Accounting advice

Time 2020-12-29 23:08:33

Web Name: Accounting advice

WebSite: http://www.irishrovers.info

ID:150339

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Accounting,advice,

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There is a common misconception that the only people who can benefit from accounting services are businesses or wealthy individuals. Although there certainly are companies that are geared toward those markets, there are also many accountants who prefer to work with ordinary people regardless of their income or assets. The following services are some of the most popular offered by accounting firms for clients who fall into all income brackets:TaxesAlthough there are a number of software programs and online guides designed to help people file their taxes on their own, many consumers find it beneficial to consult with a tax specialist in person instead. Having a qualified accountant help you with your taxes helps ensure that you aren t missing out any on deductions or savings. A good accountant can also make sure you are paying enough money throughout the year so that you don t wind up owing a fortune at tax time. Typically accountants charge based on how complex the return is to complete. That means that if you have a relatively straightforward return, you probably won t have to pay a lot of money for professional advice.Oftentimes tax preparers will also represent you for free if the IRS audits a return that they prepared. Knowing that you have a qualified professional by your side can help relieve some of the stress of being audited.Estate PlanningPlanning for what happens to your assets after you die is essential if you want to make sure that your family members and loved ones are cared for after you are gone. Most accounting services help with estate planning, providing assistance in determining how best to distribute your assets. They can also work with you to assign executors or take care of other end-of-life financial planning. Although thinking of your death can be unpleasant, the peace of mind that you can get from knowing that your family will be cared for makes it worthwhile.Retirement PlanningRegardless of how young or old you are, it is never too soon to start planning for your future. A good accountant will be able to advise you on how best to put away money for retirement. This advice can vary greatly from one person to the next, depending on each person s unique financial situation. For instance, someone with young children may need to invest their money far differently than someone who is preparing for retirement in the next couple of years. A qualified accounting firm can help you evaluate your current finances to determine how best to get where it is you want to go in terms of your financial future. They can recommend certain investment techniques that may help you grow your money more quickly, without jeopardizing your savings.Budgetary AdviceIf you are struggling to make ends meet, an accounting service can help you develop a realistic budget. Not only that, but they can also help you plan for how to reduce or eliminate any debt that you may have. Likewise, if you are currently being harassed by collection agencies, they can talk to them on your behalf to work out payment arrangements or other financial settlements.Individual people can benefit from accounting services just as much s businesses can. Regardless of your own personal financial needs, the right accounting firm should be able to help. The more time and effort you can put into planning your financial future, the more likely you are to attain your goals.Whether you want to start a career in the financial sector or you want to improve your knowledge and move to another department within your own company, taking an accounting course can give you valuable insight, offering you a range of benefits.Accounting courses are offered to private individuals and companies who are looking to gain knowledge and skills when it comes to basic bookkeeping and accounting tasks. These courses are taken by company owners and employees, helping them understand the financial standing of a company with ease and confidence.The first benefit to choosing an accounting course is the career prospects. With a certificate in hand, you can increase your chances of being accepted for a promotion within your own company. In the event you are changing careers or have just finished school and looking for a career, having an accounting course accredited certificate can give you the added boost you need to secure the place moving forward.Next you will find that you can work in just about any industry. Most companies, especially larger companies, have their own bookkeeping or accounting department. This gives you the chance to find an industry that interests you and work within that industry whether it s a manufacturing company, a retail company or even the financial sector.The accounting course is something you can use at home to manage your own finances effectively and help you save money where possible to using it within the working environment, whether you own your own company or you are working in an accounts department of another company.The course give you working knowledge of accounts. This will help you with statements, invoices, payments, general ledgers, profit and loss statements, salaries and more. You can use the knowledge you learn in the course and join it into your working day without delay.To find the right course for you, there are a few steps you may want to take to make sure you choose the highest quality accounting course to help you make your financial goals moving forward. With the right course behind you, you can improve your own productivity and with working knowledge, you can enjoy what you do each and every day.Start online. The internet is brimming with information and you can find a handful of training companies offering accounting courses in your local area. Choose a minimum of three training centres, so you can review each one in detail and then compare them against each other.A little tip. When reviewing the training company, don t rely on what you read on their website alone. Ensure you conduct your own independent research by typing their name into your search engine, going through the results and finding online forums and independent review sites where you can read the feedback from current and past students. This can help you narrow down your search to that one training specialist you feel will give you the best learning experience.Look at the courses provided by the centre. Not all accounting courses are the same. You want to find what you will learn in each of the courses and then choose the one you feel is going to be the best match based on your unique learning requirements.Look at the dates of the courses to ensure that they meet your time frame. If you are working full-time you may need to arrange to take a day or two off for the course. In class courses will provide you with one on one training, helping you understand the syllabus with ease.One might be led to believe that profit is the main objective in a business but in reality it is the cash flowing in and out of a business which keeps the doors open. The concept of profit is somewhat narrow and only looks at expenses and income at a certain point in time. Cash flow, on the other hand, is more dynamic in the sense that it is concerned with the movement of money in and out of a business. It is concerned with the time at which the movement of the money takes place. Profits do not necessarily coincide with their associated cash inflows and outflows. The net result is that cash receipts often lag cash payments and while profits may be reported, the business may experience a short-term cash shortage. For this reason, it is essential to forecast cash flows as well as project likely profits. In these terms, it is important to know how to convert your accrual profit to your cash flow profit. You need to be able to maintain enough cash on hand to run the business, but not so much as to forfeit possible earnings from other uses.Why accounting is neededHelp you to operate better as a business ownerTo succeed, your company must be profitable. All your business objectives boil down to this one simple fact. But turning a profit is easier said than done. In order to boost your bottom line, you need to know what s going on financially at all times. You also need to be committed to tracking and understanding your KPIs.What are the common Profitability Metrics to Track in Business key performance indicators (KPI)Whether you decide to hire an expert or do it yourself, there are some metrics that you should absolutely need to keep tabs on at all times:Outstanding Accounts Payable: Outstanding accounts payable (A/P) shows the balance of cash you currently owe to your suppliers.Average Cash Burn: Average cash burn is the rate at which your business cash balance is going down on average each month over a specified time period. A negative burn is a good sign because it indicates your business is generating cash and growing its cash reserves.Cash Runaway: If your business is operating at a loss, cash runway helps you estimate how many months you can continue before your business exhausts its cash reserves. Similar to your cash burn, a negative runway is a good sign that your business is growing its cash reserves.Gross Margin: Gross margin is a percentage that demonstrates the total revenue of your business after subtracting the costs associated with creating and selling your business products. It is a helpful metric to identify how your revenue compares to your costs, allowing you to make changes accordingly.Customer Acquisition Cost: By knowing how much you spend on average to acquire a new customer, you can tell exactly how many customers you need to generate a profit.Customer Lifetime Value: You need to know your LTV so that you can predict your future revenues and estimate the total number of customers you need to grow your profits.Break-Even Point:How much do I need to generate in sales for my company to make a profit?Knowing this number will show you what you need to do to turn a profit (e.g., acquire more customers, increase prices, or lower operating expenses).Net Profit: This is the single most important number you need to know for your business to be a financial success. If you aren t making a profit, your company isn t going to survive for long.Total revenues comparison with last year/last month. By tracking and comparing your total revenues over time, you ll be able to make sound business decisions and set better financial goals.Average revenue per employee. It s important to know this number so that you can set realistic productivity goals and recognize ways to streamline your business operations.The following checklist lays out a recommended timeline to take care of the accounting functions that will keep you attuned to the operations of your business and streamline your tax preparation. The accuracy and timeliness of the numbers entered will affect the key performance indicators that drive business decisions that need to be made, on a daily, monthly and annual basis towards profits.Daily Accounting TasksSince cash is the fuel for your business, you never want to be running near empty. Start your day by checking how much cash you have on hand.Weekly Accounting Tasks2. Record TransactionsRecord each transaction (billing customers, receiving cash from customers, paying vendors, etc.) in the proper account daily or weekly, depending on volume. Although recording transactions manually or in Excel sheets is acceptable, it is probably easier to use accounting software like QuickBooks. The benefits and control far outweigh the cost.3. Document and File ReceiptsKeep copies of all invoices sent, all cash receipts (cash, check and credit card deposits) and all cash payments (cash, check, credit card statements, etc.).Start a vendors file, sorted alphabetically, (Sears under S , CVS under C, etc.) for easy access. Create a payroll file sorted by payroll date and a bank statement file sorted by month. A common habit is to toss all paper receipts into a box and try to decipher them at tax time, but unless you have a small volume of transactions, it s better to have separate files for assorted receipts kept organized as they come in. Many accounting software systems let you scan paper receipts and avoid physical files altogether4. Review Unpaid Bills from VendorsEvery business should have an unpaid vendors folder. Keep a record of each of your vendors that includes billing dates, amounts due and payment due date. If vendors offer discounts for early payment, you may want to take advantage of that if you have the cash available.5. Pay Vendors, Sign ChecksTrack your accounts payable and have funds earmarked to pay your suppliers on time to avoid any late fees and maintain favorable relationships with them. If you are able to extend payment dates to net 60 or net 90, the better. Whether you make payments online or drop a check in the mail, keep copies of invoices sent and received using accounting software.6. Prepare and Send InvoicesBe sure to include payment terms. Most invoices are due within 30 days, noted as Net 30 at the bottom of your invoice. Without a due date, you will have more trouble forecasting revenue for the month. To make sure you get paid on time, always use an invoice form that contains the right details such as payment terms, itemized charges, and your payment address.7. Review Projected Cash FlowManaging your cash flow is critical, especially in the first year of your business. Forecasting how much cash you will need in the coming weeks/months will help you reserve enough money to pay bills, including your employees and suppliers. Plus, you can make more informed business decisions about how to spend it.All you need is a simple statement showing your current cash position, expected cash receipts during the next week/month and expected cash payments during the next week/month.8. Executive Dashboard (weekly review)This dashboard gives you a snapshot of your operations on a weekly basis.It consist of Cash on Hand, Cash burn rate, Account Receivables, Accounts Payable, Items sold, Inventory on Hand, inventory turns, outstanding issues in the business, and gross profit margin, new sales wins, customer losses, customer service performance, on time delivery rate and product quality performance.Monthly Accounting Tasks9. Balance Your Business CheckbookJust as you reconcile your personal checking account, you need to know that your cash business transaction entries are accurate each month and that you are working with the correct cash position. Reconciling your cash makes it easier to discover and correct any errors or omissions-by you or by the bank-in time to correct them.10. Review Past-Due ( Aged ) ReceivablesBe sure to include an aging column to separate open invoices with the number of days a bill is past due. This gives you a quick view of outstanding customer payments. The beginning of the month is a good time to send out overdue reminder statements to customers, clients and anyone else who owes you money.At the end of your fiscal year, you will be looking at this account again to determine what receivables you will need to send to collections or write off for a deduction11. Analyze Inventory StatusIf you have inventory, set aside time to reorder products that sell quickly and identify others that are moving slowly and may have to be marked down or, ultimately, written off. By checking regularly (and comparing to prior months numbers), it s easier to make adjustments so you are neither short nor overloaded.12. Process or Review Payroll and Approve Tax PaymentsWhile you have an established schedule to pay your employees (usually semi-monthly), you need to meet payroll tax requirements based on federal, state and local laws at different times, so be sure to withhold, report and deposit the applicable income tax, social security, Medicare and disability taxes to the appropriate agencies on the required dates.Review the payroll summary before payments are disbursed to avoid having to make corrections during the next payroll period. A payroll service provider can do all this to save you time and ensure accuracy at a reasonable cost.13. Review Actual Profit and Loss vs. Budget and vs. Prior YearsEach month, take the time to review your budgeted expenses and compare them to what you have actually spent. Are you spending above or below budget? Discuss the variances and take action as neededYour profit and loss statement (also known as an income statement), both for the current month and year to date, tells you how much you earned and how much you spent. Measure it against your budget every month (or quarter). Comparing your actual numbers to your planned numbers highlights where you may be spending too much or not enough, so that you can make changes.If you have not prepared a budget, compare your current year-to-date P L with the same prior-period year-to-date P L to identify variances and make adjustments.14. Review Month-End Balance Sheet vs. Prior PeriodBy comparing your balance sheet at one date-June 30, 2015, for example-to a balance sheet from an earlier date (December 31, 2014), you get a picture of how you are managing assets and liabilities. The key is to look for what is significantly up and/or down and understand why. For example, if your accounts receivable are up, is it due to increased recent sales or because of slower payments from customers?Quarterly Accounting Tasks15. Prepare/Review Revised Annual P L EstimateIt s time to evaluate how much money you are actually making, whether your net assets are going up or down, the difference between revenues and expenses, what caused those changes, how you are spending profits, as well as identifying trouble spots, and making adjustments to improve sales and margins.16. Review Quarterly Payroll Reports and Make PaymentsYou have been reviewing your semi-monthly payroll reports. However, the IRS and most states require quarterly payroll reports and any remaining quarterly payments. Again, it s best if your payroll service provider completes these reports and files them. Your job is to review to make sure they appear reasonable.17. Review Sales Tax and Make Quarterly PaymentsIf your company operates in a state that requires sales tax, make sure you comply to avoid serious penalties. The U.S. Small Business Administration (SBA) can help you determine your state tax obligations.18. Compute Estimated Income Tax and Make PaymentThe IRS and states that have income taxes require you to pay estimated income taxes. Review your year-to-date P L to see if you owe any estimated taxes for that quarter. Your tax accountant can assist if necessary.Annual Accounting Tasks19. Review Past-Due ReceivablesNow it s time to check significant past due receivables and decide whether you think customers will eventually pay, whether to send past due bills to a collection agency or whether to write them off for a deduction.20. Review Your InventoryReview your current inventory to determine the value of items not sold. Any write-down of inventory translates to a deduction on your year-end taxes. If you do not write down unsellable inventory, you are overstating your inventory balance and paying additional taxes that you don t owe.21. Fill out IRS Forms W-2 and 1099-MISCThe IRS has a January 31 deadline that requires you to report the annual earnings of your full-time employees (W-2s) and most independent contractors (1099s). This deadline includes mailing copies of the tax forms to the people who worked for you. Note: A 1099 form is not required for any contractors who earned less than $600. Consider saving time and avoiding errors with an e-filing service.22. Review full-year financial reports for tax reportingAt tax time, carefully review your company s full-year financial reports before giving them to your accountant. Before you sign your return, be sure to review it for accuracy based on your full-year financial reports. Remember if IRS audits due to underpayment, they will deal with you not your accountant for any additional taxes, penalty and interest.If you don t have the bandwidth to do all this yourself, a great strategy is to partner with a monthly accounting service. Outsourcing your accounting to an expert will simplify your life and give you more time to focus on running your business operations.A monthly accountant will provide you with a profit and loss sheet, balance statement, and accurate account reconciliation every month, ensuring that you have the financial information you need to make the best choices for your company.

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