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Accounting Education Series: Upgrading Your Bookkeeping Services


deciding your bookkeeping strategyWe often find ourselves presented with a common question--"How do I know when it is time to switch to an accounting services provider?"--in fact, it is the most common question we get when we're out on the road meeting with business owners and entrepreneurs. Used to doing it themselves or with the help of a single bookkeeper, it can be difficult to pinpoint that exact moment when business needs outgrow current resources.

We often find our clients come to us just after that intangible moment--when a few months of bookkeeping mistakes or the inability to keep up has prevented the ability to stay on top of financial information. Staying ahead of that issue, we put together the following information to help evaluate your current bookkeeping situation and when to know when it isn't enough anymore.

Why You Need to Evaluate Your Bookkeeper Now

You evaluate your employees. You base their raises and bonuses, at least in part, on the results of these evaluations. You also base their continued employment on what you learn. But do you evaluate all your employees? After all, some employees are harder to review than others.

Why You Overlook Your Bookkeeper

You hired a bookkeeper because you’re not a bookkeeper. When employees do the same job you do or when they do jobs you’ve done in the past, it’s easy to review their performance. When employees do a job you’ve never done or a job you’ve never done well, it’s a lot harder to judge them. You’re paying a bookkeeper because that person is better at the job than you could be.

Why You Should Review Your Bookkeeper’s Performance

Keep in mind, however, that you’re also paying your bookkeeper to do a job that needs to be done right. Your financial future may depend on accurate bookkeeping. If your bookkeeper isn’t performing well, you may be spending more than you’re making without noticing, you may be subject to costly late payment fees or increased interest rates, you may owe back taxes because your financial records were inaccurate, you may be due for a nasty audit you don’t have the records to satisfy, or you may be the victim of embezzlement or fraud without knowing it. Can you afford to take those risks?

Evaluating Your Bookkeeper

Here is a list of questions you need to answer:

  • Does your bookkeeper stay up to date with QuickBooks?

  • Does your bookkeeper maintain training schedules and accreditation standards?

  • Is your financial data being recorded on time?

  • Are transactions being recorded properly?

  • Are bank statements and credit card statements being reconciled in a timely fashion?

  • Are your bills and invoices being processed properly and on time?

  • Are your accounts ready for an audit?

If you can’t answer these questions by reviewing your bookkeeper’s work yourself, you need help. You can’t simply take your bookkeeper’s word for it.

Keeping Your Bookkeeper

You hire a bookkeeper to keep the books, but who keeps the bookkeeper if you don’t? If you hire an accountant to do your taxes, you can use the same accountant to evaluate your bookkeeper. Of course, you’re spending a lot more money this way. If you can’t provide the oversight your bookkeeper needs, it might be time to entrust your bookkeeping to a provider that has oversight built into its bookkeeping services.

How to Know Your Bookkeeping Isn't Enough

Your needs change as your business grows--and after evaluating your current bookkeeping, maybe you're thinking your books are at risk. Is it time to make the leap to accounting services?

What Is Outsourced Bookkeeping?

Bookkeepers are responsible for recording your transactions. If these transactions are entered into accounting software, bookkeeping services generally include the producing of account statements. A scalable service, like, will often start fledgling businesses on their monthly bookkeeping service. This service is recommended for businesses with less than $500,000 in sales. This monthly service includes recording your bank activity, your credit card activity, and your payroll, as well as preparing your sales return and reconciling your bank and credit card statements. They also produce financial reports for you.

Weekly bookkeeping services steps this up a notch to account for the needs of businesses with between $500,000 and $2 million worth of sales. This service also includes controller oversight, accounts payable and accounts receivable. Either set of bookkeeping services is adequate for many businesses.

What Is Outsourced Accounting?

Outsourced accounting is a more comprehensive service. It includes all the bookkeeping services, but also provides financial statements that are appropriate for GAAP reporting. This service follows an accrual based accounting practice, versus the cash based accounting of bookkeeping services. This service is designed for businesses with sales of $1 million to $25 million.

When Do You Make the Leap?

The complexities of what bookkeepers are prepared to handle are limited. The more frequent your transactions become, the more you will need the services of a controller. The more complex your transactions become, the more you will need the services of an accountant. While sales amounts are good indicators of when you need to make the leap from monthly bookkeeping to weekly or daily bookkeeping and from bookkeeping to accounting, or from a part-time bookkeeper to full accounting services, they are not the only indicators to consider.

When is it time to make the leap?

  • When your sales exceed $1 or 2 million

  • When your business requires an accrual based accounting system

  • When your transactions become complex enough to require accounting oversight

  • When you want the security of having your own outsourced accounting department to provide the full scope of accounting services

The choice is yours. It’s not just about the numbers. It’s about your confidence, your needs and your business. That’s what scalable services are all about.

Looking for more information on whether to outsource your accounting services? Our experts can help--Schedule a 30 minute consultation today.

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Accounting Education Series: Deciding When and What To Outsource


outsourced accounting servicesAs we wrap up the last week of our Accounting Education Back to School Series, we're taking a close look at a subject near and dear to our virtual accounting hearts: Outsourcing. As a leading provider of outsourced accounting and bookkeeping services, we know firsthand the benefits of outsourcing business processes--and we also have an intimate understanding of many of the concerns that SMB owners have when considering whether or not to outsource.

From simply making the decision to outsource, to weighing the pros and cons of outsourcing your accounting services, to exploring other options for outsourcing, such as outsourcing your HR, we've got you covered on things you need to know and consider before deciding to outsource. And if you have any questions or want more information on topics we covered, please don't hesitate to ask!

Is Outsourcing Right For Your Business?

Is the Job Ongoing or Limited?

For time-limited jobs, such as special projects, it just doesn’t make sense to hire someone, because once the project is completed you’ll be faced with letting them go even if they’ve done a stellar job. Certainly, there are many cases when it makes sense to outsource ongoing work such as accounting services, but in cases when the job has a time limit, outsourcing is almost always your best alternative. You can find an outsourcing company to manage the workload quickly, and their employees are already trained and ready to get the job done.

What Is Your Budget?

Most professionals – such as CPAs, marketing experts, and IT professionals – demand salaries upwards of $50,000 per year, plus benefits. In these cases, it is generally less expensive to outsource than to pay these salaries. Many times, companies are able to outsource jobs and eliminate the overhead of office space and equipment, insurance, and other employee costs. The exceptions are very small businesses with limited monthly needs for professional services. In these cases, hiring an independent contractor is usually the best alternative.

Is the Job Mission Critical?

Jobs that fall within the production area of your business are almost always best done in-house, unless temporary workers are needed until you can hire and train a sufficient workforce. Small businesses can then outsource the support work – such as accounting services, cleaning services, and other non-production jobs. This allows the company to focus on their core activities and build a suitable, well-trained workforce of essential employees before bringing non-critical jobs in-house.

Does the Job Require Special Expertise?

Jobs that demand a high level of expertise or specific training can easily be outsourced, especially in a growing company that can’t yet support a professional on staff. Examples of these types of workers include lawyers, computer specialists, and bookkeeping. Outsourcing gives smaller companies the opportunity to get the benefits of experienced professionals without paying them full-time. This is especially true of jobs that require expertise when you don’t have enough work to justify a full-time employee.

The Pros and Cons of Outsourcing Accounting Services

Today’s most successful small business entrepreneurs are smart, industrious, and customer-oriented. They flourish in a world that is both intense and exhilarating, where no two days are ever the same. Indeed, they sometimes spend their days putting out proverbial fires, and their nights handling paperwork. SMB owners wear a lot of different hats, from human resources to marketing professionals, writers, and employee supervisors. One of the biggest pain points for small business owners is keeping their thumb on the company’s finances. Considering professional accounting services is a prudent idea. Still, finding the business professionals that are right for your business can be challenging, and outsourcing these key functions is not for everyone.

Here are some pros and cons of outsourced accounting, along with some tips to make the choice easier.

Pros of Outsourcing

  • Outsourcing removes accounting and financial tasks from your daily to-do list.
  • Outsourcing can be cost-effective, as you will not need to add an employee to your payroll for these tasks.
  • Accounting firms will record and maintain your financial transactions accurately and deliver the work quickly.
  • Firms typically only employ well-trained professionals, so quality work is ensured.
  • Accounting services firms can handle as much, or as little, of your financial work as needed.
  • Most firms will do data entry, bookkeeping, payroll, and taxation, among other tasks.
  • Outsourcing your bookkeeping leaves you with more time for more important duties.
  • Boosts in productivity are seen when owners and employees have time to focus on the customer and not handle administrative chores.
  • Smart accounting agencies will utilize the latest technology to gain efficiencies and controls, and set regular parameters for reports and other communications.

Cons of Outsourcing

  • You will be laying your business bare to an outside source; this is a step many SMB owners have difficulty with.
  • You must do adequate research to find a reputable accounting services firm that you can trust.
  • Not every firm can handle each of the needed aspects of your bookkeeping. Be sure to explore this and be sure that what you need is included in your contract.
  • Likewise, some firms offer a limited service contract that covers daily transactions, but charge for month-end closings or tax filings. Forewarned is forearmed.
  • Costs might seem prohibitive to you; compare these to what hiring help would cost, or how many hours of your own time it would take to complete. These numbers will give you some guidance on how best to proceed.

Outsourcing your accounting services can give you back hours to focus on your customers and on growing your business. By doing your homework and setting expectations with your chosen accounting firm upfront, you can make the transition to outsourced accounting services smooth and the partnership successful, freeing up your most valuable resource – your time.

Outsourcing Your HR

Outsourcing makes the modern business world go round. An increasing number of enterprises have shifted from a monolithic corporate infrastructure to a more flexible, cost-effective one. For many businesses, this means turning more and more core tasks over to third parties. Outsourced accounting, outsourced bookkeeping, outsourced IT – you name it, some company somewhere has decided to outsource it. Your own company may be outsourcing some core functions already. But did you know that you can also outsource many of your HR work? Well, you can, and outsourced HR might just save your business a lot of effort, time and money. Let’s examine some of the advantages:

Foolproof Financial and Legal Compliance

If you have employees, you have potential HR compliance issues. Workplace laws continue to evolve and change from year to year, and it’s all too easy to make that one tiny slip-up that opens the door to lawsuits, audits and other problems. A HRO (human resources outsourcing) firm can keep up to date on these issues and make sure everybody learns, understands and obeys clear-cut rules.

Affordable Expertise

For the price of maintaining one reasonably seasoned HR veteran on your staff, you can most likely outsource an astonishing number of this equivalent through a HRO firm. According to Dan Hettrich of AcadiaHR, you may only pay around $550 to $800 per year for an outsourced employee that would normally cost you more than $67,000 in annual salary, benefits and associated expenses. That adds up to a lot of skill and expertise for your dollar.

Greater Productivity

Do you have employees forced to assume routine HR tasks in addition to the work they were actually hired to do? Outsourcing lets you relieve your core team of the more time-consuming HR tasks so they can focus on larger strategic issues impacting the company’s future. You’ll get better results from more focused personnel, all without missing a beat HR-wise.

Higher Employee Retention and Satisfaction

CPEhr points out that HROs can often provide a wider range of benefits for employees than most small-to-midsize companies could hope to provide directly. These may include insurance package options, financial services, employee assistance programs and other perks that inspire loyalty and attract a higher calibre of worker. Happier, harder-working employees mean less attrition, better attendance and higher overall morale at your company.

Different outsourcing companies will offer different rates and conditions, based in part on how many employees you have and how many of your current HR functions you wish to outsource. Take the time to contact a few such firms – you may be pleasantly surprised at just how nimble your company can get!

Think your business is ready to take the next step towards outsourcing your accounting services? Our accounting and bookkeeping experts can help assess your situation and find opportunities to outsource, automate and streamline your accounting processes. Schedule a free consultation today!

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Accounting Education Series: Tips for Setting Up QuickBooks


QuickBooks Certified ProAdvisorOur clients don't worry about tips for using QuickBooks because they know we're on top of it for them. However, since we know there are still a few companies out there that have yet to sign up as our clients--and are trying to go it alone wit their QuickBooks files, we've gone ahead and prepared a short list of "QuickTips for QuickBooks". If you're using QuickBooks yourself... or maybe working with a local bookkeeper in your area... hopefully these tips will help you out until you're ready to become our client!

QuickTips for QuickBooks

There are many responsibilities that accompany running a business. Keeping track of your finances can be tricky, especially if you don’t have a bookkeeper or an accounting services firm to help navigate your way. One of the most popular financial recordkeeping programs on the market is the QuickBooks software system. This system helps keep your finances in order while giving you all the reports you need, keeping your records readily available. Although QuickBooks is a great system to use, there are certain things you need to know to make the user experience efficient. Here are a few quick tips:

Watch the QuickBooks Tutorials

This can save time and money. The tutorials included with this program are detailed and can show you how to immediately get started, right out of the box. There are also a number of online tutorials available that can offer you additional tips and guidance on how to best use the program.

Set Your Personal Preferences

When you are establishing the accounts for your business, QuickBooks gives you a number of options on how you want things to flow, and which reports can be quickly accessed. You can edit or establish new preferences by going to the edit drop down menu, selecting Preferences and following the prompts to set them up.

Customize QuickBooks Menus

This can be a lifesaver. QuickBooks allows you to customize the processes you use on a frequent basis, while keeping the ones you don’t at bay. This program also gives you options of customizing your icons. As you learn the program better, you can integrate new tasks as you need them.

Utilize the Memorize Transactions Feature

This is a great feature to use, especially for those transactions that occur often. Once you enter the information under this feature, all you have to do is change the amount and the transactions will post under the correct bank account.

Create a Vendor List

Although this program automatically creates a vendor list, using a specific number in front of the name will help you find the vendor quickly. Using unique names can also help you when setting up your accounts. This cuts down on time when issuing checks, consolidating records, or recording transactions.

Create Specific Internal Passwords

If you are working with an accountant or bookkeeper, make sure you have a password on the file prior to sending it. This is called a closing date password and will prevent others from changing your closing dates.

Establish Shortcuts

This is probably one of the most important functions of the system that speeds up productivity and makes using the program very efficient. The system comes with some established shortcuts, and you can add to them to make your job a lot easier.

Not sure if you want to keep managing your QuickBooks yourself? We're happy to help! Contact us today for a free consultation for your bookkeeping and accounting services.

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Accounting Education Series: Distribution Software with SalesPad


salespadLately we've been exploring some new accounting technology providers for our clients--and today's education post covers some how-to's for SalesPad.

SalesPad ERP catch phrase is "distribution software simplified" and it integrates with Intuit’s QuickBooks desktop suite of products. Between its user interface and workflow engine, it is a powerful tool for managing business processes and data. If you're considering (or already using) SalesPad ERP, hopefully these how-to's will help get you on the right track.

As a customer, sales, business, and distribution management plugin, SalesPad ERP consolidates disparate teams into one system. Now your employees can work together on selling, service, and rapid fulfillment with total visibility into important data they need to complete their assignments. The business analytics SalesPad ERP provides helps users to easily understand the data trends entered into SalesPad ERP, in QuickBooks, or other data sources - and it offers a great deal of flexibility with its customization options.

In this post we’ll look at tasks and purchasing in SalesPad ERP.

How to Create Sales Document Tasks in SalesPad

One feature of SalesPad that is particularly useful is called Sales Document Interactions. This feature allows you to generate customer relationship management tasks directly from the sales document, instead of at the customer level then needing to back-track to the sales document. An interaction task could be anything from a reminder to check on a prospective customer about a quote or a request to a co-worker for input on a project. Tasks can even be pushed from the SalesPad Today calendar to an Outlook calendar.

It’s as simple as opening up the Interactions tab while working on a sales document in SalesPad ERP and clicking “New” to start composing your task. Then enter your Subject, Notes, Interaction Type, and Dates. You can even set the task to an All Day Event and set a reminder if need be. What’s more, you can assign the task to a member of your team and mark it as complete when done.

By having all of the tasks within the CRM itself, it is much easier for users to keep track of associated tasks and sales activities. From the customer level you can drill down to the document through the task and from the document you can view important customer information. In short, sales document tasks keep your team on track and linked to the project or sale at hand.

Enabling Sales Document Tasks

Granting permission to Sales Document CRM functionality requires a visit to SalesPad’s Security Editor. From there, enable Sales Document Interactions in the Security panel and set the appropriate permissions to True. SalesPad defaults these settings to False so to the administrator can dial in the system to the specific User or Security Group.

Purchase Advisor in SalesPad

Another feature of SalesPad is the ability to create purchase orders based on historical data. If you have inventory that you order frequently, it’s a time saver to utilize Purchase Advisor. SalesPad’s Purchase Advisor will look at your inventory levels (On Hand, Allocated, Available, Re-order Point), run an analysis against your monthly sales numbers, and provide you with a recommended Purchase Quantity for your inventory items.

Simply click on Auto Calculate Purchase Quantities then PO Generator and you’ve just opened the purchase plan for all of your inventory items in need of purchasing attention. Now you can adjust your quantities, confirm your preferred vendor, and generate the purchase order for every inventory item from one screen.

How to Set Up Purchase Advisor

Assuming you’ve already set-up Purchase Orders in SalesPad ERP, open Security Editor and identify the Users or Security Groups that need Purchase Advisor access. In the Security panel click to enable Purchase Advisor and Purchase Plan Editor.

Let SalesPad Work for You

As you can see, SalesPad ERP settings can be configured at the individual user level. Once you have your security settings configured, it’s easy to have the software work for you and provide an added level of internal control over your business.

SalesPad ERP is a powerful add-on for QuickBooks and was originally designed as an add-on for Dynamics GP, which should give the reader an idea as to its capabilities and what it brings to the QuickBooks ecosystem.

SalesPad has positioned the SalesPad ERP platform as a comprehensive solution for the QuickBooks end user.

Interested in how SalesPad can help your business? We're helping our clients explore the same thing--and our team of accounting and bookkeeping experts can help get you started too.

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TSheets Guest Post: How to Motivate Your Employees to be Awesome


tsheets guest postToday's Accounting Education Series is from our friend and partner, TSheets. You've probably heard us talk about TSheets before--we think they're an awesome company innovating and disrupting the time tracking industry. Seriously, who couldn't love a company whose tagline is "We Love Employees"? That just about sums up how much TSheets cares about its customers--and we're proud to work with them.

Today they've been kind enough to contribute a piece on a topic near and dear to their hearts--How to Motivate Your Employees to Be Awesome. Because awesome employees equal awesome companies--and any small business owner can tell you that awesome employees mean the difference between banner years and lackluster performances. But enough of us talking--without further ado, our friends at TSheets have some advice for you!

How to Motivate Your Employees to be Awesome!


We recently blogged about how TSheets helps employees track time and awesomeness. For real. Why should that matter to your business? A recent article in Forbes, sheds some light on why it’s important (for your business) to motivate your employees to achieve a.k.a be awesome.

At TSheets we track some important data for your business that impacts your bottom line, your future profitability, and time saved or conversely wasted at work. Pretty much all numbers (number crunchers eat your heart out!).

What about the employees behind those numbers? While everyone has unique motivations (a combination of personality, personal interests, maturity, etc.) one way to ultimately motivate your employees is by giving them an opportunity to have an impact at work.

In our recent blog about tracking time and awesomeness, we cover several ways TSheets benefits your employees; one in particular, letting them know their work counts.

When your employees successfully track their time in TSheets, as an employer, you see just how many hours of sweat and tears they are investing in your business, towards a project, an achievement, a long-term client, etc.

Since you have the data: acknowledge them, empower them, encourage them. And when it comes to planning for future projects, use the data to have realistic expectations and set achievable goals for your employees.

As a leader, have the conversation with your employees; find out if they are satisfied in their work and what their goals are. Be specific in how you will help them achieve their goals and create an opportunity for them to achieve and have a long term impact on your business (and ultimately their career).

Delve deeper with the remaining eight of the 9 Things That Ultimately Motivate Employees to Achieve, highlighted in the Forbes article, and share our blog post, TSheets is Helping Employees Track Their Time…and Their Awesomeness with your employees to let them know consistently tracking time with TSheets positively impacts their career (and their paycheck).

Need help figuring out how to fit TSheets into your overall accounting systems and processes? We can help connect you--and get your accounting in order. Schedule a free consultation to review your accounting today.

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Accounting Education Series: Automated Bill Payment and Invoicing


setup automated billing workflowsAs the leading provider of virtual accounting and bookkeeping services, we spend a great deal of time considering how technology can be implemented to make accounting processes more efficient. In fact, we're not embarassed to admit that sometimes we even dream about it. Seriously--who doesn't envision a world where accounts receivable and accounts payable are streamlined through seamless approval workflows and automated systems?

Ok, so maybe that isn't number one on everyone's holiday wishlist this year--but it tops ours and as such, we love to pass on the best of what we find to our friends and clients in the hopes that they too will be able to enjoy the nirvana that is automated AR and AP! So for those of you interested in (a personal favorite of ours!), here are some basic tips to get your started:

How to Set Up Bill Payment and Invoicing in is a cloud-based bill payment and invoicing service that helps businesses cut down on the amount of accounting paperwork they receive in the process of sending and receiving payments. Since this service combines bill payment and invoicing, it’s a convenient set up to run all of your finances through the application. It takes a bit of time to set up, but once everything is in the system it streamlines your workflow and helps you to stay on top of payments and your overall business cash flow. Once you have your customers, contractors, and vendors set up in, you can start creating bill pay and invoices.

Setting Up Bill Payment in

The basic bill payment function is located in the Payables tab. All of the bills that you have entered into the system are displayed here, along with the customers, clients, or vendors that they’re associated with. Select any bills from the unpaid bill section you wish to pay, then enter the amount that you are paying and what day you want to process it. Select the appropriate payment account from the drop down list underneath the Unpaid Bills section and click “Pay” to process the payments.

To set up a different lead time on bills, choose the “Settings” menu and click Overview. The settings page lets you control many aspects of your account. Select “Payables” and “Preferences” to get to the recurring menu. Enter a lead time on the Payables settings so you have a standard time for paying the vendor bills. Click “Save.”

Setting Up Invoices in

Invoices are handled through the Receivables tab in Choose the “Invoices” option and click “New” to create a new customer invoice. The invoice asks for several pieces of data, such as the invoice number, the specific customer, how much lead time is expected on the payment, when the payment is due, messages to send to the customer, and the items that the invoice is for. Select how you want to send the invoice so it’s delivered in the most appropriate fashion. Click “Save.”

How to Set up Recurring Bills and Invoices in

Your time is valuable as a small business owner. Manually sending out bills and invoices that are the same amount every month is a time consuming process that takes you away from tasks better suited to your expertise. Instead of manually handling regularly recurring bills and invoices, consider using a service such as to handle it automatically. This frees up your time to handle business tasks that can’t be automated, as well as helping you stay on top of all of your payments.

Setting up Recurring Bills

Open the Payables tab to access your bill information. Go into the “Manage Recurring” section of Payables. Choose “New” to create a bill. The primary field to fill out on this page is the bill schedule. Enter the established due date and choose the vendor it’s associated with. The recurring frequency is set based on your payment terms for a particular vendor. If the recurring bill is generating at an incorrect time, change the payment terms under the vendor’s account.

Choose the billing frequency and click “No End Date” if this is a bill that continues to go on without a set term. If you don’t have a vendor entered into the system for the recurring bill, you can create one directly from this page. Enter in a description of the bill, the total amount of the bill, and any line items associated with the bill. Use the approvers drop down field if a particular person, such as your accounting department head, needs to approve the bill before it goes out. Click “Save” to save your changes.

Recurring Invoices Setup

Go to the “Receivables” section on Select “Recurring Invoices” to access the section you need. Choose “New” to start creating the recurring invoice. Fill out the relevant fields on the invoice, such as the due date, when the invoice gets generated, the customer information, the invoicing frequency, how soon payment is due after the invoice is sent, whether there’s an end date to invoice generation, and what the invoice is for. also includes a field for a message to the customer, as well as specifying the method that the invoice is sent. Save your changes, and you’re ready to move on to the tasks that really matter.

Not sure how to get started or simply prefer to have it all handled by a bookkeeping service? Our experts can help get you on the path to automated bill payment perfection. Schedule a free consultation today!

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Accounting Education Series: Cash vs. Accrual Accounting Methods


cash vs accrualIf your bookkeeping is like most other small business bookkeeping services, you use the cash method of accounting. You record transactions either when you receive a payment or when you pay an expense. Cash accounting is simple, and it provides a clear picture of your company’s cash flow. However, some companies prefer the accrual method even though it’s more complex.

Accrual accounting differs from cash accounting because it doesn’t book transactions when payment changes hands. You don’t record payment when your customer pays an invoice; instead, you record payment on the day you complete the job. Also, you don’t log an expense when you write the check, but you log the expense on the day that you received the service. Your accounting services provider can help you evaluate whether cash or accrual is right for your business.

What Are the Advantages of Cash vs. Accrual Accounting?

Although the real comparison between cash and accrual is more complex, this list provides a simple summary of each method’s major advantages:

  1. Accrual accounting gives you a better picture of your company’s overall performance. Instead of tracking payments, you’re tracking how much work you do during a particular period, which gives you a better picture of the health of your business.
  2. Accrual accounting is more timely. If you complete a large job for a client in December and don’t receive payment until January, then you can still book the income in December even when you haven’t received payment. You can count your income in the current tax year instead of delaying it until the following tax year.
  3. Cash accounting requires less work. Cash accounting allows you to spend less effort on bookkeeping.
  4. Cash accounting helps you to see what you have at a glance. With cash accounting, you can see your cash flows all of the time, which helps you to quickly see how much cash your business is putting into the bank.

Tax Reform Could Force More Companies to Switch to Accrual

The IRS requires most companies that have inventory to use accrual accounting to record sales of merchandise. Once a business earns more than $10 million annually, it’s generally required to switch to accrual accounting.

This requirement may change, however, based on a tax reform bill that the House Ways and Means Committee is currently drafting. If Congress gets its way, more businesses may have to switch to accrual accounting in the future, which could significantly affect your small business tax bill. If your company is a partnership, an S-corporation, a personal services corporation or a farm operation, talk to an accounting services provider about how these changes might affect your company.

Need help figuring out what type of accounting you need? Our certified bookkeepers and accounting professionals can help. Schedule a free 30 minute consultation today.

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Accounting Back-To-School Education Series: Accounts Receivable


how-to-manage-accounts-receivableOne of the most common complaints we hear from incoming clients is staying on top of their accounts receivable. They often find themselves without the ability to track or manage outstanding invoices, resulting in extra work, wasted staff resources and reduced profits. But finding ways to improve accounts receivable processes can be overwhelming, especially in small businesses and with limited resources.

Whether you're exploring outsourcing your accounting services or simply looking to improve the way you manage your local bookkeeper, the following tips are intended to help shed some light on the common pitfalls stalling your accounts receivable.

4 Accounts Receivable Tips for Small Businesses

Of all the accounting services crucial for small business success, accounts receivable may just be the most important. Why? Because this metric measures the lifeblood of your business: cash flow. You may have a phenomenal marketing team and the best sales force but if the cash isn’t coming in your business will struggle to make its own payments. Below are some suggestions for using accounts receivable to maximize your profits and success.

Invoice Promptly

You should invoice your customers immediately in order to make sure your services are fresh in their minds. After all, if it takes months for you to send out the invoice, are they really going to be in a rush to pay it? QuickBooks allows you to create and send invoices automatically. Emailed invoices are even better, leaving little chance of a customer saying your invoice got lost in the mail.

Send Monthly Statements

As part of your accounting services package, monthly statements are an essential for keeping money coming in, especially for customers you work with frequently. Invoices can be put aside and forgotten about, but if your customer is receiving a statement of their account every month they’ll know exactly what they need to pay and when. You can also reconcile the statement to make sure they have all of your invoices.

Monitor Aging

The QuickBooks aging summary report shows you customer account balances at a glance, so you can quickly view accounts that are overdue by 30 days, 60 days or even longer. The more overdue an invoice becomes, the less cash you’re pulling in that month. Aim to stop 30 days delinquencies from snowballing to 60 days delinquencies and so on.

Chase Overdues

It can be difficult to pick up the phone to make a call to a customer with an overdue balance, but it’s vital that you chase payment as soon as an invoice comes due. Your customer might have missed their payment because it slipped their mind, because they’re having issues with their payment process or for many other reasons. The point is, you won’t know until you make contact with them. If you struggle with making that contact personally, QuickBooks can be set up to send reminders at certain points. Automating as much of the process as possible will greatly improve your return rate.

Managing accounts receivable can seem like a daunting part of overall accounting services, but with an automated system and increased knowledge of the process, you’ll find it’s actually a breeze to have customers that pay on time, every time.

Need help managing your accounts receivable processes or setting up new automated AR systems? Our bookkeeping experts can help relieve you of this responsibility and help you get paid quickly and efficiently. Contact us to find out how today.

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August Accounting Back-To-School Education Series: Unpaid Interns


unpaid interns accounting services bookkeeping regulationsYour startup or SMB probably operates on a tight budget, so unpaid interns might seem like the ideal solution to your labor problems. Unfortunately, you could end up in hot water with the Department of Labor if your internship program doesn’t meet certain legal standards. Every employee in the United States is entitled to a minimum wage and overtime compensation. In addition, employees might be entitled to workers’ compensation, unemployment benefits and protection under state labor laws and discrimination laws. According to the Supreme Court’s ruling in Walling v. Portland Terminal Company, your company can’t avoid these obligations by simply calling someone an “unpaid intern.”

Before establishing an internship program, you should talk to your accounting services provider. Unpaid internships have to pass six legal tests to exempt your company from the employer/employee relationship:

1. The intern’s training simulates what he or she would receive in an educational environment. Asking an unpaid intern to file papers for a summer might decrease your office workload, but it won’t provide the intern with the caliber of job skills that would be delivered in an educational environment. Work with a local college to make sure that your intern gets college credit while working for you.

2. The internship experience benefits the intern. If your intern doesn’t gain more than your company does from the experience, then your internship program doesn’t pass the exemption test.

3. The intern doesn’t displace a regular employee. Your intern shouldn’t fulfill a role better filled by a paid employee. Also, existing staff should supervise all interns closely. If your interns act like employees, then they should be paid at least minimum wage. Your accounting services provider can help you make the distinction.

4. The business doesn’t receive advantages from the intern’s presence. The effort to train an intern should actually impede your business, not make it easier, according to the Fair Labor Standards Act (FLSA). Again, the intern should be receiving the benefit, not your company.

5. The intern isn’t entitled to a job once the internship is complete. Before the internship start-date, have the intern sign an agreement. The agreement should explain that no intern is entitled to a job offer.

6. The intern isn’t entitled to payment. The intern should sign an agreement acknowledging that he or she isn’t going to be paid.

In today’s uncertain employment environment, unpaid interns might eagerly trade free labor for work experience. However, even if interns seem willing to work for nothing, accepting free labor puts your company in litigious territory. Keep yourself and your business safe. Work with tax and accounting professionals to ensure strict adherence to labor regulations and structure unpaid internships around the Walling v. Portland Terminal Company standards.

Need help managing your small business bookkeeping? Our professionals can help--schedule your free 30 minute consultation today.

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August Accounting Back-To-School Education Series: Job Costing


job costing outsourced accounting servicesIn bookkeeping, job costing is simply the task of tracking the expenses on a project and comparing them to the revenue that job produces. Job costing is critical for high-dollar jobs like building projects, consulting or architectural contracting, but it is also used by manufacturers to record and compile costs for materials, overhead and labor for a specific job or batch of products. Job costing can give a business keen insights to reduce expenses and improve profitability, if properly utilized.

Bookkeeping services are typically well-versed in job costing procedures, and they can set up your accounting systems to easily track your expenses and revenues. Having access to detailed job costing data will help you, your CFO or controller make the best decisions as they pertain to the job at hand, and to future job quotes and resource management as well. It also ensures that all of the costs that are part of the job are appropriately passed along to the customer. An Estimated vs. Actual report will give an analysis of the quoted costs to those that were actually incurred – critical information to have when bidding on future work.

Components of job costing

Ideally, your bookkeeper will track all the costs attributed to the job, make sure that all the costs are billed to the customer, and produce a report that details costs and revenues for each job. There are typically two types of jobs quoted – fixed fee jobs, and time and materials jobs. Fixed fee jobs are typically quoted a bit higher to include any potential overruns.

Let’s look at a few of the many components of job costing:

Quotes - The initial projection of costs you give the customer before the job is awarded to you. These can also be called proposals or bids. Quotes also need a way to track ongoing costs; this keeps costs in line and allows for overruns to be dealt with.

Materials - All of the project components, like building supplies, are assigned to the project once they are used. They can be costed based on actual costs as purchased for the job, or on average if they are materials used frequently by the business.

Labor - Employees and subcontractors record their time for specific jobs, and your bookkeeping services assign it to the jobs in your accounting software.

Overhead - Overhead costs are typically accumulated in cost pools, and divided among the jobs proportionally.

How can job costing improve profits?

Job costing is the best tool for tracking costs to specific jobs and analyzing them to reduce costs in future jobs. Job costing reports are helpful for keeping costs down during the progression of a job, and they also help you to identify the most profitable and least profitable components of your business, allowing you to focus on those parts that make you money, while adjusting or eliminating those that are draining profit.

By having and using detailed job costing reports from previous, similar jobs, quoting new work is much more of a science than a mere “guesstimate.” This allows the business to earn maximum profits and take advantage of future growth opportunities.

Need help implementing job costing at your company? Our team of dedicated financial controllers and bookkeepers can help you get your job costing on track. Schedule a free 30 minute consultation today to review your accounting needs.

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