Accounting

Only Saving Receipts for ‘Big’ Expenses

Whether it’s a new computer that costs $900 or a $2 box of paperclips, you should keep track of all business-related expenses. Only saving the receipts for your “big” expenses is a serious mistake that will end up costing you in the long run. You have to remember that each of those small expenses will add up over the course of a year, allowing you to keep more money in your pockets and spend less in taxes.

Failure to Reconcile at the End of Each Month

It’s a good idea to reconcile your books at the end of the month to make sure they match your bank accounts. Reconciliations aren’t fun, but they are a necessary step towards preventing discrepancies. And if a discrepancy occurs, you’ll need to identify and fix it promptly; otherwise, the problem could snowball and affect other aspects of your financial documents.

Not Creating Backups

Remember the saying “it’s better to be safe than sorry?” Well, it holds true in the world of small business accounting. Hopefully, your financial documents will remain in tact, but if something happens to them you’ll want a backup copy on hand to continue your normal day-to-day operations. This is why it’s essential that small business owners create regular backups of their books. Assuming you use the Quickbooks accounting software, creating backups is a breeze. In fact, you can even set up the software to create backups automatically, eliminating the need to create them manually by hand.

Wrong Classification for Workers

As an employer, it’s your responsibility to classify workers correctly. There are to primary types of classifications for workers in the United States: employees or independent contractors. Employees generally have fixed schedules, whereas independent contractors work at their own according. In terms of tax obligations, employers must withhold federal and state taxes from employees but not independent contractors.

Lack of Communication

Keeping the lines of communication between you and your accountant, tax preparer, and employees/independent contractors is key to running a successful business. When the lines of communication break down, discrepancies may arise in the books, in which case you’ll have to go back and reconcile to find the problem. Whenever a change is made in the books, everyone should know about it.

What bookkeeping mistakes are you guilty of making? Let us know in the comments section below!

Keeping track of income, business-related expenses and other financial details can be a daunting task to say the least. But the good news is that you don’t have to do this yourself. By outsourcing it to a professional accountant, you can focus your attention on other aspects of running and growing your business. So, here are some essential tips on how to choose an accountant for your small business.

Go Local

While there’s no rule stating that you must use a local accountant, doing so will give you peace of mind knowing that he or she can be easily reached. Furthermore, speaking with your accountant in person instills greater trust and confidence. Instead of hiring an accountant who lives across the country — or in a different country altogether — choose one that’s located within a reasonable distance from your business.

Certification

When comparing prospective accountants for your business, check to see what certifications they have. Depending on the state, some accountants may hold certifications from the Certified Public Accountants or Chartered Accountants. Chartered Accountants (CAs). Obtaining certifications such as these requires extensive training and education; therefore, you can rest assured knowing the accountant is knowledgeable in the trade.

Industry Experience

Of course, it’s always a good idea to choose a professional accountant who is experienced in your respective industry or trade. If you operate a retail store, for instance, you should hire an accountant who has performed services for other retailers.

Availability

You should also choose an accountant who is readily available. When you have a question about your finances, you’ll want to know that your accountant can be easily reached. If he or she has a tendency to not return your calls, it could reflect negatively on your business.

Testimonials and Reviews

Last but not least, do some research to see what past customers have said about prospective accountants. A simple Google search of the accountant’s name will likely reveal customer reviews. Were customers satisfied with the accountant’s services? Were there any complaints? How were these complaints handled? A single negative review shouldn’t prevent you from hiring an accountant, but if the bulk of his or her customers were not satisfied, you may want to consider a different accountant for your business.

#1) You Spend More Time Doing Accounting than Running Your Business

Granted, you can expect accounting to take up some of your time, but it shouldn’t consist of the bulk of your workday. If you are spending more time accounting than running your business, it’s probably time to hire a professional accounting. By freeing up more time, you can focus on other aspects of your business.

#2) You Don’t Back Up Your Data

If your hard drive way wiped clean today, would your business be able to survive? Business owners who fail to perform regular back ups of their data place themselves at risk for a critical data loss. But when you’re busy doing all of the tasks that go into running a business, how are you supposed to perform back ups? Thankfully, this is a task that most professional accountants will gladly perform, protecting your business from data loss.

#3) You are Making Too Many Mistakes

No matter how hard you try to prevent it, mistakes are bound to occur when entering financial data into your preferred accounting software. However, if you are making multiple mistakes on a regular basis, you should consider outsourcing the task to a professional accountant. Accountants have the skills and tools necessary to keep track of your transactions — and accurately.  This doesn’t necessarily mean that an accountant will do it without ever making mistake, but errors are usually few and far between.

#4) You are Still Using a Word Processor for Accounting

Sure, you can technically use Microsoft Word or even Notepad to keep track of your financial transactions, but just because you can use a word processor doesn’t mean it’s the best choice. Hiring a professional accountant will allow you to utilize the power of modern accounting software like Quickbooks, which can make a world of difference in terms of your accounting operations.

#5) You Don’t Have the Time to do Accounting

Last but not least, if you don’t have the time to keep track of each and every financial transaction that pertains to your business, it’s probably time to hire an accountant. They’ll take this burden off your shoulders, ensuring your financial data is accurate and up to date.

Did we leave anything out? Let us know in the comments section below!

Choosing the Right Version of Quickbooks

Many people are surprised to learn that there are several types of Quickbooks, each of which has its own unique features and characteristics. The three different types include Quickbooks Online, Desktop Quickbooks, and Hosted Quickbooks. So, which one should you choose? Hosted Quickbooks is actually the Desktop version that’s “hosted” by an authorized third-party. It offers the greatest flexibility and easy of use, making it the recommended choice for accountants.

Close Windows Fast

There are two different ways to close windows in Quickbooks: you can close them by clicking the [x] button in the upper-right corner, or you can do it simply by pressing the Esc key. If you are trying to streamline your accounting (which you should be), try to get into the habit of using the Esc key. This alone can save you huge amounts of time, as it eliminates the need to move your mouse around from window to window.

Disable Spellcheck

Quickbooks has a built-in spellcheck that’s enabled by default. This feature is great for catching those grammar and spelling mistakes in your invoices and other documents. However, it can also be a nuisance, especially when it catches words that aren’t really mispelled. You can disable the spellcheck feature by logging into your account and choosing Edit > Preferences > My Preferences > and untick the box next to “Always check spelling before printing … .”

There’s a Hidden Calculator…

Did you know that Quickbooks has a calculator built into never field? Rather than opening a separate calculator on your computer, you can simply crunch your numbers straight from the field. To use it, click on a field and then press the + button. This will enable the calculator so you can add, subtract and perform other operations.

Templates

Another helpful feature included in Quickbooks is pre-made templates. Whether you are a contractor, accountant, business owner, etc., there’s probably an invoice template for you. But you don’t have to limit yourself to only using the invoice templates provided in Quickbooks. All of these templates can be edited and customized according to your liking.

Free enterprise is the backbone of this country’s economy. When a new business emerges, it creates needed jobs for the unemployed and keeps money flowing through the market. The government acknowledges the importance of small business and has a grant program in place to help new businesses get up on their feet.

Many people are unaware the grant program even exists for business owners, because it’s not advertised or spoken of often. But, there are dozens of different grants that you may be eligible for if you plan on starting a business, or if you already own one.

The amount of grant money you can receive for a business will vary depending on the requirements and type of grant you are applying for. You will never be responsible for paying it back and it can be used for such things as business licenses, overhead, company payroll, supplies, and any other business related expenses.

The process of applying for a business grant can be lengthy compared to other types of grants, such as school or college grants. To prepare for federal funding for your business, its important to get all your needed paperwork in order. This means going through your sales revenue, spending, projected sales, set goals, and time-line of the business. You may need other information if the grant application asks for it. Be sure to fully complete any and all grants you apply for.

When you think you have all, or most of the information pertaining to your business ready, its time to start applying for the grants. Remember, don’t limit yourself to one grant; apply for as many business grants as possible. It’s not uncommon to receive a grant to start your business and one to use for paying your employees.

During your application, be as honest and accurate as possible. A simple mistake on something like revenue could cost you the grant. It’s not a bad idea to have someone go over and proofread your application.

You may want to consider hiring a consultant to help identify your businesses needs and help find a government grant that your business would likely qualify for. This can be time-consuming and may cost a little extra, but compared to the payoff you’ll receive, it should be more than worth it in the long run.

If you do take the route of hiring a professional consultant, keep an open dialog with them. They will be your lifeline to knowing whats going on with your grant application process. Not only will they be there to guide you through, but they can answer any questions you have along the way.

If your business is related to research, community projects, or “going green”, you will be more likely to receive multiple business grants. The government realizes these types of businesses not only help the economy, but they help the community as a whole.

Starting and owning a business is no easy task. It takes time, effort, and money. Thankfully, though, grants are commonly given out to people just like you who are looking to start a business. It’s up to you to be proactive and find the information you need on applying for these free business grants.

Did you know that banks are charging for debit card transactions? This isn’t a new phenomenon, as they’ve been doing it for decades. However, recent federal laws may increase the amount of fees customers incur from using their debit card. If you have a bank checking account with a debit card, it’s important that you understand what these fees are and how they’ll affect you.

You may not realize it, but each time you swipe your debit card at a store or use it to make an online purchase, the retailer is charged a fee by the bank. If a store wants to have the ability to process debit or credit card transactions, they must pay the banks for its their use. For a while, fee amount charged by the bank was uncapped and was varied depending on the bank. It wasn’t until Obama signed into effect the Dodd-Frank Act which focused on protecting consumer’s rights and interests, one of which is placing a cap on how much banks could charge retailers and small businesses for processing credit and debit card transactions.

The Dodd-Frank Act may seem like a good idea on paper, but it’s a double-edged sword of sorts. Although it caps the fee banks charge retailers to use their cards, it’s also responsible for increasing the fees for cardholders. With less money charged to retailers and merchants, banks are looking for other methods to make up for this lost revenue, such as charging cardholders for using debit cards.

Not all banks are charging their customers for using their debit cards. Thankfully, it’s usually not a per-transaction fee either. Instead, banks are charging a flat monthly fee if their customers decide to use their debit cards. Bank of America is one such bank that’s now charging a flat $5 monthly fee to their debit card customers. Whether you make 1 transaction or 100, you’re still charged the flat $5 per month fee. Certain Wells Fargo locations are also charging their card holders a monthly fee of $3 for using their debit cards.

Both of the Wells Fargo and Bank of America debit card fee programs are new and considered to be in test mode. In fact, Wells Fargo is calling their program the pilot program. Because of this, we can expect to see some changes in the years to come. Even though they’re only charging a couple of dollars for customers to use their debit cards, it’s something that most people expect for free. Sure, the program might put some money into the bank’s pockets, but it will also turn away many potential customers.