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Thought Leadership from the Leaders in Virtual Accounting and Bookkeeping Services

Factors You Are Likely Overlooking In Calculating Your Sales Margins

Posted by Bill Gerber on February 10, 2016

If you calculate your sales margins by subtracting the cost of inventory from your retail sales amounts, you might feel that you have a handle on your true profitability. However, using a simple formula for determining whether a product is profitable for your company doesn't always reveal true profit margins. From factoring in advertising and marketing costs to understanding the human costs of service, you may very well be overlooking many factors when calculating your sales and profit margins. To make sure you have a full picture, consider the following:

1. Cost of paid marketing

Data analytics shows you your click-through rate, traffic engagement, and other valuable metrics involved in your paid and organic marketing. You spread your paid marketing costs, such as Google AdWords and direct mailing, across your products unless you have an advertising campaign for a specific product or service. These marketing overhead costs cut into your gross profit margins, so you can study them to get a better idea of how much you're actually spending to sell a product. For some products, the cost of marketing to move units is not worth the actual cost of inventory.

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Tags: Bookkeeping Best Practices, Small Business Advice and Tips, improving sales, accounting services, accounting tips

How to Account for Slow Seasons in Cash Flow Forecasting

Posted by Bill Gerber on February 8, 2016

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

Why You Don't Know What Your Bookkeeping Is Missing

Posted by Dennis Najjar on February 3, 2016

We talk to a lot of business owners on a regular basis. They come to us for various reasons—some exciting, such as running a startup about to take off and desperately in need of professional-level bookkeeping, and others downright terrifying, such as having just been the victims of fraud or embezzlement by their most recent bookkeeper. Regardless of the reasons and paths they take to get to us, nearly every business owner ends up having what we like to call an “Oh Wow!” moment when first viewing a demonstration of our services. Actually, a more accurate count is approximately 7 to 10 “Oh Wow!” moments. Now, we’re pretty proud of our services—but we still wondered a bit why so much of it was such an eye opener to business owners. After all, bookkeeping is bookkeeping, right? Well, turns out maybe it isn’t. So we set about trying to answer why so many revelations occur in our meetings and we realized that a lot of business owners simply don’t even know what is missing in their bookkeeping.

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Tags: bookkeeping services, small business tips, business accounting

How to Track Time and Integrate with your Bookkeeping

Posted by Kris Merritt on January 29, 2016

One of the most difficult tasks for businesses is keeping track of employee time. Knowing how your employees are spending their time during business hours and what they are working on is virtually impossible without proper time tracking. When time tracking is used properly, it can be very beneficial to any business; however, if used improperly (such as through micro managing), it can lead to disgruntled employees, poor company morale, and subpar productivity and results.

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Tags: small business bookkeeping, accounting software, small business tips, time tracking

Outline Your Bookkeeping Requirements Before You Hire a Service

Posted by Bill Gerber on January 27, 2016

Before you decide to hire virtual bookkeeping staff, it’s important to understand and outline your bookkeeping requirements. Every company varies in their needs and circumstances. Where one company may benefit from a full-charge bookkeeper, financial controller, and software specialist, another may have less expansive needs. Perhaps they require only a monthly write up bookkeeper or perhaps their needs are limited for now but they expect to scale to need additional services shortly. Whichever camp you fall into, it is helpful if you have a general idea of what you need and why.

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Tags: outsourced accounting services, bookkeeping services

How to Accurately Job Cost in an Agile Project Environment

Posted by Kris Merritt on January 22, 2016

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

3 Reasons to Use Time Tracking Even if You Charge a Flat Rate

Posted by Kris Merritt on January 19, 2016

Your company always uses flat rates for client projects. You don't want to deal with the hassle of time tracking, the push back from clients who think your hourly rate is too high compared to a flat rate and the extra accounting services involved. However, there are a few valid reasons to use time tracking even if you're a strict adherent to flat rate pricing.
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Tags: accounting services, time tracking, job costing

3 Things Your Bookkeeping Services May Know More About In Your Data

Posted by Bill Gerber on January 15, 2016

How well do you know your own business? Think about it.

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Tags: outsourced accounting services, bookkeeping services, accounting services

Expense Reporting and Management – How Can Automation Prove Beneficial?

Posted by Kris Merritt on January 13, 2016

Spreadsheets are versatile enough to manage almost all types of information, but they may not scale up when processing large volumes of complex data, which can prove to be quite a challenge to your bookkeeper. Manually processing travel and entertainment (T&E) expenses can be both effort- and time-intensive, not to mention the possibilities of typographical errors, delays in processing and clearing claims and, mostly importantly, the need for employees to preserve and present paper receipts. This is especially difficult when a firm relies on remote accounting services or bookkeeping services to connect all the dots.

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Tags: automated processes, expense tracking, accounting processes, expense management

How to Troubleshoot Your Profit Margins

Posted by Kris Merritt on January 11, 2016

When a company’s profit margins aren’t at expected levels, a variety of factors can be at play. Profit margins are generally a measure of business efficiency, and if the numbers fall short of projections, the solution will generally involve reducing costs, increasing sales or both. Businesses must also assess why profit margins are below expectations so that they can make focused and effective corrections.

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Tags: profit margins, revenue forecasting, online accounting services, cash flow management

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