Thought Leadership from the Leaders in Virtual Accounting and Bookkeeping Services

The Pulse of Small Business Accounting: What to Watch in 2015

Posted by Bill Gerber on Fri, Jan 30, 02015

As a small business owner, it is imperative for you to pay close attention to all of the accounting and regulatory issues that could have a negative impact on your company. For example, tax laws change on a regular basis, and you are required to comply with them at all times. This is one of the main reasons that working with a virtual accounting services provider can be extremely beneficial. After all, staying on top of each tax and regulatory change can be almost impossible for someone who is also responsible for overseeing every other aspect of their business.

There are many new changes and hot topics that each small business owner needs to be aware of for 2015. To assist you with this process, we have compiled a list of five issues that you must stay on top of if you want to avoid future legal or tax related problems.

Five Items to Watch in 2015

1. Taxes and Online Sales

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Tags: Small Business Advice and Tips, accounting services, small business, accounting regulations

5 Accounting Pitfalls Small Businesses Should Avoid

Posted by Dennis Najjar on Thu, Jan 29, 02015

You value your small business, but are you doing all you can to ensure its security? Unfortunately, even seemingly small accounting oversights can put your company in jeopardy. Keep your small business on solid ground by avoiding these common accounting pitfalls.

1. Disorganized Expense Records/Lost Receipts

Misplacing business expense receipts can cause accounting and tax issues. Even if it is a legitimate business expense, loss of a receipt can result in incorrect reporting and a tax penalty if you’re audited. The solution? Designate one debit or credit card for all business expenses, and use a mobile app to record purchases as they happen, such as Tallie. Read More

Tags: small business bookkeeping, small business tips

3 Signs Your Time Tracking System is Broken

Posted by Kris Merritt on Wed, Jan 28, 02015

Your business uses the same time tracking system it had in place for the last decade. Keeping up on exactly when employees come in, how many hours they work, what they're spending their time on, and whether time is accounted for properly is all in question. Your time tracking system is essential for accurate payroll, employee vacation tracking, and analyzing how much time is spent on particular tasks. If you suspect your system is better off in the stone age, look for these three signs to determine whether it's time to find a new one.

1. Your system forces employees to track their own time manually.

Time clock and timesheet-based time tracking systems puts full responsible on the employee, requiring the employee to remember to clock in and out in order to track their total hours worked. Employees may game the system to have another person clock them in to manipulate hours, forget to clock out for lunches, and completely forget to clock in for the day at all. Timesheet based time tracking is even worse in this respect, as the employee has to write down the times they worked. It's rare to get exact time measurements in these situations, risking inaccurate calculations for payment.

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Tags: time tracking, accounting tips

How to Account for Slow Seasons in Cash Flow Forecasting

Posted by Bill Gerber on Mon, Jan 26, 02015

Cash flow forecasting can make or break your business. Business owners need to know how much cash they have on hand for essential business expenses, whether to lean on your lines of credit, and whether they can purchase the inventory needed for the business. Slow seasons make accurate cash flow forecasting difficult, especially if the business is particularly seasonal in nature. However, whether your business sells products or provides services, there are a few best practices to lean on to help ensure accurate cash flow forecasting year round.

1. Look at historical trends within your company.

You have a plethora of data, so use it. You might not have exact numbers if you've experienced fast growth, but you can compare your historical trends to figure out approximate cash flow during slower seasons of the year. This method works best if you have an extended period of data to work with, such as the past five years or so. For startups and early stage businesses, lean on industry data to help project seasonal ups and downs. If you have an industry mentor or professional group, reach out for help finding and digesting the data. You may want to invest in market research from similar companies to get additional data points if industry data is limited or difficult to ascertain.

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Tags: small business bookkeeping, accounting services, accounting tips, revenue forecasting

3 Essential Metrics in Calculating Profit Margins

Posted by Bill Gerber on Thu, Jan 22, 02015

It's time to calculate your profit margins so you know which products to keep, which to dump, and which need major adjusting. Many data points go into figuring out your exact profit margin, but these 3 metrics represent the most important parts of your accounting calculation.

1. Your net profits.

You don't want to bother too much with your gross profit off of a product since that doesn't take into account the many expenses that made that sale possible. Your net profits look at the price you sold the product at, minus expenses such as the original inventory cost, marketing, administrative, building overheads, and other associated costs. If you don't include all direct and indirect costs that go into the cost of a product, you may end up losing money on an item that seems like a best seller at first glance. Calculating your net profits on a frequent basis helps you avoid your business bleeding money.

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Tags: Bookkeeping Best Practices, profit margins, accounting metrics

3 Ways to Use Revenue Forecasting to Even Your Cash Flow

Posted by Dennis Najjar on Wed, Jan 21, 02015

Knowing when to expect money coming in and how much is going out is basic business accounting, but that doesn't always mean it's the easiest financial aspect to manage. If you deal with too many feast or famine situations with your cash flow, you can put your revenue forecasting to work.

1. Automated invoicing.

Your revenue forecasting shows information about when your client and customer payments should enter into your business cash flow. However, your forecast doesn't account for invoices that aren't sent out in an appropriate amount of time. If your clients don't receive their invoice, they may be uncertain how much they owe you for products or services. Use an automated invoicing system to take care of the problem and smooth out your cash flow when revenue forecasting says you should have plenty in reserve.

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Tags: accounting tips, revenue forecasting, business accounting

How to Encourage Departments to Accurately Report Expenses

Posted by Dennis Najjar on Mon, Jan 19, 02015

Your company incurs plenty of expenses, especially when you have a global workforce you send out on a regular basis. Sales reps, upper management, and remote employees have expenses that get covered by the company or are reimbursed to the employee. Accurate expense accounting helps you forecast revenue and future expenses, handle department spending, and work on your budgeting for future quarters. Sometimes departments and employees need a bit of encouragement to stay on top of their expense reports.

1. Make it easy for departments and employees to track their expenses.

When reporting expenses is a major hassle, your departments and employees may choose to take the easy route and avoid it. This situation ends up creating a nightmare for accounting, so it's important to provide user-friendly ways to accurately report any costs they incur. For departments, look into project management software that tracks expenses for a particular project, task, or even individual milestones. Putting expenses in an app the department uses already puts everything in one place in a form they can easily access. For employee travel expenses, consider smartphone apps to scan in receipts and track credit card expenses. These apps often auto generate expense reports for importing into an accounting software.

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Tags: accounting services, job costing, expense tracking, project management

How to Accurately Job Cost in an Agile Project Environment

Posted by Kris Merritt on Wed, Jan 14, 02015

Your business life is easier when you deal with projects in a waterfall methodology. You follow a linear course with predictable milestones, deliverable deadlines, and project budget. In today's technology driven business world, agile project methodologies are becoming more common as project goal posts change with new requirements, deliverables, budget restrictions, and other factors. Accurately job costing in an agile project environment is a difficult task, but not an impossible one.

1. Break down the project to its component parts.

When you have an understanding of the project on a task-based level, it's easier to figure out pricing for the whole. You look through standard task costs and use those as a foundation to create job costing estimates as accurate as possible. Thorough time tracking is essential to getting task cost estimates, so spend time gathering this data if you haven't already.

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Tags: accounting strategies, small business tips, automated processes, job costing

How to Determine Profit Margins on Services

Posted by Dennis Najjar on Mon, Jan 12, 02015

Understanding your profit margins is a critical component of healthy financial management. With a product-oriented business, profit margins are often largely focused on tangible goods and materials that are easily quantifiable. However, if you are in a service-based business, understanding profit margins can become a bit trickier. For services, determining profit margins requires looking into more intangible factors and qualitative factors to figure out whether your business is really getting a good ROI or not.

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Tags: improving sales, accounting services, job costing

3 Major Benefits of Class Tracking

Posted by Kris Merritt on Thu, Jan 08, 02015

Business owners and financial managers have plenty of expenses to juggle from individual employees, teams, and departments. You have several accounts set up for your business, but the expenses don't seem to add up properly and they aren't giving you the insights you need. QuickBooks and other bookkeeping software have a section for class tracking, which gives you a way to add custom categories to each expense. This feature may not seem like a big deal at first, but it's quickly apparent how useful it is to keeping on top of your business's expenses.

1. Category flexibility.

You aren't limited to a single account for a particular set of expenses. If you want to get a company wide view of a specific set of expenses, such as per diem meals, office supplies, or inventory, assigning a class to these purchases in addition to an account provides you with valuable information. If it seems like spending is out of control and your expense accounts are running dry, it may be easier to figure out everyone in the office is taking clients out to fancy steakhouses instead of company-approved restaurants through classes than going account by account to figure out where the issue is.

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Tags: accounting strategies, small business bookkeeping, quickbooks tips

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