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Keeping your books is not just about preparing for tax filing or tax savings; there is a lot more to it. A lot of critical decisions about the business are made based on the information offered in financial statements. Some might consider bookkeeping to be something that can be done by anyone. However, maintaining accurate records of business financials is not an ordinary task and requires skills and expertise. Businesses outsource professional accounting and bookkeeping services for this job because they consider it important and understand the significance of doing it right. Here are some of the reasons why business accounting tasks should be taken seriously.

Corporate Veil and Bookkeeping

The corporate veil is a legal concept that separates a corporation from its shareholders and protects them from being personally liable to company debts and obligations. When you maintain separate books for each subsidiary of the business, it demonstrates that you have recognized it as a separate entity and, therefore, everything related to the entity is a business of its own. Also, when you keep your personal and business finances separate, it makes it easier for you and the auditors to accurately measure the business performance.

Cutting Corners

Unfortunately, this is an approach that many new business owners opt for and it inexorably comes back to bite them. Accurate bookkeeping is indispensable for tracing the growth of your business and legal/tax purposes. Legal business demands you to maintain an accurate measure of cash flows, expenses, labor costs, and revenues. Cutting corners to save time and money must not be an option and should be avoided at all costs.

Audit and Tax Protection

Every business, whether big or small, has to go through IRS auditing. This can be really bad for you if your books are not well maintained. Discrepancies in financial records will be noted by the audit team and you can face potential charges from the IRS. These charges can result in you paying heavy penalties or fines and, in some cases, even lead to the closure of your business. This is certainly a situation that must be avoided. Appropriate bookkeeping is the only way to avoid such scenarios. 

The amount of taxes that you have to pay depends on the revenues generated by your business. Professional accounting procedures ensure that you pay payroll taxes as well as prepare the documentation for filing your taxes on time. If you have maintained your books properly, you can search for legal ways to reduce the tax burden, which is quite possible given you understand accounting practices. If you are not adept at accounting, it is recommended to hire a professional to assist you with this task.

Bookkeeping Leads to Improved Decision Making

The success of any business depends on its ability to interpret the given information accurately and make informed decisions based on the provided knowledge. The best source of information for any business is its financial records which include expense tracking, budgeting, income statements and sale reports. Any inaccuracy in these records will mean that your decisions are based on imprecise information and that can have disastrous consequences. Whether you are handling the bookkeeping needs internally or have outsourced the job, you must ensure that the highest standards are followed in their compilation. As a business owner or manager, it is your duty to find someone who is capable enough to perform this important task for you.

Automating the Process

The evolution of technology has simplified most tasks that were thought to be complicated just a few short years ago. Using automated bookkeeping services, such as QuickBooks, automates most of the tasks that were previously handled manually. This means that the tasks are completed efficiently with less resources than previously required. You will notice a significant fall in costs related to bookkeeping. You won’t have to spend surplus payroll money on a full-time staff bookkeeper to handle the job, as the automated software will:

  • Keep essential information at your fingertips
  • Efficient use of online banking
  • Better collection of receivables
  • Track real-time receipts and invoices
  • Give you access to financial information on the go

In conclusion, don’t be naïve and laid back about managing your books. Take charge of your business with the help of these vital tips.

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.

 

 

 

 

 

 

 

 

 

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Small business owners face the job of making sure that all of their accounting procedures are conducted as efficiently and accurately as possible. On the whole, company owners have to make a choice between a manual accounting method or accounting software programs. An accounting software system has many major advantages towards achieving faster growth in a company. More and more companies are choosing to use this method for the following reasons.

  1. Time Saving

One of the most important advantages provided by computerized accounting software is that it can save huge amounts of time for small business owners. They can easily make calculations for operations such as billing and payroll performed efficiently and quickly just by using accounting software programs intended for small businesses. They can also have access to their accounting records swiftly without having to go through huge files of paper. Businesses can give more time to their customers and focus more on their marketing functions which will help their business grow further.

  1. Reduced Errors

Manually “number crunching” presents opportunity for human error. This error can be costly for any small company owner who happens to be in a rush to finish an accounting task. Calculation errors can occur due to inaccurate inventory counts, incorrect total sales receipts, along with many other reasons.

With the help of computerized accounting programs and software, there is a drastic reduction in calculation errors. If you have accurate accounting information, it will also help you escape any tax blunders that could possibly lead to complications and difficulties with the Internal Revenue Service.

  1. Centralization

Using an accounting software in a business helps centralize and unify many aspects of the business’s financial management. A small business owner will easily be able to undertake tasks such as payroll, invoicing, inventory management, and some sides of customer relationship management, all from an accounting software program. A business owner will save money and time because of centralization as long as the owner does not need to buy separate software programs in order to perform operations such as invoicing customers.

  1. Makes Tax Compliance Straightforward and Easier

Besides presenting the amount of tax that is to be paid on particular invoices, accounting software also aids the business owner in preparing reports. An example of this scenario can be the amount of a particular tax the business owner has been paying during the course of a certain period. Also, accounting software makes it a lot easier to collect the information needed to complete and apply for essential government tax forms.

  1. Provides Tools for Analysis

If a business owner uses an accounting software, it will be just like having their own in-house financial consultant. The customizable reports will allow the owner to analyze and examine various aspects of the business as well as provide the information and statistics needed to make better and more informed financial judgments. Reports, such as a balance sheet, help summarize exactly just how well the business is doing.

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.

 


When initiating a business, you might decide to put off many operational aspects until a later date. However, it is never too early to set up an unpretentious accounting function. Whether you’re tracing your bootstrapped expenses or revenues, it is never a wise choice to go too far in the process without launching an accounting system. It does not have to be a complex system, however, excel sheets won’t cut it. It is valuable to institute an accounting system that supports your business model and unique business needs while keeping a focus on your future goals and ambitions for your business.

Here are few ways to manage your accounting needs in the best way possible.

Set Up a Simple Accounting Function

When you are just initiating your business, you don’t yet require something fancy for your bookkeeping. There are many good options out on the market that are simple and convenient for a new business. Systems like QuickBooks and Xero are user-friendly and inexpensive, which is exactly what a business such as yours requires at this point in time. There are also some free options for you if you are short on cash, however, they will only offer very limited features.

A simple accounting function will take care of everything related to your payroll, invoicing, bookkeeping, and payments, which takes care of most of your basic needs. Be sure to check all features before implementing a system and ask for a demo so that you get a fair idea about its functionality.

Set a Chart of Accounts

It will suffice to say that the chart of accounts would form the core of whatever accounting system you use. It is basically a listing of all of the accounts that are included in the general ledger of a business. It helps you to locate specific accounts quickly and conveniently. It must be created to cater to the unique needs of your business and track income and expenses appropriately.

Open a Business Account 

Irrespective of the fact that your business is bringing in any revenue, you must get a business account right at the start. Personal and business finances must be kept separate at all times as this will save you from many troubles later. Banks, these days, offer online portals that can be used to manage your finances as you please. You can authorize your bank to make certain automated payments that are of high priority so that you never miss them. Moreover, the newly established accounting function has the capacity to integrate with your bank account, which can be extremely efficient for all of your business operations.

Hold On to your Receipts and Invoices

All invoices and receipts must be held and stored in a suitable place for future reference. Whether they are paper or electronic, develop a bookkeeping habit of properly storing all information and proof of your transactions. This will ensure that you have a headache free tax season at the year-end because it will be easier for you to account for everything.

Stay on Top of your Tax Obligations

This might be surprising, but you need to think about taxes in your accounting function even before you start sales. Your business must develop a good standing in terms of both a provincial and federal tax standpoint, including all fees and registration requirements. Your taxable income is your net income, which is deduced after deducting all expenses. This is why it is important to keep a record of all important documentation as it will make the whole process easier.

Stay on top of your payroll taxes and 1099s because that is the government’s money which you are assigned the task to hold. Therefore, you are required to account for it. Find a reputable tax expert along with your accounting function that can help you stay in acquiescence with your tax responsibilities and preemptive preparations to curtail the tax bite.

Create an Effective Payment Collection Process

Every business has an accounts collection system installed that manages accounts receivables. Your bookkeeping system must guide you with the open invoices and balances. All payment terms must be clearly highlighted on invoices. When collecting payments from your customers, be sure to remind them on the due date as well as 2-3 days before. Your clients should be clear about your payment terms because you cannot afford a negative cash flow at such an early stage of your business. Start with a simple payment collection accounting function and gradually start accepting checks and other forms of online payments.

Forecast for the Future

Projecting expected expenses will help you deal with the cash burn. Tracking how much runway you have in terms of cash allows you to better anticipate and plan for the future. An accounting function that can help you develop better future projections is essential in this day and age.  

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.

 

 

 

 

 

 

 

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A chart of accounts for a small business is basically an index of all of the accounts where the financial information of the company is kept. Account names and numbers where the financial transactions of a company are recorded so it is imperative to set it up before you start composing the general ledger. Setting up a chart should be the number one priority for a new business that is setting up it’s bookkeeping system. Depending on the scale of your business, items are included in the chart of accounts. An inventory account is a must have for a manufacturing business, however, it will not be used for a service-based business.

When setting up an accounts chart, you must think long term. Think of any possible scenarios that could happen 5 years down the road. As you go along, you will have to add new accounts to the chart because the number of employees and scale of your business eventually increases. Making up the accounts chart requires you to assign a block of numbers to each account and leave blank spaces for the ones to be added on later. Below are some of the categories that may be included in the chart.

Categories for Chart of Accounts

  • Assets
  • Liabilities
  • Equity
  • Revenue
  • Expenses

Assets

The accounts chart must be formatted similarly to the format of your balance sheet so that it is easy to interpret. This account will list all of the assets that your company owns, starting from current assets and moving on to the fixed ones. The asset account is generally given the number 1000, which moves on in a sequence for other accounts. Your current asset account would include all the cash and receivables that are owned by you. Also, if you have an inventory, that would be included in an inventory chart of accounts. 

Fixed asset accounts are adjusted similarly and, after that is done, you need to account for depreciation. Your fixed assets will always go through accumulated depreciation and it will always be shown as negative. Buildings, vehicles, and machinery all go through depreciation for which they must be accounted for.

Liabilities

The liabilities of your company shows your debt obligations and what you owe or may owe in the future. Just like assets, follow the same pattern for liabilities as it is followed in the balance sheet. There is a chart of accounts for a current liabilities section and a long-term liabilities section. Short-term debt accounts are included in the current liabilities section. Accrual accounts are also included in the liabilities that contain payroll taxes and accrued wages. Long-term debts such as mortgages are also recorded in the liabilities.

Equity

The equity account entails all of the investments made in the business. If you are the sole owner of the business, the chart of accounts for equity would only include your share. However, if you plan to bring in other investors, the chart would require you to account for the common and preferred stocks separately. Retained earnings and gross profit accounts are also included in this section. The accounts are generally started with the block sequence 3000, 3010, and so on.

Revenue

The revenue account would be on the same pattern as the income statement. You will have to account for sales revenue, which is the main source of income for your business. Sales allowances and discounts should also be included along with sales revenue so that you have a clear picture in front of you and all the discrepancies can be accounted for easily.

Cost of goods sold is another important item in the chart of accounts for revenue. Your bookkeeping needs require you to cater to all of the sales costs, supplier discounts and other costs related to shipping.

Expenses

This is the last category of the chart and often starts with 5000. The best way to input your expenses is by adhering to the internal revenue service tax form, which can be found online. This will make the work a whole lot easier when it is the end of the year and you have to file tax returns. Develop a separate chart of accounts for all expenses listed in the form in addition to any other expenses that are specific to your firm. Blank spaces should always be left for currently unaccounted expenses.

Conclusion

Following these guidelines will ensure that your chart of accounts is ready for interpretation and is in correlation with both your balance sheet and income statement.

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Accountants and bookkeepers play a pivotal role in determining and defining the growth of your business. They can handle and tackle many more things than tax returns and payroll. Start-Ups looking to stay on top of their game from the very beginning need to hire a professional accountant to ensure smooth financial operations and maximize profitability. Do you need a specialized start-up accountant or bookkeeper for your business?

Hiring A Specialized Start-Up Accountant Gets You One Step Closer To Success

A specialized start-up accountant is the need of the hour to accomplish a startup’s short and long-term ambitions. Accounting is where the difference between success or failure is created. It helps your company grow and move forward in the right direction. Without a second thought, it is one of the most crucial aspects of keeping your company profitable. Making financial projections and assumptions requires you to have a clear picture of your company’s financial worth in the market. However, doing all of this alone is nearly an impossible task. It becomes mandatory for start-ups to hire the services of outside accounting/bookkeeping individuals and agencies to take the business venture one step closer to a successful endeavor.

A specialized start-up accountant makes things simpler for you in many ways such as managing payroll and making decisions regarding potential new expenditures and overhead. However, there is nothing worse than hiring an unprofessional or inexperienced accountant for your new business start-up. Since an accountant can make or break the game, you need to hire the right person for the right job to improve efficiency and performance. According to studies, accounting is the secret key that unlocks the doors to success. Hiring a specialized start-up accountant that is suitable to your business requirements and specifications makes your start-up profitable.

Knows the Art of the Game

A specialized start-up accountant can drive your business to profitability by sharing their accounting wisdom, skills, and expertise. A fragile accounting setup at the very beginning can kick your business out of the competitive race within just a year. Hire a trusted business advisor, accountant, or bookkeeper who can get your business on the right track.

A specialized start-up accountant plays a predominant role in the growth and evolution of your business. Their skills beyond accounting are where the real art lies and that’s where your trusted professional will work for you. A qualified and seasoned accountant can manage your finances, cash flow, income, and expenses as well as review your bookkeeping and financial records better than anyone else around. Experience, coupled with a wide variety of accounting skills to tackle complex situations, counts more than anything else when it comes to going beyond only accounting.

Understands Start-Up Culture and Space

The best thing about specialized accountants is that they understand the start-up culture and space as well as the growing needs of a business. Through their wealth of experience, they will give you their best informed advice for resolving complex business situations. The needs of every business largely differs from on to the next, making it clear that advice to resolve certain matters is imperative. From initiating a business venture and applying for loans to financial audits, a specialized start-up accountant can make your life much easier with each and every step.

Saves You Time

Entrepreneurs are largely known for conceiving a unique workable business idea. They may be good at the management side of business, but most of them lack skills in the accounting side of it. This indicates that a professional accountant or bookkeeper can help you save time, allowing you to focus more on what you have the potential to do best—your business. Find the right specialized start-up accountant who will help you save time and effort by giving guidance when required.

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.

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Managerial Accounting, also called management or cost accounting, emphasizes on inside information received through financial accounting. Managerial accounting reports are used for planning, regulating, decision making, and measuring performance. These reports are continuously being generated throughout the accounting and bookkeeping period, according to requirements. Because many critical decisions depend on the authenticity of these reports, they should be carefully crafted by experts who are adept at bookkeeping. Managers then analyze these reports to highlight certain patterns and convert them into useful information for the company. Below is an explanation of certain such reports.

Budget Reports

Budget managerial accounting reports are very critical in measuring company performance and are generated as a whole for small businesses and, department wise, for large organizations. However, each company creates an overall budget to understand the grand scheme of their business. A budget estimate is made based on previous experiences, though, a great budget always caters for unforeseen circumstances that might arise. A company’s budget lists all sources of earnings and expenditures. A company tries to achieve its goals and mission while staying within the budgeted amount.

Managerial accounting reports related to budgeting can guide managers to offer better employee incentives, cut costs and renegotiate terms with vendors and suppliers. Therefore, a budget report is critical to any business.

Account Receivable Aging Reports

If your business relies heavily on extending credit, then account receivable aging reports are vital to it. Breaking down the remaining balances of your clients into specific time periods allows managers to identify the defaulters as well as find issues in the company collection process.  In the case that there are many defaulters, then the company may need a complete transformation to tighter credit policies as cash flow is critical to the operation of any business. There is always some bad debt that needs to be written off, however, you cannot make it a habit. You must always know who owes you what.

Cost Managerial Accounting Reports

Managerial accounting computes the costs of articles that are manufactured. All raw material costs, overhead, labor and any added costs are taken into deliberation. The totals are divided by the amounts of products produced. A cost report offers a summary of all of this information. This report offers managers the capacity to realize the cost prices of items versus their selling prices. Profit margins are estimated and monitored through these reports as you have a clear picture of all of the costs that went into the production or procurement of the articles.

Inventory waste, hourly labor costs, and overhead costs are also part of cost managerial accounting reports. They provide an exact understanding of all expenses, which is essential for better optimization of resources among all departments.

Performance Reports

Performance reports are created to review the performance of a company as a whole as well as for each employee at the end of a term. Departmental performance reports are also generated in large organizations. Managers use these performance reports to make key strategic decisions about the future of the organization. Individuals are often awarded for their commitment to the organization and under performers are laid off or dealt with as required. Performance-related managerial accounting reports also offer deep insight into the working of a company. If you think that you should be performing in a certain capacity but somehow that is not happening, these reports can point you towards flaws in the setup. The role of performance reports is vital for any company to keep an accurate measure of their strategy towards their  mission.

Other Managerial Accounting Reports

Order information reports, project reports, competitor’s analysis and many other similar reports are vital to every business. They are either generated internally or outsourced through professionals. The best course of action depends upon your capabilities to handle the reporting requirements of your firm. The ideal choice can differ for everyone but professional services do have the experience and skills to carry out this task better. In order to attain the most out of their decisions, your managers must have access to credible and authentic managerial accounting reports. 

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.

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At A Glance

The terms accounting and bookkeeping are often used interchangeably but, in reality, they are not. They are different from one another. The fact is, bookkeeping is a stepping stone of accounting that helps businesses to achieve common financial goals. Looking at the bigger picture, accounting has a much wider scope than bookkeeping as it helps businesses to get a clear picture of their current financial status for future financial decisions.

No one would deny the fact that accounting and bookkeeping are both integral parts of managing a business’s finances. Regardless of the scale and size, businesses need to be wise and hire the right people for doing the job in order to see optimal results. When it comes to accounting and bookkeeping, you must acquire the services of experienced and seasoned accountants for getting different accounting-related tasks done—the first time. Ideal management of numbers, books, and finances can make or break the entire game of any business. Therefore, they must be handled professionally and in the best tone and fashion.

Bookkeeping and It’s Functions

Bookkeeping is the subset of accounting in which financial activities are recorded in a systematic manner. The main purpose of documenting business transactions is to get a snapshot of income and expenditures at the end of an accounting period. Accounting and financial decisions of the company are taken on the basis of bookkeeping records. However, it doesn’t reflect the financial position of an organization, it just shows the cash flow status of the company.

Bookkeepers are responsible for recording accurate financial data on a daily basis such as the influx and outflow of cash. Hence, they must have profound knowledge about managing financial books and overseeing accounts, goods sold or purchased on credit, expenditures incurred, etc. It is safe to say that without a bookkeeper and their reports, accountants are unable to give you comprehensive financial advice. Bookkeepers are tasked with important duties which they may be held responsible for in a crisis situation. Some of the core bookkeeping tasks that these professionals perform are as follows. 

  • Process invoices, receipts, payments and other crucial financial transactions
  • Process payroll for the company
  • Reconcile different accounts and prepare reconciliation reports
  • Manage account receivable and payables
  • Calculate GST for the firm
  • Design, establish and review accounting systems and look for improvements in the system

Accounting and It’s Functions

Accounting is a process that uses financial information gathered and recorded by a bookkeeper to transmit the entire bookkeeping record for making valuable financial judgments for a business establishment. Per the business dictionary, “it is a systematic process that involves identifying, recording, weighing, classifying, verifying, summarizing, interpreting and communicating vital financial information”. Therefore, once an accountant has a clear picture of finances (influx or outflow of finances and the actual status of the firm’s assets, liabilities and owners’ equity), then he/she has to make critical decisions pertaining to the future and, hence, the success of the company.

Unarguably, accounting and bookkeeping services have become a primary need of the modern time. Business owners usually lack the financial wisdom to manage their finances which is why they tend to hire the services of professional accountants and bookkeepers. With so many options and access to credible and trustworthy accounting services, businesses prefer to hire the pro-level expertise of accountants of their own suiting. Moreover, this allows businesses to focus more on the core of the business and less on the accounting side of affairs. Some of the core tasks that accountants need to comply with are as follows.

  • Help businesses to make important financial decisions through financial management advice
  • Lead businesses to maximize tax reductions, reduce costly errors, save time and money
  • Aid businesses in corporate-budgeting and financing
  • Help a business analyze their performance and with filing tax bills
  • Corporate reporting, auditing and compliance
  • Maintain financial control and aid business owners to understand the impact of financial decisions
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.

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Accounting and bookkeeping are the key functions in any business. Small businesses face challenges in accounting and bookkeeping procedures. Accounting is the systemic and comprehensive recording of financial operations in a business. Business bookkeeping is the recording of financial transactions as a part of the accounting process.

Entrepreneurs and business owners often do not see that common small business accounting mistakes are a major threat to the growth of their business in the long run.

Biggest Bookkeeping Challenges For Small Businesses

Not Using the Best Accounting Software

Choosing the correct software is among the biggest accounting challenges that small businesses can face. An important and challenging step in business is to choose the proper software per your business needs. Consider it’s cost, usability, and extra features when choosing a suitable bookkeeping software for your small business.

Features of an accounting software must include:

  • Inventory management
  • Sales tracking
  • Contacts management and contact history tracking
  • Account to accept credit card payments
  • Generating invoices
  • Financial statements, cash flow statements and balance sheet
  • Budget planning
  • Payrolls
  • Taxation matters

The cost of an accounting software is an important issue to consider. First, plan out your business needs and finances. Purchasing a costly software with highly-advanced features will not help your small business if you do not need these expensive features. A small business owner can plan to purchase an accounting software by providing a full payment at once or they have the option to make payments in installments or monthly payments. Plan to purchase the software that suits your business finances the best.

Financials are Incorrect

Incorrect financials is a threatening accounting problem in your business. If your financials are incorrect, it may sink your funding round in your business.

Any error in your financial statements leads to big loss. Business bookkeeping and other business operations will go into a mess if you do not keep your financial data up to date. Your accounting statements must be clear and transparent. Income and expense statements must be precise and related to the cash flow and balance sheet. Delayed data entry is a big risk of frauds and thefts.

Financials are not Produced Monthly

In a small business, it is often thought that it is okay to produce financials on a quarterly or bi-annual basis. However, monthly financials show investors that you are closely monitoring your business.

It can lead to negative balance if expenses are made but no income statement is updated. Invoices to be paid by the company may go unnoticed and it can put a bad reputation on a company. It can end terms with the suppliers. Business growth is halted or significantly reduced.

Business Owners mix Personal Finances with their Business Account

If you mix your personal and business finances, you cannot correctly estimate how much profit was generated out of your invested capital.  For example, if a business credit card is utilized for personal expenses during a trip or dinner, later on, this amount could be paid from the company’s income.


Covering Small Expenses out of Pocket without Recording

Paying  for business expenses out of your own pocket will eventually make your company look stronger in income than it actually is. It is extremely important to record everything so that you have a true picture of where your company stands financially.

Starting New Projects and Ideas without a Clear Budget

If you start a new project in your business without planning for it, you can easily run short of your budget for other business operations. You may have to quit the project in the middle if you don’t get the loan or find other investors. It’s important to always plan ahead before making big moves.  

Not Using Accounting Software or Cloud Technology

Failure to set up the correct software needed by your company leads to poor decision making. Installing the wrong (more complicated than required or lacking crucial functions) software can lead to more complexity in accounting. Accounting software prevents accounting and bookkeeping errors. Many software come with guided help boxes to make an accounting process easier to interpret. Inventory control tools are provided in software. Tax matters are made easier using accounting software.

Poor Interpretation of Accounting Information

Accounting information software is only a tool to use. Decisions must be made after completely checking the reports and interpreting the data. Data interpretation is made by comparing financial statements with the cash flow statements and balance sheets. This interpretation can be complex and hard to understand, therefore hiring a bookkeeping service may be ideal.

Entrepreneurs and business owners must focus on the long-term consequences of decisions they make after getting the full picture of accounting information. Making short term decisions after interpretation of accounts data does not provide the business with any long term benefits.


Conclusion

Small businesses face the biggest accounting challenges. Either they are running short on resources to keep an up to date accounting and bookkeeping picture or they are not using the correct software for their accounting. From choosing a proper accounting software to managing accounting tasks correctly as well as keeping them up to date are among the biggest accounting challenges that small businesses face.

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.

Man holds invoice of electric power usage
Whether you are working in the creative industry or you have your own gadget store, it’s not easy to avoid the “elephant in the room”. There are multiple mistakes even experienced entrepreneurs make while setting up their business practices and culture, which makes it harder for them to recover payments from their clients. For an entrepreneur, the payment made from their client’s end is their lifeblood. Negligence of clients can even halt the business itself, especially at an initial level, as the company’s future bills are funded by client payments. The internet has grown so far that people are using multiple methods to approach their clients globally. However, not keeping a secure payment method has caught our attention regarding the missed or late payments from the clients’ end. Although, the clients, especially those who are using the internet as their only source of communication, are skeptical regarding paying in advance. Therefore, expecting them to pay a complete upfront payment is not possible at an initial level when you have just started your business. At times, clients make unnecessary delays or deductions after the delivery of their desired product or services which is accounted for as a bad debt account for entrepreneurs.

If you are struggling with this issue, here are a few practical bits of advice for you that can help in recovering your stuck money and even help you in avoiding such scenarios.

Tips to Secure your Payments

Choose the Right Client

Your ideal situation is when you only attract paying clients. Evaluate the clients as they are approaching you for your work, as this will make it easier for you to shortlist the clients you actually want to work for and benefit from. Here are few tips from which you can easily choose the right client base.

1. Raise your Worth

Selling a product or offering a service? Keep your rates at or above the market price. Selling services at a price that is too low will make you more approachable to frauds or less ethical clients. However, the people who are satisfied with your quality of work will be willing to pay you the average market price or even a premium price for your quality.

2. Design a Proper Payment Policy in Advance

Once you have a proper payment policy for your product or service, the client will get the idea of your fixed payment policy. This will depict your professional attitude towards your work. Your professional policy should cover all of the aspects of your best practices as it will act as a preventive for fraudulent cases. The policy should include:

  • Your invoice duration such as weekly/bi-monthly/monthly or project wise
  • Your terms of payments
  • Penalties in case of any late payment
  • Your detailed rate structure that includes basic per hour rate and monthly rate of that project
  • Payment methods that are acceptable to you
  • How you will handle late payments
  • How your company will recover missed payments from the client

 

Identify your Clients while they Talk

Don’t waste time after you have invested your work and money on providing the customer’s desired product. Dealing with late or missed payments later is a frustrating experience. Therefore, one should identify the seriousness of their clients before they start to work on their project.

  • Avoid bargaining
  • Understand the client’s psychology and their potential to understand you
  • Get a contract signed, even for smaller payments/projects
  • Look for clients through references as this will be a more solid and secure source

Always Maintain your Records

Bookkeeping is a very beneficial and necessary part of an entrepreneurial business. The most successful strategies of keeping your payments secure is recording all of your transactions, bad debts, and accounts receivables in detailed records that can help you later in analyzing how much work you are providing and how much you are owed.  

Be Serious about Getting Paid

Sitting and waiting for payments will not solve your problem. You need to personally be proactive in seeking all of your expected payments.

  • Contact the clients as soon as the deadline has passed
  • Start charging interest on late payments
  • Keep nudging the client, even after a month or so
  • Send a demand letter to the client’s address
  • If you are still unsuccessful, contact a collections agency 


Be Ready to do Something

Starting up your own business is not a cup of tea and managing it is a much tougher job. Dealing with your employees as well as your customers is a challenging task in itself. If a client is missing their payments or canceling the payment altogether, you should not wait for the end result. Rather, you should adopt a proactive approach to do something regarding the issue.

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.