Monthly Archives: January 2017

Reality of small business owners in accounting

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Reality of small business owner in accounting

If you own a business, you need to settle all the necessary details that you need to accomplish with regard to the nature of your business, part of what to settle with is the account record of the business.

To handle the account record of your business, you need the reality of an accountant that is; you need the assistance of an accountant to do the job for you. Though, some self business owner can file their tax returns even without the help of an accountant, this may be applicable in some ways, but hiring an accountant is more productive than doing it on your own.

An accountant is more than what you think of what he or she can do to your business. Looking for the right accountant will not only save you money, time and effort but he or she can also help you to manage and smoothly organize your business.

Accounting has bring about many reality to our business today, apart from the issue of keeping a good business account record, they open the eyes of business owners to mistakes commonly made during managing their business and when conducting their marketing and how to avoid these mistakes and move forward.

Here are five point realities of small business in accounting and why business owners should hire the service of an accountant when it comes to keeping good account record:

Make Documentation Faster: Hiring the service of an accountant can save you more time and effort than doing it on your own. Business owners need an accountant to make things fast in doing the documentation that needs to be done over the Revenue & Expenditure in order to keep on with the level of income rate. Without the help of an accountant, you can miss important deadlines of legal documents.

Save More Money: Having an accountant will also save you more money. If you think that you can do it with yourself, an accountant can guarantee you that you will pay less in all possible aspects with regard to your tax returns and other accounting chores.

Expand Business: They can also help you expand your business. Aside from doing paper works and minimizing your tax bill, they can also give you best advice in order for you to expand your business and how to become a successful businessman as they organize all the aspects when it comes to managerial and financial status of your business.

Prepare Business Budget Ahead-Time: Another reality of accounting to business owners is they can help you to prepare your business plan ahead of time. Remember that a well-organized business plan is your gateway for both short and long-term goals of your business. Also, if you employ them, you will also be up to date on all the latest level of tax laws in which you cannot pay attention if you will do all the works in your business.

Scaling High in the Labour Market: Lastly, they can help you scaling at the apex of your business career and be at the forefront in the labour market. When you have a balanced account record, there is no cause for any alarm on financial disasters and this open a way for your business to attain and achieve your financial ambitions.

What should be helpful for small business owners

Basically, accounting is one major thing that is much helpful for small business owners, apart from good marketing, sound and good accounting system as a long way to go in determining how much the business spends and realize over time. As small business owners all hands must be on desk; we need to market and keep a good account record of our business so as to reach and achieve the preset goals of the business.

A business is prone and vulnerable to shrivel up and die without marketing and buoyant account record. So, it is imperative and helpful that we do that which is right by keeping a broad eye on the business accounting system by getting a competent accountant to handle the business accounting system.

Actually, when people think of accountants, what comes into their head is the image of someone sitting at a desk having piles of papers in front of him/her and completing tax returns, yes! But they are way more helpful to the growth of our business than we think. More so, there work has integrated to more cumbersome duties; it’s a new era with new insight.

As a business owner, having a competent and expert accountant to handle your account is the best idea. Apart from the accounting service rendered by an accountant, they can be more helpful to your business in ways like:

  • Pre-start-up business advice: An experience accountant can be helpful in giving you expert advice on 60% of what you need in all areas of kick-starting your business, ranging from tax advice to managing your expenditure.
  • Give advice on raising finance: The degree of your profitability is greatly determined by the way in which you finance your business. An accountant can be helpful in term of giving advice on such things as whether new equipment should be leased or purchased or to issue more shares, whether to take out a loan or increase your overdraft and how to go about investing with you profit manageably.
  • Give advice on running and managing a business: As a business owner already or still thinking on getting one started. An accountant can help you out on what would work best for you in any situation you find yourself.
  • Look after the finances and tax – keeping a good record is an essential requirement for monitoring the financial status of your business. It is the obligation of an Accountant to suggest the most efficient and practical way for you to keep your financial records intact and will also do for you.
  • Planning and managing growth – a good accountant should be able to help you grow your business which will cut back on expenses. Looking at your financial records and data, they will pinpoint exactly where you are spending too much money help adjust. Most Accountants would stop here, though. But if you find a really good one, you will be advised on how you can use extra financing to grow your business larger.

Indeed, accounting is one major determinant of any successful business owner as it is greatly needed and helpful for any kind of business venture.

 

 

 

 

 

 

 

Why do small business owners have to do accounts?

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Accounting Needs For Small Business

It is obvious that most small business owners don’t give much thought to their account record when they start their business venture, they don’t think about the accounting much at all. They only think about running the business and how to make cash. Poor financial records are the reason many small businesses fail today. Indeed, keeping accurate and timely account records for your business is important.

The most important need of accounting for business owner is to be successful over their business and to be able to answer rising questions like: how is the business is doing? Is money flowing in from the business? Have you been charging enough for your products and services? How have you been keeping up with your expenses?

Accounting is for Small Business Owners, not only for corporates

Virtually speaking, many small business owners today have no idea on how their business is really doing. Some believe as much as cash is in the bank, their business is doing well, honestly speaking; this may not be a good assumption. And if bad financial decision is made and you didn’t realize not until the end of the year, I’m afraid it may be too late to recover from such an expensive mistake.

Another need of accounting to business owner is that, it helps you to know if you are pricing your product or service accurately or not. Knowing the correct price to charge may be one of the most important decisions you make in your business wrongly and this greatly affects the income rate of your business; you charge too much and you may end up losing business to your competitors, you charge too little and you may price yourself right out of the business scope. All you need do is to make sure you price your product or service high enough to cover all of your costs-prices as well as costs that might not directly go into your product, such as: loan costs, insurance costs, supply costs, and so on.

A business owner needs accounting in a bid to apply for a business loan. It is certain that you will be asked to supply your financial statements to the financial institution so they can determine if you will or not be able to pay the loan back. And if you have to take time to update your financial records before you can apply for a loan you could definitely miss out on a business opportunity.

Accounting must be done properly to be compliant

Accounting is needed to prepare your tax return that you may have good business records as poor records can result in missed tax deductions and therefore higher taxes. Having good records and preparing your taxes will be way faster and a lot easier. Similarly, when you pay a tax preparer to complete your return poor records could result in higher fees as it will take the tax preparer longer time to file your tax return accurately.

More importantly, good records can save your time and money in your business firm. You are most respected when you are working on profitable activities especially getting the sale or delivering the service.

Accounting is very important and much needed to save time and help make more income. Luckily, the key is to keep accurate, timely business account records so as to always know where your business stands and you’ll never have to miss out when businesses are available.

Benefits of Keeping Good Account Record

Ordinarily, it may seem like a hassle or some kind of difficult chore, but keeping good account record is one of the best decisions you need to make when it comes to being successful at your business. Speaking the fact, keeping accurate and up-to-date records can provide you with a long list of advantages and benefits such as keeping your business running smoothly, and staying out of financial troubles of any kind.

Here are some benefits of keeping good account records:

Healthy Financial Stand: As a business owner, keeping good records can help you maintain healthy financial stand and put your business in a good order. Indeed, this is just one of the various benefits good records keeping and monitoring our account provides you with.

Easy Retrieval of Longtime Information and Data: Another benefit of keeping good account record is to ensure accurate records and to keep track of all aspects of their business. It enables you to refer back to previous records and compare them to current records, which makes you to monitor and know whether or not the business is improving, maintaining or running at loss. This supply needed information to keeping the owner informed and allows them to determine where to make improvements if business seems to be falling. It is a great avenue to making your business successful or saving your business from crashing.

Allocation of Prices and Record Purchases: Monitoring and keeping good business account record also enables the business owner to keep track of purchases. That is, the business owner will record items purchased to resell to their customers at a particular profitable price. It is very vital to keep documents, it portrait how much you paid for each product and how much of the product you have purchased and help to allocate your selling price accordingly. The record also includes: bank statements, voided checks, receipts, invoices, and credit card receipts or statements. Keeping track of these transactions throughout the year all along helps the business owner to determine their inventory at the end of each year.

Maintain Revenue And Expenditure: One more important benefit to keeping good account records is that it helps to keep track of your expenses. The expenses you incur are the costs of your business such as rent, supplies, or purchasing business licenses, you need to keep good account of these documents in order to keep your business up and running. Keeping good record of all of these documents is how you track where and how your money is being spent.

In case your business has a petty cash account, you should keep specific records about the spending activities also ensure that your business account record contains a place to record gross receipts. At times, some business owners are required to travel in the course of doing business; this fact makes it imperative and creates the need to keep track of all their expenses each time they travel. These expenses include their lodging bills, meal bills, mileage, etc when away on the journey.

Promote Business and Guarantees Lasting Business Life-Span: Finally, maintaining good business account records promote and guarantees a lasting life-span of your business venture. It is the defining factor of whether or not a business succeeds. Accounting makes it easy for buyers to maintain good, up to date records as this shows the financial history of your business. During tax collection, it will be very easy to claim tax deductions by when you have complete, orderly account records. As small business owner it is very crucial for you to do account as it will help your business succeed.

Thesimplest form of accounting and bookkeeping for small business owners

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Simple Small Business Accounting and Bookkeeping

Bookkeeping refers to recording financial transactions such as sales and payments. Although, many small businesses skip this process to focus on their sales and only at the end of financial year they make rough financial statements, it is one of the most important aspects in a business especially when you aim to improve your profit with limited resources. Despite the importance of this tool, small businesses neglect it altogether due to the time and efforts it takes. This is the reason why a moving company does not count it as an optional activity.

Accounting is for Business

The basic reason for bookkeeping is to manage the finances of a business. Bookkeepers who record daily transactions can determine which sources of income should be collected, and which expenditures should be made. In today’s world, bookkeeping can prevent small businesses from being conned as well as ensure the smooth flow of cash into the business.

Another reason for bookkeeping is that it is the first step to full-fledged accounting. Without the transactions being recorded, the generation of cash flow and income statements will be difficult. As a result, analyzing financial data for a business’ growth will become impossible. Additionally, since accounting statements won’t be seen, then the business may have trouble getting an accurate picture of its taxes.

Single entry or Double entry? Basics of Bookkeeping

If you are the owner of a small business, you should make use of bookkeeping. There are two systems which you can choose from: the single entry bookkeeping system and the double entry bookkeeping system. The first method is most suitable for your business since you only record income and expenses. As for the second method, transactions are recorded twice using debits and credits.

If you don’t want – Bookkeeping Services do the work

Are you looking for a reliable and cheap bookkeeper? Locating an expert bookkeeper is neither difficult nor complex these days, you as owner of a small business; you can as well outsource for a bookkeeper. The main reason why you want to outsource is because you want to pay them for the services you needed from them and if you employ a full-time bookkeeper then you will not only pay them for keeping your books but also provide them with other staffing needs as demanded by the law. Ref: The detailed reasons and benefits of hiring accounting services

These include paid leaves, performance reviews, bonuses, health insurance, on-the-job training and safe working facilities and conditions. All these obligations will make you incur costs that you can easily avoid via bookkeeping outsourcing. This is because of the fact that you will simply assign work to an independent contractor who already possesses their resources. Uncontrollably rising office overheads is a major managerial problem faced by most owners of start-up businesses.

Small businesses don’t have resources to waste. Use outsourcers

Did you know that employees are among the most expensive assets your business has? If you want to see costs declining, gradually, try farming out some of the tasks they do for you. To be specific, do bookkeeping outsourcing first. Among all your employees, bookkeepers and accountants are perhaps earning the highest salaries. If you combine their total monthly rates with their mandatory staffing needs, you are probably spending more money than your new business can afford. Remember that failure to pay employees’ salaries might attract strict industrial court measures against you.

So, whether you get new contracts, the law requires you to take care of your workers. If caring for your internal bookkeeper has become difficult, try bookkeeping outsourcing for a change. By doing so, you will have power to hire an external accountancy firm when it is really needed. When business is slow, you can keep your books and avoid spending any money. This clearly shows that substituting your internal accounting staff for independent accounting companies is a very prudent decision.

Since you will entrust a third party with your accounting work, you will no longer waste time dealing with problematic employees. When it comes to bookkeeping outsourcing, you can request part-time or full-time services. In addition, you could buy one or more services. Some of the services offered include reconciliation of bank statements, creditors and petty cash. An outsourced bookkeeper will also follow up debts payable and debts receivable on your behalf.

Doing daily helps your business and reduces cost of accounting and bookkeeping

The most conventional way to record transactions is by using daybooks, petty cash books, journals and ledgers. Each of these records transactions in different ways, so you should use all of these in your business. However, if you prefer less hassle and a paperless working environment, you can opt for computerized bookkeeping.

After locating the right accounting company to assign books to, you will just do what you are asked to do. Modern bookkeeping outsourcing services are rendered quickly via software tools. Instead of buying these tools, and spending time to learn how to use them, you should let the experts handle it for you. Since they update books every day, they are more experienced than most part-time bookkeepers.

Besides, a company uses a large team to finish a lot of work in the shortest time possible. When you try Bookkeeping Outsourcing, you will soon forget about piling accounts because your bookkeeper is too busy or inexperienced. The rules of outsourcing are simple as all you need is a company to form a contract with. After agreeing on all important matters, the firm will take over your accounting matters and let you have more time to run other affairs.

 

No matter how small your business is but it is best not to ignore this task, or do it with half-hearted attempts. Both these options are a mistake. If you think you are not good enough to balance your bank account, then you can hire professional help.

With professional making monthly financial statements, you will exactly know where your money is going. This makes things easy. After all, you will have to show your financial records to lenders or investors whenever you seek grants or want financing for your business.

Moreover, you need to have exact details to manage the financial health of your company. You must know if there are customers in debts, or if you have over-burdening balances on your lines of credit. Without proper records, you simply cannot manage the cash flow of your business. Certainly bookkeeping is a way to make sure that your business’s financial house is in good shape.

Outsourcing is investment, generating return for small business with scarce resources

An accurate bookkeeping improves the ability of businesses to focus on business growth while simultaneously curtailing risks and costs. Obviously, there are many Bookkeeping Outsourcing Firms that work for small and medium businesses worldwide. The process of bookkeeping is simple and actually keeps your business in order. All you need is to put aside some of your time for it, and you can notice how your business will flourish.