunity at hand and compare it with their needs and desires and then decide whether or not to steal from the company. Perhaps this 80% is where companies can capitalize on and prevent their employees from steal from them by using various preventive measures, modern tools, and techniques.

Studies also reveal that most accounting fraud that occurs has little to do with opportunity, but more with motivation to make a deliberate attempt to steal from the company when the employees feel that they are discouraged, undervalued or underpaid. Trust me! A dissatisfied employee is more likely to engage in criminal behavior than those who have just joined the company. Why? Because when efforts are not valued or compensated, fraud becomes a habit of the employees, especially those who have been waiting years just to get an official acknowledgment from the company in terms of promotions, perks and bonuses, and pay-increase.

The Fraud Triangle

So this makes it clear that an accounting fraud revolves around opportunity, pressure, and rationalization. Organizations need to come up with a sound fraud prevention plan if they expect to reduce fraudulent activities in the company. Check out America's Best Bookkeepers

Accounting Fraud: Red Flags

One job of an accounting professional is to find fraudulent activities or accounting fraud during an audit. Any accounting discrepancies found in the audit may require a more in-depth examination. Warning signs of fraud may include missing documents, excessive complaints, inventory shortages, and excess purchases. They also include duplicate payments, changes in an accountant’s working behavior, and spending habits. The most important factor is to look out for red flags while also balancing trust in your employees.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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. Check out America's Best Bookkeepers

Cash basis and Accrual basis

“In which month should you write off the expenses?” From the point of view of accounting theory, there are two methods of note: the cash method and the accrual method. According to the cash method, income and expenses are recognized when there is a movement of cash flows associated with them. The cash method is convenient to use when the enterprise is small, and the results of its activities are highly dependent on incoming and outgoing cash flows. Bookkeeping can also be used for processing the information on income and expenses. Check out America's Best Bookkeepers

The main rule of the accrual method is that the accounting of income and expenses are not related to the actual movement of money. The cash method reflects information about when the funds are received and when spent. For many managers, this information is important and specific.

Expenses are recognized in the reporting (tax) period in which these expenses arise based on transaction conditions. If the transaction does not contain such conditions and the relationship between income and expenses cannot be determined clearly or is determined indirectly, expenses are distributed by the taxpayer independently.

Benefits of Cash Method

Check out America's Best Bookkeepers In the cash method, income is considered received on the day of receipt of the funds. Or at the time of receiving any property, services, or performance of work as payment, which must be confirmed by the act.  Shortcomings level the advantages of the cash method. Additionally, benefits from the application of the cash method can be different for specific organizations, from the structure of their activities. There is a list of certain types of activities in which this method is justified and allows you to reduce tax costs.

The cash method is convenient because the main principle of accounting is cash flow and no situation typical for the accrual method.  When work is completed, money has not yet been received, but implementation is necessary to pay taxes. Such a principle is understandable for small businesses, and if the organization works by providing a deferred payment to customers. And the question arises that who is entitled to apply the specified accounting system? And in what is this application mandatory?

The cash method means that receiving an advance is also an income and necessary to pay taxes even if the work has not yet been completed. Also, the advance may have to be repaid. The cash method is characterized by the fact that the actual receipt of cash determines income. Income will be considered received if the obligation to pay is repaid in another way – offset, compensation, and innovation. But even in this case, those incomes which are received because of this operation will be considered. For example, if an agreement to repay the debt for completed work and compensation less than the amount owed, the income will reflect the amount received by compensation rather than the one that had to pay. Check out America's Best Bookkeepers

An important feature of income accounting for the cash method is the fact that the advances received are also recorded as income. The advance can be returned – the client can change his mind, the organization may not fulfill its obligations; that is, the situation with the return of the advance often occurs.

The cash method is one of two methods for recognizing the income and expenses provided for by the Tax Code. Let us remind, that the firms paying the profit tax, can independently choose a cash method or an accrual basis. Businesses and individual entrepreneurs who have switched over to a simplified taxation system are obliged to apply the cash method.

In the cash method, income and expenses cannot be considered when calculating the tax until the actual cash flow has occurred. In other words, income from sales in the form of the cost of services rendered is recognized in accounting at the time of receipt of funds in their payment.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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. Check out America's Best Bookkeepers

QuickBooks is a software that possesses the aspects of functionality and productivity. The QuickBooks software is used for accounting and bookkeeping and has advantages for those who run a small or mid-sized business. QuickBooks has reduced the burden that is usually required to set up to run the system of accounting.  The following are the pros and cons of using QuickBooks for business accounting and bookkeeping:

Pros of QuickBooks Check out America's Best Bookkeepers

  • An affordable accounting and bookkeeping tool
  • Reduces bookkeeping and accounting workload
  • Prepares accounts payable and accounts receivable functions such as preparation of checks, invoices reports, inventory, time entry, payroll, and processing of credit cards
  • It is user-friendly and intuitive
  • It works with Microsoft Office, which is considered effective in word processing and spreadsheet programs
  • It can run on both Windows and the Mac
  • It has an online version which can be accessed at remote locations

Cons of QuickBooks Check out America's Best Bookkeepers

  • Large businesses will find the usage of the QuickBooks becomes less effective
  • The online version requires a monthly fee
  • Online, your valuable data possibly be hacked
  • It does not contain all the features which an accountant uses
  • It has a limitation on the number of entries you can submit
  • It may not contain all the functions your company needs

Check out America's Best Bookkeepers Even though there are some drawbacks to QuickBooks, if you are a small or mid-sized business owner, it is the best choice to help you with your accounting and bookkeeping needs. This will be especially helpful if you, as the owner, have to handle the accounting or you have only one person handling the accounting bookkeeping.

Bookkeeping and accounting is the most important aspect of a business, and if you do not have an accounting system in place that fact alone can be the difference between the success or failure of your business. QuickBooks was designed to be user-friendly and foolproof for every level of accounting experience. It has features that will save time on your daily accounting tasks. It will also keep you ready for tax time when you have a strong accounting of all your business finances in concise and easy to understand formatting.

Having weighed the pros and cons, it is still to a small to mid-sized business’s advantage to use QuickBooks for their accounting and bookkeeping needs. The cons should serve only to warn you of some of the pitfalls you may encounter while using the software.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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. Check out America's Best Bookkeepers

Profit is the primary motivation for initiating a startup business. A business can’t survive on capital investments or loans for long, which means that you need to earn and make profits to survive in a competitive business environment. As an entrepreneur, you must ensure the smooth flow of administrative processes as well as business-related tasks, no matter how complicated they may sound. The accounting and bookkeeping practices of a business can make or break it. Using superior accounting and bookkeeping software and best practices are the best ways to secure success.

Accounting Is the Key That Makes Your Startup Profitable!

Check out America's Best Bookkeepers The secret to success and profitability lies in how well you manage your business accounting. Most successful retail businesses that have great returns have hired professional accountants to handle business finances. Why? Because they are unsung heroes of the business world, who have the potential to change the entire fate of the company. Even if you consider yourself a professional in accounting, outside accounting help is a good idea.

Don’t Skimp On Accounting

For making your startup profitable, you need to look at your cash flow statements, bank statements, accounts receivables, and payables and make income projection and handle other financial aspects of the business. This indicates that the life of an accountant is never easy as it requires time, efforts, energies, accounting knowledge, and wisdom. Accountants also need to adapt to changing market dynamics and find new ways to streamline your business. Check out America's Best Bookkeepers

Also, it is to note that handling complex aspects of the retail business like decisions regarding payroll, the potential of new expenditures, and overheads are never easy. And there is nothing worse than hiring a fresh accounting grad for managing important accounting related matters. By hiring an accounting grad with a lack of experience to run your business, you can never expect to make your startup profitable. The chances are quite low. So, you need to invest in acquiring accounting expertise for maximizing your company’s profitability and making the most out of your company.

Set Result-Driven Goals

Market and cost-benefit analysis, coupled with effective financial projections and assumptions, can put your business on the right track. By measuring progress, it becomes relatively easier for you to pinpoint problem areas in your business. Also, it becomes easy to track and monitor the performance of the company, allowing you to correct problems with relevant yet effective solutions before they become serious threats. Check out America's Best Bookkeepers

Making your startup profitable is not that difficult; all you need to do is keep your morale high and set realistic and result-driven goals and objectives. A right strategy can save a large amount of money every year, allowing you to grow and expand your business quite successfully. So, you must hire an accounting professional who understands your long-term business goals and knows the worth of your hard-earned money. For example, if a business expects to see a reduction in their annual sales or income taxes, it must hire an accounting professional who has expertise in that specific domain. Another business desires to save time and money and wants its debt repayments to be appropriately scheduled, then it could hire a professional accounting or budgeting planner for having an effective plan.

What to Do to Make a Retail Startup Profitable?

Retailers across the globe want to maintain healthy financial cash flows and maximize their profitability. Gone are the days when startups used to maintain a large inventory, which means the cash and profits used to get stuck in inventory. Now, they do not have large inventories. Instead, they keep the level of inventory, which they can sell easily.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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. Check out America's Best Bookkeepers

It takes determination and tenacity before launching a retail business. Any business requires the satisfaction of customers, which needs milestones of care. From developing a bookkeeping system to determining tax expenses, when you are about to launch your retail venture, you need to first get on the accounting tasks that go hand in hand with the running of the business. Below are four business accounting preparation steps that will guide you on how you should manage financial dealings with your business persistently.

Open a Bank Account

When you have finally succeeded in getting your business registered, you will then need to hoard your overall income of the business. For this, you should open a separate bank account where you can conceal your records. All corporations, enterprises, and LLCs have a legal obligation to have a different bank account to run the retail business. Those proprietors who are doing business on a sole basis do not need to have a separate bank account, but it is always recommended for accounting preparations. Check out America's Best Bookkeepers

You must know what types of accounts are available for your retail business. Begin by setting up a checking account, followed by a savings account. It will help you manage your retail fund’s accounting and plan your taxes. It is suggested to have separate savings account to preserve a percentage of your income for tax matters. Moreover, you want to acquire a business credit card to compensate for later. Retail business is required to have a separate credit card to avoid mixing it up with their assets.

Track Your Expenses

The foundation of the success of any retail business requires tracking of business expenses in an effective way. It is an essential step that will allow people in business to overhaul the overall growth of their business, establish financial statements, prepare tax returns, and keep an eye on deductible expenses as a part of accounting preparation. Check out America's Best Bookkeepers

Right from the start, you must develop such a system to organize your receipts and other essential business records. This process is simple by using services such as Filofax or ShoeBoxed. Internal Revenue Service (IRS), which is a Federal Agency of the US, does not require receipts for those expenses that exceed the limited amount of $75. But it is a good habit to keep them.

There are five kinds of receipts that need acute attention from your side.

Meals and Recreation

Many retail business dealings take place in small cafes or large restaurants, which is an excellent choice for business dealers. You just make sure to arrange it in a well-disposed manner. Record on the back of your receipts who have taken an interest in the meeting and what their purpose was for an outing.

Business Travel

Internal Revenue Service (IRS) or Canadian Revenue Agency (CRA) is conscious of people who claim their personal activities as part of business expenses. Your receipts, on the contrary, provide detail of your business expenses when you are out of town.

Vehicle Expenses

You must record why and where you are using your personal vehicle for business matters, and then maintain the percentage of vehicle expenses separately. Check out America's Best Bookkeepers

Set up a Payroll System

For a new retail business, you could probably be a one-person show. You might want to hire a part-time employee to get his assistance whenever required. You need to know whether that person is your employee or an independent contractor. For employees, you need to make sure that you are withholding the right tax and decide on a payroll accounting schedule. For those who are independent contractors, make sure to track how much you pay to each person rightly.

Initiate a Sales Tax Procedure

The present world is highly dependent upon the e-commerce industry, which has affected sales tax regulations that are most confusing owing to dispersed location issues. When a customer approaches your retail business shop or company, they have to pay the sales tax of the required city or state in which they are, whether they native to that city or state or not. Even if a person has visited the city, he has to pay the tax that is an obligation in that city. If you are selling anything through online service, you might be selling to customers who are living in diverse cities.

You are required to accumulate each kind of tax, i.e., Gross Sales Tax (GST) when you have succeeded as much revenue in a single year. International purchases have an exemption from taxes in the US. You must discuss with your accountant about tax information about a specific state.

Conclusion

Initiating a new retail business may be a complicated process. If you follow these accounting steps in order, you will see new business finances from the beginning. The above tasks contribute to any retail business’s success.

 

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The most important method of accounting is accrual. Incomes must be considered at the time they were earned. In the meantime, expenses need to be considered at the time when they were incurred, regardless of the cash flow. Accrual accounting is the basis under which the impact of transactions and other events is recognized when they occur (and not when cash and cash equivalents are received or paid). They are reflected in the accounting entries and in the financial statements in the periods to which they relate. Thus, accrual accounting includes all tools developed by accountants for the application of the compliance rule. The method consists of two main methods:

  1. Accounting for the accounting of income at the time when they are earned and expenses at the time they are incurred;
  2. Adjustment of accounts. Check out America's Best Bookkeepers

The financial statements prepared on an accrual basis inform users. Not only about past transactions related to the payment and receipt of cash but also about the obligation to pay money in the future, as well as on resources equivalent to cash that will be received in the future. Bookkeeping can also be used in keeping the record of financial statements. The specificity of the accrual method is that income to the profit tax base must be included in the period in which they arise from the documents justifying their occurrence, regardless of the actual payment (or transfer of property as it.)

Maintaining Accounting Records

Most companies use the accrual method to maintain accounting records, in which expenses and revenues are recognized immediately after they occur, without taking into account the time of receipt of funds or payment of expenses. On the other hand, some small enterprises and individual entrepreneurs use the cash accounting method. With the cash method, income is recorded only when the money is received, and costs are recognized only after the payment is made. With the cash method, the determination of profit is based on information on receipt of payment and payment of expenses, and the facts of recognition of profit and expenses are not taken into account. Therefore, the cash basis for accounting does not comply with International Financial Reporting Standards. Check out America's Best Bookkeepers

Financial statements prepared on the accrual basis provide the user with information not only about past transactions but also about future cash obligations and the resources in the form of funds to be received.

The accrual method and the cash method are used to characterize two ways of accounting for income and expenses used in determining the basis for income tax. The accrual method and the cash method differ from each other. As a circle of taxpayers who are entitled to use one or another method of accounting, and conditions that make it possible to use each of the methods.

Cash Basis and Accrual Basis Check out America's Best Bookkeepers

The modern economy uses loans more than cash. The accrual method and not the cash method shows all aspects of credit. Investors, creditors, and other decision-makers want to have prompt and detailed information about the company’s future cash flows. The accrual principle provides such information in the Cash Flow Statement as soon as these amounts can be determined with enough accuracy. Accounts receivable and accounts payable indicate future cash receipts and disbursements. In other words, the accrual method helps to predict future cash flows, reflecting economic transactions at the time they occur, and not when the money is received or paid. The accrual method determines how income and expenses are allocated by a period. The rules for recognizing income and expenses must also be based on the assumption of the continuity of the company’s activities.

Check out America's Best Bookkeepers 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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. Check out America's Best Bookkeepers