Many small business owners prefer using paper systems to keep track of their finances. This can work well, but there’s really no need to soldier on with paper and pen when there are so many excellent online accounting services for business owners to use.
Here are just five advantages that come along with making the switch.
1. Reduced Costs
As a small business owner, you’ll want to make sure that your costs are kept low, and an online accounting service can help make that happen. You’ll usually be charged a low monthly fee for the service itself, but having everything easily spread out online will help reduce overall costs since accountants will be able to access more easily. Instead of having them spend time going through your paper receipts, everything will be collected online.
2. Improved Convenience
Money isn’t the only thing you’ll save by using an online accounting service. Many link directly to your business bank account, so you’ll often have payments recorded automatically instead of being forced to enter the information and perform calculations manually. Invoicing can also be tied to the online system, and several tasks can be automated.
3. Prevents Mistakes
One of the biggest risks that comes along with using a paper accounting system is finding that you’ve made a mistake in your calculations or entered a figure incorrectly. Such errors can be inconvenient at best, but you can also make fatal errors in cash flow projections and possibly report an incorrect income level when you do your taxes. Online services don’t eliminate the risk of errors, but automated data entry and calculations make them far less likely to occur.
4. Easier Accountant Access
Even with online software on your side, you should still keep using an accountant. After all, they will be able to help put together your tax return, sort out your deductibles and offer general financial advice. With an online service, you can give them the password to your account and let them take care of business from afar. That means fewer trips to see them and the option to have accounting work carried out quickly.
5. Data Protection
Perhaps most importantly of all, using an online accounting service will ensure that your data is never lost. It used to be that paper accounting methods were safer; after all, computers can crash and hard drives can be easily lost. However, online services sync your data to the cloud, so a backup will always exist.Read More
Do you own a small business? Read on and discover some of the different forms of working capital financing that you can select from when you need funds for your business activities.
Accounts Receivable Financing
Accounts receivables refer to the money that the companies to which you supplied goods or services owe your small business. Such unpaid sums can put a strain on your operations because you may lack capital to run other daily activities of your business.
It is possible for you to contact a financial institution so that the account receivables act as collateral for a working capital loan for your business. The financing company takes on some of the risk of collecting the receivables so that you can focus on producing goods or services for other clients.
Purchase Order Financing
Purchase order financing refers to capital financing given to a business so that the business can fund the execution of a large order that it has received. The funding agency examines the financial state of the client who made the order before releasing the funds to facilitate that order. This can save your small business from having to come up with collateral for other forms of business loans. Purchase order financing may attract little or no interest on the money borrowed since it is a short-term loan.
Production financing is ideal for small businesses that need funds in order to expand their manufacturing facilities. You may need to provide collateral so that a funding agency can help you to buy equipment or expand your facilities. However, the equipment or facilities that you acquire may serve as the collateral for that loan.
Contract financing is available for businesses that have entered into contracts to provide goods or services over a long period. This form of capital financing helps you to fund the day-to-day activities, such as paying salaries or buying office supplies as you meet your side of the contract before you can start receiving milestone payments for the goods or services that you have been contracted to deliver. This differs from purchase order financing because purchase order financing covers a single transaction after which you receive full payment.
As you can see, many capital-financing options are available to business owners. You need to contact your accountant for advice about which particular option is most suited to a specific business need. That expert will help you to avoid taking on debt that isn’t suitable for the financial health of your small business.Read More
When you are just starting up a technology business, it can be very important to find the right accountant. Not only can they help to minimise the tax you pay in the short term, but they can also help to keep a track of your expenses to minimise the tax bill if you do get bought out by a big investor.
Research and development (R&D) tax benefits
If your startup is in the technology field and is working on either generating new knowledge or processes and has an uncertain outcome, then you may be eligible for an R&D tax offset. This offset is for small companies and is designed to encourage businesses to embark on R&D. An accountant can help you to apply for the offset. It can be useful to get an accountant that specialises in startups as the offset application is a very specialised accounting task.
Setting up an easy to use accounting system
As you go through the life of your startup, you may accumulate a lot of costs. It can be easy to miss some of the amounts, particularly if you are self-funding and there is an overlap between personal and company funds. However, it’s important to keep a track of accounts and costs that you are using, as these can be used to offset your tax at a later date. Losses can be carried forward and offset against future profits in some cases, so you can use these early losses in later years as your business becomes more successful.
If you are working on multiple R&D projects it’s important to have a system that easily allocates costs between the projects. There are several great accounting systems that can be connected to smartphone apps, making it easy to keep a track of expenses and allocate them to the right project centre. This means that if you get an offer to buy or invest in one of your projects, you can easily describe how much money that your company has already invested into the project (including people related costs such as hours worked on each project by your staff).
If you would like some help in setting up your accounts for the maximum long-term benefit to your startup, it can be good to get advice from accountants who specialise in startups. They can give you specific advice depending on the nature of your business as well as your future plans for the business.Read More
With the online community growing by the day, more and more businesses are using this platform to streamline how they operate. You now can reach out to a host of individuals to provide you with services related to your business, no matter what industry you are part of. One of the services that more and more business owners are opting to outsource is accounting. The following are some of the reasons why you should outsource these services for your business’ accounting and bookkeeping needs.
Outsourcing accounting services is time and cost effective
One of the biggest benefits of outsourcing accounting services is that it is both time and cost effective. Having to stay on top of back-end office work can take time away from activities that could function toward increasing your business’ bottom line. Instead of having to keep tabs on your accounts as well as find ways to make more money for your business, you should task this responsibility to a qualified professional. Not only does this free up time for you to pursue other business matters, but you can rest assured the accounting process will go by faster since the individual you have hired is solely concentrating on bookkeeping and not other office-related matters.
A misconception some business owners have is that outsourcing accounting services would be more expensive than simply having their own staff doing it. What you may not be considering though is that having your own staff means putting them on a payroll. This translates into salary payouts on a monthly basis. If you would like to decrease your business’ operational costs, you should only opt to hire accounting services as you need them. This way, you are paying for what you require at any given time, no more and no less.
Outsourcing accounting services gives you access to the latest technology
Technology in the accounting business has grown in leaps and bounds. There are numerous state-of-the-art software programs that function to make this bookkeeping processes more accurate and efficient. Instead of having to invest in these software programs on a regular basis to stay up to date, you should simply outsource your accounting needs. Since these professional bookkeepers do this for a living, they have to ensure that they are not using outdated accounting procedures so as to keep up with the competition. This in turn ensures that you are getting quality, state-of-the-art services whenever you outsource your accounting needs.Read More
While many couples undergo marital counselling before they marry to discuss values, it can be just as important to have a joint financial planning session to make sure you have joint financial goals. Here are some of the issues that can be useful to cover.
These days many couples start married life with a variety of debts that they have accumulated before marriage, including credit cards, car loans, personal loans and other forms of debt. These need to be paid off and can affect the amount of money available for the joint budget as well as the amount available for lending for future ventures such as buying a house together. Before getting married, it’s good to have a discussion about whether debts accumulated before marriage will be paid out of joint funds or will remain the responsibility of the party that incurred them.
Housing and ongoing budgets
Housing can take a lot of money in a couple’s budget, particularly with the rising cost of housing in Australia. It can be useful to discuss where the couple wants to live and how much they would like to spend on housing, as well as whether they prefer to rent or by a home. This can naturally lead on to conversation about other lifestyle issues such as planning a household budget and discussing how much money should be spent on household expenses vs discretionary spending such as entertainment and holidays or savings and investments.
Finally, another important issue to discuss is who will inherit your estate if you pass away, and if you are happy for your spouse to take control of your financial matters if you are incapacitated but not yet dead. This can be a complicated issue if one party has more money than the other, or if one or both of you has dependent children from previous relationships. For example, you may wish that a shared house passes to your spouse, whilst financial assets pass to your children for their future upbringing. You may also want to leave money to charitable causes that you are passionate about or to other relatives.
Before you get married, it’s a good idea to do some financial planning and ensure that your financial goals and planning are aligned. This can prevent many later arguments about money and help ensure that you have many happy married years together with the same goals.Read More
Using a computer program to prepare your taxes may seem very simple, and of course it’s usually more affordable than hiring an actual accountant to guide you through tax season. However, when it comes to your money and especially preparing your taxes, you don’t want to only think of the cost of a program versus a professional; in the long run, it can save you money when you hire a professional to manage your taxes for you. Note why this might be true and why an accountant can often be the better choice, come tax season.
1. Red flags
A computer program may note something unusual or that isn’t in agreement with each section of your taxes, but they often cannot tell you if it seems that you aren’t making enough money according to the expenses you’re claiming, if you may have overlooked a deduction according to your filing from last year, and so on. An accountant who is familiar with your business, your family situation, and your taxes overall can often note different red flags that may warn you about deductions you shouldn’t be claiming or ones you’re overlooking. In turn, you might get a larger return or avoid penalties and fees.
A computer program cannot give you advice on how to save on your taxes. You may wonder if filing separately even when married may save you money or if you should be using a different accounting program for your business, and your only way of finding out if these things would be better with a computer program would be to go through each scenario with your taxes to see which results in the lowest tax bill. This can be cumbersome and time-consuming, and you may be missing out on other ways of saving money. An accountant can often know immediately the best way for you to file in order to save money and get the best return and can advise on how to manage your money in the coming year so that next year’s taxes are also as low as possible.
3. Financial reports
You can get different reports from a computer program, but they may not include everything you need if, for example, you’re looking to get a business loan for your home-based business or are looking to ask for a reduction in spousal support based on your income. An accountant will be able to give you a report with all the information you need. No matter your reasons for wanting a professionally prepared financial report after filing your taxes, an accountant is usually the better choice over a computer program.
With this information in mind, don’t hesitate to contact qualified accountants in your area the next time tax season comes around.Read More
Not every person will need a tax accountant to handle their tax returns every single year; if you have a regular job and your employer takes out taxes for you, it can be simple enough to just fill out the paperwork for your taxes and submit them by the appropriate deadline. However, not every person works a “regular job” and many people have other income, deductions, and plans for their money that can affect their tax returns, making them very complicated. Note a few signs that you may need a tax accountant this year and on into the future.
1. You have income from a foreign source
You may not think you have income from a foreign source if you work for an employer based in your own home country, but if you have stocks or shares in a company that is foreign and you receive a large dividend from those shares, this may be considered income from a foreign source. You may not even realize that certain companies in which you’re invested are foreign. A tax accountant will know what companies are not based in your home country and what other sources of income might be considered foreign. They will also know how to claim this income on your taxes so that nothing is overlooked or omitted.
2. You want to make a large charitable donation
When it comes to donating to a charitable cause or other similar organization, you may not even be thinking of the tax advantages you might enjoy. However, if you’re going to make the donation anyway, why not discuss how it can benefit you when it comes to your tax bill? The organization to which you donate, the way you donate, and other such details may affect your overall tax bill and have many advantages that could save you quite a bit of money every year.
3. You have business assets or property
Business assets or property may need to be depreciated so that you’re not overpaying on your tax bill. These assets can include anything from equipment and tools you use for a contracting or small construction business, to real estate and rental property. Rather than assuming you know how to claim these on your taxes or risking overlooking their depreciation in order to lower your tax bill, have a tax professional go over these items in detail and include them on your taxes for you.Read More