Interior Of Busy Design Office With Staff
Starting a business is often exciting – yet scary at the same time! It is a bit like moving through immense fog where you can only see a few feet in front of the windshield. Hence, you have no knowledge of what is awaiting you until it is actually upon you. However, the more experienced you are when it comes to entrepreneurship, the better you are able to navigate through that fog. From bookkeeping to business management, your knowledge and expertise will enable you to make the right decisions. Here are 9 critical factors or vital decisions at start-up which can go a long way.

1. A good sense of timing

You need to understand this in two ways:

1.  Picking the best moment to begin your startup: The ideal moment to start your company is typically a balancing act which is determined by several great factors including: the availability of necessary startup funds, the success or failure of competitors, the ebb and flow of your industry, and your personal and family circumstances. For instance, you may delay the plan as you are expecting a baby in the next few couple months.

2.  Immediate action to grab the opportunity:
Since entrepreneurship is all about taking calculated risks, you must leverage an opportunity as soon as it appears. You can achieve this by completing your business plan and making decisive moves to get your company off the ground promptly. But, always avoid a rush attitude. In fact, you must show diligence in the plan development. However, many startups fail simply because they are too sluggish and wallow to complete any task timely.


2. Avoid giving heed to statistics

Many people use statistics like ‘95 percent of businesses fail’ simply as an excuse to make themselves comfortable about giving up. Even if that number is correct, it is because most of them do not commit to their goals, follow through to the end, or have money management skills.

3. Do something you love

Do not begin something you will not want to do in the next five years. Making your passion your business means you will still be enjoying and earning in the next five years. It could be anything like painting, singing, engineering, teaching, marketing, auditing or bookkeeping. 

4. Assess if you have to raise funds to launch your start-up

It is often rare if an entrepreneur has enough savings and funds in his bank account to seamlessly begin their business. On the other hand, most startup enthusiasts have to raise finances to turn their idea into a reality. Therefore, you might need to use bank loans, leverage assistance from family and friends, or put properties on mortgage to arrange money to invest in your startup. Hence, assess your business goals to know how much you need to begin.

5. Know your team members before bringing them on board

The people behind your business are the most critical factor, particularly for startups. As recordkeeping is essential for bookkeeping and as products or services have to be iterated many times until they find their market place; similarly, it is all about having the right people doing the right job. Their direction is more important than the pace of their performance. Here you should focus on their background story, such as precious experience, companies and qualification, and what nature of value they bring to the table.

6. Invest wisely

Warren Buffet says, “Instead of putting all your eggs in the same basket, make multiple investments.” Following this inspiration, you should also diversify your investments that help increase your chances of success and reduce the risk involved. Since these investments are for the long run, always show patience.

7. Avoid over, or under, investment

Starting a business can significantly affect you and your family financially. You must learn where and when to spend what amount. You should neither waste your precious dollars nor fail or delay to invest adequately where necessary, simultaneously. In fact, you often need to spend funds to earn money in any business.  Hence, never skimp out or underestimate things your company needs.

8. Set up your cash flow tracking

Since you will be required to submit a self-employed tax return, you will need to have a good track record of all business transactions. Though opening up a separate business account is not necessary when you are setting up as a sole-trader, it could be helpful to keep track. There are several online tools that not only help small businesses to manage bookkeeping and maintain other accounts, but also enable large organizations to prepare audit reports and complex financial reports. 

9. Start selling

You must know how to promote your product or service and who to target. Though you have already mentioned it in your business plan, it is time to put the matter into execution. In fact, much of your early budget will be on advertisement and marketing, whether that is SEO, networking, telemarketing or targeting retailers. Your first few sales will boost your confidence to show more commitment and dedication towards the business goals.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Close-up Photo Of Businesswoman Hand Giving Cheque
Many bookkeeping software solutions are more alike than they are different, in terms of features. Standard components include overall ledger management, invoicing, and payment processing. Every association has different requirements and needs. They can be customized for their size, kind of employees and clients, and the particular industry they are in. For these reasons, no system can proffer perfect functionality out-of-the-box. If you need a lifeline when it comes to processing payroll—and avoiding the feared late payroll tax—not to worry. Plenty of small business owners struggle with those exact same problems: you’re not the only one. Check out these top-notch payroll-focused accounting tools listed below.

1. WagePoint

WagePoint is a simple online payroll application designed for small businesses in North America. Managing payroll is important for small and mid-sized companies and WagePoint gets the work done quickly and easily. WagePoint can manage government remittances/reporting, direct deposits, and all year-end reporting for both hourly and salaried workers. WagePoint is an instinctive, easy to use, web-based payroll software. It is perfect for small businesses seeking to pay their employees or contractors while remaining compliant with IRS regulations. It is an ideal app for companies in a wide range of industries.

WagePoint is used by thousands of small businesses and it offers an easy-to-use interface that allows establishments to set up the app in a few hours. The salesperson offers a service called “Switch It” – for businesses with more than ten employees, to help them switch over their existing payroll system to WagePoint.

2. Gusto

Gusto (previously named ZenPayroll) is a completely featured payroll, welfare administration, and compliance management platform. It has been designed to assist mainly small businesses. Gusto provides tools to manage core HR needs such as time tracking, hiring, onboarding, and training, among others. With devoted online accounts, employees can fill out their personal details into the system and track all paperwork in one chief place. Companies can mechanize their payroll operations by scheduling payment and benefits release. Payments can be made via direct bank deposit or through check. The solution automatically delivers electronic pay slips to an employee’s inbox upon completing the transaction.

Employees even have the choice to make charitable donations to their association of choice, directly from their paychecks. The solution mechanically calculates, pays, and files a company’s local, state, and federal payroll taxes. Some of the supplementary features include custom reporting, multiple pay rates, multiple pay schedules, and third-party calendar integrations.

3. SurePayroll

SurePayroll is a complete online payroll solution for every business. On top of that, SurePayroll has also created an administration platform in its payroll software called One-Click Payroll. It simplifies all of the procedures related to payroll in just a few seconds without bargaining accuracy and reliability.

The bookkeeping software comes with an interactive, customizable dashboard. Another highlight of the system is that it supports multiple payroll types and calculates and delivers payroll taxes. Many businesses choose SurePayroll to handle their payroll processes because of its extensive set of payroll-processing tools and unparalleled recordkeeping. SurePayroll is built to streamline the payroll process with its awesome tools and excellent third-party integrations. It is a solid option for any business that is looking to get software that will make payroll faster yet very accurate and reliable.

With SurePayroll accounting software, workers can easily check their payroll information, including paychecks, vacation leaves, pay stubs, and more. They can also do all of these via their smartphones, tablets, and other mobile devices. The system also takes care of taxes by automating the processes while maintaining compliancy with the company’s payroll services. Customer support is also credible. The software fields knowledgeable and responsive support staff as well as an easy to access support center.

Conclusion

Aside from key features, when choosing the best bookkeeping payroll software for your business, consider these other accounting aspects: ease of use, compatibility and integration, and security. More importantly, you should prefer a cloud-based software model.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Chubby puzzled man looking at credit cards in hands looking desperate with spending money.
A budget is an approximation of revenue and expenses over a quantified future period of time; it is accumulated and re-evaluated on a periodic basis. Budgets can be prepared for an individual, a family, a group of people, a business, a government, a country, a multinational organization or just about anything else that makes and spends money. Among businesses and organizations, a budget is an internal instrument used by administration and is often not essential for reporting by external parties.

Following a budget or spending plan will also keep you out of debt or aid you to work your way out of debt if you are currently in debt. Spending less than we make is usually quoted as the most important personal finance objective. It helps us to save for emergencies and stash cash away for retirement. It’s the principal practice that facilitates us to attain some level of financial freedom.Constructing a budget with a template can help you feel more in control of your finances.

Common Excuses for not having a Personal Budget

Individuals and families have finances, too, of course – or they should. Generating and using a budget is not just for those who need to meticulously monitor their cash flows from month to month because “money is tight”; it’s a valued tool for all demographics. Even though budgeting is a wonderful tool for managing your finances, many people still think it’s not for them. Below is a list of budget mythologies – the specious logic that halts people from keeping track of their investments and allotting money in the best way.

1. I don’t need to Budget: Having a grip on your monthly salary and expenditures allows you to make sure your hard-earned money is being put to its highest and finest purpose. For those individuals who enjoy a salary that covers all bills with money left over, it can help maximize savings and investments.

2. I’m not good at Mathematics: Thanks to budgeting/costing software, you don’t have to be; you simply have to be able to follow guidelines.

3. My job is Safe: No one’s employment is truly secure. If you work for a corporation, being laid off due to downsizing or a takeover is always a possibility. If you work for a small business, it could die with its titleholder, be bought out, or just fold. You should always be ready for a job loss by having at least three months’ worth of living expenditures in the bank.

4.  And if it’s not, Unemployment Insurance will save me: Unemployment compensation is not a definite thing. Let’s assume if a bad condition at work leaves you with no choice but to resign from your job. Unless you can prove constructive discharge (that is, you were virtually forced to resign), your exit will be measured voluntary, making you ineligible for unemployment insurance.

5. I don’t want anything big: If you don’t have any main savings goals, it’s tough to tap up the motivation to stack away extra money each month. Though, your condition and your attitudes are possible to change over time.

6. I’m Debt-Free: Great for you! But it won’t pay your bills in an emergency.

7. I always get a Raise or Tax Repayment: It’s never a good notion to count on changeable sources of income. This may be the year your business may not have enough money to give you a raise or as much of an elevation as you’d hoped for, even if you’ve earned it. The same is true of bonus money. Tax refunds are more trustworthy, but this also depends in part on how good you are at computing your personal tax liability.

8. I just don’t have the right regimen: If you’re still not swayed that budgeting is for you, here’s an approach to safeguard yourself from your own spending practices. Set up an automatic transfer from your checking account to a savings account, programmed to occur right after you get paid each time.

Conclusion:

Formulating a budget doesn’t have to be difficult. A budget can secure your future financial status and lead you to financial freedom.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Happy newlywed couple with a piggybank and money bundles isolated on white background
Marriage opens up the doors to a new life. Sure, maybe money and finances aren’t the most romantic topics you want to bring to the dinner table.  However, it shouldn’t be avoided. Let’s be honest. One of life’s biggest expenses is a wedding which bounds a couple together and lifelong commitments are made.

Couples who trust their spouses or partners with money matters typically feel more secure and financially content with gratitude. On the contrary, issues and arguments about money matters harms many relationships. In fact, most couples fight about finances twice as much as they quarrel about their sex life. Issues related to money is the leading cause of stress in relationships. Almost 60% of divorces were finalized due to financial arguments between couples, hence, making financial arguments the primary indicator of divorces. In the long run, it’s better to plan ahead and put your heads together when it comes to money and finances.

1. Be Clear About Your Assets and Liabilities

Couples should opt for bookkeeping their assets and liabilities and controlling their expenditures as soon as they plan to marry each other. The beautiful journey of love and romance thereby puts you in a new financial life. Therefore, it’s obligatory to be aware of the upcoming financial dilemma in your life. The complications of possessions, properties and debts can brutally damage a relationship. So, be clear about all sources of income and earnings, spending habits, financial goals, and budgets with each other. Being honest about finances enhances a couple’s trust. Clarification of such finances also prevents a great deal of shame and fear in the future.

2. Share Your Family History

In many ways, your family background and upbringing demonstrates how you will handle your new financial life upon marriage. Therefore, couples should discuss their family history of finances beforehand; how they spend their allowances, the money etiquette they have learned from their parents, their budgeting priorities and spending habits. The more you know about each other and your preferences, the better understanding you will have regarding personal and financial matters that ultimately help strengthen the trust among one another.

3. Joint vs Separate Accounts

Some couples prefer having open, joint accounts and pooling all of their earnings into that account, while others prefer to keep their income discrete. However, it’s better if couples set up a joint account for shared expenses such as groceries, utilities, house rent or home mortgage payments, and children’s education. And, if you prefer, you can keep the extra money separate for your own expenditures or saving purposes. Again, the more open and honest you are, the more successful your relationship will be.

4. Be Flexible in Sharing Expenses

When it comes to sharing family expenses, a couple has to be flexible with their new financial life and onward. This is because one spouse may be earning much lower than the other and, by distributing equal expenses, you will be seen as equals in the relationship. Financial stress can spoil a relationship. It’s best if it’s a shared burden rather than one person struggling to get by.

5. Sensible Sharing of Expenses Via Joint Account

When one spouse has a habit of overspending money on frivolous purchases, it can cause conflict in your new life together. To ease such tension in a marriage, decide on a monthly figure that each partner can spend freely at their own discretion, without being questioned about the expenses. Simply agree to consult each other on significant transactions in order to avoid further stress. For such a case, $154 is an ideal amount that most couples agree upon to spend without informing one another.  Anything over that amount should be discussed before purchasing.

6. Take An Early Look At Each Other’s Taxes

When a couple has similar earnings, one might owe more tax in comparison to the other at the start of  their marriage. The opposite can happen when one earns much lower than the other. Therefore, sort out tax issues and update your W-2 withholding forms as soon as possible.  

7. Pay Off Debt Together

Although your new financial life comes with more responsibility, one cannot automatically owe their spouse’s debt right from the start of their marriage. Even then, what he or she owes will still affect your family budget and life choices. Therefore, aim to tackle such debt together simply as a team and make reducing debt your first priority. In the case that there are multiple loans, begin with the obligation carrying the highest interest rate first in order to reduce the overall interest you both pay.

8. Team Up To Save

It is much less expensive to maintain household finances as a couple rather than living separately. Paying less on rent or mortgage is just one of many smart ways a couple can opt for saving more. Car insurers, home mortgage companies, and facilities like gyms and clubs usually offer better deals at reasonable costs when you sign up together. In addition, there is no need to have multiple Amazon or Netflix accounts when you have already started your new financial life, the first chapter of your marriage.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Man is shredding a piece of paper

Best Practices for Document Destruction

Definitively destroying confidential documents is easier than it seems, without lighting up a massive bonfire to burn everything! You need a device that is specially designed to do this: A paper shredder. Different types of document shredders are available on the market. Depending on whether you are a homemaker, head of a major firm, or director of an intelligence service, your perception of the word “confidentiality” will be very different. 

Paper shredding machines are the most common tools that help destroy confidential documents. The advantage of paper shredders is that they can destroy several pages at a time. The pieces are then recovered directly into a closed basket. Some models offer straight cuts, others are crosscuts for optimized safety. Some models are also capable of destroying cards and other hard paper types.

Remove the Documents that You no Longer Need

Every month there is a bombardment of various documents that contain sensitive information: bank statements, invoices, receipts, list goes on. Sometimes, you might be in possession of confidential company documents that need to be destroyed properly.

As one of the best practices for document destruction, sort through these documents and get rid of the ones you do not need. Its always a good option to use a professional paper shredder. Using other methods like burning the papers and throwing the ash in the sink will also get rid of them for good. It’s impossible to extract information from burned out ash, but that method takes more time and makes a much bigger mess!

Do not Throw Sensitive Papers in a Bin

Throwing away papers with sensitive or private information in the trash bin is not safe.  Maybe you work for the government or a company that manages confidential data. Throwing these papers in the garbage is not enough to protect them from those who are looking for specific information.

To protect yourself from the illegal or malicious use of this information, learn how to destroy these documents. It’s important to follow the best practices for document destruction to keep you and your company safe.  

Investing in a Paper Shredder

A paper shredder is the best choice for document destruction. When you decide on a paper shredder, it is important to use a crosscut mill, not a straight-cut mill, as this will result in finer paper webs. This will prevent people with unauthorized access from piecing together the pages with the strips of paper. Choose a machine that cuts the paper into strips up to 0.5 mm wide and 0.5 cm long.

Security Level of the Paper Shredder

Considering the best practices for document destruction, experts recommend checking the security level of the paper shredder. A higher security measure would indicate how efficiently the machine cuts the paper. Paper mills are available in office supply stores and are classified into several security levels, depending on the smoothness of the cut strips.

The more fine bands the machine has, the higher the security level will be. Most companies provide paper shredders that are much more advanced and sophisticated options for document destruction. They offer a higher option for secure paper shredding or other document destruction services.

Shred Your Documents Regularly

Make it a regular routine to shred your papers. When you have a fixed schedule for document destruction, it will save you and your company plenty of time. An added benefit of having a fixed schedule is that you won’t have to go through a massive pile of sensitive documents.

Scheduled shredding is one of the best practices for document destruction. It help minimize the risk of an intentional or unintentional breach in the database. Regular shredding will allow the information not to fall into the wrong hands.

Use Professional Document Destruction Services

What if you have many sensitive documents that need to be destroyed, but do not have the time or the equipment to do it in a secure manner? It’s always one the best practices of document destruction to hire a professional service. Many companies provide expert services for eliminating sensitive documents with confidentiality. These professional services will get rid of your sensitive documents without compromising the trade secrets, client list, and other sensitive company information.

Training your Staff about Properly Securing the Document Destruction

It’s always one of the best practices for document destruction to arrange a staff training about properly disposing off documents with sensitive company information. Training your own staff about the document destruction will help keep confidential data safe. Employees, themselves, can be held responsible for theft of trade secrets. Holding each employee accountable for their data is a good practice for document destruction.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Red refinancing stamp in torn dollar hole
Millions and millions of homeowners today have refinanced their mortgages and some of them are even considering refinancing it a second time. However, even though these rates are hitting a rock bottom low, refinancing is not the correct option to choose for every homeowner. Following are the six reasons why you should definitely opt out of refinancing.

  1. A Very Small Loan Amount

With a very small loan amount, it can become very difficult to save enough money by refinancing to make this entire process worthwhile. For instance, if you refinance a $750,000 loan from 5.5% to 4%, it might yield you the monthly savings of approximately $678. However, savings for a $75,000 loan will only amount to approximately $68 each month. Apart from this, lenders will often lack the additional fee or interest rate premiums for a small loan amount, thus it becomes very difficult to obtain a rock bottom mortgage rate.

  1. Small Rate Difference

Refinancing a large loan might result in noteworthy savings; however, getting a considerably better interest rate is very important over the long term as well. While it is possible to save a lot of money by refinancing to a slightly lower interest rate, it is a painfully slow and steady process. Taking into account the low mortgage rates we have today, shoot for an interest rate of at least 1% lower than your current rate to make both your time and effort worthwhile. 

  1. Short Time Frame

While refinancing at today’s low rates can sometimes translate into huge monthly savings on the mortgage bill, those savings do not usually come without noteworthy upfront costs. If you have only a few years before you are expected to move or simply refinance again, you may not want reap the benefits of saving from a lower monthly rate. There are numerous ways in which you could refinance and save some money alongside with “no cost” refinance plans even if you have a very short time frame. However, all of these options often come with complex interest rates, reducing all of the various benefits considerably.

  1. Term Extension

If you have already refinanced and reduced the term of the loan you have taken, you might be forced to obtain a longer term loan when you refinance. Characteristically, the shortest fixed rate mortgage term is ten years. If you have less than ten years remaining on your loan, the one way in which you can ensure savings is to refinance the fixed term loans and then make payments to reserve the remaining term.

  1. A Low Rate ARM

Federal Reserve policies have recently driven down short term interest rates to unparalleled lows. As some of these short term rates administer the interest rates for adaptable rate mortgages, a number of the borrowers have, of late, seen their interest costs fall as the new rates have sunk to the 2%-3% range. Refinancing to a fixed rate loan today might help in eliminating the interest rate risk that comes with ARMs; nevertheless, this security comes at a very high cost and higher interest rates. Holding onto an ARM with a rock bottom interest rate, for the time being, may not be such a depraved idea.

  1. Inertia and Hassle

Getting a fresh mortgage in today’s very tight lending climate is not fun nor easy. If your current lender does not offer a streamlined refinancing program, it may be a very time consuming process. In addition, if the monthly savings are too small or the reimbursements take too long to materialize, the costs of refinancing may outweigh the reimbursements.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Successful international financial investment concept with business person showing growth, charts and dollar sign, digital technology
Businesses face several accounting costs when conducting day to day business operations that can easily be identified and calculated. Companies, however, also face other costs known as economic costs that are not displayed on the bookkeeping records and have a huge impact on the decisions made by management. Accounting costs are crucial for the external and internal reports of the company. Whereas, economic costs are applicable to the internal sector only.

Implicit Costs

Economic costs reflect both the implicit and explicit costs of a company that are encountered during the year. Implicit costs are linked to resources that are offered to a company without any price tag. If a company, for instance, is operational from a building that it owns, it encounters an implicit cost due to the rent that could have been earned by leasing off the building to some other company. The owner could have earned around $3,000 a month from a renter who was commercial. Therefore, in this case, the company faces an implicit cost of $3,000, which will be referred to as its economic cost.

Explicit Costs

Accounting costs are generated from the overall explicit costs of a business throughout the fiscal year. They do not include the implicit costs coming from resources that are unused. Explicit costs that have their monetary value defined are included in the accounting costs of a business in order to identify the net income.

Accounting Profit

If an accountant or bookkeeper wants to calculate the accounting profit of the financial year, they will only have to look at the profit of the company and its accounting costs. The economic cost details are not needed by the accountant to form an income statement for the company. For instance, accountants have no concern with the fact that the company could have made $3,000 by leasing off the building to some other business – making a total of around $36,000 during the financial year. This figure of $36,000 has nothing to do with the gross profit of the company during the financial year.

Economic Costs are not included in Bookkeeping

Economic costs are not written or mentioned in the accounting records or bookkeeping of a company. When creating financial reports, accountants are focused on the explicit costs generated from the business operations conducted throughout the financial year.

Economic costs, however, are generally considered when a company has to make strategic decisions that involve opportunity. For example, if a company has intended to close down an operational location and rent or lease it out to another business, the company needs to consider the economic costs of losing the money generated from business operations or the profit that might be generated from the rent.

In general, economic cost comprises of the monetary value of resources employed by the business. Also, it links to the opportunity cost that arises from the inputs used by the enterprise to make the business functional.

Accounting costs, on the other hand, are focused on explicit costs that are incurred by the business. The costs that are incurred by any company in normal, day to day market transactions are referred to as explicit costs. One common example of explicit costs include wages that are given to employees. The money spent on buying the resources needed by the business is also known as explicit costs.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Business technology concept.
Cloud accounting technology is a new player in the economic landscape.

Cloud accounting is similar to traditional accounting and bookkeeping procedures done on an accounting software. Cloud accounting software is hosted on remote servers, similar to the SaaS (Software as a Service) business model. Data is sent to the server into a ‘cloud’ where it is processed and sent back to the user. All application functions are done off-site, into the cloud, not on the desktop. The accounting functions are done online and not on the desktop software. The internet or another network are used for the process. Users access cloud accounting software through a cloud application service provider. The software has not be installed on a computer. It can be accessed from any place in the world, provided the cloud applications service provider is present.

Features of an accounting software must include:

  • Inventory management
  • Sales tracking
  • Contacts management and contact history tracking
  • Account to accept credit card payments
  • Generating Invoices
  • Financial statements, cash flow statements and balance sheet
  • Budget planning
  • Payrolls
  • Taxation matters

BENEFITS OF CLOUD ACCOUNTING FOR SMALL BUSINESS

Cloud accounting technology is a new player in the economic landscape. Why?  We’ve listed the reasons below.

1. Access to accounting and bookkeeping data anywhere and anytime in the world. You can spend time on other activities related to business operations or spend your quality time with family. You can go online to access cloud accounting software while sitting at home and keep yourself updated with the accounting and bookkeeping functions in your business. You always have an up to date view of the financial status of the business to make the right decisions at the right time.

2. Go paperless in accounting and bookkeeping. This step is Eco-friendly, too. Paperwork takes a lot of time for accountants and business owners. Small business owners need time to interpret accounting information. Accounting software makes it easy to interpret accounting information.

3. Cloud accounting software has multi-user access.

4. Cloud accounting software is automatically updated.

5. Cloud accounting reduces upfront business costs. You do not face regular maintenance and fees for upgrading the system.

 

A Few Cloud Accounting Software and their benefits

  1. FreshBooks

You can access FreshBooks from a desktop computer and mobile phones. It has many features used to simplify accounting processes. It makes it easy to track expenses, make online payments, generate customized invoices, generate reminders of late payments, purchase history with time-tracking, client records, and management of different projects with different rates.

30 days free subscription of FreshBooks is available for a new user.  After that, it costs $19.95 a month.

  1. QuickBooks Online

QuickBooks is the major bookkeeping and cloud accounting tool for small businesses and is used to handle accounting operations. QuickBooks is developed and marketed by Intuit. QuickBooks is used to:

  • Generate invoices with the logo of your company and with all details required by the customers.
  • Process payrolls according to HR policies
  • Manage all business transactions, including bills from suppliers and vendors
  • Manage Inventory
  • Track expenses
  1. Kashoo:
  • Creating professional invoices
  • Categorization of income and costs
  • Connectivity with online credit cards and bank accounts
  • Online Sharing of data with accountant
  • Reconciliation of accounts due to double entry accounting process

20 transactions per month are free.

 4. Outright:

Outright is an online cloud accounting system for small businesses and is used for tracking expenses, profit, sales, and customers. Bank accounts and other services such as PayPal, eBay, FreshBooks and web stores can be connected to Outright and data can be easily exported from one app to another.

 5.   Xero:

  • Dashboard with bank balances, expenses, and invoices
  • Customized reports required by the small business
  • Tracking cash flow in real time
  • Graphical presentation of data
  • Data can be shared and accessible to accountant and others
  • Generating customized reports and reminders to customers
  • Scheduling of Payments and returns

Apple, Blackberry, and Android applications are available. Many add-ons like CRM, invoicing, inventory management packages are also available on demand.

 

CONCLUSION

Cloud based accounting technology is changing the landscape by providing its customers the services which were not available a few years ago. One can access their company’s data from anywhere in the world by logging into the account. Small business owners must avail this technology as the costs are affordable and benefits are more abundant than ever.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Concept image for filing federal income taxes online and being audited. Computer keyboard, calculator and pen are placed on income tax form 1040. The 'word' AUDIT is stamped on the form 1040.

What Exactly is Cloud Hosting?

Essentially, cloud hosting is a service providing the host; the host provides the users with virtual servers for extracting and storing data which is then connected to a vast and complex network of physical web servers provided at the back end.

Usually, the clients could use the cloud hosting services for as many times as they want depending on their usage and requirements. Cloud hosting is an ultimate solution for cost-effective storage of data without using up a lot of physical storage disks on your end. Furthermore, the client is not required to pay for the extra capacity and pays only for the storage being used by them. 

What is an IRS Audit?

An IRS Audit is essentially a detailed review of an organization or a person’s accounts and the information pertaining to the financials. The audit checks that all information is reported correctly, all tax laws are being followed, and the company or individual is paying their taxes as required and, hence, verifying all the amounts paid as tax to be correct.

The Three Basic Types of IRS Audits

If you or your organization has been earning millions, there is a one-sixth chance that you might be selected for an IRS audit. If you are earning an average pay, your chances are even. An IRS audit is random and is a detailed analysis of your finances to make sure that all money is earned from lawful sources and that all taxes are being paid according to the law.

Usually, an IRS audit is triggered if the IRS notices unlawful activity that is related to your revenues or earnings. It could also be performed because the IRS notices that the taxes required to be paid are not being paid. An example of such activity is a sudden massive drop in your revenues or earnings that might point towards the fact that you are trying to hide money to avoid taxes. It is a very detailed auditing process in which details of your finances are combed through so that any discrepancies could be caught. The three basic types of IRS audits are explained below.

Correspondence Audits

These audits are the simplest audits of them all. Correspondence audits usually take place when you have a slight mistake in your tax returns which could be a human error based on typing in the correct amount.

Office Audits

An office audit is a bit more complicated and scary. During this audit, you are asked to go to an IRS office with all the correct paperwork that is required of you. This audit might be triggered if you have increased and high tax deductions – such as a medical expense.

Field Audits

A field audit, on the other hand, is similar to that of an office audit but the IRS approaches you. In such cases representatives from the IRS visit you at your home or workplace and request to look at certain paperwork and records of your business dealings.

In the case that you are being audited, you would be notified properly by the IRS via a call or letter. The letter or call would further let you in on the details of the required documents and paperwork that might help them assess your earning patterns and your tax paying patterns.

What Documents are usually required by the IRS?

When selected for an audit, the IRS notifies and informs you about all of the documents they might need to conduct your audit. However, some of the documents may include:

  • All documents that are of material in the administration of the internal revenue law
  • Records regarding revenues, taxes, earnings, expenses, and purchases for at least the three previous years
  • Complete employment records for the past four years at least

Documents required to meet IRS Standards in Cloud Hosting

Electronic times have made things faster and more accessible. Hence, it is important that you create digital copies of all related paperwork and store it in your cloud hosting services. When facing an IRS audit, not only are these documents readily available, they save both of parties a lot of time and effort, making the complete audit process more easy and quick.

According to the IRS website, the documents stored electronically which are acceptable for the audit should be prepared as following:

“The electronic storage system must index, store, preserve, retrieve and reproduce the electronically stored books and records in a legible format. All electronic storage systems must provide a complete and accurate record of your data that is accessible to the IRS. Electronic storage systems are also subject to the same controls and retention guidelines as those imposed on your original hard copy books and records. The original hard copy books and records may be destroyed provided that the electronic storage system has been tested to establish that the hard copy books and records are being reproduced in compliance with IRS requirements for an electronic storage system and procedures are established to ensure continued compliance with all applicable rules and regulations. “

In essence, all of these documents must be complete, accessible, and accurate while serving their purpose of proving all the possible transactions and details that are required and asked by the IRS Audit.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Sign on IRS headquarter building in downtown Washington, DC
The Internal Revenue Service IRS is an agency that was made to collect tax from Americans and administer the Internal Revenue Code enacted by Congress.

The internal revenue service is always generating tax resources for small-sized businesses. In fact, small sized business owners do not always need to turn to accounting consultants. They can greatly benefit by using these resources provided by the IRS – Internal revenue service.

IRS – Internal revenue service is a legal body that makes laws relating to taxes. At the same time, IRS – Internal revenue service offers resources for small business owners.

Here are some of the important small business tax resources provided by the IRS -Internal revenue service:

  1. A Federal Tax Center for Small Business owners & the Self-Employed

The Small Business and Self-Employed Tax Center conveys info on IRS.gov to a single shared place.

The link to this resource is:

https://www.irs.gov/businesses/small-business-and-self-employed-tax-center

  1. Small Business Tax Resources for Organizing Tax-related Information

The IRS Tax Calendar for Businesses and the elf-Employed aids owners in systemitizing. It contains tax due dates & actions for each month. Users can subscribe to calendar reminders or download the calendar to their desktop or calendar on their mobile phones.

The link to this resource is:

https://www.irs.gov/businesses/small-businesses-self-employed/irs-tax-calendar-for-businesses-and-self-employed

  1. Tax-Related Information by Topic is Indexed and Searchable

There is an A to Z business index and it helps people in finding small business topics on IRS.gov.

Here is the link to this:

https://www.irs.gov/businesses/small-businesses-self-employed/a-z-index-for-business

  1. Benefit from Informational Videos

The IRS Video Gateway deals with learning actions & informational videos on various business issues.

Here is the link to this:

https://www.irsvideos.gov/Business

  1. Discover Forms

The Small Business Forms and Publications page benefits business owners in finding the documents they require for the kind of business they own. It lists tax forms, directions, desk guides and more.

Another link to this service/resource is:

https://smallbusiness.com/taxes/small-business-irs-tax-forms-guide-2017/

  1. Personally Meet Someone from the IRS or Online

Small business workshops, seminars, and meetings are held all over the country. They are funded by IRS allies that major in federal tax topics. Topics differ from summaries to further definite topics such as retirement plans and business bookkeeping and record keeping.

CONCLUSION

Small business owners are often busy in their day to day business functions. Most of them are managing their resources on their own. From very basic business functions to bookkeeping and accounting, they are managing them alone. Keeping a check and balance type control on bookkeeping is not a small task. They are left with little time to calculate new ideas and interpret their financial status better. Especially at the start of business, it is a very difficult task to interpret and carry out all business operations in an effective way. At that time, entrepreneurs require assistance throughout the year until their business gets settled to some extent. Many cannot hire accounting consultants all at once. At the same time, small business owners need to pay taxes as well. They might be trying to manage several loans as well. Knowing how to cope with taxes and loans is a challenging task for new entrepreneurs and small business owners. That’s why the IRS has made many resources for the proper guidance and tax assistance for small business owners?entrepreneurs. 

Small businesses work like a network of veins throughout the body. The body is the national economy. Small business owners are essential for the economy of a country. That is why the IRS is facilitating its small business owners in the best possible and legal way. They can get instructions, forms and many other services on the conjoined web-portals that are specially designed and dedicated to small sized business owners/entrepreneurs.

Small sized business owners utilize these services provided by the ‘Internal Revenue Service’, the way that is most convenient for them. These can be accessed from homes, offices or sitting anywhere if you have an internet connection. You can utilize these services by downloading them from your phone or desktop and use them whenever and wherever you want. A small business owner can access them 24 X 7.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.