As a small business owner, it’s essential to understand the concept of debt and its implications thoroughly. Good debt refers to borrowing money to invest in activities that will generate positive returns for your business in the long run, such as purchasing equipment, hiring additional staff, or expanding operations. On the other hand, bad debt represents borrowing money for expenses that do not contribute to your business’s growth and can result in long-term financial troubles. Therefore, it is vital to manage your finances prudently and use debt as a tool to fuel your business’s growth rather than a burden that impedes your progress.
Understanding Debt
Good debt
Good debt is typically used to invest in assets that will generate a return on investment, such as property, equipment, or inventory. These assets can help your business grow and increase revenue over time. Additionally, good debt often comes with lower interest rates and longer repayment periods, making it more manageable for your business.
Bad debt
Bad debt, on the other hand, is typically used to fund expenses that don’t provide a long-term benefit to your business. This might include things like credit card debt used to cover day-to-day expenses or loans taken out to pay off other debts. Bad debt often comes with high-interest rates and short repayment periods, which can make it difficult to manage and pay off.
So, what are the most important tips for managing your small business finances? Here are a few to keep in mind:
Create a Budget and Stick to It
One of the most important things you can do as a small business owner is to create a budget and stick to it. This will help you track your expenses and ensure that you’re not overspending in any one area. Make sure to include all of your expenses, including debt payments, in your budget.
Prioritize Debt Repayment
If you have debt, make sure to prioritize repayment. Focus on paying off high-interest debt first, as this will save you money in the long run. Additionally, consider consolidating your debt into a single loan with a lower interest rate to make it more manageable.
Use Credit Wisely
Credit can be a powerful tool for small business owners, but it’s important to use it wisely. Make sure to only use credit for expenses that will benefit your business long-term, and avoid using it to cover day-to-day expenses.
Build an Emergency Fund
Unexpected expenses can arise at any time, so it’s important to have an emergency fund in place. This will help you cover unexpected expenses without having to rely on credit or other forms of debt.
Seek Professional Advice
If you’re struggling to manage your finances, don’t be afraid to seek professional advice. A financial advisor or accountant can help you create a plan to get your finances back on track and ensure that you’re making the most of your resources.
Summary
Small business owners face various challenges when it comes to managing their finances. It’s essential to have a clear understanding of the difference between good and bad debt. Good debt, such as loans for business expansion, can help grow your business, while bad debt, such as high-interest credit card debt, can damage your financial health. Creating a budget is another crucial step in managing your finances, as it helps you keep track of your expenses, income, and cash flow. Prioritizing debt repayment is also crucial, as it helps you pay off high-interest debts first and avoid accumulating more debt. Moreover, using credit wisely can help you avoid unnecessary debt and build your credit score. Building an emergency fund is another important step, as it provides a financial cushion during unexpected situations. Finally, seeking professional advice from a financial expert can help you make informed decisions and avoid costly mistakes. By following these tips, you can effectively manage your small business finances and ensure that your business is on the right path to success.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Social Security in the United States: A Complete Guide to Benefits, Eligibility & Strategic Claiming
Social Security in the United States is a federal program providing retirement, disability, survivor, and supplemental income benefits to eligible workers and their families, funded by payroll taxes and based on your earnings history. The program serves over 72.9 million Americans—more than one-fifth of the entire U.S. population—delivering monthly payments that average $2,015 for retired workers, $1,580 for disabled workers, and varying amounts for survivors based on family composition.
As the founder of Complete Controller, I’ve spent over 20 years working alongside entrepreneurs and retirees, watching countless clients navigate Social Security decisions that directly impact their financial futures. My team and I have discovered that understanding these benefits early—and integrating them with proper bookkeeping practices—can add tens of thousands to your lifetime income. This article breaks down the essential components of Social Security, from eligibility requirements and benefit calculations to strategic claiming decisions and common pitfalls, giving you the knowledge to maximize your benefits while avoiding costly mistakes.
What is social security in the United States and how do you navigate it?
Social Security provides retirement benefits (age 62+), disability coverage, survivor support, and supplemental income to qualified Americans through payroll tax funding
Retirement benefits start at age 62 with reductions, reach full value at full retirement age (66-67), and increase 8% yearly if delayed to age 70
Disability benefits require recent work credits and strict medical criteria; SSI assists low-income individuals regardless of work history
Survivor benefits support spouses, children, and dependents based on the deceased worker’s earnings record
Benefits include annual cost-of-living adjustments—2.8% for 2026, adding approximately $56 to average monthly payments
What Are Social Security Benefits in the United States?
Social Security operates as the nation’s most comprehensive social insurance program, touching nearly every American family through its multi-faceted benefit structure. The system distributes five primary benefit types: retirement income for workers age 62 and older, Social Security Disability Insurance (SSDI) for those unable to work due to severe medical conditions, Supplemental Security Income (SSI) for low-income aged or disabled individuals, survivor benefits for families of deceased workers, and dependent benefits for qualifying family members.
The program’s massive scale demonstrates its central role in American financial security. Currently supporting 72.9 million beneficiaries with 93% of the workforce contributing through payroll taxes, Social Security processes approximately 6 million new benefit awards annually. Monthly payments vary significantly by benefit type and individual circumstances:
Retired workers average $2,015 monthly
Disabled workers receive approximately $1,580
Widow(er)s with two children can receive up to $3,761
SSI recipients average $698 for individuals, $1,048 for couples
Spousal benefits range from 32.5% to 50% of the worker’s amount
Eligibility Requirements for Social Security in the United States
Qualifying for Social Security requires meeting specific work history, age, and status criteria that vary by benefit type. The foundation of eligibility rests on earning work credits through employment covered by Social Security taxes—you can earn up to four credits annually, with 2025 requiring $1,810 in earnings per credit.
Retirement eligibility
Standard retirement benefits demand 40 work credits (typically 10 years of covered employment) and reaching age 62. Your full retirement age depends on birth year: 66 for those born 1943-1954, gradually increasing to 67 for anyone born 1960 or later. While you can claim as early as 62, benefits permanently reduce by up to 30% compared to waiting until full retirement age.
Disability and SSI rules
SSDI eligibility requires both a qualifying disability and sufficient recent work history—generally 20 credits earned in the last 10 years, though younger workers need fewer. The Social Security Administration applies a strict five-step evaluation process, requiring proof that your condition prevents any substantial gainful activity for at least 12 months.
SSI operates differently, focusing on financial need rather than work history. Individuals must have limited income (below $943 monthly in 2025) and resources (under $2,000 for individuals, $3,000 for couples) while being 65 or older, blind, or disabled.
Family and noncitizen qualifications
Spouses, divorced spouses (married at least 10 years), and children under 18 can receive benefits based on a worker’s record without earning their own credits. Noncitizens must have lawful permanent resident status and either 40 credits or qualifying military service, with special rules for refugees and asylees.
How Social Security Benefit Amounts Are Calculated in the United States
Your Social Security payment depends on a complex formula using your 35 highest-earning years, adjusted for wage inflation to create your Average Indexed Monthly Earnings (AIME). The Social Security Administration converts AIME to your Primary Insurance Amount (PIA) through bend points that provide higher replacement rates for lower earners—90% of the first $1,226, 32% of amounts between $1,226 and $7,391, and 15% above that threshold in 2025.
Early vs. Delayed claiming impact
Timing dramatically affects your monthly benefit amount. Claiming at 62 with a full retirement age of 67 reduces benefits by 30%, meaning you’d receive only 70% of your PIA. Conversely, delaying past full retirement age earns delayed retirement credits of 8% annually until age 70, potentially increasing benefits by 24% to 32% depending on your birth year.
Recent behavioral shifts validate delay strategies—since the mid-1990s, average claiming age has risen from 63 to 65, with fewer Americans rushing to claim at 62. This trend reflects growing awareness that patience pays: someone entitled to $2,000 at full retirement age would receive only $1,400 at 62 but could collect $2,480 by waiting until 70.
Women face particular challenges with average monthly benefits of $1,780 compared to men’s $2,181—a $401 monthly gap stemming from career interruptions and wage disparities. However, women’s longer life expectancy means total lifetime benefits often exceed men’s, making strategic claiming especially important.
Common Mistakes When Claiming Social Security in the United States
Many retirees stumble over earnings restrictions, missing thousands in potential benefits through poor timing or overlooked strategies. Understanding these pitfalls—and their solutions—protects your retirement income from unnecessary reductions.
Working while receiving benefits
The earnings test trips up countless early claimants who continue working. In 2026, beneficiaries under full retirement age lose $1 for every $2 earned above $24,480 annually. The year you reach full retirement age, the limit jumps to $65,160 with only $1 withheld per $3 excess. These withheld benefits aren’t lost forever—Social Security recalculates your payment at full retirement age, potentially recovering the full amount over your lifetime.
Tax and Medicare deductions
Up to 85% of Social Security benefits become taxable when combined income exceeds thresholds—$25,000 for individuals, $32,000 for couples. Medicare Part B premiums, automatically deducted from benefits, consumed $185 monthly in 2025 for standard beneficiaries, with higher earners paying income-related surcharges up to $600 monthly.
Consider Tom and Deb’s strategic approach: retiring at 60 with $2 million saved, they optimized by having Deb claim at 62 ($2,100 monthly) while Tom delays until 70 (growing to $5,800). Combined with Roth conversions during early retirement, their plan achieved a 94% success rate across 1,000+ market scenarios while saving $600,000 in lifetime taxes.
Family and Survivor Benefits Under Social Security in the United States
Social Security extends beyond individual workers, creating a safety net for families through auxiliary benefits. Eligible family members can receive up to 50% of your benefit amount while you’re living, with higher percentages for survivors after death. Total family benefits face a maximum limit, typically 150% to 180% of the worker’s PIA.
Spousal and ex-spousal rules
Current spouses age 62 or older qualify for benefits worth up to 50% of the worker’s PIA at full retirement age, reduced to as little as 32.5% if claimed at 62. Divorced spouses meeting the 10-year marriage requirement can claim identical benefits without affecting the worker’s or current spouse’s payments. Uniquely, divorced individuals can claim spousal benefits at 62 even if their ex-spouse hasn’t yet filed, provided both meet age requirements and have been divorced at least two years.
Survivor benefits offer more generous terms—widows and widowers can claim as early as age 60 (50 if disabled) and receive up to 100% of the deceased worker’s benefit. A 2023 SSA case study highlighted a widow who switched from her own $1,300 retirement benefit to $1,832 in survivor benefits at age 60, demonstrating how comparing benefit options can boost income by 40% during critical years.
How to Apply for Social Security Benefits in the United States
Successful benefit applications require preparation and proper documentation. Start your application up to four months before you want benefits to begin, using Social Security’s online portal at SSA.gov, calling 1-800-772-1213, or visiting a local office with an appointment.
Required documents by benefit type
All applicants need proof of identity (driver’s license or passport), Social Security number verification, birth certificate, and direct deposit information. Additional requirements vary:
Retirement: W-2s or self-employment tax returns
Disability: Complete medical records, treatment history, work history details
Survivors: Death certificate, marriage certificate, dependent birth certificates
Divorced spouse: Marriage certificate, divorce decree
Through my experience at Complete Controller, I’ve watched clients lose months of benefits due to missing paperwork. Create your mySocialSecurity account immediately—even years before claiming—to verify earnings records, estimate benefits, and spot errors requiring correction before they impact your payments.
Changes and Planning Tips for Social Security in the United States
Social Security faces an urgent financial crisis that demands your attention: the Old-Age and Survivors Insurance trust fund will deplete in 2033, potentially triggering automatic 23% benefit cuts unless Congress acts. This looming threat—affecting today’s 59-year-olds at their full retirement age—makes strategic planning more critical than ever.
The 2026 cost-of-living adjustment brings a 2.8% increase, adding approximately $56 to average monthly benefits. However, retirees often find COLAs insufficient because they’re based on working-age spending patterns rather than retiree expenses, particularly healthcare costs that typically rise faster than general inflation.
Medicare integration and future adjustments
Coordinate Medicare enrollment carefully—sign up during the seven-month window starting three months before your 65th birthday to avoid lifetime premium penalties. High earners should budget for income-related Medicare surcharges that can add hundreds monthly to healthcare costs.
Strategic integration with tax planning multiplies benefits: timing Roth conversions, managing retirement account withdrawals, and coordinating spousal claiming strategies can save hundreds of thousands over retirement. Consider how SSI operates differently, funded by general revenues rather than payroll taxes, providing a safety net regardless of work history.
Conclusion
Social Security in the United States forms an essential pillar of retirement security, delivering critical income through retirement, disability, survivor, and supplemental programs to nearly 73 million Americans monthly. Maximizing these benefits requires understanding eligibility rules, calculating optimal claiming ages, avoiding common pitfalls like earnings test surprises, and leveraging family benefit options that many overlook.
My two decades leading Complete Controller have shown me how proper financial tracking transforms Social Security from a confusing bureaucracy into a powerful wealth-building tool. Smart claiming strategies—like coordinating spousal benefits or delaying claims for higher payments—regularly add $100,000 or more to clients’ lifetime income. Take action today: create your SSA account to verify earnings records, then contact the experts at Complete Controller for guidance on integrating Social Security optimization with comprehensive financial planning that secures your future.
Frequently Asked Questions About Social Security in the United States
What is the minimum age to receive Social Security retirement benefits?
You can start receiving Social Security retirement benefits as early as age 62, but your monthly payment will be permanently reduced by up to 30% compared to waiting until your full retirement age of 66-67.
How many work credits do I need for Social Security benefits?
Most people need 40 work credits (about 10 years of work) for retirement benefits. Disability benefits require fewer credits based on your age when you become disabled—as few as 6 credits for workers under 24.
What is full retirement age for Social Security?
Full retirement age ranges from 66 to 67 depending on your birth year. Those born 1943-1954 reach full retirement at 66, while anyone born 1960 or later must wait until 67 for unreduced benefits.
Can I work while receiving Social Security benefits?
Yes, you can work while receiving benefits, but earnings above $24,480 (2026 limit) reduce benefits by $1 for every $2 earned if you’re under full retirement age. After reaching full retirement age, no earnings limits apply.
What documents are needed to apply for Social Security?
Basic requirements include your Social Security number, birth certificate, proof of citizenship or lawful status, W-2s or tax returns, and bank information for direct deposit. Disability claims also require detailed medical records and treatment documentation.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Jennifer BrazerFounder/CEO
Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.
Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.
Technology is constantly evolving. This evolution clears paths for solving problems that would otherwise require valuable staffing resources.
There are many ways technology has upgraded the quality of life for people while also providing ease and comfort. Innovation has seeped into the workplace as well, as people can now take the help of technological advancements to make their tasks easy for them.
Automation has been available to bookkeepers and accountants for some time now. However, a theme of hesitancy is seen all around, which prevents them from moving towards automation.
Before diving into the advantages of automation in the accounting and finance department, let us first analyze the reason behind this hesitancy on the part of bookkeepers.
Why are Bookkeepers Hesitant to Get an Automated System?
Bookkeepers and accountants struggle to keep up with automation and cannot get their tasks sorted through this comparatively easy system.
The reason why they avoid an automated system could be one of two reasons.
Little knowledge
It is possible that since not many people are aware of technology’s advantages, they are skeptical about it. Often, bookkeepers are not entirely aware of how much automation can change their work game completely. This lack of knowledge compels them to stay away. Companies can count on this by paying extra attention to education to give all the bookkeepers the needed understanding. This education will equip them with the information required to receive their work well in a competitive market.
Fear of being replaced
Another trend identified in bookkeepers is that they often fear being replaced by technology for their jobs. With newer technology rolling out all the time, people are worried they will lose their jobs. These bookkeepers fail to understand that technology is there to assist them, not replace them. The work of an automated system combined with the brains of a bookkeeper would create a phenomenal result within the workplace. Bookkeepers should focus on their advantages, their professional careers, and the company that employs them.
How To Introduce Automation to Bookkeepers?
Automation has a lot of advantages in the vast world of bookkeeping.
First of all, the managing staff must ensure that the bookkeepers are receptive to the idea of automation. For this purpose, they must have open conversations where the bookkeepers can speak their minds and share their concerns.
They must then have the required knowledge of automation and use it to make their tasks easier. It would help if you informed them that it would not only take away more than half the burden but also develop a momentum that would increase the workflow. These benefits add to the client’s value, which makes it a win-win situation for all.
Advantages Of Automation in Bookkeeping
You can stay in contact with your clients at all times. Communication may be challenging if you aren’t using automation, but a bookkeeper can contact you with an automated system. An automated system assists them in building a good relationship with their client, which might deteriorate if the client cannot get a hold of the bookkeeper in time.
Automation allows you to always stay in contact with the rest of the staff. Group communication promotes efficacy within the system since all the staff members can communicate when and where required.
Having an automated system gives the bookkeeper a bird’s eye view. They can see the bigger picture, allowing them to identify any issue with the plan and cater to the problem before it reaches a point of no return.
Automation holds more advantages for bookkeepers than they realize. It is high time that all bookkeepers look into how automation could potentially change their bookkeeping game forever.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
The first step in this process is to establish a financial plan. But don’t worry, it’s not that difficult. Only by starting to save will you be able to enhance your equity. It is a basic approach that requires a lot of self-awareness regarding your financial condition and spending habits.
Essentially, it would be best to consider how much you earn and how much you spend to determine how much you can save each month. Also, if you have debt, you must first pay it off. Planning your bill payment without taking out loans or being caught off guard by an unexpected cost is a significant benefit for the vast majority. Many people lose track of their finances precisely because they have no idea how much they spend or spend more than they make. That’s why you must know your current financial situation so it’s easier to understand what you need to do to get where you want to go.
The essence of sound financial planning is this. It is possible to be disciplined and structured in a basic manner. You don’t need to be an expert or a finance enthusiast to get financially organized. Did you realize that control tools available today can make your job easier?
This conduct will follow you for the rest of your life. In addition to demonstrating that it is feasible in practice, to begin with, a small amount of money!
Make a Habit of Saving
The second stage is to save what you can from your budget once you’ve identified your financial status and defined your ability to save. It occurs when money saved can be used toward an emergency fund or invested for a medium- to long-term goal. Developing a habit of saving money is a wise method to get your ideas off the ground and, as a result, enhance your wealth.
Saving takes a lot of commitment and willpower, just like any new habit. Changing your thinking one step at a time might lead to a new method of managing your finances. One way to make this work more accessible is to utilize the “pay yourself first” concept, which entails separating the percentage you want to invest as soon as you receive your salary after considering your expenses.
You might begin with a lower percentage and progressively increase it. The critical thing is to take the initial step, regardless of the percentage. It is a simple shape that can help you break free from your state of lethargy.
The 52-week methodology, which advises that every new week be set aside for an entire year to save $1 more than the previous week, is another exciting method that demonstrates the strength of the saving habit. If the person started with only $1 in the first week, they would have saved $1,378 by the end of the time.
Although the accumulated amount is negligible in this example, developing the habit of saving—through the exercise of discipline, implicit in the technique—is significantly invaluable since this behavior has a positive effect throughout the rest of your life. In addition to showing in practice that it is possible to start with little!
Invest According to Your Profile
Investing your money is just as vital as saving. Knowing your investor profile is critical for this. You can figure out which apps are best for you with this information. Several investment options are accessible in the market for people seeking to expand their wealth. Among them stand out:
Government funds (Direct Treasury)
Private securities (CDB, LCI, and LCA)
Investment trends
Stock change shares
However, before investing to increase your equity, you must first examine your risk tolerance or how you deal with losses. Each application has its own set of attributes that are suggested for different investors. Not everything good for one person is also suitable for another. Conservative investors, for example, place higher importance on security, even if it entails lesser returns. On the other hand, those with bold or aggressive personalities enjoy taking risks and embracing the prospect of losses in exchange for a more significant potential reward. The investor with a moderate profile prefers to balance the possibility of losses with profitability. In other words, it would be a compromise.
Knowing your profile makes it easier to define which type of investment is most recommended for you. This way, you can increase your equity without worry and in accordance with your expectations.
People who equate investing with the chance of rapidly becoming wealthy or believe investing in the stock market is the fastest midway increase in money are not uncommon. But that’s not all; remember that increasing equity is a difficult task that takes time and effort. Many people can lose money and feel dissatisfied with their investments at this time. As a result, investing according to your profile is the most responsible strategy for enhancing your equity.
Always Try to Diversify Applications
In addition to investing according to the profile, diversification is another essential piece of advice for developing equity. It is a fantastic investing technique that tries to shield an investor’s money from market swings that might negatively influence results. Because it is impossible to win every time, spreading the money over numerous assets is a technique to offset losses in some by gaining in others.
After all, each investment entails some level of risk. Even the most secure apps might suffer losses due to market volatility, legal changes, or government intervention. As a result, instead of concentrating resources on a single investment, an optimal risk management strategy is to spread them among at least a few different assets, preferably with varied hazards.
For individuals who don’t know what they’re doing, Warren Buffet, an American billionaire, the approach of investing in numerous forms of investments makes more sense. “Diversification is a safeguard against ignorance,” an eminent investor said.
As a result, persons with less investment knowledge should be cautious when allocating funds to specific types of assets. As a result, before diversifying, it’s critical to have a well-thought-out strategy that allows for quick and precise answers when needed. On the other hand, those who are new to the financial market may not have a plan in place or may not know where to begin. Here’s why it’s critical to get the assistance of someone well-versed in the subject.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Temporary disability is a situation caused by a standard or occupational disease or an accident, whether work or not, that prevents work and requires healthcare.
You can attribute the right to a subsidy to alleviate your lack of income while receiving Social Security health care and continuing to be prevented from working for a maximum period of 12 months, extendable for another 6 when it is assumed that during them, the worker can be discharged by cure.
The work accident of the self-employed worker shall understand the one that occurred as a direct and immediate consequence of the work performed on their account and which determines its inclusion in the field of application of said Space Regime. It does not include accidents suffered by the worker when going to or from the workplace (except in the case of TRADE), those due to force majeure foreign to work, and those due to intentional recklessness or recklessness of the worker.
For the same purposes, you shall understand professional illness as contracted due to work carried out on its account.
It causes the action of the elements and substances and in the activities specified in the list of occupational diseases with the relationships of main activities capable of producing them, annexed to Royal Decree 1995/1978, of May 12, which approves the picture of occupational diseases in the Social Security System.
The requirements demand common illnesses are being registered or in a situation assimilated to discharge, having contributed a minimum of 180 days during the last five years, and being up to date with the payment of fees. No prior contribution period is required in case of an accident or occupational disease.
You can obtain the amount of the benefit by applying the following percentages to the regulatory base:
If there is a common illness or non-occupational accident, 60% from the fourth day to the twenty-first casualty and 75% from the twenty-first.
If an accident at work or occupational disease occurs, 75% of the regulatory base from the day following the leave, provided the interested party had opted for coverage of professional contingencies.
The regulatory base will be the contribution base of the self-employed worker corresponding to the month before the medical leave, divided by 30.
The self-employed person has a period of 15 days to notify the Social Security of the cancellation and the situation in which the activity remains, indicating on the official form which will directly manage the business or, where appropriate, the temporary or definitive cessation of the movement.
In situations of cessation of activity after temporary disability, the self-employed person will continue to receive the IT benefit, in the same amount as the cessation of activity benefit, until it is exhausted. At that point, he will receive the economic benefit for the end of the activity that corresponds to it, discounting the time spent in the IT situation of the period of cessation of activity to which you are entitled.
The contribution for temporary disability due to common contingencies is mandatory. However, maintaining an option for self-employed persons in situations of proactivity who are listed simultaneously in another Social Security scheme and for Workers included in the Special System for Agrarian Self-Employed Workers. The contribution of the professional contingencies of occupational accidents and diseases, the RETA, however, is voluntary, except for dependent self-employed workers and those obliged to formalize said protection for performing a professional activity with a high risk of accidents. You can expand the information in our article on the bases and types of contributions.
Permanent Disability Benefit
It intends to cover the loss of salary income of those self-employed who cannot continue working because they have been affected by an illness or accident that incapacitates them from professional practice in a presumably definitive manner.
It will be necessary to have contributed to occupational accidents and diseases and have received prior or simultaneous coverage of the temporary disability benefit.
The regulatory basis for a disability derived from professional contingencies will be equivalent to the worker’s contribution based on the date of the causal event.
Without reaching the total grade, partial permanent disability causes the worker to decrease not less than 50% of his expected performance. It is only protected if it derives professional contingencies but not if it derives from common contingencies.
The total permanent disability will increase by 20% of the regulatory base for people over 55 years. It increases for those who do not exercise a paid or self-employed activity, have ownership of an agricultural or maritime-fishing operation, or a commercial or industrial establishment as owner, lessee, usufructuary, or another similar concept.
Instead of the total permanent disability pension, the self-employed person may choose to collect compensation in a single payment for 40 monthly payments of the contribution base for professional contingencies on the date of the causal event. If it derives from common contingencies, there will be 40 monthly payments from the regulatory bottom of these contingencies.
Benefit for Permanent Non-Disabling Injuries
The self-employed may opt for this benefit in case of injuries, mutilations, and deformities caused by work-related accidents or occupational diseases, which, without constituting permanent disability, entail a decrease in the physical integrity of the worker if they include the established scale to that effect.
Among the specific requirements to be met by the self-employed, they must contribute to work-related accidents and occupational diseases. They must have opted for the coverage of the economic benefit for temporary disability and be up to date in the payment of fees. The surcharge of economic benefits is not applicable due to a lack of occupational risk prevention measures.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Mistakes that can damage and affect an individual’s finances in the long term haunt the utmost; similarly, not handling your credit correctly can become a significant complication shortly. If an individual does not manage the credit correctly, it can be crucial for any financial institution to lend money to him because of his credit history. Moreover, even if an individual’s financial position seems well currently, it doesn’t mean that poor handling of credit cannot become an issue soon. Managing credit wisely can look tough, but it is essential to know its importance because your credit plays a vital role in your financial life.
To avoid indulging in following mistakes, one must understand the importance of how credit should be handled and used.
Having a Maximized Credit Card Balance: Credit cards have made life easier for many. However, if not used properly, they can also create problems with finances. According to the study, it is ideal for maintaining your credit utilization ratio at around 30% of the available credit. If the balance is creeping up towards your credit limit, this could be alarming as it can badly affect your credit. Hence, the lower the credit utilization ratio, the better.
Take Partial Responsibility for Someone Else’s Loan: Taking responsibility on your head for someone else can be risky, especially when money is involved. Co-signing a loan is to bear the responsibility of someone else who took the loan but failed to repay it. That can be problematic for one’s credit score because what will happen if the other person doesn’t act?
Not Being Mindful of Your Credit Report: If someone believes that looking up to their credit report is not essential, they might have a loss. Credit reports need to be looked at regularly so that you can spot mistakes and plan expenses accordingly. If a credit score is low, one can always change spending patterns. Believing that your credit is okay just because it was in good shape the last time you checked is nothing but a betrayal for one’s self. Mistakes and errors tend to appear on the credit report most of the time, and if not solved, these mistakes can lead to massive problems later on.
Over Spending & Failing to Keep Track of Your Budget: Many people do not check and balance their spending. That is one of the most common mistakes which disturb the credit or finances. Those who overspend cannot afford to save some money that might help them during tough times. It may, as a result, end up in over-drafting frequently. Thus, in times of crisis, they have no option other than to borrow or take loans that they have to repay with high interest.
Failure to Create a Budget & Plan Early: A big part of an individual’s financial future depends on the time he spent in his youth. Scrolling through social media and doing nothing productive will lead us nowhere. Build a strategy and follow it to avoid mistakes that can hurt your credit in the future.
It takes years to work on your financial plan and build your credit; however, it can ruin in a short period if not handled correctly. It may sound intimidating initially, but to avoid these mistakes, a person must avoid any tiny possibility that might disorganize the financial plan or credit.
Monitoring every expense should be made compulsory, whether it is a substantial expense or a small expense.
Make sure you have a solid financial plan and that you follow it duly
Make a habit of saving a little of whatever you as an individual or your business earns monthly
Taking these safety measures will help to avoid putting a strain on the budget. Even if you are not born with good credit, you can always handle it reasonably well by developing the earlier-mentioned habits. Thus, the more promptly these habits are developed and considered, the easier it becomes to maintain good credit.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Setting up a new business could be a lot of fun. You try to get in sync with as many avenues as possible to expedite the whole process and get yourself on the market. A huge part of setting up a business is bringing accounting software to cater to the financial sorting of your company. This software potentially changes your stepping and helps you achieve your goals by making bookkeeping easy.
There is a plethora of accounting and financial software in the market that may seem like the right option for you. But what decides if the software is the one for you?
To make the right choice, it is significant that you are entirely aware of your company’s requirements. Highlighting the needs would help you filter out the software and make the right choice. Before assessing any potential options, be clear about your expectations from the software and how you wish to see it perform. This clarity will assist you in making the right choice for your business because any decision you make would directly affect the performance of your business at the end of the day.
Top Things to Consider When Choosing an Accounting Software
There are a few aspects that a business owner should look deep into before making a choice. These aspects would aid them in choosing suitable software according to their business requirements and set expectations for them.
Go through the list below to know which features you should look for in software before deciding which one to get.
Software Performance & Functionalities: Deciding whether accounting software is right for you eventually comes down to its performance. Of course, you cannot test all software on the market, but you can research. By researching, you would come across reviews and experiences from different business owners that may help you shortlist software based solely on their performance.
If the software lacks performance and does a sloppy job organizing your financial data, then it’s useless. Purchasing comparatively expensive software that works impeccably and lasts long is better than a cheap one that would do you more harm than good.
Customizations & Integrations: Your accounting software should feel like it has been curated especially for your and your business’s needs. Customizing the software would be a significant advantage that you could use to set up the perfect system for your business.
We know customization may not feel necessary, but it is vital to understand why you need it in your accounting software. It is a known fact that each business is different and has contrasting needs and requirements. To ensure that the accounting software you will use fits your business model perfectly, you would need the option of customization to tailor it into the perfect choice for your company.
Security & Risk Protection: Your financial and accounting software should have very tight security. The software would handle all your financial affairs while analyzing, interpreting, and sorting them. If the security of your accounting software is not up to par, the information could fall into the wrong hands. Security breaches not only affect the future of your business in the market but could also be dangerous.
Always look for secure accounting software to do all your bookkeeping while keeping your data safe from any external threats and protecting you from any potential damages in the future.
Choosing the right accounting software could make or break your game in the market. The accounting software service goes beyond just rearranging your data in an organized manner. Good accounting software would keep your financial records sorted and aid you in highlighting the areas of profitability. It would prepare you for any hiccups your business may see in the future, while it also keeps track of your taxes.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Tax minimization is a controversial topic, often confused with tax avoidance. When you talk about minimizing taxes, most people think you are trying to evade taxation, which is illegal. This misconception is one of the primary reasons most businesses cannot reduce their tax burden, considering it is unlawful. Contrary to popular belief, lowering taxes is illegal and an acceptable practice within the taxation world. It is vital for any business in today’s world to have a tax minimization strategy in place using perfectly legal methods. Suppose you are looking to reduce your tax burden through legitimate means. In that case, it is essential for you first to understand the distinction between tax evasion and tax minimization to avoid any mishaps.
What Does Tax Minimization Mean?
Tax minimization refers to using various resources and means to reduce the amount of tax a business pays. Use tax depreciation effectively by planning for taxation in advance. For instance, if you have unearned income showing in your income statement for this year while the payment will be received next year, it makes sense to mention the amount under a different tab, such as account receivables, etc. You can significantly reduce your tax burden by simply renaming and managing your finances.
What are the Two Basic Ways Tax Minimization Works?
Broadly, there are two main ways tax minimization works. Many people wonder how they can legally avoid paying taxes or reduce the amount of taxes they pay. Again, we cannot stress enough the term “legally.” Two primary ways to reduce their tax burden are tax mitigation and finding loopholes in the law. The latter sounds unethical, so let’s leave that to the big fish. For now, let’s focus on tax mitigation and how you can use it to reduce the taxes you pay.
How Can You Minimize Your Tax Burden?
There are numerous ways businesses can reduce their tax burden. Most of these ways revolve around identifying presently occurring expenses and subtracting the ones that will incur later on. By doing this, you can reduce some of the burden of your taxable income from your income statement. Here are some more strategies to reduce your tax burden:
Depreciate Your Assets Regularly
Depreciation is the process of evaluating an asset’s current value and life expectancy concerning its market worth. When you depreciate your assets, you maintain your taxable depreciation expense. However, not many companies perform their depreciation yearly or during the taxation period. The best way is to use an accelerated depreciation process to calculate your assets’ depreciation before the taxation season.
Increase Your Capitalization Limit
Another way to reduce your overall taxable income is to buy assets recognized as fixed assets by the law. When you put a higher threshold for the amount reserved for purchasing fixed assets, you use a part of your income as an expense. If you reduce the overall taxable income, your income tax will diminish, too.
Reduce Your Inventory
A common practice for most businesses is reducing the overall inventory size by the end of the fiscal year. It would be best to sell all the unsold items in your inventory before the year-end. When you do this, the cost of these items will equal the cost of goods sold. This way, you reduce your overall taxable income.
Reduce Account Receivables
Again, another common practice most companies adopt is writing off their account receivables before the year-end. If you have not collected the income, showing it as income will only increase your tax amount. Why show it at all?
Most companies worldwide use these basic accounting strategies to reduce their overall taxable income, which is illegal. You can reduce your taxable income by simply managing and balancing your accounts. Why would that be considered unethical or unlawful?
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
In the recent decade, online businesses, mainly eCommerce businesses, have experienced enormous growth and change. More than that, the current COVID-19 pandemic has also pushed many traditional companies to online platforms. Whether you are selling through a website or social media platforms, you are part of the massive online business community. Unfortunately, while there is a significant emphasis on digital marketing, only a handful of people talk about financial management, which is the cornerstone of any business model. Since the flow of visitors and sales is enormous, it can be tedious to maintain accounts. However, you might not be able to evaluate and predict your business’ performance without assessing your accounts and cash flow.
If you are an online business owner struggling with your accounting, here are some of the best practices followed in the industry to keep you on the right track:
Connect Your Online Store with Your Accounting Software
First and foremost, this is probably the one practice that can revolutionize your business. You have hit gold if you have accounting software that can integrate with your online store. With this done, you will save time and effort and focus more on selling your products rather than manually entering them into another software or register. Such accounting software will record your data, such as the number of products sold, the price they were sold for, the cost of those products, and the overhead expenses, instantly giving you the ROI (return on investment). Again, it cannot be stressed enough how important it is for any online business, especially eCommerce, to connect its accounting software with its store.
Inventory Management with Overhead Expenses
Inventory management software is also crucial for your business’ success. Such tools only reduce your efforts and exhaustion, giving you time to focus more on the results. If you have inventory management software integrated within your accounting software connected with your online store, then that’s an online business owner’s dream come true. If not, that’s not an issue. You must get functional inventory management software that regularly updates your inventory and the cost of goods sold (COGS). You would also need to add the overhead expenses such as packaging, delivery, etc. With all this in one place, subtracting the cost from the revenue will be a piece of cake. Again, it will save you hours of manual work.
Account Reconciliation Management
One of the significant problems small to medium-sized businesses face is reconciling their accounts. Sure, it seems like a job for an expert accountant, but in reality, it is a manageable task for a business owner to take on as long as they stay on a schedule. When running an online business, you will face numerous decline transactions, doubling transactions, refunds, and chargebacks. Your software might record it as sales, but you would have to reconcile it manually if the transaction was refunded or declined. Do this regularly to get your analytics right. Without reconciling your cash at the bank vs. sales, you might overestimate your profit, which can have disastrous effects.
Jump on the Bandwagon – Go to Cloud Software!
Lastly, working with cloud software is one of the best ways to keep your data secure. Hackers are always on the hunt, and many businesses suffer data leakage, which leads to the loss of clients’ or clients’ financial information. With cloud software, your data is always secure on the cloud.
To conclude, if you are an online business, you have taken the first step towards joining the digital revolution. However, being ahead of your competition and adopting practices that will take your business to new heights is imperative. Managing your accounts seems boring. Most online business owners want to focus on sales and marketing. However, remember that the flow of money might be overwhelming if you don’t plan to deal with the accounting side of things.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
A startup business is a business that has just started its initial operations or is about to begin operating. An organization that is very early and in the first few stages of being functional is a startup. A startup business funds come from the person(s) who initially intended to start the company or the founder of the business. These startup businesses generally begin with high costs and limited revenue and struggle to enter the market correctly. Many startup businesses struggle initially as they have to form an image, reputation, and brand name. The people who run the business, be it the company’s founders or other partner(s), struggle to manage many tasks as they have to handle many things to make their business operational. At this stage, some business owners struggle with time management as all the tasks run simultaneously, and they get confused and mess things up.
Comparatively, new businesses face more costs than stable companies.
Companies incur these costs to make the business functional, whereas regular companies are already operational; hence, they don’t require as many operational costs as startups. There are two types of startup costs, known as pre-opening startup costs and post-opening startup costs. Pre-opening startup costs are the costs required to start the business or the necessary costs for the company to function. These costs include business expenses, research expenses, borrowing costs, and expenses. Pos expenses-opening costs are the costs created when the business starts its operations, and these costs are essential as they make a business operational and stable in the future. As startups have a lot of expenses that are hard to meet or afford, they should put financial controls on their costs and fees. Financial authorities are rules a business places on its financial practices to avoid overspending and control expenditure. Here are some ways you can practice financial controls in your startup business:
Always create cash flow statements. Making a cash flow statement will identify all your cash inflows and outflows to determine if your business is overspending or if any unnecessary expenses could be cut off or eliminated easily. You can even detect fraud taking more of your money than intended. Create these cash flow statements almost monthly to keep a better eye on and look at your records.
Ensure you run a proper background check on your employees before hiring. It would be best to run adequate and thorough background checks on the employees to prevent fraud, primarily for the business’s accounting department employees. These positions include the accountant, the bookkeeper, or even the analysts, as their errors could lead to disastrous situations.
It is essential to review all the financial statements. The creation of the financial statements is only helpful if the business owner reviews them. These statements contain the information through which you can determine the economic situation of your business and make other decisions accordingly.
Don’t rush when looking for finances for your business. It is essential to plan for the finances you will be attaining to fulfill the financial needs of your business. If you make these decisions in a rush, you may get the wrong match for you; this means that fast choices could lead you to take loans from banks with very high interest rates, which will only increase your expenses.
Having analysts in your business is very useful as financial analysis can help you make better decisions, and you can quickly put financial controls on your expenses. A startup must run the business wisely and minimize its costs and fees as much as possible.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
